-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MphabfKi6hY43KfgpJbzswdz4iAFsMeFoWM0/ycS2a86IIU2nunPfpLZGy/QE3Z7 h2lB2a0LCFegHWVCjcUsIA== 0000950164-97-000332.txt : 19971117 0000950164-97-000332.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950164-97-000332 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORT BUSINESS SERVICES CORP CENTRAL INDEX KEY: 0000905401 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 541662135 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14146 FILM NUMBER: 97722176 BUSINESS ADDRESS: STREET 1: 4401 FAIR LAKES CT STE 300 CITY: FAIRFAX STATE: VA ZIP: 22033 BUSINESS PHONE: 7039688500 MAIL ADDRESS: STREET 1: 4401 FAIR LAKES COURT STE 300 STREET 2: 4401 FAIR LAKES COURT STE 300 CITY: FAIRFAX STATE: VA ZIP: 22033 FORMER COMPANY: FORMER CONFORMED NAME: NEW CORT HOLDINGS CORP DATE OF NAME CHANGE: 19930825 10-Q 1 FORM 10-Q ================================================================================ 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 September 30, 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. Class Outstanding as of November 10, 1997 Class A, $.01 par value Class B, $.01 par value 12,854,938 - 0 - ================================================================================ CORT BUSINESS SERVICES CORPORATION INDEX TO FORM 10-Q Page No. Part I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Condensed Consolidated Balance Sheets 1 Unaudited Condensed Consolidated Statements of Operations 2 Unaudited Condensed Consolidated Statements of Cash Flows 3 Notes to Unaudited 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 9 SIGNATURE 10 CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
December 31, September 30, 1996 1997 ---- ---- ASSETS (unaudited) Cash and cash equivalents................................................... $ 123 $ 452 Accounts receivable, net.................................................... 11,011 14,302 Prepaid expenses............................................................ 4,224 4,105 Rental furniture, net....................................................... 147,161 165,109 Property, plant and equipment, net.......................................... 35,667 37,709 Other receivables and assets, net........................................... 3,815 2,904 Goodwill, net............................................................... 45,198 52,128 ------ ------- Total assets............................................................. $247,199 $276,709 ======= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable............................................................ $ 4,157 $ 5,097 Accrued expenses............................................................ 27,491 29,708 Deferred revenue and security deposits...................................... 14,358 16,650 Revolving credit facility, secured ......................................... 15,600 21,800 Senior notes, 12%........................................................... 50,000 49,932 Deferred income taxes....................................................... 10,441 10,441 ------ ------ 122,047 133,628 Stockholders' equity........................................................ 125,152 143,081 ------- ------- Total liabilities and stockholders' equity............................... $247,199 $276,709 ======= =======
See accompanying notes to unaudited condensed consolidated financial statements. - 1 - CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------- ------------------------- 1996 1997 1996 1997 ---- ---- ---- ---- Revenue: Furniture rental...................... $ 53,707 $ 61,135 $139,144 $ 176,367 Furniture sales....................... 10,900 12,253 32,340 38,803 ------ ------ ------ ------ Total revenue....................... 64,607 73,388 171,484 215,170 Operating costs and expenses: Cost of furniture rental.............. 10,175 11,582 26,803 33,597 Cost of furniture sales............... 6,537 7,377 19,115 23,474 Selling, general and administrative expenses........... 37,865 42,326 100,159 123,842 ------ ------ ------- ------- Total costs and expenses............ 54,577 61,285 146,077 180,913 ------ ------ ------- ------- Operating earnings.................. 10,030 12,103 25,407 34,257 Interest expense......................... 2,192 2,125 6,237 6,363 ----- ----- ----- ----- Income before income taxes............ 7,838 9,978 19,170 27,894 Income taxes............................. 3,247 4,102 7,936 11,481 ----- ----- ----- ------ Net income............................ $ 4,591 $ 5,876 $ 11,234 $ 16,413 ====== ====== ====== ====== Earnings per share....................... $0.35 $0.43 $0.93 $1.20 Weighted average number of shares used in computation............ 12,976 13,758 12,075 13,674
See accompanying notes to unaudited condensed consolidated financial statements. - 2 - CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Nine Months Ended September 30, ------------- 1996 1997 ---- ---- Cash flows from operating activities: Net income............................................................... $ 11,234 $ 16,413 Proceeds of disposals of rental furniture in excess of gross profit................................................. 18,280 21,241 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization: Rental furniture depreciation ......................................... 19,290 25,186 Other depreciation and amortization.................................... 2,698 3,559 Goodwill amortization.................................................. 668 1,137 Amortization of debt issuance costs.................................... 518 540 Rental furniture inventory shrinkage.................................. 1,728 2,366 Changes in operating accounts, net.................................... 5,533 4,468 ----- ----- Net cash provided by operating activities.............................. 59,949 74,910 ------ ------ Cash flows from investing activities: Purchases of rental furniture............................................ (65,245) (62,710) Purchases of portfolio acquisitions...................................... (467) (13,041) Purchases of property, plant and equipment............................... (5,272) (6,361) Sales of property, plant and equipment................................... 461 900 Purchase of Evans Rents.................................................. (27,737) - Purchase of assets of Apartment Furniture Rental..................................... (9,269) - ------ ------- Net cash used by investing activities.................................. (107,529) (81,212) -------- ------ Cash flows from financing activities: Issuance of common stock................................................. 32,748 499 Borrowings on the line of credit......................................... 75,853 56,512 Repayments on the line of credit......................................... (59,353) (50,312) Repayments of long term debt............................................. (573) (68) --- -- Net cash provided by financing activities.............................. 48,675 6,631 ------ ------ Net increase in cash and cash equivalents.............................. 1,095 329 Cash and cash equivalents at beginning of period............................ 379 123 ------ ------ Cash and cash equivalents at end of period.................................. $ 1,474 $ 452 ======== ====== Supplemental disclosures of cash flow information: Tax benefit from exercise of stock options............................... $ -- $ 1,017 Interest paid............................................................ 7,084 7,231 Income taxes paid........................................................ 5,643 8,471
See accompanying notes to unaudited condensed consolidated financial statements. - 3 - CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 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 September 30, 1997, and the results of their operations for the three and nine months ended September 30, 1997, and the cash flows for the nine months ended September 30, 1997 and 1996. The results of operations for the nine months ended September 30, 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, including expenses, was approximately $12.7 million, subject to certain adjustments, 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. 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 - CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollar figures in thousands) Certain information contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations contains foward-looking statements as such term is defined in Section 27A of the Securities Act and Sections 21E of the Exchange Act. Certain factors such as competition and general economic conditions could cause actual results to differ materially from those in forward-looking statements. Results of Operations Three months ended September 30, 1997 as compared to three months ended September 30, 1996 Revenue Total revenue increased 13.6% to $73,388 for the three months ended September 30, 1997 from $64,607 for the three months ended September 30, 1996. Furniture rental revenue for the quarter ended September 30, 1997 was $61,135, a 13.8% increase from $53,707 for the corresponding period in 1996. Rental revenue growth, adjusted for the impact of the 1996 Summer Olympics and the Company's Salt Lake City, New York City, and Trade Show acquisitions, was approximately 10%, which reflects growth in the number of leases as well as revenue per lease. Furniture sales increased 12.4% to $12,253. Operating Costs and Expenses Cost of furniture rental has remained constant at 18.9% of furniture rental revenue in 1996 and 1997. Cost of furniture sales increased from 60.0% of furniture sales revenue in 1996 to 60.2% of furniture sales revenue in 1997. Selling, general and administrative expenses totaled $42,326 or 57.7% of total revenue for the quarter ended September 30, 1997 as compared to $37,865 or 58.6% of total revenue for the quarter ended September 30, 1996. In 1996, the percentage of selling, general and administrative expenses to revenue was higher due to the impact of start up districts. Operating Earnings As a result of the changes in revenue, operating costs and expenses discussed above, operating earnings were $12,103 or 16.5% of total revenue in the third quarter of 1997 compared to $10,030 or 15.5% of total revenue in the third quarter of 1996. Nine months ended September 30, 1997 as compared to nine months ended September 30, 1996 Revenue Total revenue increased 25.5% to $215,170 for the nine months ended September 30, 1997 from $171,484 for the nine months ended September 30, 1996. Furniture rental revenue for the nine months ended September 30, 1997 was $176,367 a 26.8% increase from $139,144 for the nine months ended September 30, 1996. Rental revenue growth, adjusted for the impact of the 1996 Summer Olympics and before the impact of acquisitions, estimated by excluding the Company's California operations for the first six months and New York City, Salt Lake City and - 5 - CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Trade Show operations was approximately 13%, which reflects growth in the number of leases as well as revenue per lease. Furniture sales increased 20.0% to $38,803 in the nine months ended September 30, 1997 from $32,340 in the nine months ended September 30, 1996. Approximately 5% of this increase is due to an unusually large corporate sale in the second quarter of 1997. Operating Costs and Expenses Cost of furniture rental has decreased from 19.3% of furniture rental revenue in 1996 to 19.0% in 1997. Cost of furniture sales increased from 59.1% of furniture sales revenue in 1996 to 60.5% of furniture sales revenue in 1997. Without the unusually large corporate sale, cost of furniture sales for 1997 would be 59.6%. Selling, general and administrative expenses totaled $123,842 or 57.6% of total revenue for the nine months ended September 30, 1997 as compared to $100,159 or 58.4% of total revenue for the nine months ended September 30, 1996. Excluding $425 of certain charges associated with duplicate showrooms related to the Evans Rents acquisition, selling, general and administrative expenses for 1996 would have been 58.2% of total revenue. In 1996, the percentage of selling, general and administrative expenses to revenue was higher due to the impact of start up districts. Operating Earnings As a result of the changes in revenue, operating costs and expenses discussed above, operating earnings were $34,257 or 15.9% of total revenue for the nine months ended September 30, 1997 compared to $25,407 or 14.8% of total revenue for the nine months ended September 30, 1996. Excluding the charges related to the Evans Rents acquisition, operating earnings would have been 15.1% of total revenue for the nine months ended September 30, 1996. Furniture Purchases Furniture purchases totaled $62,710 in the nine months ended September 30, 1997, a decrease of 3.9% from the $65,245 purchased in the nine months ended September 30, 1996. In 1996, there were additional purchases for the Summer Olympics. - 6 - CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) 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 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 leasehold improvements, warehouse and office equipment, and computer hardware. Net purchases of property, plant and equipment were $4,811 and $5,461 for the nine months ended September 30, 1996 and 1997, respectively. During the nine months ended September 30, 1996 and 1997, net cash provided by operations was $59,949 and $74,910, respectively. During the nine months ended September 30, 1996 and 1997, net cash used in investing activities was $107,529 and $81,212, respectively. In 1996, approximately $27,737 was used for the acquisition of Evans Rents and in 1997, approximately $13,041 was used for portfolio acquisitions. The remaining cash used in investing activities consists primarily of purchases of rental furniture. During the nine months ended September 30, 1996 and 1997, net cash provided in financing activities was $48,675 and $6,631, respectively. In 1996, approximately $27,725 was borrowed to acquire Evans Rents. 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. 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 $21,800 under the Revolving Credit Facility at September 30, 1997. 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 - 7 - CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) 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. In June 1997, the Financial Accounting Standards Board issued Statement No. 130, "Reporting Comprehensive Income" ("Statement 130"). Statement 130 establishes standards for the reporting and display of comprehensive income and its components in the financial statements. The Company is required to adopt the provisions of Statement 130 for the year ending December 31, 1998. Earlier application is permitted; however, upon adoption of Statement 130, CORT will be required to reclassify previously reported annual and interim financial statements. CORT believes that the disclosure of comprehensive income in accordance with the provisions of Statement 130 will impact the manner of presentation of its financial statements as currently and previously reported. - 8 - 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. - 9 - 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: November 14, 1997 By: /s/ Frances Ann Ziemniak ----------------- ------------------------ Frances Ann Ziemniak Vice President, Finance, CFO & Secretary (Principal financial and principal accounting officer) - 10 - 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 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
E-1 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 10.8 CFR's Supplemental Executive Retirement Plan, dated October 28, 1992, as revised effective January 1, 1993, restated through the Second Amendment; E-2 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 10.10Letter 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 10.11Letter 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 10.12Employment 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 10.13Amended 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 10.14Equity 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 10.15Form 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 10.16Private 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 10.17Amended 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 10.18CORT 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 27 Financial Data Schedules E-3 EX-11 2 EXHIBIT 11.1 Exhibit 11.1 CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES COMPUTATIONS OF EARNINGS PER SHARE
Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 1996 1997 1996 1997 ---------- ---------- ----------- ----------- Net income applicable to common shares: Net income applicable to common shares $4,591,000 $5,876,000 $11,234,000 $16,413,000 ========= ========= ========== ========== Weighted average common shares outstanding for primary earnings per share: Average shares outstanding during the period 12,038,038 12,833,985 11,001,928 12,784,987 Unexercised stock options and warrants using the treasury stock method 938,444 923,734 1,072,805 889,274 ------- ------- --------- ------- Total weighted average common shares for primary earnings per share 12,976,482 13,757,719 12,074,733 13,674,261 ========== ========== ========== ========== Weighted average common shares outstanding for fully diluted earnings per common share: Average shares outstanding during the period 12,038,038 12,833,985 11,001,928 12,784,987 Unexercised stock options and warrants using the treasury stock method 955,883 956,778 1,107,260 985,767 ------- ------- ---------- ------- Total weighted average common shares for fully diluted earnings per share 12,993,921 13,790,763 12,109,188 13,770,754 ========== ========== ========== ========== Earnings per common share: Primary $ 0.35 $ 0.43 $ 0.93 $ 1.20 ========= ========= ========= ========= Fully diluted $ 0.35 $ 0.43 $ 0.93 $ 1.19 ========== ========= ========== =========
EX-27 3 FDS --
5 1,000 9-MOS DEC-31-1997 SEP-30-1997 452 0 17,056 2,754 165,109 0 51,251 13,542 276,709 0 0 0 0 129 142,952 276,709 38,803 215,170 23,474 57,071 0 1,426 6,363 27,894 11,481 16,413 0 0 0 16,413 1.20 1.19
-----END PRIVACY-ENHANCED MESSAGE-----