11/9/2004

SIRVA Reports Third Quarter Results

Operating income from continuing operations in the third quarter was $44.5 million compared to $55.4 million for the comparable 2003 period. Income from continuing operations for the quarter was $25.9 million, versus $27.2 million last year. Earnings per share from continuing operations in the quarter were $0.34 versus $0.45 in the comparable period last year.

Third quarter results were primarily impacted by a $15.2 million charge to increase insurance loss reserves in addition to difficult operating conditions in Europe. The company noted that its core North American relocation business, its largest segment, continued to perform very well in the third quarter, both in terms of industry share and operating income.

Operating losses and charges in the third quarter from discontinued operations, comprised of the company’s three logistics businesses that were classified as held-for-sale at September 30, 2004, were $26.4 million.  This includes $24.8 million of asset impairments, facility lease impairments and severance charges ($15.5 million after tax) associated with the planned disposal of these businesses. 

“We are moving aggressively to address the two issues that impacted our third quarter performance – insurance and European operations,” said Brian Kelley, president and chief executive officer of SIRVA. “Our North American Relocation Solutions segment continues to perform well, with strong results from both relocation and moving services, reflecting the traction we continue to gain in the industry.” During the third quarter, he added, the company won a number of significant new corporate relocation clients, including Textron, QUALCOMM and 3M, building a strong base for initiations growth in 2005.

Because of the strong growth of its core relocation solutions business and the steps taken to address issues in insurance and Europe, the company said that it felt comfortable in reaffirming its fundamental long-term EPS growth profile of 20 percent-plus per annum. After recalibrating its 2005 EPS guidance, the company also expects its earnings to be approximately $1.25 to $1.30 per share, driven by an expected 40 percent-plus increase in operating income from Relocation Solutions – North America. Due to the higher reserves for insurance claims and continued poor market conditions in Europe, the company is revising its 2004 earnings guidance to $0.85 - $0.87 per share from continuing operations.

Relocation Solutions – North America

SIRVA’s largest business segment, Relocation Solutions – North America, which includes Relocation Services and Moving Services, grew net revenue by 21 percent and operating income by 40 percent in the third quarter. Relocation Services continued its momentum, as fixed fee initiations grew 32 percent in the quarter, driving net revenue growth of 35 percent. Relocation Services provides corporate clients with a range of services to support employees required to relocate, including home sales and purchases, mortgage origination, facilitating integration into the new locale, administering the relocation program, and managing the move of household goods.

Moving Services had net revenue growth of 12 percent, reflecting strong peak season demand. Overall shipment volumes increased 2 percent, while corporate shipments increased by 10 percent. In addition, overall revenue per shipment was up 8 percent on a 12 percent increase in consumer revenue per shipment.

Relocation Solutions – Europe and Asia Pacific

The Relocation Solutions – Europe and Asia Pacific segment had third quarter net revenue growth of 10 percent. Excluding the positive effects of currency translation and acquisitions, net revenue declined 5 percent for the quarter primarily due to deteriorating market fundamentals in Europe, which accelerated in the third quarter. The company has implemented a number of aggressive actions to improve margins in its European operations, including management realignment, reducing costs and paring down network capacity. The impact of these actions will begin to take effect by the first quarter of 2005.

Network Services

Network Services, which provides a wide range of insurance, driver and fleet services to moving agents, independent owner operators and small truck fleets, posted revenue growth of 26 percent year over year, or 14 percent organically.

During the quarter, the company increased its insurance loss reserves by approximately $15.2 million to reflect adverse loss development in certain lines of business. The company expects that insurance will remain a stable, profitable, but smaller business because of its actions to discontinue or cap new policies in certain business lines while raising premiums and increasing the use of reinsurance.

Logistics Divestitures

The company continued to move forward with its strategy to simplify its business model by divesting non-core logistics businesses that are now reported as Discontinued Operations. The company completed the sale of its High Value Products Division, a component of its Specialized Transportation North America unit on October 30, 2004 and expects to complete the sale of its European counterpart by the first quarter of 2005. In addition, the company expects to dispose of its Transportation Solutions business in the first half of next year.

Summary

Mr. Kelley said, “SIRVA’s core relocation business in North America will continue to be the growth engine of the company’s revenue, earnings and cash flow. We are taking the right steps in our insurance business and in our European operations. And we remain confident that our core business and strategy are very much on track to meet our stated long-term growth target of 20 percent-plus EPS growth.”

Use of Non-GAAP Financial Measures

In an effort to provide investors with additional information regarding SIRVA’s results as determined by generally accepted accounting principles (GAAP), the company also discloses certain non-GAAP financial measures within the meaning of Regulation G under the federal securities laws, including operating revenue less purchased transportation expense (PTE), or net revenue, return on invested capital and free cash flow. Management believes this information is of interest to investors and facilitates more useful period-to-period comparisons of the company’s financial results. Pursuant to the requirements of Regulation G, the company has attached reconciliations of these measures to the most directly comparable GAAP financial measures. In addition, the Form 8-K furnished to the Securities and Exchange Commission today provides detailed information on additional non-GAAP financial measures and, as appropriate, a reconciliation of the measure to the most directly comparable GAAP measure.

Webcast

SIRVA will hold a conference call to discuss its results for the third quarter ended September 30, 2004, at 5 p.m. Eastern Time (ET) on Tuesday, November 9. SIRVA’s call will be Webcast by CCBN and can be accessed through the investor relations portion of SIRVA’s Web site at www.sirva.com. It also will be distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN’s individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected event management site, StreetEvents, at www.streetevents.com. A replay of the call will be available through the investor relations portion of SIRVA’S Web site starting at 8 p.m. ET on November 9.

About SIRVA, Inc.

SIRVA, Inc. is a leader in providing relocation solutions to a well-established and diverse customer base around the world. The company is the leading global provider that can handle all aspects of relocations end-to-end within its own network, including home purchase and home sale services, household goods moving, mortgage services and insurance. SIRVA conducts more than 365,000 relocations per year, transferring corporate and government employees and moving individual consumers. The company operates in more than 40 countries with approximately 8,000 employees and an extensive network of agents and other service providers. SIRVA’s well-recognized brands include Allied, northAmerican, Global, and SIRVA Relocation in North America; Pickfords, Huet, Kungsholms, ADAM, Majortrans, Allied Arthur Pierre, Rettenmayer, and Allied Varekamp in Europe; and Allied Pickfords in the Asia Pacific region. More information about SIRVA can be found on the company’s Web site at www.sirva.com.

Major Business Lines

Relocation Solutions – North America

This segment is SIRVA’s largest business unit and sells to customers in North America under the Allied, Global, northAmerican and SIRVA Relocation brands. The services it provides include home purchase and home sale services, household goods moving, mortgage services, appraisal and title services, expense management, expatriate services and high-value products moving.

Relocation Solutions – Europe & Asia Pacific

This segment provides the same services as Relocation Solutions – North America to customers in Europe and Asia under the ADAM, Allied Pickfords, Arthur Pierre, Kungsholms, Huet, Majortrans, and Pickfords brands.

Network Services

This segment offers a wide range of services – including insurance, fleet maintenance programs, equipment and fuel purchasing and legal/tax services – to moving and storage agents, independent owner-operators and small truck fleets under the NAIT, TransGuard and Vanguard brands.

Forward-Looking Statements

This release includes statements that constitute forward-looking statements within the meaning of the U. S. Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “includes,” “plans,” “assumes,” “will,” “estimates,” “projects,” “intends,” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon SIRVA, Inc. and its subsidiaries. There can be no assurance that future developments affecting SIRVA, Inc. and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including without limitation the factors described under the caption “Business-Investment Considerations” and other risks described in SIRVA, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2003, filed with the Securities and Exchange Commission on March 26, 2004. SIRVA, Inc. does not intend, and is under no obligation, to update any particular forward-looking statement included in this release. Readers should consider the information referred to above when reviewing forward-looking statements contained in this release.

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