================================================================================
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, 1998
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.
<TABLE>
<CAPTION>
Outstanding as of
Class May 8, 1998
----- -----------
<S> <C>
Common Stock, $.01 par value 13,019,419
Class B Common Stock, $.01 par value - 0 -
</TABLE>
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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....................6
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)
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
---- ----
(unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents.......................................................... $ -- $ 1,422
Accounts receivable, net........................................................... 13,521 13,322
Prepaid expenses................................................................... 4,127 4,933
Rental furniture, net.............................................................. 164,323 170,213
Property, plant and equipment, net................................................. 38,777 39,580
Other receivables and assets, net.................................................. 3,183 3,240
Goodwill, net...................................................................... 53,910 61,775
-------- ------
Total Assets.................................................................. $277,841 $294,485
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable................................................................... $ 5,551 $ 6,410
Accrued expenses................................................................... 27,936 26,176
Deferred revenue and security deposits............................................. 17,217 18,265
Revolving credit facility.......................................................... 13,200 22,200
Senior notes, 12%.................................................................. 49,932 49,932
Deferred income taxes.............................................................. 14,673 14,673
------ ------
128,509 137,656
Stockholders' equity............................................................... 149,332 156,829
------- -------
Total liabilities and stockholders' equity.................................... $277,841 $294,485
======= =======
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
1
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1997 1998
---- ----
Revenue:
<S> <C> <C>
Furniture rental............................................... $ 55,553 $ 62,814
Furniture sales................................................ 11,748 12,629
------ ------
Total revenue.............................................. 67,301 75,443
------ ------
Operating costs and expenses:
Cost of furniture rental....................................... 10,632 11,087
Cost of furniture sales........................................ 6,908 7,615
Selling, general and administrative expenses................... 39,350 44,166
------ ------
Total costs and expenses................................... 56,890 62,868
------ ------
Operating earnings......................................... 10,411 12,575
Interest expense.................................................... 1,985 1,967
----- -----
Income before income taxes................................ 8,426 10,608
Income taxes........................................................ 3,496 4,417
----- -----
Net income................................................ $ 4,930 $ 6,191
====== =====
Earnings per common share........................................... $ .39 $ .48
Weighted average number of common
shares used in computation.................................... 12,724 12,924
Earnings per common share - assuming dilution....................... $ .37 $ .46
Weighted average number of common
shares used in computation - assuming dilution................ 13,296 13,472
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
2
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1997 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income..................................................... $ 4,930 $ 6,191
Proceeds of disposals of rental furniture in
excess of gross profit....................................... 6,594 7,294
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization:
Rental furniture depreciation ............................. 7,868 8,465
Other depreciation and amortization........................ 1,169 1,445
Goodwill amortization...................................... 317 434
Amortization of debt issuance costs........................ 180 184
Rental furniture inventory shrinkage........................ 709 830
Changes in operating accounts, net.......................... 890 (1,060)
----- -----
Net cash provided by operating activities.................. 22,657 23,783
------ ------
Cash flows from investing activities:
Purchases of rental furniture.................................. (20,985) (20,917)
Purchase of portfolio acquisitions............................. (13,024) (9,175)
Purchases of property, plant and equipment..................... (1,728) (1,975)
Sales of property, plant and equipment......................... 20 106
------- ------
Net cash used by investing activities...................... (35,717) (31,961)
------- ------
Cash flows from financing activities:
Borrowings on the revolving credit facility.................... 29,400 22,700
Repayments on the revolving credit facility.................... (16,800) (13,700)
Issuance of common stock....................................... 182 600
Other.......................................................... 155 --
---- -----
Net cash provided by financing activities.................. 12,937 9,600
------- -----
Net increase (decrease) in cash and cash equivalents....... (123) 1,422
Cash and cash equivalents at beginning of period.................... 123 --
----- -----
Cash and cash equivalents at end of period.......................... $ -- $ 1,422
======== ========
Supplemental disclosure of cash flow information:
Interest paid.................................................. $ 3,196 $ 3,206
Income taxes paid.............................................. 821 768
Tax benefit from exercise of stock options..................... -- 708
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
3
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
(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, 1998, and the
results of their operations and cash flows for the three months ended March
31, 1998 and 1997. The results of operations for the three months ended
March 31, 1998 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 1997 Annual Report on Form 10-K.
(2) 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. 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 $35 million for such periods (including interest
through December 31, 1997). 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>
(3) Earnings Per Share
The following table sets forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1997 1998
---- ----
<S> <C> <C>
Weighted average shares outstanding during the period 12,723,583 12,923,998
Effect of dilutive securities:
Stock options 460,311 489,099
Warrants 112,095 58,699
------- ------
Weighted average common shares - assuming
dilution 13,295,989 13,471,796
========== ==========
Net income applicable to common shares $4,930,000 $6,191,000
========== ==========
Earnings per common share $ .39 $ .48
========== ==========
Earnings per common share - assuming dilution $ .37 $ .46
========== ==========
</TABLE>
5
<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, 1998 as compared to three months ended March 31,
1997
Revenue
Total revenue increased 12.1% to $75,443 for the three months ended March 31,
1998 from $67,301 for the three months ended March 31, 1997. Furniture rental
revenue for the three months ended March 31, 1998 was $62,814, a 13.1% increase
from $55,553 in 1997. Rental revenue growth before the impact of acquisitions
and merged markets was approximately 7% which reflects growth in the number of
leases as well as revenue per lease. Furniture sales increased 7.5% to $12,629
for the three months ended March 31, 1998.
Operating Costs and Expenses
Cost of furniture rental has decreased from 19.1% of furniture rental revenue in
1997 to 17.7% of furniture rental revenue in 1998. The improvement in rental
margins is attributable to the expansion of CORT's housewares and trade show
furnishings operations. Cost of furniture sales increased from 58.8% of
furniture sales revenue in 1997 to 60.3% in 1998.
Selling, general and administrative expenses totaled $44,166 or 58.5% of total
revenue for the quarter ended March 31, 1998 as compared to $39,350 or 58.5% of
total revenue in 1997. While the Company made investments in personnel,
facilities and new programs, these increased costs were offset by efficiencies
gained in the California markets. As a result, selling, general and
administrative expenses remained flat as a percentage of revenue.
Operating Earnings
As a result of the changes in revenue, operating costs and expenses discussed
above, operating earnings were $12,575 or 16.7% of total revenue in the first
quarter of 1998 compared to $10,411 or 15.5% of total revenue in the first
quarter of 1997.
Furniture Purchases
Furniture purchases, which totaled $20,917 in the three months ended March 31,
1998, were about equal to the $20,985 purchased in the three months ended March
31, 1997. Purchases for start-up districts and incubator businesses in 1997
included building inventory in line with expansion requirements while 1998
reflected purchases required by normal business operations. This reduction,
combined with reduced furniture requirements for merged markets, were largely
offset by increased purchases for acquired operations.
Liquidity and Capital Resources
CORT Business Services Corporation 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
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 for purchases of rental
furniture. The Company purchases furniture throughout each year to replace
furniture which has been sold and to maintain adequate levels of rental
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)
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 leasehold improvements, warehouse and
office equipment, standard programming enhancements and computer hardware. Net
purchases of property, plant and equipment were $1,708 and $1,869 in the three
months ended March 31, 1997 and 1998, respectively.
During the three months ended March 31, 1997 and 1998, net cash provided by
operations was $22,657 and $23,783, respectively. During the three months ended
March 31, 1997 and 1998, net cash used by investing activities was $35,717 and
$31,961, respectively, consisting primarily of purchases of rental furniture and
portfolio acquisitions. During the three months ended March 31, 1997 and 1998,
net cash provided by financing activities was $12,937 and $9,600 respectively.
The Company is required to make semi-annual interest payments, in arrears on
March 1 and September 1, of approximately $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 on September 1, 2000.
CFR has available a revolving line of credit of $75,000 to meet acquisition and
expansion needs as well as seasonal working capital and general corporate
requirements. CFR had borrowings of $22,200 under the line of credit at March
31, 1998.
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. 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 $35 million for such
periods (including interest through December 31, 1997). 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.
Forward-Looking Statements
In addition to historical information, this Quarterly Report on Form 10-Q
includes certain forward-looking statements as such term is defined in Section
27A of the Securities Act and Section 21E of the Exchange Act. These
forward-looking statements involve certain risks and uncertainties, including
but not limited to acquisitions, additional financing requirements, development
of new products and services, purchases of rental property, the effect of
competitive products and pricing and the effect of general economic conditions,
that could cause actual results to differ materially from those in such
forward-looking statements.
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 15, 1998 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
<TABLE>
<CAPTION>
Exhibit
Number Description Page
------ ----------- ----
<S> <C> <C> <C>
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 Amendment to Restated Certificate of Incorporation; incorporated
by reference to Appendix A to the Company's Definitive Proxy
Statement on Schedule 14A, filed as of March 31, 1997
3.3 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
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
</TABLE>
E-1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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 February 13, 1998 by and among CFR,
the Company, the lenders identified therein, and NationsBank,
N.A., as agent; incorporated by reference to Exhibit 10.1 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997
10.2 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
10.3 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
10.4 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
10.5 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
10.6 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
10.7 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
10.8 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
10.9 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
10.10 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
</TABLE>
E-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10.11 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
10.12 Amended and Restated CORT Business Services Corporation 1995
Directors Stock Option Plan adopted by the Board of Directors
October 18, 1995 and amended and restated on May 14, 1997;
incorporated by reference to Exhibit 10.13 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 1997
10.13 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
10.14 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
10.15 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
10.16 Amended and Restated CORT Business Services Corporation 1995 Stock
Based Incentive Compensation Plan as adopted by the Board of
Directors on July 25, 1995 and amended and restated on May 14,
1997; incorporated by reference to Exhibit 10.17 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June
30, 1997.
10.17 CORT Business Services Corporation 1997 Directors Stock Option
Plan, as adopted by the stockholders of the Company at the Annual
Meeting of Stockholders on May 14, 1997; incorporated by reference
to Appendix C to the Company's Definitive Proxy Statement on
Schedule 14A, filed as of March 31, 1997
11.1 Statement re computation of per share earnings; incorporated by
reference to page 5 of the Company's Form 10-Q for the fiscal
quarter ended March 31, 1998
27 Financial Data Schedules
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> MAR-31-1998 MAR-31-1997
<CASH> 1,422 0
<SECURITIES> 0 0
<RECEIVABLES> 16,393 16,041
<ALLOWANCES> 3,071 1,989
<INVENTORY> 170,213 157,006
<CURRENT-ASSETS> 0 0
<PP&E> 55,400 59,429
<DEPRECIATION> 15,820 23,181
<TOTAL-ASSETS> 294,485 268,880
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 130 128
<OTHER-SE> 156,699 130,136
<TOTAL-LIABILITY-AND-EQUITY> 294,485 268,880
<SALES> 12,629 11,748
<TOTAL-REVENUES> 75,443 67,301
<CGS> 7,615 6,908
<TOTAL-COSTS> 18,702 17,540
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 151 301
<INTEREST-EXPENSE> 1,967 1,985
<INCOME-PRETAX> 10,608 8,426
<INCOME-TAX> 4,417 3,496
<INCOME-CONTINUING> 6,191 4,930
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 6,191 4,930
<EPS-PRIMARY> .48 .39
<EPS-DILUTED> .46 .37
</TABLE>
