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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: April 30, 2003
(Date of earliest event reported)
Commission File Number 1-14373
INSIGNIA FINANCIAL GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 56-2084290
(State of Incorporation) (I.R.S. Employer
Identification No.)
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
(212) 984-8033
(Registrant's Telephone Number, Including Area Code)
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ITEM 9. REGULATION FD DISCLOSURE AND ITEM 12. RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
A debt offering circular disseminated today by CBRE Holding, Inc. ("CBRE
Holding") in connection with the financing of its pending acquisition of
Insignia Financial Group, Inc. ("Insignia") contains preliminary financial data
regarding Insignia's quarter ended March 31, 2003. The disclosure in CBRE
Holding's offering circular, in its entirety, is as follows:
"Insignia's preliminary unaudited consolidated revenue was
$133.5 million for the first quarter of 2003, representing an
increase of $9.4 million or 8% over the corresponding period in 2002.
Substantially all of the revenue increase in 2003 was attributed to
Insignia's service operations in the United States and the United
Kingdom. Conversely, Insignia incurred a preliminary unaudited
consolidated operating loss of approximately $10.0 million for the
first quarter of 2003, compared to operating income of $97,000 for
the corresponding period in 2002. The operating loss for the first
quarter of 2003 was impacted by approximately $2.0 million of merger
related expenses incurred for legal advice and other services in
connection with the potential acquisition of Insignia by CBRE
Holding. Insignia's results for the first quarter of 2002 have been
restated to exclude the operations of Insignia's residential real
estate services subsidiaries, Insignia Douglas Elliman LLC and
Insignia Residential Group LLC, which were sold on March 14, 2003.
See "--Sale of Insignia Douglas Elliman LLC and Insignia Residential
Group LLC." The operating results of these businesses for the period
from January 1, 2003 to March 14, 2003 and the first quarter of 2002
will be reported by Insignia as discontinued operations for financial
reporting purposes.
"In the United States, service income of Insignia in 2003
declined by $5.1 million from $3.6 million for the first quarter of
2002 to a loss of $1.5 million for the corresponding period in 2003.
The largest factor affecting service income was a change in the bonus
plan for the New York consulting group that caused the acceleration
of annual bonus compensation on a ratable basis across the year,
thereby increasing expense by over $3.0 million in the first quarter
of 2003, as compared to the corresponding period in 2002. In prior
periods, bonuses payable to the consulting group were earned and
expensed based solely on the consulting group's performance, which
was nominal for the first quarter of 2002. Other contractual bonuses
to certain key producers contributed a further $1.0 million to the
quarter over quarter decline. In Europe, service income declined by
$2.9 million from $3.2 million in the first quarter of 2002 to
$282,000 for the corresponding period in 2003, primarily as a result
of lower earnings in France, Spain and Germany compared to the
corresponding period in 2002.
"The preliminary unaudited consolidated financial results
for the first quarter of 2003 for CBRE Holding and Insignia are not
final, and, as such, CBRE Holding and Insignia have not concluded
their internal certification process nor have their respective
auditors completed their review of such results. These preliminary
unaudited consolidated operating results disclosed above could change
and such changes could be material."
The financial results disclosed today are not final. Insignia has not
determined the adequacy of
accruals for litigation and claims or completed its impairment analyses of
investment properties, its analytical review of year-to-year changes or its
processes for internal certification of first quarter results and acceptance by
senior management. Insignia's auditors have also not completed their review of
first quarter results.
Insignia expects the financial results disclosed in the CBRE offering
circular to be adjusted prior to Insignia's financial statements being issued
for the quarter. Insignia expects to publicly file its final first quarter 2003
financial results on or about May 14, 2003.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
INSIGNIA FINANCIAL GROUP, INC.
By: /s/ Adam B. Gilbert
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Adam B. Gilbert
Executive Vice President
DATE: April 30, 2003