[LETTERHEAD OF CB RICHARD ELLIS]
EXHIBIT 99.1
P R E S S R E L E A S E
- -------------------------
FOR IMMEDIATE RELEASE -- 23 May 2001
For further information:
Joseph Fitzpatrick
Executive Vice President
CB Richard Ellis
213-683-4317
CB RICHARD TO IMPLEMENT COST REDUCTION PROGRAMS
Company Expects to Realize $35-$40 Million in Operational Savings for Fiscal
Year 2001
Los Angeles, CA (23 May 2001)
CB Richard Ellis, Inc. (NYSE:CBG) today announced it will implement programs
expected to reduce budgeted expenses for the remainder of 2001 by approximately
$35 to $40 million, excluding one-time severance costs. The cost-reduction
initiatives are being implemented effective immediately as a result of a recent
decline in revenues congruent with the overall decline of commercial real estate
activity. Operational savings will be the result of targeted reductions in
workforce, reduced senior management bonus compensation, continued streamlining
of back-office operations as well as cuts in areas of budgeted, discretionary
operating expense across the organization. Work force reductions are expected to
be completed in the third quarter.
"In the latter part of the first quarter of 2001, our business was adversely
affected by a slowdown in the U.S. economy in general, and certain local and
regional U.S. economies in particular, which have led to deteriorating
commercial real estate market conditions," said Ray Wirta, Chief Executive
Officer of CB Richard Ellis.
The company noted first quarter results reflecting a strong January followed by
a slowdown in U.S. sales activities beginning in February and a slowdown in U.S.
lease activities beginning in March. Revenues for Europe and Asia were also
lower than expected. Weakened sales and lease activity continued into the second
quarter with preliminary internal figures indicating operating results for April
2001 as considerably below operating results for both the month of April 2000
and the month of March 2001.
The company's reduction in work force combined with a hiring freeze is expected
to yield a savings of approximately $8 million to $10 million in 2001.
Initiatives focused on streamlining of back-office operations and reductions in
discretionary expense, as well as a decrease in senior management bonuses as a
result of weakened sales, are expected to result in approximately $7 to $10
million and approximately $20 million of realized savings in 2001, respectively.
- more -
CB Richard Ellis Press Release
23 May 2001
Said Wirta, "Our organization remains highly responsive to changing market
conditions. As with past expense control initiatives, we are confident that
these results will achieve our desired intent."
ABOUT CB RICHARD ELLIS
CB Richard Ellis (NYSE:CBG) is the world's leading real estate services company.
Headquartered in Los Angeles with 10,000 employees worldwide, the company serves
real estate owners, investors and occupiers through nearly 250 offices in 44
countries. Services include property sales and leasing, property management,
corporate services, facilities management, commercial mortgage services,
investment management, appraisal/valuation, research and consulting. CB Richard
Ellis had 2000 revenues of $1.3 billion. For more information about CB Richard
Ellis, visit the company's website at www.cbre.com.
------------
This release contains forward-looking statements concerning expectations for
future cost reductions and earnings performance. These statements reflect the
company's current plans and expectations and are based on information currently
available to it. They rely on a number of assumptions and estimates, which could
prove to be inaccurate, and which are subject to risks and uncertainties that
could cause the company's actual results to vary materially from the results
anticipated. CB Richard Ellis undertakes no obligation to update publicly or
revise any forward-looking statements. These statements are qualified by
reference to the company's 2000 Annual Report and Form 10-K and its quarterly
reports on Form 10-Q.
CB Richard Ellis filed a preliminary proxy statement regarding its proposed
merger with BLUM CB Corp. on April 12, 2001, and will file a definitive proxy
statement regarding the merger when it is available. Information regarding the
identity of persons who, under rules of the Securities and Exchange Commission,
may be considered participants in the solicitation of proxies from stockholders
of CB Richard Ellis, and those persons' holdings of securities of CB Richard
Ellis, are included in the preliminary proxy statement. Stockholders of CB
Richard Ellis are urged to read the definitive proxy statement regarding the
merger when it is available, because it will contain important information.
Copies of the proxy statements and related Rule 13e-3 Transaction Statement on
Schedule 13E-3 may be obtained for free at the Securities and Exchange
Commission web site at www.sec.gov. These documents may also be obtained for
-----------
free from CB Richard Ellis. Requests for copies should be directed to CB Richard
Ellis Services, Inc., 505 Montgomery St., Sixth Floor, San Francisco, Calif.
94111, Attention: Walter Stafford, Secretary.
# # #