CONTACT: David D. HoguetFOR IMMEDIATE RELEASE
(513) 771-8287
GLOBE BUSINESS RESOURCES RELEASES
FOURTH QUARTER AND FULL-YEAR EARNINGS AND
ANNOUNCES AMENDMENT TO MERGER AGREEMENT
CINCINNATI, May 10, 2000 - Globe Business Resources, Inc. (NASDAQ:GLBE)
reported today that for the year ended February 29, 2000, diluted earnings per
share were 51(cent) (71(cent) before non-recurring items), as compared with
$1.10 for the year ended February 28, 1999. Revenues of $157.7 million for
fiscal 2000 increased 7% from $147.5 million for fiscal 1999. Corporate housing
revenues, aided by acquisitions, reached $101.9 million, a 17% increase over
fiscal 1999, while rental revenues of $39 million were 10% below fiscal 1999 and
retail revenues of $16.9 million were flat compared to fiscal 1999. Excluding
revenues from the Castleton and Corporate Condominiums acquisitions consummated
in the fourth quarter of fiscal 1999 and the first quarter of fiscal 2000,
corporate housing revenues in fiscal 2000 were 6% below the fiscal 1999 level.
For the fourth quarter, seasonally the weakest quarter of the year, diluted
earnings per share were a loss of 7(cent) (a loss of 4(cent) before
non-recurring items) in fiscal 2000, down from earnings of 21(cent) per share
for the fourth quarter of fiscal 1999. Revenues of $35.1 million for the fiscal
2000 fourth quarter were 4% below the fourth quarter of fiscal 1999. Fiscal 2000
fourth quarter retail revenues of $4.9 million were 34% above the fiscal 1999
fourth quarter, while rental revenues of $9.1 million were 11% below the fiscal
1999 fourth quarter levels. Corporate housing revenues of $21.1 million were
down 8% (17% excluding the Castleton and Corporate Condominiums acquisitions)
from the fiscal 1999 fourth quarter level, reflecting a slowdown in business
attributable to a decrease in Y2K compliance projects as well as the absence of
a large U.S. Navy project that contributed approximately $1.3 million to fiscal
1999 fourth quarter revenues.
Fourth quarter earnings were lower than anticipated. These developments
resulted in Globe entering into an Amended and Restated Agreement and Plan of
Merger with Equity Residential Properties Trust (NYSE:EQR). This agreement
continues to provide for the sale of Globe for $13.00 per share (cash) upon
closing but eliminates the potential post closing payment of up to $.50 per
share, which was contingent upon final determination of costs, if any, relating
to any potential breaches of certain representations and covenants contained in
the Merger Agreement. Globe expects to file an amended proxy statement with the
SEC this week reflecting these revised terms. The merger must be approved by
Globe shareholders and is subject to customary closing conditions. A special
meeting of shareholders to consider adoption of the merger with Equity is now
scheduled to be held at 10:00 a.m. Eastern Time on June 29, 2000. The record
date for shareholders entitled to notice of and to vote at the meeting is May
12, 2000.
Globe Business Resources, Inc., is a leading consolidator in the temporary
relocation industry. Doing business as Globe Corporate Stay International, the
Company is the third largest operator in the corporate housing market, providing
fully furnished short-term housing through an inventory of leased housing units
to relocated, transferred and temporary personnel. Doing business as Globe
Furniture Rentals, the Company is the third largest operator in the rent-to-rent
segment of the furniture rental business renting and selling quality office and
residential furniture to a variety of corporate and individual customers.
# # #
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995
Statements contained in this press release that are not historical
facts constitute forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995, and are intended to be covered by the
safe harbors created by that Act. Reliance should not be placed on
forward-looking statements because they involve risks, uncertainties and other
factors which may cause actual results to differ materially from those expressed
or implied.
These include, without limitation, factors discussed in conjunction with a
forward-looking statement, risks involved in integrating the furniture rental
and corporate housing businesses under a regional management structure,
penetrating new markets, integrating acquired businesses and maintaining large
customer contracts, and the potential loss of furniture rental revenues from
competing corporate housing companies that are also customers.
Any forward-looking statement speaks only as of the date made. The Company
undertakes no obligation to update any forward-looking statements to reflect
events or circumstances arising after the date on which they are made.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data) Fourth Quarter Ended February 28/29 Twelve Months Ended February 28/29
- ------------------------------------------------------------------------------------------------------------------------------------
2000 1999 % 2000 1999 %
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Revenues
Corporate housing sales $ 21,100 $ 22,867 -7.7% $ 101,865 $ 87,248 16.8%
Rental sales -10.5% 38,965 -10.2%
9,097 10,165
Retail sales 33.7% 16,850 0.2%
4,884 3,652 16,818
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-4.4% 157,680 6.9%
35,081 36,684 147,450
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Cost of Sales
Cost of corporate housing sales -7.1% 15.3%
15,665 16,863 71,679 62,181
Cost of rental sales 11.1% 13.0%
934 841 3,874 3,428
Cost of retail sales 60.2% 6.2%
2,919 1,822 10,587 9,966
Furniture depreciation and disposals 2.3% 12.0%
2,269 2,218 9,721 8,680
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0.2% 95,861 13.8%
21,787 21,744 84,255
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Gross Profit (a) -11.0% -2.2%
13,294 14,940 61,819 63,195
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Operating expenses (b) 5.2% 50,284 4.4%
12,022 11,430 48,181
Amortization of intangible assets 6.7% 22.5%
625 586 2,491 2,034
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5.3% 5.1%
12,647 12,016 52,775 50,215
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Operating Income -77.9% 9,044 -30.3%
647 2,924 12,980
Interest and other expenses 2.4% 4,833 10.1%
1,215 1,187 4,389
Income Before Income Taxes -132.7% -51.0%
(568) 1,737 4,211 8,591
Provision for income taxes -128.2% -49.5%
(215) 763 1,735 3,437
- ------------------------------------------------------------------------------------- ----------------------------------------------
- ------------------------------------------------------------------------------------- ----------------------------------------------
Net Income $ (353) $ 974 -136.2% $ 2,476 $ 5,154 -52.0%
- ------------------------------------------------------------------------------------- ----------------------------------------------
Earnings Per Common Share
Basic $ (0.07) $ 0.21 -133.3% $ 0.52 $ 1.13 -54.0%
- ------------------------------------------------------------------------------------- ----------------------------------------------
- ------------------------------------------------------------------------------------- ----------------------------------------------
Diluted $ (0.07) $ 0.21 -133.3% $ 0.51 $ 1.10 -53.6%
- ------------------------------------------------------------------------------------- ----------------------------------------------
Weighted Average Number Of
Common Shares Outstanding
Basic 2.7% 4.8%
4,803 4,677 4,799 4,578
- ------------------------------------------------------------------------------------- ----------------------------------------------
- ------------------------------------------------------------------------------------- ----------------------------------------------
Diluted 1.9% 4,836 3.1%
4,834 4,743 4,689
- ------------------------------------------------------------------------------------- ----------------------------------------------
Operating Income excluding
nonrecurring expenses and
amortization of intangible assets -56.7% -12.2%
1,520 3,510 13,175 15,014
Earnings Per Common Share
excluding nonrecurring expenses
Basic $ (0.04) $ 0.21 -118.8% $ 0.72 $ 1.13 -36.3%
----------------- ---------------
Diluted $ (0.04) $ 0.21 -118.9% $ 0.71 $ 1.10 -35.3%
- ------------------------------------------------------------------------------------- ----------------------------------------------
(a) Includes nonrecurring ($240) in the twelve months ended February 29, 2000.
(b) Includes nonrecurring expenses of $248 in the fourth quarter ended February
29, 2000 and $1,400 in
the twelve months ended February
29, 2000.
FOURTH QUARTER REPORT
OF FISCAL 2000