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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
Commission File No. 1-14146
CORT BUSINESS SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 54-1662135
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4401 Fair Lakes Court, Fairfax, VA 22033
(Address of principal executive offices) (Zip Code)
(703) 968-8500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Outstanding as of
Class April 30, 1997
----- --------------
Common Stock, $.01 par value 12,787,870
Class B Common Stock, $.01 par value -0-
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<PAGE>
CORT BUSINESS SERVICES CORPORATION
INDEX TO FORM 10-Q
Page No.
--------
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets.................. 1
Condensed Consolidated Statements of Operations........ 2
Condensed Consolidated Statements of Cash Flows........ 3
Notes to Condensed Consolidated Financial Statements... 4
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................... 5
Part II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K ...................... 8
SIGNATURE............................................................... 9
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, March 31,
1996 1997
------------ -----------
(unaudited)
ASSETS
Cash and cash equivalents..................... $ 123 $ --
Accounts receivable, net...................... 11,011 14,052
Prepaid expenses.............................. 4,224 4,768
Rental furniture, net......................... 147,161 157,006
Property, plant and equipment, net............ 35,667 36,248
Other receivables and assets, net............. 3,815 3,875
Goodwill, net................................. 45,198 52,931
-------- --------
$247,199 $268,880
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable.............................. $ 4,157 $ 6,478
Accrued expenses.............................. 27,491 26,982
Deferred revenue and security deposits........ 14,358 16,360
Revolving credit facility, secured ........... 15,600 28,355
Senior notes, 12%............................. 50,000 50,000
Deferred income taxes......................... 10,441 10,441
-------- --------
122,047 138,616
Stockholders' equity.......................... 125,152 130,264
-------- --------
$247,199 $268,880
-------- --------
See accompanying notes to condensed consolidated financial statements.
1
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
March 31,
------------------
1996 1997
---- ----
Revenue:
Furniture rental................................. $38,555 $55,553
Furniture sales.................................. 10,214 11,748
------- -------
Total revenue.................................. 48,769 67,301
------- -------
Operating costs and expenses:
Cost of furniture rental......................... 7,438 10,632
Cost of furniture sales.......................... 5,938 6,908
Selling, general and administrative expenses..... 28,221 39,350
------- -------
Total costs and expenses....................... 41,597 56,890
------- -------
Operating earnings............................. 7,172 10,411
Interest expense.................................... 1,781 1,985
------- -------
Income before tax.............................. 5,391 8,426
Income taxes........................................ 2,231 3,496
------- -------
Net income..................................... $ 3,160 $ 4,930
======= =======
Earnings per common share........................... $ .27 $ .36
Weighted average number of common
shares used in computation.................... 11,631 13,602
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
------------------
1996 1997
---- ----
Cash flows from operating activities:
Net income......................................... $ 3,160 $ 4,930
Proceeds of disposals of rental furniture in
excess of gross profit........................... 5,767 6,594
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization:
Rental furniture depreciation ................... 5,351 7,868
Other depreciation and amortization.............. 721 1,169
Goodwill amortization............................ 165 317
Amortization of debt issuance costs.............. 165 180
Rental furniture inventory shrinkage............ 338 709
Changes in operating accounts, net.............. (293) 890
------- -------
Net cash provided by operating activities........ 15,374 22,657
------- -------
Cash flows from investing activities:
Purchases of rental furniture...................... (18,430) (20,985)
Purchase of portfolio acquisitions................. (217) (13,024)
Purchases of property, plant and equipment......... (1,982) (1,728)
Sales of property, plant and equipment............. 23 20
------- -------
Net cash used by investing activities............ (20,606) (35,717)
------- -------
Cash flows from financing activities:
Repayments on the revolving credit facility........ (4,200) (18,957)
Borrowings on the revolving credit facility........ 9,053 31,712
Issuance of common stock........................... -- 182
------- -------
Net cash provided by financing activities........ 4,853 12,937
------- -------
Net decrease in cash and cash equivalents........ (379) (123)
Cash and cash equivalents at beginning of period...... 379 123
------- -------
Cash and cash equivalents at end of period............ $ -- $ --
======= =======
Supplemental disclosure of cash flow information:
Interest paid...................................... $ 3,072 $ 3,196
Income taxes paid.................................. 997 821
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(1) Basis of Presentation
---------------------
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments, consisting of
only normal recurring accruals, necessary for a fair presentation of the
consolidated financial position of CORT Business Services Corporation
("CORT" or the "Company") and Subsidiaries as of March 31, 1997, and the
results of their operations and cash flows for the three months ended March
31, 1997 and 1996. The results of operations for the three months ended
March 31, 1997 are not necessarily indicative of the results that may be
expected for the full year. These condensed consolidated financial
statements are unaudited, and do not include all related footnote
disclosures.
The interim unaudited condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial statements
included in the Company's 1996 Annual Report on Form 10-K.
(2) Acquisitions
------------
On March 6, 1997, the Company acquired the stock of each of Levitt
Investment Company and McGregor Enterprises, Inc. and certain assets of
Alco Trade Show Services, Inc. These companies provide rental specialty
furniture for short term use at conventions and trade shows. In addition,
McGregor Enterprises, Inc. provides rental furniture in the "rent-to-rent"
segment of the furniture industry in Orlando, Florida. The cost of the
acquisitions was approximately $12.7 million, subject to certain
adjustments, including expenses in transactions accounted for as purchase
business combinations. The preliminary allocation of the purchase price
over the net assets acquired resulted in goodwill of approximately $7.6
million.
(3) Income Taxes
------------
The Internal Revenue Service ("IRS") has proposed the disallowance of
certain deductions taken by Fairwood Corporation for a consolidated tax
group of which CORT Furniture Rental Corporation ("CFR") was previously a
member (the "Former Group") through the year ended December 31, 1988 and
subsequent years. The IRS challenge includes the assertion that certain
interest deductions taken by the Former Group should be recharacterized as
non-deductible dividend distributions and that deductions for certain
expenses related to the acquisition of Mohasco Corporation (now
Consolidated Furniture Corporation ("Consolidated")), CFR's former
shareholder, be disallowed. Under IRS regulations, the Company and each
other member of the Former Group is severally liable for the full amount of
any Federal income tax liability of the Former Group while CFR was a member
of the Former Group, which could be as much as approximately $31 million
for such periods (including interest through December 31, 1996). Under the
agreement of sale for CFR, Consolidated agreed to indemnify the Company in
full for any consolidated tax liability of the Former Group for the years
during which CFR was a member of the Former Group. In addition, the Company
may have rights of contribution against other members of the Former Group
if the Company were required to pay more than its equitable share of any
consolidated tax liability. Fairwood Corporation has indicated to the
Company that it has tentatively reached an agreement in principle with the
IRS Appeals Officer handling the case regarding a settlement of the
principal issues in the case. A final settlement on that basis would be
substantially less than the liability that would result from the proposed
adjustments. The terms of such a tentative settlement are subject to
further review by the IRS and by the Joint Committee on Taxation, and no
assurance can be given that any settlement will be reached with the IRS.
The Company is not in a position to determine the probable outcome and its
impact on the Company's consolidated financial statements, if any.
4
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(dollar figures in thousands)
Results of Operations
- ---------------------
Three months ended March 31, 1997 as compared to three months ended March 31,
1996
Revenue
Total revenue increased 38.0% to $67,301 for the three months ended March 31,
1997 from $48,769 for the three months ended March 31, 1996. Furniture rental
revenue for the three months ended March 31, 1997 was $55,553, a 44.1% increase
from $38,555 in 1996. Rental revenue growth before the impact of acquisitions,
estimated by excluding the Company's California, New York City, Salt Lake City
and trade show services operations, was approximately 15% which reflects growth
in the number of leases as well as revenue per lease. Furniture sales increased
15.0% to $11,748 for the three months ended March 31, 1997, reflecting in part,
the expansion of retail operations in California to accommodate the combined
CORT and Evans Rents operations.
Operating Costs and Expenses
Cost of furniture rental has decreased from 19.3% of furniture rental revenue in
1996 to 19.1% of furniture rental revenue in 1997. Cost of furniture sales
increased slightly from 58.1% of furniture sales revenue in 1996 to 58.8% in
1997.
Selling, general and administrative expenses totaled $39,350 or 58.5% of total
revenue for the quarter ended March 31, 1997 as compared to $28,221 or 57.9% of
total revenue in 1996. This increase is a result of investments the Company has
made in personnel and facilities to support the expanding businesses.
Operating Earnings
As a result of the changes in revenue, operating costs and expenses discussed
above, operating earnings were $10,411 or 15.5% of total revenue in the first
quarter of 1997 compared to $7,172 or 14.7% of total revenue in the first
quarter of 1996.
Furniture Purchases
Furniture purchases totaled $20,985 in the three months ended March 31, 1997, an
increase of 13.9% from the $18,430 purchased in the three months ended March 31,
1996. The increase supports the growth in furniture rental revenue and
replenishes furniture which has been sold or disposed of.
5
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(dollar figures in thousands)
Liquidity and Capital Resources
- -------------------------------
The Company is a holding company with no independent operations, no material
obligations and no material assets other than its ownership of CFR. The Company
is dependent on the receipt of dividends or distributions from CFR to fund any
obligations. The Revolving Credit Facility (as defined below) and the indenture
governing the Senior Notes restrict the ability of CFR to make advances and pay
dividends to the Company.
The Company's primary capital requirements are purchases of rental furniture
(including new furniture purchases and lease portfolio acquisitions) and debt
service. The Company purchases furniture throughout each year to replace
furniture which has been sold and to maintain adequate levels of rental
furniture to meet existing and new customer needs. As the Company's growth
strategies continue to be implemented, furniture purchases are expected to
increase.
The Company's other capital requirements consist primarily of purchases of
property, plant and equipment, including warehouse and showroom improvements,
warehouse and office equipment, and computer hardware. Net purchases of
property, plant and equipment were $1,959 and $1,708 in the three months ended
March 31, 1996 and 1997, respectively.
During the three months ended March 31, 1996 and 1997 net cash provided by
operations was $15,374 and $22,657, respectively. During the three months ended
March 31, 1996 and 1997 net cash used by investing activities was $20,606 and
$35,717, respectively, consisting primarily of purchases of rental furniture and
in 1997 the acquisition of the trade show services businesses. During the three
months ended March 31, 1996 and 1997 net cash provided by financing activities
was $4,853 and $12,937, respectively.
The Company is required to make semi-annual interest payments, in arrears on
March 1 and September 1, of $3,000 ($6,000 annually) on the Senior Notes. The
Company will not be required to make principal repayments on the Senior Notes
until maturity.
CFR has available a revolving line of credit of $70,000, subject to certain
borrowing base restrictions, to meet acquisition and expansion needs as well as
seasonal working capital and general corporate requirements (the "Revolving
Credit Facility"). CFR had borrowings of $28,355 under the line of credit at
March 31, 1997.
6
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(dollar figures in thousands)
The IRS has proposed the disallowance of certain deductions taken by Fairwood
Corporation for a consolidated tax group of which CFR was previously a member
(the "Former Group") through the year ended December 31, 1988 and subsequent
years. The IRS challenge includes the assertion that certain interest deductions
taken by the Former Group should be recharacterized as non-deductible dividend
distributions and that deductions for certain expenses related to the
acquisition of Consolidated, CFR's former shareholder, be disallowed. Under IRS
regulations, the Company and each other member of the Former Group is severally
liable for the full amount of any Federal income tax liability of the Former
Group while CFR was a member of the Former Group, which could be as much as
approximately $31 million for such periods (including interest through December
31, 1996). Under the agreement of sale for CFR, Consolidated agreed to indemnify
the Company in full for any consolidated tax liability of the Former Group for
the years during which CFR was a member of the Former Group. In addition, the
Company may have rights of contribution against other members of the Former
Group if the Company were required to pay more than its equitable share of any
consolidated tax liability. Fairwood Corporation has indicated to the Company
that it has tentatively reached an agreement in principle with the IRS Appeals
Officer handling the case regarding a settlement of the principal issues in the
case. A final settlement on that basis would be substantially less than the
liability that would result from the proposed adjustments. The terms of such a
tentative settlement are subject to further review by the IRS and by the Joint
Committee on Taxation, and no assurance can be given that any settlement will be
reached with the IRS. The Company is not in a position to determine the probable
outcome and its impact on the Company's consolidated financial statements, if
any.
New Accounting Pronouncement
- ----------------------------
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share" ("Statement 128"), Statement 128 supersedes Accounting
Principles Board Opinion No. 15, "Earnings per Share" ("APB 15") and its related
interpretations, and promulgates new accounting standards for the computation
and manner of presentation of the Company's earnings per share. The Company is
required to adopt the provisions of Statement 128 for the year ending December
31, 1997. Earlier application is not permitted; however, upon adoption the
Company will be required to restate previously reported annual and interim
earnings per share in accordance with the provisions of Statement 128. The
Company does not believe that the adoption of Statement 128 will have a material
impact on the computation or manner of presentation of its earnings per share as
currently or previously presented under APB 15.
7
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (see Index on page E-1)
(b) Reports on Form 8-K:
None.
8
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
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
(Registrant)
Date: May 14, 1997 By: /s/ Frances Ann Ziemniak
------------ ------------------------------------------------------
Frances Ann Ziemniak
Vice President, Finance, CFO and Assistant Secretary
(Principal financial and principal accounting officer)
9
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit
Number Description Page
- ------- ----------- ----
2.1 Stock Purchase Agreement, dated June 22, 1993, by and among
the Company, Interfinancial, Inc., General Furniture Leasing
Company and Fortis, Inc.; incorporated by reference to Exhibit
2.1 to CFR's Registration Statement on Form S-1, No. 33-65094,
filed on June 25, 1993
2.2 First Amendment to Stock Purchase Agreement, dated as of
August 31, 1993, by and among the Company, Fortis, Inc.,
Interfinancial, Inc. and General Furniture Leasing Company;
incorporated by reference to Exhibit 2.2 to CFR's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30,
1993
2.3 Assignment and Assumption Agreement, dated as of August 31,
1993, between CFR and the Company; incorporated by reference
to Exhibit 2.3 to CFR's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1993
2.4 Acquisition Agreement, dated March 15, 1996, by and among the
Company, CE Merger Sub Inc. and Evans Rents; incorporated by
reference to Exhibit 2.4 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995
3.1 Restated Certificate of Incorporation of the Company;
incorporated by reference to Exhibit 3.1 to Amendment No. 3 to
the Company's Registration Statement on Form S-1, No. 33-97568
filed on November 13, 1995
3.2 By-laws of the Company; incorporated by reference to Exhibit
3.2 to Amendment No. 3 to the Company's Registration Statement
on Form S-1, No. 33-97568 filed on November 13, 1995
4.1 Form of Indenture between CFR and United States Trust Company
of New York, as Trustee, with respect to CFR's 12% Senior
Notes due 2000; incorporated by reference to Exhibit 4.1 to
Amendment No. 3 to the Company's Registration Statement on
Form S-1, No. 33-65094, filed on August 20, 1993
4.2 First Supplemental Indenture between CFR and United States
Trust Company of New York, as Trustee, dated August 25, 1995;
incorporated by reference to Exhibit 4.2 to the Company's
Registration Statement on Form S-1, No. 33-97568 filed on
September 29, 1995
4.3 Second Supplemental Indenture between CFR and United States
Trust Company of New York, as Trustee, dated September 29,
1995; incorporated by reference to Exhibit 4.9 to Amendment
No. 1 to the Company's Registration Statement on Form S-1, No.
33-97568 filed on October 23, 1995
E-1
<PAGE>
4.4 Warrant Agreement, dated September 1, 1993, between the
Company and United States Trust Company of New York, as
Warrant Agent; incorporated by reference to Exhibit 4.7 to the
Company's Registration Statement on Form S-1, No. 33- 97568
filed on September 29, 1995
4.5 Amendment No. 1 to Warrant Agreement, dated February 1, 1994,
between the Company and United States Trust Company of New
York, as Warrant Agent; incorporated by reference to Exhibit
4.8 to the Company's Registration Statement on Form S-1, No.
33-97568 filed on September 29, 1995
10.1 Credit Agreement dated as of November 21, 1995 by and among
CFR, the Company, the lenders identified therein, and
NationsBank, N.A., as agent; incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1995
10.2 First Amendment to Credit Agreement dated as of May 24, 1996
by and among CFR, the Company, the lenders identified therein,
and NationsBank, N.A., as agent, incorporated by reference to
Exhibit 10.18 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1996
10.3 Stock Option, Securities Purchase and Stockholders Agreement,
dated as of January 18, 1994, by and among the Company, CFR,
Citicorp Venture Capital Ltd. and certain investors named
therein; incorporated by reference to Exhibit 4.6 to the
Company's Registration Statement on Form S-8, No. 33-72724,
filed on December 9, 1993
10.4 Amendment 1 to New Cort Holdings Corporation and Subsidiaries
Employee Stock Option and Stock Purchase Plan as adopted by
the Board of Directors of the Company on December 21, 1993;
incorporated by reference to Exhibit 10.11 to CFR's Annual
Report on Form 10-K for the fiscal year ended December 31,
1993
10.5 New Cort Holdings Corporation and Subsidiaries Employee Stock
Option and Stock Purchase Plan (1995 Plan Distribution) as
adopted by the Board of Directors of the Company on December
16, 1994; incorporated by reference to Exhibit 10.13 to CFR's
Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1995
10.6 Form of First Amendment to Stockholders Agreement, dated as of
November 13, 1995, by and among the Company, Citicorp Venture
Capital Ltd., and certain investors named therein;
incorporated by reference to Exhibit 10.5 to Amendment No. 3
to the Company's Registration Statement on Form S-1, No.
33-97568 filed on November 13, 1995
10.7 Registration Rights Agreement for Common Stock, dated as of
January 18, 1994, by and among the Company, Citicorp Venture
Capital Ltd. and certain investors named therein; incorporated
by reference to Exhibit 10.4 to the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended March 31, 1994
E-2
<PAGE>
10.8 CFR's Supplemental Executive Retirement Plan, dated October
28, 1992, as revised effective January 1, 1993, restated
through the Second Amendment; incorporated by reference to
Exhibit 10.8 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1996
10.9 Agreement for Irrevocable Trust Under CORT Furniture Rental
Supplemental Executive Retirement Plan, dated June 1, 1996,
between CFR and Mentor Trust Company; incorporated by
reference to Exhibit 10.9 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1996
10.10 Letter Agreement, dated July 24, 1992, between CFR and Paul N.
Arnold; incorporated by reference to Exhibit 10.16 to CFR's
Registration Statement on Form S-1, No. 33-65094, filed on
June 25, 1993
10.11 Letter Agreement, dated August 18, 1993, between CFR and Paul
N. Arnold; incorporated by reference to Exhibit 10.26 to
Amendment No. 5 to the Company's Registration Statement on
Form S-1, No. 33-65094, filed on August 25, 1993
10.12 Employment Agreement, dated September 1, 1994, between CFR and
Charles M. Egan; incorporated by reference to Exhibit 10.10 to
CFR's Annual Report on Form 10-K for the year ended December
31, 1994
10.13 New Cort Holdings Corporation 1995 Stock-Based Incentive
Compensation Plan, as adopted by the Board of Directors on
July 25, 1995; incorporated by reference to Exhibit 10.16 to
Amendment No. 1 to the Company's Registration Statement on
Form S-1, No. 33-97568 filed on October 23, 1995
10.14 Equity Share Agreement, between CFR and Lloyd and Eileen S.
Lenson, dated April 20, 1994; incorporated by reference to
Exhibit 10.17 to the Company's Registration Statement on Form
S-1, No. 33-97568 filed on September 29, 1995
10.15 Form of Senior Notes Purchase Agreement between CFR and
certain holders of CFR's 12% Senior Notes Due 2000, dated
September 28, 1995; incorporated by reference to Exhibit 10.18
to Amendment No. 2 to the Company's Registration Statement on
Form S-1, No. 33-97568 filed on November 1, 1995
10.16 Private Exchange Commitment Letter by and among the Company,
Citicorp Venture Capital Ltd. and certain investors, dated
September 28, 1995; incorporated by reference to Exhibit 10.19
to Amendment No. 1 to the Company's Registration Statement on
Form S-1, No. 33-97568 filed on October 23, 1995
10.17 CORT Business Services Corporation 1995 Directors Stock Option
Plan, as adopted by the Board of Directors on October 18,
1995; incorporated by reference to Exhibit 10.20 to Amendment
No. 3 to the Company's Registration Statement on Form S-1, No.
33-97568 filed on November 13, 1995
11.1 Statement re computation of per share earnings
27 Financial Data Schedules
E-3
Exhibit 11.1
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
COMPUTATIONS OF EARNINGS PER COMMON SHARE
Three Months Ended
March 31,
----------------------------
1996 1997
---- ----
Weighted average common shares outstanding:
Average shares outstanding during the period 10,422,638 12,723,583
Unexercised stock options and warrants using
the treasury stock method 1,208,231 878,884
---------- ----------
Total weighted average common shares 11,630,869 13,602,467
========== ==========
Net income applicable to common shares:
Net income applicable to common shares $3,160,000 $4,930,000
========== ==========
Earnings per common share $ .27 $ .36
========== ==========
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 16,041
<ALLOWANCES> 1,989
<INVENTORY> 157,006
<CURRENT-ASSETS> 0
<PP&E> 59,429
<DEPRECIATION> 23,181
<TOTAL-ASSETS> 268,880
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 128
<OTHER-SE> 130,136
<TOTAL-LIABILITY-AND-EQUITY> 268,880
<SALES> 11,748
<TOTAL-REVENUES> 67,301
<CGS> 6,908
<TOTAL-COSTS> 17,540
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 301
<INTEREST-EXPENSE> 1,985
<INCOME-PRETAX> 8,426
<INCOME-TAX> 3,496
<INCOME-CONTINUING> 4,930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,930
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
