Central Parking Finance Trust PFD TR CV SECS (CRLKP)
Filed: 7 Aug 08, 12:00am
EXHIBIT 99.1
CHICAGO, Aug. 6, 2008 (PRIME NEWSWIRE) -- Standard Parking Corporation (Nasdaq:STAN), one of the nation's leading providers of parking management, ground transportation and other ancillary services, today announced second quarter 2008 earnings of $0.29 per share, as compared with $0.22 per share in the second quarter of 2007. Year to date free cash flow of $14.2 million is in line with the Company's full year expectation of $27 million to $30 million.
Second Quarter Highlights
* Total number of locations at the end of the second quarter up by 11% over the 2007 second quarter * Same location revenue growth of 3% (revenue figures exclude reimbursement of management contract expense) * Gross profit and operating income growth of 12% and 11%, respectively * Earnings per share increased to $0.29, a 32% increase as compared to the second quarter last year. $0.03 per share of the increase was the net effect of the favorable $2.0 million settlement of the Company's Hurricane Katrina insurance claim as offset by less favorable changes in insurance reserve estimates and an increase in the cost of post-retirement benefits. * Free cash flow of $11.3 million * Common stock repurchases of $5.1 million
2008 Full-Year Guidance Affirmed
* EPS expected to be in the range of $0.95 - $1.05 * Free cash flow expected to be in the range of $27 million - $30 million
James A. Wilhelm, President and Chief Executive Officer, said, "We are pleased that in the face of a challenging economy and elevated activity levels throughout our organization as new IT initiatives are rolled out and acquisitions are absorbed, the Company has turned in a solid performance for the first half of the year. Earnings per share increased by 32% for the quarter and 30% for the year to date. The Katrina settlement was partially offset by changes in prior year insurance reserve estimates and an increase in post-retirement benefit costs. Excluding these items, earnings per share increased 15% for the quarter and 26% for the first half of the year. This performance reinforces the belief that our management contract-based business model is well suited to minimize the impact of such economic conditions. I am pleased that the second quarter retention metrics remained strong, with location retention at 91% and gross profit retention at 97%, which suggest that our clients continue to recognize the excelle nt service that our employees consistently strive to deliver."
Wilhelm continued, "That said, in the second quarter, many of the parking facilities we operate did experience a decline in parking volume that correlates with general reports of a decline in travel and driving activity levels. Accordingly, we're not surprised to see a moderation in our gross profit growth as economic conditions impact some of our locations. We are proactively reviewing the staffing levels and operating expense structures at all of our locations to ensure that they are appropriate in light of these changing operating conditions."
Wilhelm ended by stating, "During these times, we are especially focused on the basic elements of our business that will drive continued improvement in the Company's financial performance. These include growing the number of locations as well as increasing gross profit per location by taking advantage of our management contracts' fee escalation provisions and selling additional services. We also continue to move forward with IT initiatives intended to improve operating efficiencies and reduce costs. Finally, we continue to deploy the Company's substantial free cash flow to pursue acquisitions and share buybacks."
Second Quarter Operating Results
Revenue for the second quarter of 2008, excluding reimbursed management contract expense, increased by 18% to $76.4 million from $64.5 million in the second quarter of 2007. Revenue growth reflected continuing organic location growth and also included $1.6 million received from the Company's Hurricane Katrina insurance claim. Revenue from same locations increased 3% year over year.
Gross profit in the quarter increased by 12% to $23.5 million from $21.1 million in the year ago quarter. This result includes $1.6 million of the $2.0 million total favorable Katrina settlement. In addition, the 2008 second quarter benefited from a $0.4 million favorable change in insurance loss reserve estimates relating to prior years, which was $0.2 million less than the $0.6 million favorable change in insurance loss reserve estimates for prior years recorded for the second quarter of 2007. The year to year comparison also is affected by the benefit received in the second quarter of 2007 from a $0.3 million insurance dividend. On a same location basis, second quarter gross profit increased by 2% year over year.
General and administrative expenses increased by 11% to $12.0 million in the second quarter of 2008 from $10.8 million in the second quarter of 2007. The increase was due in part to increased spending for productivity focused IT initiatives that is expected to be ongoing. Other G&A costs incurred in the second quarter, however, are not expected to recur in the second half of 2008. These other G&A costs include increases of $0.2 million in the annual stock grants to our Board of Directors and $0.4 million in the cost of post-retirement benefits. Partially offsetting these negative factors is a $0.4 million second quarter reduction in G&A attributable to the Katrina settlement. Excluding these items specific to the second quarter, G&A for the period was in line with recent quarters.
Total depreciation and amortization expense increased by $0.3 million in the second quarter of 2008 as compared with the same period last year due to the amortization of contract rights relating to acquisitions completed over the last twelve months. Operating income increased by 11% to $9.9 million.
Second quarter 2008 net interest expense decreased $0.5 million year over year due to lower interest rates during this time period. Resulting net income increased 21% to $5.3 million, or $0.29 per share, in the second quarter of 2008 from $4.4 million, or $0.22 per share, in the prior year, an increase of 32% on a per share basis.
The Company generated $11.3 million of free cash flow during the second quarter of this year, which was used to repurchase $5.1 million of common stock and to make debt repayments of $5.9 million. On a trailing twelve-month basis, free cash flow was $32.3 million as compared with $29.7 million for the twelve months ended June 30, 2007.
Total debt at the end of the 2008 second quarter was $86.9 million, an increase of $7.5 million from $79.4 million at June 30, 2007.
Recent Developments
As recently announced, the Company has finalized an amended and restated credit agreement that increased the facility size by $75 million, to $210 million, and extended the maturity by two additional years, to July 2013. Commenting on this accomplishment, Wilhelm stated, "We are very proud of having renegotiated our bank credit agreement. To have completed this transaction in this uncertain economic environment in which financial institutions are generally looking to decrease their exposures is a real testament to the confidence that our lenders have placed in the Company."
Additional recent developments include the following:
* The Company's Board of Directors approved a $60 million increase in the authorization for stock repurchases. * The Company recruited Frederic Kreiter to be Vice President of Transportation Services. In this capacity, Mr. Kreiter, the former President and Chief Operating Officer of Veolia Transportation Services, Inc., will be responsible for the growth and development of the ground transportation and shuttle bus services rendered throughout the Company. Mr. Kreiter's hiring reinforces Standard Parking's commitment to internal growth in the transportation services market. * Canderel awarded the Company a multi-year lease for the College Park Garage, which serves six different properties in Toronto, Canada. On the day the Company commenced operations, it installed new equipment to fully automate the garage. * The Company recently commenced the management of more than 22,000 parking spaces in nineteen Class A office buildings in Los Angeles County for Equity Office Properties. * In August, the Company will cease its parking management operations for the City of Miami Beach garages. The Company will continue, however, to manage the City of Miami Beach's parking meter operations.
Year-to-Date Results
Revenue for the first half of 2008, excluding reimbursed management contract expense, increased by 17% to $150.0 million from $127.9 million in the first half of 2007.
Gross profit for the first half of 2008 increased by 11% to $45.2 million from $40.7 million in the first half of 2007. On a same location basis, gross profit increased by 2%.
General and administrative expenses for the first six months of 2008 increased 8% to $23.4 million from $21.7 million for the comparable period last year. General and administrative expenses as a percent of gross profit decreased to 51.9% during the first half of 2008 from 53.2% a year ago, reflecting continuing improvement in the Company's operating leverage.
Operating income for the first half of 2008 increased by 14% to $18.8 million from $16.5 million in the same period of the prior year.
Net income increased by 22% to $9.6 million for the first half of 2008 as compared with $7.8 million for the first half of 2007. Earnings per share for the first half of 2008 were $0.52, $0.12 higher than the same period a year ago, of which $0.03 per share was the net effect of the favorable $2.0 million settlement of the Company's Hurricane Katrina insurance claim as offset by less favorable changes in insurance reserve estimates and an increase in the cost of post-retirement benefits. Earnings per share also benefited from the decrease in diluted shares outstanding resulting from the stock repurchase program.
Free cash flow of $14.2 million was generated during the first half of 2008 versus $14.0 million in the first half of 2007. The cash tax rate in the first six months of 2008 was 10% compared with 5% in the first half of 2007. This increase in cash tax rates reduced free cash flow by $0.9 million. The first half 2008 free cash flow, along with borrowings under the revolving credit facility, was used to complete an acquisition and repurchase common stock. Through June 30, 2008, the Company expended $35 million of the $45 million previous stock repurchase authorization.
Financial Outlook
Based on year-to-date results, the Company is affirming its 2008 net earnings guidance of $0.95 to $1.05 per share. This guidance includes the $0.06 per share impact of the Katrina settlement as well as the $0.04 per share impact of the long-term restricted stock unit grant to senior management on July 1, 2008. Full year 2008 free cash flow is still expected to be in the range of $27 million to $30 million.
Conference Call
The Company's quarterly earnings conference call will be held at 10:00 am (CDT) on Thursday, August 7, 2008, and will be available live and in replay to all analysts/investors through a webcast service. To listen to the live call, individuals are directed to the Company's investor relations page at www.standardparking.com or www.earnings.com at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, replays will be available shortly after the call on either website and can be accessed for 30 days after the call.
Standard Parking, with more than 13,000 employees, manages approximately 2,200 facilities, containing over one million parking spaces in more than 330 cities across the United States and Canada, including parking-related and shuttle bus operations serving approximately 60 airports.
More information about Standard Parking is available at www.standardparking.com. You should not construe the information on this website to be a part of this report. Standard Parking's annual reports filed on Form 10-K, its periodic reports on Form 10-Q and 8-K and its Registration Statement on Form S-1 (333-112652) are available on the Internet at www.sec.gov and can also be accessed through the Investor Relations section of the Company's website.
DISCLOSURE NOTICE: The information contained in this document is as of August 6, 2008. The Company assumes no obligation to update any forward-looking statements contained in this document as a result of new information or future events or developments.
This document and tables contain forward-looking information about the Company's financial results that involve substantial risks and uncertainties. You can identify these statements by the fact that they use words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" and similar terms and phrases in connection with any discussion of future operating or financial performance. These forward-looking statements are made based on management's expectations and beliefs concerning future events affecting the Company and are subject to uncertainties and factors relating to the operations and business environment, all of which are difficult to predict and many of which are beyond management's control. These uncertainties and factors could cause actual results to differ materially from those matters expressed in or implied by these forward-looking statements. The following factors are among those that may cause actual results to differ materially from for ward-looking statements: the loss, or renewal on less favorable terms, of management contracts and leases; our ability to form and maintain relationships with large real estate owners, managers and developers; integration of future acquisitions in light of challenges in retaining key employees, synchronizing business processes and efficiently integrating facilities, marketing and operations; our ability to renew our insurance policies on acceptable terms, the extent to which our clients choose to obtain insurance coverage through us and our ability to successfully manage self-insured losses; availability, terms and deployment of capital; the ability of our majority shareholder to control our major corporate decisions; the impact of public and private regulations; the ability to obtain performance bonds on acceptable terms to guarantee our performance under certain contracts; extraordinary events affecting parking at facilities that we manage, including emergency safety measures, military or terrorist attacks and natural disasters; changes in federal and state regulations including those affecting airports, parking lots at airports or automobile use; the loss of key employees; changes in general economic and business conditions or demographic trends; and development of new, competitive parking-related services. A further list and description of these risks, uncertainties, and other matters can be found in the Company's Annual Reports on Form 10-K and in its periodic reports on Forms 10-Q and 8-K.
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share data)
June 30, Dec. 31,
2008 2007
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 11,595 $ 8,466
Notes and accounts receivable, net 44,340 42,706
Prepaid expenses and supplies 3,188 2,765
Deferred taxes 6,247 6,247
--------- ---------
Total current assets 65,370 60,184
Leasehold improvements, equipment and
construction in progress, net 16,151 15,695
Advances and deposits 1,873 1,382
Long-term receivables, net 5,747 4,854
Intangible and other assets, net 5,137 4,350
Cost of contracts, net 10,404 7,688
Goodwill 124,530 119,890
Deferred taxes -- 1,345
--------- ---------
Total assets $ 229,212 $ 215,388
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 46,587 $ 42,941
Accrued and other current liabilities 31,612 33,195
Long-term borrowings 1,419 1,938
--------- ---------
Total current liabilities 79,618 78,074
Deferred taxes 2,496 --
Long-term borrowings, excluding current portion 85,448 78,425
Other long-term liabilities 24,467 19,550
Stockholders' equity (1):
Common stock, par value $.001 per share;
21,300,000 shares authorized; 17,873,658 and
18,371,308 shares issued and outstanding as of
June 30, 2008 and December 31, 2007,
respectively 18 18
Additional paid-in capital 139,144 150,520
Accumulated other comprehensive income 455 482
Treasury stock, at cost, 72,263 and 48,474
shares as of June 30, 2008 and December 31,
2007, respectively (1,479) (1,172)
Accumulated deficit (100,955) (110,509)
--------- ---------
Total stockholders' equity 37,183 39,339
--------- ---------
Total liabilities and stockholders' equity $ 229,212 $ 215,388
========= =========
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share data, unaudited)
Three Months Ended Six Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Parking services
revenue:
Lease contracts $ 40,003 $ 35,988 $ 77,697 $ 71,186
Management
contracts 36,415 28,539 72,295 56,735
----------- ----------- ----------- -----------
76,418 64,527 149,992 127,921
Reimbursed
management
contract expense 99,317 87,588 198,768 178,085
----------- ----------- ----------- -----------
Total revenue 175,735 152,115 348,760 306,006
Cost of parking
services:
Lease contracts 34,711 31,768 69,604 63,786
Management
contracts 18,162 11,703 35,208 23,427
----------- ----------- ----------- -----------
52,873 43,471 104,812 87,213
Reimbursed
management
contract expense 99,317 87,588 198,768 178,085
----------- ----------- ----------- -----------
Total cost of
parking services 152,190 131,059 303,580 265,298
Gross profit:
Lease contracts 5,292 4,220 8,093 7,400
Management
contracts 18,253 16,836 37,087 33,308
----------- ----------- ----------- -----------
Total gross
profit 23,545 21,056 45,180 40,708
General and
administrative
expenses 12,029 10,844 23,440 21,658
Depreciation and
amortization 1,579 1,276 2,950 2,528
----------- ----------- ----------- -----------
Operating income 9,937 8,936 18,790 16,522
Other expenses
(income):
Interest expense 1,086 1,770 2,604 3,573
Interest income (41) (227) (83) (446)
----------- ----------- ----------- -----------
1,045 1,543 2,521 3,127
Minority interest 3 89 125 249
----------- ----------- ----------- -----------
Income before
income taxes 8,889 7,304 16,144 13,146
Income tax expense 3,612 2,953 6,590 5,313
----------- ----------- ----------- -----------
Net income $ 5,277 $ 4,351 $ 9,554 $ 7,833
=========== =========== =========== ===========
Common stock data:
Net income per
share:
Basic $ 0.29 $ 0.23 $ 0.53 $ 0.41
Diluted $ 0.29 $ 0.22 $ 0.52 $ 0.40
Weighted average
shares
outstanding:
Basic 17,891,155 18,930,560 18,007,316 19,068,612
Diluted 18,265,653 19,376,018 18,400,527 19,547,670
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Six Months Ended
------------------
June 30, June 30,
2008 2007
-------- --------
Operating activities:
Net income $ 9,554 $ 7,833
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation and amortization 2,775 2,499
Loss on sale of assets 175 29
Amortization of debt issuance costs 142 136
Non-cash stock-based compensation 465 465
Excess tax benefit related to stock option
exercises (491) (944)
Reversal for losses on accounts receivable (49) (196)
Deferred income taxes 3,841 3,710
Change in operating assets and liabilities 606 3,029
-------- --------
Net cash provided by operating activities 17,018 16,561
Investing activities:
Acquisitions (5,457) --
Purchase of leaseholds improvements and
equipment (2,515) (2,483)
Cost of contracts purchased (185) --
Contingent purchase payments (47) (102)
-------- --------
Net cash used in investing activities (8,204) (2,585)
Financing activities:
Repurchase of common stock (12,926) (9,998)
Proceeds from exercise of stock options 342 754
Tax benefit related to stock option
exercises 491 944
Proceeds from (payments on) senior credit
facility 7,450 (5,050)
Payments on long-term borrowings (56) (77)
Payments of debt issuance costs (35) (35)
Payments on capital leases (891) (1,195)
-------- --------
Net cash used in financing activities (5,625) (14,657)
Effect of exchange rate changes on cash and
cash equivalents (60) 17
-------- --------
Increase (decrease) in cash and cash
equivalents 3,129 (664)
Cash and cash equivalents at beginning of
period 8,466 8,058
-------- --------
Cash and cash equivalents at end of period $ 11,595 $ 7,394
======== ========
Supplemental disclosures:
Cash paid during the period for:
Interest $ 2,806 $ 3,372
Income taxes 1,614 719
STANDARD PARKING CORPORATION
FREE CASH FLOW
(in thousands, except for share and per share data, unaudited)
Three Months Ended Six Months Ended
------------------ ------------------
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
-------- -------- -------- --------
Operating income $9,937 $8,936 $18,790 $16,522
Depreciation and
amortization, net of gain
(loss) on sale of assets 1,579 1,276 2,950 2,528
Non-cash compensation 71 286 465 465
Income tax paid (1,113) (509) (1,614) (719)
Minority interest (3) (89) (125) (249)
Change in assets and
liabilities 3,796 2,485 (702) 1,403
Purchase of leaseholds,
equipment and cost of
contracts and contingent
purchase payments (1,599) (1,840) (2,747) (2,585)
-------- -------- -------- --------
Operating cash flow $12,668 $10,545 $17,017 $17,365
Cash interest paid (1,397) (1,754) (2,806) (3,372)
-------- -------- -------- --------
Free cash flow (1) $11,271 $8,791 $14,211 $13,993
Decrease (increase) in
cash and cash
equivalents (540) (546) (3,129) 664
-------- -------- -------- --------
Free cash flow, net of
change in cash $10,731 $8,245 $11,082 $14,657
(Uses)/Sources of cash:
Proceeds from (Payments
on) senior credit
facility ($5,400) ($2,450) $7,450 ($5,050)
(Payments) on other
borrowings (463) (447) (947) (1,272)
(Payments) of debt
issuance costs (35) (35) (35) (35)
Proceeds from exercise of
stock options 120 576 342 754
Tax benefit related to
stock option exercises 172 679 491 944
(Repurchase) of common
stock (5,127) (6,568) (12,926) (9,998)
(Payments) on acquisitions 2 -- (5,457) --
-------- -------- -------- --------
Total (uses) of cash ($10,731) ($8,245) ($11,082) ($14,657)
------------------------------------------------------------------
(1) Reconciliation of Free Cash Flow to Consolidated Statements
of Cash Flow
Six Three Three
Months Months Months
Ended Ended Ended
June 30, March 31, June 30,
2008 2008 2008
--------- --------- ---------
Net cash provided by operating
activities $17,018 $4,144 $12,874
Net cash (used in) investing
activities (8,204) (6,607) (1,597)
Acquisitions 5,457 5,459 (2)
Effect of exchange rate
changes on cash and cash
equivalents (60) (56) (4)
--------- --------- ---------
Free cash flow $14,211 $2,940 $11,271
Six Three Three
Months Months Months
Ended Ended Ended
June 30, March 31, June 30,
2007 2007 2007
--------- --------- ---------
Net cash provided by
operating activities $16,561 $6,074 $10,487
Net cash (used in) investing
activities (2,585) (745) (1,840)
Acquisitions -- -- --
Effect of exchange rate
changes on cash and cash
equivalents 17 (127) 144
--------- --------- ---------
Free cash flow $13,993 $5,202 $8,791
-----------------------------------------------------------------
Trailing Twelve Month Free Cash Flow
Twelve
Three Months Ended Months
------------------------------------------ Ended
Sept. 30, Dec. 31, March 31, June 30, June 30,
2007 2007 2008 2008 2008
--------- --------- --------- --------- ---------
Free Cash
Flow $8,421 $9,677 $2,940 $11,271 $32,309
Twelve
Three Months Ended Months
------------------------------------------ Ended
Sept. 30, Dec. 31, March 31, June 30, June 30,
2006 2006 2007 2007 2007
--------- --------- --------- --------- ---------
Free Cash
Flow $9,476 $6,263 $5,202 $8,791 $29,732
STANDARD PARKING CORPORATION
LOCATION COUNT
June 30, Dec. 31, June 30,
2008 2007 2007
-------- -------- --------
Managed facilities 1,979 1,893 1,753
Leased facilities 240 238 238
-------- -------- --------
Total facilities 2,219 2,131 1,991
CONTACT: Standard Parking Corporation
G. Marc Baumann, Executive Vice President and
Chief Financial Officer
(312) 274-2199
mbaumann@standardparking.com