SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended June 30, 1996
Commission file number 001-13950
CENTRAL PARKING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Tennessee
(State or Other Jurisdiction ofIncorporation or Organization)
62-1052916
(I.R.S. Employer Identification No.)
2401 21st Avenue South,
Suite 200, Nashville, Tennessee
(Address of Principal Executive Offices)
37212
(Zip Code)
Registrant's Telephone Number, Including Area Code:
(615) 297-4255
Former name, address and fiscal year, if changed since last report:
Not Applicable
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO ___
Indicate the number of shares outstanding of each of the registrant's classes
of common stock as of the latest practicable date.
Class Outstanding at August 7, 1996
Common Stock, $0.01 par value 17,460,781
INDEX
CENTRAL PARKING CORPORATION
PART 1. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets
--- June 30, 1996, September 30, 1995 and June 30, 1995 3
Condensed consolidated statements of earnings
--- three and nine months ended June 30, 1996 and 1995 4 - 5
Condensed consolidated statements of cash flows
--- nine months ended June 30, 1996 and 1995 6
Notes to condensed consolidated financial statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 10
PART 2. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
PART I
Item 1. Financial Statements
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Amounts in thousands June 30, September 30, June 30,
1996 1995 1995
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 28,614 $ 10,218 $ 15,195
Management accounts receivable 7,417 6,771 6,167
Accounts and current portion of
notes receivable 2,937 5,732 2,374
Prepaid expenses 3,682 3,800 3,705
Deferred income taxes 0 0 39
Total current assets 42,650 26,521 27,480
Investments, at cost 4,427 4,246 4,190
Notes receivable, less current portion 6,236 4,382 3,979
Property, equipment, and leasehold
improvements, net 38,056 24,279 21,429
Contract rights, net 6,029 6,367 6,557
Investment in limited partnerships 1,235 990 1,041
Investment in general partnerships 1,307 1,450 1,382
Other assets 2,270 2,205 1,767
$102,210 $ 70,440 67,825
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 10,994 $ 10,952 $ 10,381
Accrued payroll and related costs 5,349 4,608 3,781
Accrued expenses 2,219 968 2,615
Management accounts payable 5,312 5,632 5,345
Income taxes payable 1,073 1,565 1,505
Deferred income taxes 0 120 0
Total current liabilities 24,947 23,845 23,627
Deferred compensation 2,996 4,601 4,416
Deferred income taxes 1,114 634 797
Total liabilities 29,057 29,080 28,840
Shareholders' equity :
Common stock, $.01 par value;
30,000,000 shares authorized,
17,460,781 issued and outstanding 175 102 102
Additional paid-in capital 32,032 8,198 8,198
Foreign currency translation adjustment 31 51 58
Retained earnings 40,915 33,009 30,627
Total shareholders' equity 73,153 41,360 38,985
102,210 70,440 67,825
See accompanying notes to condensed consolidated financial statements.
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Unaudited
Amounts in thousands, except per share data
Three Months Ended
June 30,
1996 1995
Revenues:
Parking $ 28,805 $ 24,438
Management contract 8,699 7,944
Total revenues 37,504 32,382
Costs and expenses:
Cost of parking 25,709 22,661
Cost of management contracts 2,416 2,515
General and administrative 4,509 3,709
Total costs and expenses 32,634 28,885
Operating earnings 4,870 3,497
Other income:
Interest income 566 441
Net gain (loss) on sales of property
and equipment, net (1) 13
Equity in partnership and joint
venture earnings 233 206
Other income, net 798 660
Earnings before income taxes 5,668 4,157
Income taxes 1,961 1,496
Net earnings $ 3,707 $ 2,661
Weighted average common shares and
common share equivalents 17,575,442 15,372,000
Net earnings per common share $ 0.21 $ 0.17
Dividends per common share $ 0.02 $ 0.01
See accompanying notes to condensed consolidated financial statements.
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Amounts in thousands, except per share data
Nine Months Ended
June 30,
1996 1995
(Unaudited)
Revenues:
Parking $ 81,568 $ 70,107
Management contract 24,867 23,299
Total revenues 106,435 93,406
Costs and expenses:
Cost of parking 73,169 63,971
Cost of management contracts 7,642 7,370
General and administrative 13,024 11,647
Total costs and expenses 93,835 82,988
Operating earnings 12,600 10,418
Other income:
Interest income 1,685 1,084
Net gains on sales of property and
equipment, net 1,182 13
Equity in partnership and joint
venture earnings 462 300
Other income, net 3,329 1,397
Earnings before income taxes 15,929 11,815
Income taxes 5,529 4,253
Net earnings $ 10,400 $ 7,562
Weighted average common shares and
common share equivalents 17,446,055 15,372,000
Net earnings per common share $ 0.60 $ 0.49
Dividends per common share $ 0.06 $ 0.02
See accompanying notes to condensed consolidated financial statements.
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Amounts in thousands
Nine Months Ended
June 30,
1996 1995
(Unaudited)
Cash flows from operating activites:
Net earnings $10,400 $ 7,562
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation 1,828 1,628
Amortization of contract rights 638 572
Amortization of deferred compensation cost 51 -
Equity in partnership and joint venture (earnings) (462) (300)
Net gain on sales of property and equipment (1,182) (13)
Deferred income taxes 360 (410)
Changes in operating assets and liabilities:
(Increase) decrease in management accounts
receivable (646) 10
(Increase) decrease in notes and accounts
receivable 3,193 (896)
(Increase) decrease in prepaid expenses 118 16
(Increase) decrease in other assets 61 (407)
Increase (decrease) in accounts payable,
accrued expenses and deferred compensation 1,954 1,491
Increase (decrease) in management accounts payable (320) 578
Increase (decrease) in income taxes payable (492) 14
Net cash provided by operating activities 15,501 9,845
Cash flows from investing activities:
Proceeds from sales of property and equipment 1,429 72
Investments in notes receivable (2,252) (1,100)
Purchase of property, equipment and leasehold
improvements (15,852) (2,006)
Purchase of contract rights (300) (9)
Investment in general and limited partnerships 234 (2,226)
Purchase of investments (181) (1,069)
Net cash used by investing activities (16,922) (6,338)
Cash flows from financing activities:
Dividends paid (697) (350)
Proceeds from issuance of common stock, net 20,534 -
Net cash provided (used) by financing activities 19,837 (350)
Foreign currency translation (20) 12
Net increase in cash and cash equivalents 18,396 3,169
Cash and cash equivalents at beginning of period 10,218 12,026
Cash and cash equivalents at end of period $ 28,614 $ 15,195
Non-cash transactions:
Exchange of properties, net $ 2,664 $ -
Conversion of deferred compensation payable
to restricted stock $ 1,874 $ -
See accompanying notes to condensed consolidated financial statements.
CENTRAL PARKING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included. All significant inter-company transactions have been
eliminated in consolidation. Operating results for the three and nine
months ended June 30, 1996 are not necessarily indicative of the results
that may be expected for the fiscal year ending September 30, 1996. For
further information, refer to the consolidated financial statements and
footnotes thereto for the year ended September 30, 1995 (included in the
Company's Annual Report on Form 10-K).
INITIAL PUBLIC OFFERING
On October 10, 1995, the Company completed an initial public
offering of common stock in which 1,243,000 shares were sold by the
Company for net proceeds of $20.0 million. In addition, 1,837,000 shares
of common stock were sold by certain shareholders of the Company.
THREE FOR TWO STOCK SPLIT
On February 21, 1996, the Board of Directors approved a three-for-
two stock split payable to shareholders of record as of March 4, 1996.
The stock split was distributed on March 19, 1996 resulting in the net
issuance of 5,805,816 new shares. Actual shares outstanding after the
split were 17,417,481.
All share and per share amounts in this report have been adjusted
to reflect the stock split, unless otherwise noted.
INCOME PER SHARE
Income per share has been computed by dividing net income for each
period by the weighted average number of shares and share equivalents
outstanding during the applicable period.
Fully diluted per share data is not presented since the effect
would dilute earnings per share by less than three percent (3%)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
Parking revenues for the third quarter of fiscal 1996 increased to
$28.8 million from $24.4 million in the third quarter of fiscal 1995, an
increase of $4.4 million or 17.9%. The increase resulted primarily from
the net addition of 64 leased and 6 owned locations over the same quarter
last year as well as a combination of rate increases and higher
utilization of parking spaces at existing facilities. Revenues from
foreign operations decreased to $3.7 million from $4.3 million. The
decrease in foreign revenues was primarily a result of the termination of
a leased location net of added locations.
Management contract revenue for the third quarter of fiscal 1996
increased to $8.7 million from $7.9 million in the third quarter of
fiscal 1995, an increase of $755 thousand or 9.5%. The increase resulted
from a net increase in the number of management contracts from 713 to
751.
Cost of parking in fiscal third quarter 1996 increased to $25.7
million from $22.7 million in fiscal third quarter 1995, an increase of
$3.0 million, or 13.5%. Rent amounted to $1.7 million of the increase
which was primarily a result of new locations and increased percentage
rent on existing locations. Additionally, payroll expense represented
$1.3 million of the increase; principally as a result of a net increase
in the number of new locations and payroll increases on existing payroll.
Cost of parking as a percentage of parking revenue decreased to
89.3% in fiscal third quarter 1996 from 92.7%. The decrease in the cost
of parking is a combination of the spreading of fixed costs over a larger
revenue base from existing locations and the elimination of two large
leases which amounted to $1.5 million which had high costs of parking
percentages.
Cost of management contracts in fiscal third quarter 1996 decreased
to $2.4 million from $2.5 million for the third fiscal quarter in 1995, a
decrease of $99 thousand or 4%. The decrease in cost of management
contract expense is primarily attributable to insurance claims on
management contracts being $210 thousand less than the same period in the
prior quarter net of other cost increases.
General and administrative expenses increased to $4.5 million for
the third quarter of fiscal 1996 from $3.7 million in fiscal third
quarter 1995, an increase of $800 thousand or 21.6%. This increase is
primarily attributable to increased incentive compensation resulting from
increased profits and the start-up costs associated with opening new
locations and joint ventures. General and administrative expenses were,
as a percentage of revenues, 12.0% for the third quarter of 1996,
compared to 11.5%, an increase of .5%. The increase in the percentage of
revenues was primarily a result of start-up costs of new locations and
joint ventures.
Interest income increased to $566 thousand for the third quarter of
fiscal 1996, from $441 thousand in the third quarter of fiscal 1995, an
increase of $125 thousand or 28.3% percent. The increase in interest
income is a result of additional investments generated from proceeds of
$20.0 million received from the IPO on October 10, 1995 and cash flow
generated from operations net of capital expenditures.
Equity in partnership and joint venture earnings increased for the
three months ended June 30, 1996 to $233 thousand from $206 thousand for
the same period in 1995. The increase in the joint venture earnings is
primarily a result of the Mexican joint venture having a profit in 1996
of $31 thousand versus a loss in 1995 of $66 thousand.
Income taxes increased to $2.0 million for the third quarter of
fiscal 1996 from $1.5 million in the third fiscal quarter in 1995, an
increase of $465 thousand or 31.1%. The tax rate for the 1996 quarter
was 34.6% compared to 36.0% for the 1995 quarter. The decrease in the
tax rate is attributable primarily to increasing interest income on tax
exempt investments in 1996 when compared to the same period in the prior
year. The trend of this tax rate decrease is not expected to continue in
future periods.
NINE MONTHS ENDED JUNE 30, 1996 COMPARED TO NINE MONTHS ENDED JUNE 30, 1995
Parking revenues for the first nine months of fiscal 1996 increased
to $81.6 million from $70.1 million in the first nine months of fiscal
1995, an increase of $11.5 million or 16.3%. The increase resulted
primarily from the net addition of 64 leased and 6 owned locations over
the same period last year as well as a combination of rate increases and
higher utilization of parking spaces at existing facilities. Revenues
from foreign operations decreased to $9.6 million from $12.6 million.
The decrease in foreign revenues was a result of the termination of a
lease location net of added locations.
Management contract revenue for the nine months of fiscal 1996
increased to $24.9 million from $23.3 million in the first nine months of
fiscal 1995, an increase of $1.6 million or 6.7%. The increase resulted
from a net increase in the number of management contracts from 713 to
751.
Cost of parking in fiscal nine months 1996 increased to $73.2
million from $64.0 million in the first nine months of 1995, an increase
of $9.2 million, or 14.4%. Rent amounted to $5.1 million of the increase
which was primarily a result of new locations and increased percentage
rent on existing locations. Additionally, payroll expense represented
$2.8 million of the increase, principally an increase in the number of
net new locations, and payroll increases on existing payroll. The
decrease in cost of parking as a percentage of revenue is primarily a
result of spreading fixed costs over a broader revenue base and the loss
of two large leases which had high cost of parking percentages.
Cost of management contracts in fiscal nine months 1996 increased
to $7.6 million from $7.4 million for the first nine months of 1995, an
increase of $272 thousand or 3.7%. The increase in cost of management
contract expense is attributable to the increased revenue generated on
the addition of new contracts of this period versus the same period last
year and a decrease in insurance claims on management contracts of $253
thousand.
General and administrative expenses increased to $13.0 million in
the first nine months of 1996 from $11.6 million in the first nine months
of 1995, an increase of $1.4 million or 11.8%. The increase is primarily
attributable to increased incentive compensation on increased profits and
start-up costs associated with the opening of new city offices and joint
ventures. General and administrative expenses were, as a percentage of
revenues, 12.2% for the first nine months of 1996, compared to 12.5% for
the first nine months of 1995, a reduction of .3%. The reduction in the
revenue percentage was primarily a result of spreading of a number of
fixed costs over a larger revenue base.
Net gains on sales of property and equipment for the nine months
ended June 30, 1996 increased to $1.2 million. For the same period in
1995, there was a gain of $13 thousand. The increased gain is primarily
from the settlement of disputed property which was condemned in January,
1994.
Equity in partnership and joint venture earnings for the nine
months ended June 30, 1996 were $462 thousand compared to $300 thousand
for the 1995 nine month period. The increase in the joint venture
earnings is primarily a result of the Mexican joint venture having a
profit in 1996 of $58 thousand versus a loss of $123 thousand in 1995.
Interest income increased to $1.7 million for the first nine months
of fiscal 1996, from $1.1 million in the first nine months of fiscal
1995, an increase of $601 thousand or 55.4%. The increase in interest
income is a result of the investment of additional investments generated
from the net proceeds of $20.0 million received from the IPO on October
10, 1995 and cash flow generated from operations, net of capital
expenditures.
Income taxes increased to $5.5 million for the first nine months of
fiscal 1996 from $4.3 million in the first nine months of 1995, an
increase of $1.3 million or 30.0%. The tax rate for the 1996 period was
34.7% compared to 36.0% for the 1995 period. The decrease in the tax
rate is attributable primarily to increasing interest income on tax
exempt investments in 1996. The trend of this tax rate decrease is not
expected to continue.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended June 30, 1996 and 1995, the Company
generated cash flows from operating activities of $15.5 million and $9.8
million, respectively. Additionally, in October, 1995 the Company
generated $20.0 million from the proceeds from an initial public
offering.
During the first nine months of 1996, the Company purchased
property, equipment and leasehold improvements of $15.9 million compared
to $2.0 million in the first nine months of 1995. This trend is in line
with the Company's objective to own or acquire more parking properties.
The Company had cash, cash equivalents and non-current investments
of $33.0 million, $14.5 million, and $19.4 million at June 30, 1996,
September 30, 1995 and June 30, 1995, respectively. The increase in June
1996 is primarily from the proceeds from the aforementioned public
offering.
The Company has a $20.0 million unsecured line of credit which
bears interest at variable interest rates at LIBOR plus 112 basis points.
There have been no borrowings under the Credit Facility since its
inception in April, 1996.
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits filed as a part of this report are listed in the
exhibit index immediately following the signature page.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
three months ended June 30, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CENTRAL PARKING CORPORATION
Date: August 14, 1996 By:/s/Stephen A. Tisdell
Stephen A. Tisdell
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
Signature Title Date
/s/ Stephen A. Tisdell Chief Financial Officer August 14, 1996
Stephen A. Tisdell (Principal Financial and
Accounting Officer)
EXHIBIT INDEX
Exhibit
Number Document
2 Plan of Recapitalization, effective October 9, 1995 (Incorporated by
reference to Exhibit 2 to the Company's Registration Statement No.
33-95640 on Form S-1.)
3.1 Form of Amended and Restated Charter of the Registrant (Incorporated
by reference to Exhibit 3.1 to the Company's Registration Statement
No. 33-95640 on Form S-1.)
3.2 Amended and Restated Bylaws of the Registrant (Incorporated by
reference to Exhibit 3.2 to the Company's Registration Statement No.
33-95640 on Form S-1.)
4 Form of Common Stock Certificate (Incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement No. 33-95640 on
Form S-1.)
10 Loan Agreement with Sun Trust for $20.0 million, dated April 30, 1996
(Incorporated by reference to Exhibit 10 to the Company's Quarterly
Report on Form 10-Q for the period ending March 31, 1996.)
27 Financial Data Schedule (for SEC use only)
E-1