Acquisition Boosts Revenue at Koll Management Services

Koll Management Services Inc., one of the nation’s largest managers of commercial property, said its revenue increased 46% in fiscal 1994.

The Newport Beach-based company attributed its revenue boost to the acquisition of Rubloff Inc., a Chicago property manager, which added 30 million square feet of properties, boosting its current portfolio to about 120 million square feet in more than 600 properties nationwide.

For the year ending March 31, Koll revenue was $56.7 million, compared to the $38.9 million reported for fiscal 1993. Net income during the year was $3 million, or 93 cents a share, compared with $2.7 million, or 82 cents a share, the previous year.

“This was an extraordinary year of growth and evolution for our company,” said William Rothe, president of Koll Management Services, which was spun off two years ago from the privately owned Koll Co., a development company formed in 1962 by Don Koll. Koll Co. retains a majority stake in Koll Management Services.

Despite its upbeat tone, Monday’s announcement did not do much for Koll stock because the company had earlier announced year-end estimates. The company’s shares did not trade Monday on Nasdaq; it’s last price was $10.75 per share on Friday.

“The earnings sure look good, but you wonder whether this is a onetime shot in the arm and they fall back, or if is this a long-term thing?,” said Mark Matheson, an analyst with Crowell, Weedon & Co., a Los Angeles investment banking firm.

For the fourth quarter, Koll revenue increased 65% to $17 million, compared with revenue of $10.3 million for the year-ago period. Net income rose to $956,000, or 30 cents a share, up from net income of $599,000, or 18 cents a share, in the fourth quarter of fiscal 1993.

During the year, Koll acquired Peregrine White Co., a leasing and appraisal firm based in New York City for $1.5 million and purchased Karsten Realty Advisors of Los Angeles, another property management company, for $1.22 million. But its single largest purchase was the Chicago commercial developer Rubloff Inc., giving Koll a major presence in the Midwest, Southeast and Southwest.

And the company will likely have more acquisitions this year.

“Consistent with our strategy of taking advantage of windows of opportunity and low barriers of entry, we continue to evaluate new lines of business while building the infrastructure necessary to expand into new markets,” Rothe said.

Koll Management Services

In the fourth quarter ended March 31, Koll Management Services reported net income of $956,000, up 60% over the same period a year ago. Fourth-quarter revenue increased 65% to $17 million. (Figures in millions of dollars, except per-share data:)

4th qtr. 4th qtr. 12 months 12 months 1993 1994 1993 1994 Revenue $10,278 $16,962 $38,924 $56,741 Net income 599 956 2,701 2,987 Per share * 0.18 0.30 0.82 0.93

* Fourth quarter 1994 earnings per share based on 5% fewer average shares outstanding, due to second quarter stock repurchase. Source: Koll Management Services; Researched by JANICE L. JONES / Los Angeles Times