Central Parking Finance Trust PFD TR CV SECS (CRLKP)
Filed: 6 Nov 08, 12:00am
EXHIBIT 99.1
CHICAGO, Nov. 5, 2008 (GLOBE NEWSWIRE) -- Standard Parking Corporation (Nasdaq:STAN), one of the nation's leading providers of parking management, ground transportation and other ancillary services, today announced third quarter 2008 earnings per share increased 21% to $0.29, as compared with $0.24 per share in the third quarter of 2007.
Third Quarter Highlights
* Total number of locations at the end of the third quarter up by 6% over the 2007 third quarter * Total revenue growth of 12% (revenue figures exclude reimbursement of management contract expense) * Gross profit and operating income growth of 5% and 4%, respectively * Earnings per share increase of $0.05, a 21% increase as compared with the third quarter last year * Free cash flow of $1.3 million * Completed common stock repurchases of $24.6 million
2008 Full-Year Guidance
* EPS expectation range narrowed to $1.00 - $1.05 * Free cash flow expected to be in the range of $20 million - $25 million
James A. Wilhelm, President and Chief Executive Officer, said, "We are pleased that our business model continues to deliver solid results. As I said last quarter, we continue to focus 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. For the first nine months of 2008, 84% of the Company's total gross profit was derived from our management contract portfolio. Gross profit from those managed locations continued to grow during the third quarter of 2008, and for the first nine months of 2008 grew by 12% more than it grew in the first nine months of 2007. Based on our observations from previous economic downturns, we expect continued growth in gross profit from managed locations.
"While a majority of our locations benefit from operating under fixed fee management contracts, certain lease and reverse management locations, particularly in the airport and hotel areas, are experiencing the effects of the challenging economic environment. Earnings per share increased by 21% for the quarter as our operating results were enhanced by a lower effective tax rate and our continuing share repurchase program."
Wilhelm continued, "Even during these difficult economic times, we have been successful in winning new contracts with resulting gross profit from new business growing by more than 10% in the first nine months of 2008 as compared with the first nine months of last year. At the same time, we are maintaining high levels of location and profit retention, at 90% and 96%, respectively."
Wilhelm ended by stating, "We also continue to move forward with IT initiatives intended to improve operating efficiencies and reduce costs, which we expect to gradually realize during the course of 2009. Simultaneously, we remain vigilant in our focus on controlling costs throughout the economic downturn. We continue to deploy the Company's substantial free cash flow to pursue acquisitions and share buybacks. As a result of the share buyback program, the Company had 12% fewer basic shares outstanding on October 31 of 2008 as compared to October 31 of 2007."
Third Quarter Operating Results
Revenue for the third quarter of 2008, excluding reimbursed management contract expense, increased by 12% to $75.5 million from $67.3 million in the third quarter of 2007. New and acquired locations, as well as 2% growth from same locations, contributed to the overall revenue performance.
Gross profit in the quarter increased by 5% to $23.5 million from $22.3 million in the year ago quarter. A favorable change in insurance loss reserve estimates relating to prior years contributed $0.4 million to 2008's third quarter versus $0.7 million in the third quarter of 2007. This year's third quarter also benefited from the receipt of a $0.6 million insurance dividend as compared to an insurance dividend of $0.3 million received in the second quarter of 2007. During the third quarters of both 2008 and 2007, the Company sold certain contract rights that resulted in net gains of $0.4 million and $0.6 million respectively. The net impact of these items is negligible on year-over-year growth. On a same location basis, third quarter gross profit increased by 1% year over year.
General and administrative expenses increased by 6% to $12.0 million in the third quarter of 2008 from $11.4 million in the third quarter of 2007. As previously disclosed, the Company issued 750,000 restricted stock units to senior management in July of this year. These restricted stock units added $0.5 million to third quarter 2008 G&A expense. In the comparable period last year, the Company recorded a $0.4 million expense related to reorganizing certain support functions to further enhance productivity. The remainder of the increase in G&A is primarily attributable to investments in ongoing productivity focused IT initiatives. Sequentially, G&A for the 2008 third quarter, which for the first time includes restricted stock unit expense in the amount of $0.5 million, is unchanged from the 2008 second quarter.
Operating income increased by 4% to $9.9 million in the third quarter of 2008 from $9.5 million in the same period of last year.
Third quarter 2008 net interest expense was flat as compared with the same period last year as lower interest rates during this time period were offset by increased borrowings to fund acquisitions and the stock repurchase program. Resulting net income increased 13% to $5.1 million, or $0.29 per share, in the third quarter of 2008 from $4.5 million, or $0.24 per share, in the third quarter of 2007, an increase of 21% on a per share basis.
The Company generated $1.3 million of free cash flow during the third quarter of this year, which, along with draws on the revolving credit facility, was used to repurchase $24.6 million of common stock. The Company defines free cash flow to include changes in working capital. During the quarter, the company experienced changes in working capital which reduced free cash flow by approximately $6.0 million. Increases in accounts receivable of approximately $2.0 million were primarily attributable to the Company's investment in new client relationships requiring working capital. Decreases in accounts payable and accrued expenses of approximately $4.0 million were attributable primarily to decreases in amounts owed to clients. While these fluctuations in working capital do not fundamentally change the nature of the Company's free cash flow generation, the Company does not expect the working capital swings experienced in the third quarter to reverse before year-end. Consequently the Company is lowering its free c ash flow guidance for the year from $27 million to $30 million to a current expectation of $20 million to $25 million.
As previously announced in July, the Company finalized an amended and restated credit agreement with its bank group, led by Bank of America and Wells Fargo. The agreement provides for a total credit facility of $210 million, an increase of $75 million, and an extended maturity of two years to July 2013. The Company's net debt to EBITDA leverage was 2.3x at September 30, 2008.
Recent Developments
Noteworthy new business activity includes the following:
* The City and County of Denver selected a Standard Parking joint venture to manage the parking operation at Denver International Airport (DIA). The DIA parking operation is one of the largest in the world, with over 40,000 total parking spaces in two garages, four surface lots and two separate valet services. The operation, as to which the Standard Parking joint venture formally assumed management responsibilities on October 16, 2008, generates more than $100 million in annual parking revenue. * The Capital Regional Airport Commission selected Standard Parking to manage the 7,300 parking spaces in two garages and three remote surface lots at Richmond International Airport. The Company will operate a fleet of 15 shuttle buses to transport passengers and Airport employees between the terminal and the three surface lots. * St. Joseph's Regional Medical Center awarded to Standard Parking a contract to manage its parking and valet services at both of its medical campuses in Patterson and Wayne, New Jersey. The parking operations will include a new 1,200 space parking facility to be constructed as part of a $250 million medical campus expansion project.
Year-to-Date Results
Revenue for the first nine months of 2008, excluding reimbursed management contract expense, increased by 15% to $225.5 million from $195.3 million in the first nine months of 2007.
Gross profit for the first nine months of 2008 increased by 9% to $68.7 million from $63.0 million in the same period of 2007. On a same location basis, gross profit increased by 2% during this period.
General and administrative expenses for the first nine months of 2008 increased 7% to $35.5 million from $33.0 million for the comparable period last year. General and administrative expenses as a percent of gross profit decreased to 51.6% for the first nine months of 2008 from 52.4% a year ago, reflecting continuing improvement in the Company's operating leverage.
Operating income for the first nine months of 2008 increased by 10% to $28.7 million from $26.1 million in the same period of the prior year.
Net income increased by 19% to $14.7 million for the first nine months of 2008 as compared with $12.4 million for the first nine months of 2007. Earnings per share for the first nine months of 2008 were $0.81, which is $0.17 or 27% higher than the same period a year ago.
Free cash flow of $15.5 million was generated during the first nine months of 2008 versus $22.4 million in the comparable period of 2007. The cash tax rate in the first nine months of 2008 was 10% compared with 5% in the first nine months of 2007. This increase in cash tax rates reduced free cash flow by $1.5 million. Free cash flow generated in the first nine months of 2008, along with borrowings under the revolving credit facility, was used to complete an acquisition and repurchase common stock. As of September 30, 2008, the Company had $45 million remaining under its current stock repurchase authorization.
Financial Outlook
Based on year-to-date results, the Company is narrowing its 2008 net earnings guidance range to $1.00 to $1.05 per share. Full year 2008 free cash flow is now expected to be in the range of $20 million to $25 million.
Conference Call
The Company's quarterly earnings conference call will be held at 10:00 a.m. (Central Time) on Thursday, November 6, 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 November 5, 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; changes in general economic and business conditions or demographic trends; 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; 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)
Sept. 30, Dec. 31,
2008 2007
--------- ---------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 11,351 $ 8,466
Notes and accounts receivable, net 45,944 42,706
Prepaid expenses and supplies 3,045 2,765
Deferred taxes 6,247 6,247
--------- ---------
Total current assets 66,587 60,184
Leasehold improvements, equipment and
construction in progress, net 15,987 15,695
Advances and deposits 2,116 1,382
Long-term receivables, net 6,224 4,854
Intangible and other assets, net 7,420 4,350
Cost of contracts, net 10,307 7,688
Goodwill 124,361 119,890
Deferred taxes -- 1,345
--------- ---------
Total assets $ 233,002 $ 215,388
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 43,541 $ 42,941
Accrued and other current liabilities 30,207 33,195
Current portion of long-term borrowings 1,215 1,938
--------- ---------
Total current liabilities 74,963 78,074
Deferred taxes 4,902 --
Long-term borrowings 110,195 78,425
Other long-term liabilities 23,986 19,550
Stockholders' equity:
Common stock, par value $.001 per share;
21,300,000 shares authorized;
16,874,259 and 18,371,308 shares
issued and outstanding as of September
30, 2008 and December 31, 2007,
respectively 17 18
Additional paid-in capital 118,054 150,520
Accumulated other comprehensive income 418 482
Treasury stock, at cost 165,266 and
48,474 shares as of September 30, 2008
and December 31, 2007, respectively (3,687) (1,172)
Accumulated deficit (95,846) (110,509)
--------- ---------
Total stockholders' equity 18,956 39,339
--------- ---------
Total liabilities and stockholders' equity $ 233,002 $ 215,388
========= =========
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share data, unaudited)
Three Months Ended Nine Months Ended
---------------------- ----------------------
September 30, September 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Parking services
revenue:
Lease contracts $ 38,634 $ 36,182 $ 116,331 $ 107,368
Management contracts 36,858 31,150 109,153 87,885
---------- ---------- ---------- ----------
75,492 67,332 225,484 195,253
Reimbursed management
contract expense 101,919 85,167 300,687 263,252
---------- ---------- ---------- ----------
Total revenue 177,411 152,499 526,171 458,505
Cost of parking
services:
Lease contracts 35,506 31,666 105,110 95,452
Management contracts 16,510 13,378 51,718 36,805
---------- ---------- ---------- ----------
52,016 45,044 156,828 132,257
Reimbursed management
contract expense 101,919 85,167 300,687 263,252
---------- ---------- ---------- ----------
Total cost of
parking services 153,935 130,211 457,515 395,509
Gross profit:
Lease contracts 3,128 4,516 11,221 11,916
Management contracts 20,348 17,772 57,435 51,080
---------- ---------- ---------- ----------
Total gross profit 23,476 22,288 68,656 62,996
General and
administrative
expenses 12,017 11,356 35,457 33,014
Depreciation and
amortization 1,539 1,389 4,489 3,917
---------- ---------- ---------- ----------
Operating income 9,920 9,543 28,710 26,065
Other expenses
(income):
Interest expense 1,777 1,739 4,381 5,312
Interest income (106) (47) (189) (493)
---------- ---------- ---------- ----------
1,671 1,692 4,192 4,819
Minority interest (4) 109 121 358
---------- ---------- ---------- ----------
Income before
income taxes 8,253 7,742 24,397 20,888
Income tax expense 3,144 3,213 9,734 8,526
---------- ---------- ---------- ----------
Net income $ 5,109 $ 4,529 $ 14,663 $ 12,362
========== ========== ========== ==========
Common stock data:
Net income per share:
Basic $ 0.30 $ 0.24 $ 0.83 $ 0.65
Diluted $ 0.29 $ 0.24 $ 0.81 $ 0.64
Weighted average
shares outstanding:
Basic 17,244,932 18,720,640 17,753,188 18,952,622
Diluted 17,694,208 19,159,252 18,165,087 19,418,196
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Nine Months Ended
-----------------------
Sept. 30, Sept. 30,
2008 2007
-------- --------
Operating activities:
Net income $ 14,663 $ 12,362
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation and amortization 4,147 3,828
Loss (gain) on sale of assets 291 (533)
Amortization of debt issuance costs 287 204
Write off of debt issuance costs 13 --
Non-cash stock-based compensation 985 563
Excess tax benefit related to stock
option exercises (878) (1,041)
Provision (reversal) for losses on
accounts receivable 79 (22)
Deferred income taxes 6,247 6,348
Change in operating assets and liabilities (6,388) 3,655
-------- --------
Net cash provided by operating activities 19,446 25,364
Investing activities:
Acquisitions (5,463) (5,762)
Purchase of leaseholds improvements
and equipment (3,539) (3,024)
Proceeds from sale of assets 264 --
Cost of contracts purchased (446) --
Contingent purchase payments (64) (102)
-------- --------
Net cash used in investing activities (9,248) (8,888)
Financing activities:
Repurchase of common stock (37,512) (14,996)
Proceeds from exercise of stock options 722 848
Tax benefit related to stock
option exercises 878 1,041
Proceeds from (payments on) senior
credit facility 32,450 (2,900)
Payments on long-term borrowings (110) (103)
Payments of debt issuance costs (2,349) (35)
Payments on capital leases (1,233) (1,745)
-------- --------
Net cash used in financing activities (7,154) (17,890)
Effect of exchange rate changes on
cash and cash equivalents (159) 176
-------- --------
Increase (decrease) in cash and
cash equivalents 2,885 (1,238)
Cash and cash equivalents at
beginning of period 8,466 8,058
-------- --------
Cash and cash equivalents at end of period $ 11,351 $ 6,820
======== ========
Supplemental disclosures:
Cash paid during the period for:
Interest $ 6,960 $ 5,049
Income taxes 2,392 939
Supplemental disclosures of
non-cash activity:
Debt issued for capital lease obligation -- 30
STANDARD PARKING CORPORATION
FREE CASH FLOW
(in thousands, except for share and per share data, unaudited)
Three Months Ended Nine Months Ended
---------------------- ----------------------
September 30, September 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Operating income $ 9,920 $ 9,543 $ 28,710 $ 26,065
Depreciation and
amortization, net
of gain (loss) on
sale of assets 1,539 1,389 4,489 3,917
Non-cash
compensation 520 98 985 563
Income tax paid (778) (220) (2,392) (939)
Minority interest 4 (109) (121) (358)
Change in assets
and liabilities (7,036) (62) (7,773) 1,306
Purchase of
leaseholds,
equipment and
cost of contracts
and contingent
purchase payments (1,038) (541) (3,785) (3,126)
---------- ---------- ---------- ----------
Operating cash flow $ 3,131 $ 10,098 $ 20,113 $ 27,428
Cash interest paid
(before payment of
debt issuance)
(1,840) (1,677) (4,611) (5,014)
---------- ---------- ---------- ----------
Free cash flow (1) $ 1,291 $ 8,421 $ 15,502 $ 22,414
Decrease (increase)
in cash and cash
equivalents 244 574 (2,885) 1,238
---------- ---------- ---------- ----------
Free cash flow, net
of change in cash $ 1,535 $ 8,995 $ 12,617 $ 23,652
(Uses)/Sources
of cash:
Proceeds from
(Payments on)
senior credit
facility $ 25,000 $ 2,150 $ 32,450 ($ 2,900)
(Payments) on other
borrowings (396) (576) (1,343) (1,848)
(Payments) of debt
issuance costs (2,314) -- (2,349) (35)
Proceeds from
exercise of
stock options 380 94 722 848
Tax benefit related
to stock option
exercises 387 97 878 1,041
(Repurchase) of
common stock (24,586) (4,998) (37,512) (14,996)
(Payments) on
acquisitions (6) (5,762) (5,463) (5,762)
---------- ---------- ---------- ----------
Total (uses) of cash ($ 1,535) ($ 8,995) ($12,617) ($23,652)
(1) Reconciliation of Free Cash Flow to Consolidated Statements of
Cash Flow
Nine Six Three
Months Months Months
Ended Ended Ended
Sept. 30, June 30, Sept. 30,
2008 2008 2008
------- ------- -------
Net cash provided by operating
activities $19,446 $17,018 $ 2,428
Net cash (used in) investing
activities (9,248) (8,204) (1,044)
Acquisitions 5,463 5,457 6
Effect of exchange rate changes
on cash and cash equivalents (159) (60) (99)
------- ------- -------
Free cash flow $15,502 $14,211 $ 1,291
Nine Six Three
Months Months Months
Ended Ended Ended
Sept. 30, June 30, Sept. 30,
2007 2007 2007
------- ------- -------
Net cash provided by operating
activities $25,364 $16,561 $ 8,803
Net cash (used in) investing
activities (8,888) (2,585) (6,303)
Acquisitions 5,762 -- 5,762
Effect of exchange rate changes
on cash and cash equivalents 176 17 159
------- ------- -------
Free cash flow $22,414 $13,993 $ 8,421
STANDARD PARKING CORPORATION
EBITDA AND NET DEBT RECONCILIATION
Twelve Months
Ended
Sept. 30, 2008
--------
Net Income $ 19,674
Add (subtract):
Interest expense, net 5,819
Income tax expense 12,475
Depreciation and amortization 5,907
EBITDA (1) $ 43,875
Long-term borrowings, excluding
current portion $110,195
Current portion of long-term borrowings 1,215
less: Cash and cash equivalents (11,351)
Net Debt $100,059
Net Debt to EBITDA multiple 2.3x
(1) EBITDA does not represent and should not be considered as an
alternative to net income or cash flow from operations, as
determined by accounting principles generally accepted in the
United States (GAAP), and the Company's calculations thereof may
not be comparable to that reported by other companies EBITDA is
calculated above as it is a basis upon which the Company assesses
its liquidity position and because we believe that this presents
useful information to investors regarding a company's ability to
service and/or incur indebtedness. This belief is based upon the
Company's negotiations with its lenders who have indicated that
the amount of indebtedness it will be permitted to incur will be
based, in part, on measures similar to its EBITDA. EBITDA does
not take into account the Company's working capital requirements,
debt service requirements and other commitments and, accordingly,
is not necessarily indicative of amounts that may be available
for discretionary use.
STANDARD PARKING CORPORATION
LOCATION COUNT
Sept. 30, Dec. 31, Sept. 30,
2008 2007 2007
------- ------- -------
Managed facilities 1,947 1,893 1,837
Leased facilities 238 238 234
------- ------- -------
Total facilities 2,185 2,131 2,071
CONTACT: Standard Parking Corporation
G. Marc Baumann, Executive Vice President and Chief
Financial Officer
(312) 274-2199
mbaumann@standardparking.com