SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 15, 1996
CORT BUSINESS SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-14146 54-1662135
(State of Incorporation) (Commission File Number) I.R.S. Employer
Identification No.
4401 Fair Lakes Court, Fairfax, Virginia 22033
(Address of principal executive offices) (Zip Code)
(703) 968-8500
(Registrant's telephone number)
<PAGE>
Item 5. Other Events.
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CORT Business Services Corporation has announced its financial results
for the second quarter ended June 30, 1996.
Item 7. Exhibits.
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99.1 Press Release issued by the Company on July 15, 1996
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CORT BUSINESS SERVICES CORPORATION
Dated: July 15, 1996 By /s/ Frances Ann Ziemniak
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Frances Ann Ziemniak
Vice President, Finance
and Chief Financial Officer
2
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release issued by the Company on July 15, 1996
3
PRESS RELEASE For more information contact:
For Immediate Release Frances Ann Ziemniak
Vice President, Finance & CFO
(703) 968-8524
CORT BUSINESS SERVICES CORPORATION
ANNOUNCES RECORD SECOND QUARTER RESULTS
Fairfax, VA, July 15, 1996 --- CORT Business Services Corporation (NYSE: CBS),
today reported record revenue and operating earnings for the second quarter
ended June 30, 1996. Results included two months of Evans Rents, which was
acquired by the Company at the end of April 1996.
Revenues for the second quarter were $58.1 million, a 30.5% increase from the
$44.5 million reported for the same period last year. Operating earnings rose
27.7% to $8.2 million from $6.4 million.
Net income was $3.5 million or $0.30 per share for the second quarter. These
results represented an increase of 27.6% over pro forma net income of $2.7
million and an increase of 25.0% over pro forma earnings per share of $0.24 over
the comparable period for 1995. Pro forma results for the 1995 period reflect
the impact of the Company's November 1995 initial public offering as if it had
occurred at the beginning of the 1995 period.
For the six months ended June 30, 1996, revenues were $106.9 million, a 20.5%
increase from $88.7 million for the prior year. Operating earnings grew 21.3% to
$15.4 million from $12.7 million.
Net income of $6.6 million or $0.57 per share for the six months ended June 30,
1996, represented increases of 24.1% and 23.9%, respectively, when compared to
pro forma results for the same period last year.
Commenting on CORT's results for the second quarter and first six months Paul N.
Arnold, President and Chief Executive Officer stated that he was "pleased with
the Company's continued acceleration of rental revenue growth." Rental revenues
rose 33.0% and 23.7% for the quarter and six month period, respectively.
Excluding Evans Rents, rental revenue grew 16.9% and 15.5% for the same periods.
Operating margins for the second quarter and the first six months, excluding
certain charges associated with duplicate showrooms resulting from the Evans
Rents acquisition, improved from 14.4% to 14.9% and from 14.3% to 14.8%,
respectively. Mr. Arnold noted that "this margin improvement was achieved even
after absorbing the expenses associated with start-up operations in four new
metropolitan markets and before full realization of the synergies resulting from
the Evans Rents acquisition."
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CORT Business Services Corporation is the leading provider of rental furniture,
accessories and related services in the "rent-to-rent" segment of the furniture
rental industry. CORT operates 104 rental showrooms, 65 furniture clearance
centers and 57 warehouses in 29 states and the District of Columbia.
CORT BUSINESS SERVICES CORPORATION
RESULTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Total revenue $58,108 $44,527 $106,877 $88,658
Costs and expenses(1) 49,903 38,104 91,500 75,983
------ ------ ------ ------
Operating earnings 8,205 6,423 15,377 12,675
Interest expense 2,264 4,199 4,045 8,344
Income tax expense 2,458 951 4,689 1,863
----- --- ----- -----
Net income $3,483 $1,273 $6,643 $2,468
===== ===== ===== =====
Earnings per common share(2) $ 0.30 $0.26 $ 0.57 $0.51
==== ==== ==== ====
Weighted average number of common shares 11,623 7,242 11,619 7,241
====== ===== ====== =====
PRO FORMA RESULTS - 1995(3)
Net income -- $2,729 -- $5,354
===== =====
Earnings per common share -- $0.24 -- $0.46
==== ====
<FN>
(1)Includes $425,000 of certain charges related to the 1996 Evans Rents
acquisition.
(2)Earnings per common share for 1995 reflect the exchange of the Company's
subordinated debt for equity as if it had occurred on January 1, 1994.
(3)Pro forma results reflect the impact of the Company's initial public offering
and related debt retirement transactions as if they occurred at the beginning of
the periods presented. Therefore, pro forma net income excludes interest expense
associated with the subordinated debt and $50 million of the senior notes.
</FN>
</TABLE>
Due to the proximity to December 31, 1995 of the Company's initial public
offering and related debt retirement transactions, the weighted average number
of common shares outstanding used in the computations of historical earnings per
share are substantially lower than will be used in future periods. To provide
for more meaningful comparisons, pro forma earnings per share for 1995 are based
upon 11,608 shares, the actual number of common and common equivalent shares
outstanding as of December 31, 1995 on a fully diluted basis.
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PRO FORMA ADJUSTED RESULTS - 1996
The Company has filed with the SEC a Registration Statement relating to the
offering by the Company of 1,700,000 shares of common stock. The following
results as of June 30 and for the six months then ended are adjusted to reflect
the offering (assuming a price of $18 3/8 per share) and the acquisition of
Evans Rents as if they had occurred at the beginning of the period.
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1996
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<S> <C>
Total revenue $116,797
Costs and expenses 99,842
Operating earnings 16,955
Interest expense 3,675
Income tax expense 5,510
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Net income $7,770
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Earnings per common share $ 0.58
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Weighted average number of common shares 13,319
======
</TABLE>
<TABLE>
<CAPTION>
As of June 30, 1996
Pro Forma
---------
Actual Adjusted
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Capitalization:
<S> <C> <C>
Credit facility and other $41,416 $12,397
Senior notes 50,000 50,000
------ ------
Total debt 91,416 62,397
Total stockholders equity 82,120 111,139
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Total capitalization $173,536 $173,536
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</TABLE>
The above-mentioned registration statement relating to the issuance of shares of
the Company's common stock has been filed with the Securities and Exchange
Commission but has not yet become effective. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration statement
becomes effective. This press release shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state. Copies of the preliminary prospectus relating to such securities may
be obtained from the Company upon request directed to the Vice
President-Finance, CORT Business Services, 4401 Fair Lakes Court, Suite 300,
Fairfax, Virginia 22033.
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