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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
Commission file number: 333-50437
_________________
APCOA/STANDARD PARKING, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 16-1171179
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
900 N. Michigan Avenue,
Chicago, Illinois 60611-1542
(Address of Principal Executive Offices, Including Zip Code)
(312) 274-2000
(Registrant's Telephone Number,
Including Area Code)
Former name, address and fiscal year, if changed since last report:
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
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APCOA/STANDARD PARKING, INC.
FORM 10-Q INDEX
Part I. Financial Information
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets as of March 31, 2001
and December 31, 2000....................................................................... 3
Condensed Consolidated Statements of Operations for the three
months ended March 31, 2001 and March 31, 2000.............................................. 4
Condensed Consolidated Statements of Cash Flows for the three
months ended March 31, 2001 and March 31, 2000.............................................. 5
Notes to Condensed Consolidated Financial Statements........................................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....... 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................. 12
Part II. Other Information
Item 1. Legal Proceedings........................................................................... 12
Item 2. Changes in Securities and Use of Proceeds................................................... 13
Item 3. Defaults upon Senior Securities............................................................. 13
Item 4. Submission of Matters to a Vote of Security Holders......................................... 13
Item 5. Other Information........................................................................... 13
Item 6. Exhibits and Reports on Form 8-K............................................................ 13
Signatures.................................................................................................. 14
Index to Exhibits........................................................................................... 15
2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
APCOA/STANDARD PARKING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)
March 31, 2001 December 31, 2000
-------------- -----------------
ASSETS (Unaudited) (see Note)
------
Current assets:
Cash and cash equivalents.......................................... $ 9,662 $ 3,539
Notes and accounts receivable, net................................. 45,307 46,826
Prepaid expenses and supplies...................................... 1,445 1,775
------------ ------------
Total current assets............................................... 56,414 52,140
------------ ------------
Leaseholds and equipment, net......................................... 27,184 28,492
Advances and deposits................................................. 2,274 2,075
Cost in excess of net assets acquired................................. 112,416 113,293
Intangible and other assets........................................... 11,779 12,341
------------ ------------
Total assets.......................................................
$ 210,067 $ 208,341
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable................................................... $ 38,681 $ 35,079
Accrued and other current liabilities.............................. 24,932 27,596
Current portion of long-term borrowings............................ 1,421 1,406
------------ ------------
Total current liabilities........................................... 65,034 64,081
Long-term borrowings, excluding current portion....................... 177,092 173,590
Other long-term liabilities........................................... 9,159 10,121
Redeemable preferred stock............................................ 56,500 54,976
Common stock subject to put/call rights;
5.01 shares issued and outstanding................................. 8,708 6,304
Common stockholders' deficit:
Common stock, par value $1.00 per share; 1,000 shares authorized;
26.3 shares issued and outstanding................................. 1 1
Additional paid-in capital.......................................... 11,422 11,422
Advances to and deposits with affiliates............................ (12,247) (11,979)
Accumulated other comprehensive income.............................. (59) (374)
Accumulated deficit................................................. (105,543) (99,801)
------------ ------------
Total common stockholders' deficit.................................. (106,426) (100,731)
------------ ------------
Total liabilities and stockholders' deficit......................... $ 210,067 $ 208,341
============ ============
See Notes to Condensed Consolidated Financial Statements.
Note: The balance sheet at December 31, 2000 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements.
3
APCOA/STANDARD PARKING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, unaudited)
Three Months Ended
-----------------------------------------
March 31, 2001 March 31, 2000
-------------- --------------
Gross customer collections.......................................... $ 395,477 $ 366,100
============ ============
Parking services revenue:
Lease contracts................................................... $ 41,273 $ 47,431
Management contracts.............................................. 20,407 15,660
------------ ------------
61,680 63,091
Cost of parking services:
Lease contracts................................................ 37,190 42,640
Management contracts........................................... 10,451 6,288
------------ ------------
47,641 48,928
------------ ------------
Gross profit ....................................................... 14,039 14,163
General and administrative expenses................................. 8,531 9,110
Other special charges............................................... - 119
Depreciation and amortization....................................... 2,729 2,541
------------ ------------
Operating income.................................................... 2,779 2,393
Interest expense (income):
Interest expense............................................... 4,662 4,421
Interest income................................................ (218) (207)
------------ ------------
4,444 4,214
------------ ------------
Loss before minority interest and
income taxes...................................................... (1,665) (1,821)
Minority interest................................................... 49 73
Income tax expense.................................................. 100 17
------------ ------------
Net loss............................................................ (1,814) (1,911)
Preferred stock dividends........................................... 1,524 1,366
Increase in fair value of common stock subject to
put/call rights................................................... 2,404 -
------------ ------------
Net loss attributable to
stockholders.................................................... $ (5,742) $ (3,277)
============ ============
See Notes to Condensed Consolidated Financial Statements.
4
APCOA/STANDARD PARKING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Three Months Ended
-------------------------------------------
March 31, 2001 March 31, 2000
-------------- --------------
Operating activities:
Net loss................................................................................ $ (1,814) $ (1,911)
Adjustments to reconcile net loss to net cash
provided by (used in) operations:
Depreciation and amortization........................................................ 2,729 2,541
Change in operating assets and liabilities, net of
acquisitions......................................................................... 1,831 (1,244)
--------- ----------
Net cash provided by (used in) operating activities.................................. 2,746 (614)
Investing activities:
Purchase of leaseholds and equipment.................................................... (455) (1,393)
--------- ----------
Net cash used in investing activities................................................... (455) (1,393)
Financing activities:
Proceeds from long-term borrowings...................................................... 3,800 3,800
Payments on long-term borrowings........................................................ (74) (107)
Payments on joint venture borrowings.................................................... (209) (187)
--------- ----------
Net cash provided by financing activities............................................... 3,517 3,506
Effect of exchange rate on cash and cash equivalents.................................... 315 (634)
--------- ----------
Increase in cash and cash equivalents................................................... 6,123 865
Cash and cash equivalents at beginning of period........................................ 3,539 5,215
--------- ----------
Cash and cash equivalents at end of period.............................................. $ 9,662 $ 6,080
========= ==========
Supplemental disclosures:
Cash paid during the period for:
Interest............................................................................. $ 7,404 $ 7,277
Taxes................................................................................ 256 456
See Notes to Condensed Consolidated Financial Statements.
5
APCOA/STANDARD PARKING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001
(in thousands, unaudited)
1. Interim Financial Data
The accompanying unaudited condensed consolidated financial statements
of APCOA/Standard Parking, Inc., ("APCOA/Standard" or "the Company") have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and notes required by accounting principles generally accepted
in the United States for complete financial statements.
In the opinion of management, all adjustments (consisting only of
adjustments of a normal and recurring nature) considered necessary for a fair
presentation of the financial position and results of operations have been
included. Operating results for the three-month period ended March 31, 2001 are
not necessarily indicative of the results that might be expected for the fiscal
year ending December 31, 2001. The financial statements presented in this Report
should be read in conjunction with the consolidated financial statements and
footnotes thereto included in APCOA/Standard's 2000 Form 10-K filed April 2,
2001.
Certain reclassifications have been made to the 2000 financial
information to conform to the 2001 presentation.
2. Other Special Charges
Included in "Other special charges" in the accompanying condensed
consolidated statements of operations are the following:
Three Months Ended
-----------------------------------
March 31, 2001 March 31, 2000
-------------- --------------
Incremental integration costs and other.................. $ - $ 119
============== ==============
The integration costs relate primarily to actions to facilitate the
accounting system consolidation and activities to realign, centralize and
reorganize administrative and other support functions.
3. Borrowing Arrangements
APCOA/Standard's $140,000 9 1/4% Senior Subordinated Notes were issued
in September of 1998 and are due in March of 2008. The Notes are registered with
the Securities and Exchange Commission. The Notes were exchanged for
unregistered notes with substantially identical terms, which had been issued
earlier in 1998 to finance acquisitions, retire certain existing indebtedness,
and for general working capital purposes.
In March of 1998, the Company entered into a $40,000 revolving Senior
Credit Facility (the "Facility") with a group of banks. Rates of interest on
borrowings against the Facility are indexed to certain key variable rates. At
March 31, 2001, borrowings under the Facility aggregated $30,750 and there were
letters of credit outstanding against this Facility of $250.
The Notes and Senior Credit Facility contain covenants that limit
APCOA/Standard from incurring additional indebtedness and issuing preferred
stock, restrict dividend payments, limit transactions with affiliates and
restrict certain other transactions. Substantially all of APCOA/Standard's net
assets are restricted under these provisions and covenants (See Note 4).
6
4. Subsidiary Guarantors
Substantially all of the Company's direct or indirect wholly owned
domestic subsidiaries, other than inactive subsidiaries, fully, unconditionally,
jointly and severally guarantee the Senior Subordinated Notes. Financial
statements of the guarantor subsidiaries are not separately presented because,
in the opinion of management, such financial statements are not material to
investors. The non-guarantor subsidiaries include joint ventures, wholly owned
subsidiaries of the Company organized under the laws of foreign jurisdictions,
inactive subsidiaries, and bankruptcy remote subsidiaries formed in connection
with Joint Ventures, all of which are included in the consolidated financial
statements. The following is summarized combined financial information for the
Company, the guarantor subsidiaries of the Company and the non-guarantor
subsidiaries of the Company:
Guarantor Non-Guarantor
APCOA/Standard Subsidiaries Subsidiaries Eliminations Total
-------------- ------------ ------------ ------------ -----
Balance Sheet Data:
- ------------------
March 31, 2001
Cash and cash equivalents............................. $ 6,928 $ 127 $ 2,607 $ - $ 9,662
Notes and accounts receivable......................... 53,806 (13,655) 5,156 - 45,307
Current assets........................................ 61,953 (13,424) 7,885 - 56,414
Leaseholds and equipment, net......................... 15,206 6,852 5,126 - 27,184
Cost in excess of net assets acquired, net............ 18,940 90,126 3,350 - 112,416
Investment in subsidiaries............................ 103,579 - - (103,579) -
Total assets.......................................... 208,110 88,499 17,037 (103,579) 210,067
Accounts payable...................................... 23,010 11,510 4,161 - 38,681
Current liabilities................................... 46,934 9,372 8,728 - 65,034
Long-term borrowings, excluding current portion....... 173,060 174 3,858 - 177,092
Redeemable preferred stock............................ 56,500 - - - 56,500
Common stock subject to put/call rights............... 8,708 - - - 8,708
Total stockholders' equity (deficit).................. (83,640) 76,787 4,006 (103,579) (106,426)
Total liabilities and stockholders' equity (deficit).. 208,110 88,499 17,037 (103,579) 210,067
December 31, 2000
Cash and cash equivalents............................. $ (593) $ 76 $ 4,056 $ - $ 3,539
Notes and accounts receivable......................... 50,972 (7,529) 3,383 - 46,826
Current assets........................................ 50,792 (6,264) 7,612 - 52,140
Leaseholds and equipment, net......................... 15,693 7,395 5,404 - 28,492
Cost in excess of net assets acquired, net............ 19,062 90,673 3,558 - 113,293
Investment in subsidiaries............................ 93,211 - - (93,211) -
Total assets.......................................... 187,446 96,818 17,288 (93,211) 208,341
Accounts payable...................................... 21,744 10,172 3,163 - 35,079
Current liabilities................................... 46,328 8,938 8,815 - 64,081
Long-term borrowings, excluding current portion....... 169,305 175 4,110 - 173,590
Redeemable preferred stock............................ 54,976 - - - 54,976
Common stock subject to put/call rights............... 6,304 - - - 6,304
Total stockholders' equity (deficit).................. (94,942) 83,504 3,918 (93,211) (100,731)
Total liabilities and stockholders' equity (deficit).. 187,446 96,818 17,288 (93,211) 208,341
Income Statement Data:
- ----------------------
Three Months Ended March 31, 2001
Parking Revenue....................................... $ 33,610 $ 22,393 $ 5,677 $ - $ 61,680
Gross profit.......................................... 8,645 4,246 1,148 - 14,039
Other special charges................................. - - - - -
Depreciation and amortization......................... 1,195 1,247 287 - 2,729
Operating income...................................... 6,226 (4,234) 787 - 2,779
Interest expense, net................................. 4,330 (11) 125 - 4,444
Equity in earnings of subsidiaries.................... (3,760) - - 3,760 -
Net (loss) income..................................... (1,814) (4,222) 462 3,760 (1,814)
Three Months Ended March 31, 2000
Parking Revenue....................................... $ 29,073 $ 23,158 $ 10,860 $ - $ 63,091
Gross profit.......................................... 7,775 4,472 1,916 - 14,163
other special charges................................. 119 - - - 119
Depreciation and amortization......................... 948 1,252 341 - 2,541
Operating income...................................... 5,517 (4,547) 1423 - 2,393
Interest expense, net................................. 4,062 (7) 159 - 4,214
Equity in earnings of subsidiaries.................... (3,362) - - 3,362 -
Net (loss) income..................................... (1,911) (4,529) 1,167 3,362 (1,911)
7
APCOA/STANDARD PARKING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Statement of Cash Flow Data:
- ----------------------------
Three Months Ended March 31, 2001
Net cash provided by (used in) operating activities......... $ 3,787 $ 408 $ (1,449) $ - $ 2,746
Investing activities: -
Purchase of leaseholds and equipment...................... (47) (408) - - (455)
-------- --------- ---------- ------- ----------
Net cash used in investing activities....................... (47) (408) - - (455)
Financing activities:
Proceeds from long-term borrowings........................ 3,800 - - - 3,800
Payments on long-term borrowings.......................... (74) - - - (74)
Payments on Joint Venture borrowings...................... (209) - - - (209)
-------- --------- ---------- ------- ----------
Net cash provided by financing activities................... 3,517 - - - 3,517
Effect of exchange rate changes............................. 315 - - - 315
Three Months Ended March 31, 2000
Net cash (used in) provided by operating activities........... $ (748) $ (1,386) $ 1,520 $ - $ (614)
Investing activities:
Purchase of leaseholds and equipment...................... (1,393) - - - (1,393)
-------- --------- ---------- ------- ----------
Net cash used in investing activities.......................... (1,393) (1,393)
Financing activities:
Proceeds from long-term borrowings........................ 3,800 - - - 3,800
Payments on long-term borrowings.......................... (107) - - - (107)
Payments on Joint Venture borrowings...................... (187) - - - (187)
-------- --------- ---------- ------- ----------
Net cash provided by financing activities...................... 3,506 - - - 3,506
Effect of exchange rate changes................................ (634) - - - (634)
8
PART I FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
APCOA/Standard Parking, Inc. ("APCOA/Standard" or "the Company")
operates in a single reportable segment operating parking facilities under two
types of arrangements: management contracts and leases. Under a management
contract, APCOA/Standard typically receives a base monthly fee for managing the
property, and may also receive an incentive fee based on the achievement of
facility revenues above a base amount. In some instances, APCOA/Standard also
receives certain fees for ancillary services. Typically, all of the underlying
revenues, expenses and capital expenditures under a management contract flow
through to the property owner, not to APCOA/Standard. Under lease arrangements,
APCOA/Standard generally pays to the property owner either a fixed annual
rental, a percentage of gross customer collections or a combination thereof.
APCOA/Standard collects all revenues under lease arrangements and is responsible
for most operating expenses, but it is typically not responsible for major
maintenance or capital expenditures. As of March 31, 2001, APCOA/Standard
operated approximately 81% of its 1,959 parking facilities under management
contracts and approximately 19% under leases.
Parking services revenue--lease contracts. Lease parking services
revenues consist of all gross customer collections received at a leased
facility.
Parking services revenue--management contracts. Management contract
revenues consist of management fees, including both fixed and revenue-based, and
fees for ancillary services such as accounting, equipment leasing, consulting,
and other value-added services with respect to managed locations, but exclude
gross customer collections at such locations. Management contracts generally
provide APCOA/Standard a management fee regardless of the operating performance
of the underlying facility.
Cost of parking services--lease contracts. Cost of parking services
under lease arrangements consist of (i) contractual rental fees paid to the
facility owner and (ii) all operating expenses incurred in connection with
operating the leased facility. Contractual fees paid to the facility owner are
based on either a fixed contractual amount or a percentage of gross revenue, or
a combination thereof. Generally under a lease arrangement, APCOA/Standard is
not responsible for major capital expenditures or property taxes.
Cost of parking services--management contracts. Cost of parking
services under management contracts is generally passed through to the facility
owner, therefore these costs are not included in the results of operations of
the Company. Several APCOA/Standard contracts, however, require APCOA/Standard
to pay for certain costs that are offset by larger management fees. These
contracts tend to be large airport properties with high cost structures.
General and administrative expenses. General and administrative
expenses include primarily salaries, wages, travel and office related expenses
for the headquarters and field office and supervisory employees.
Summary of Operating Facilities
The following table reflects the Company's facilities at the end of the
periods indicated:
March 31, 2001 December 31, 2000 March 31, 2000
-------------- ----------------- --------------
Managed facilities............... 1,593 1,575 1,429
Leased facilities................ 366 368 393
------ ------- -------
Total facilities............... 1,959 1,943 1,822
====== ======= =======
The Company's strategy is to add locations in core cities where a
concentration of locations improves customer service levels and operating
margins. In general, contracts added as set forth in the table above followed
this strategy.
9
Results of Operations
Gross customer collections consist of gross receipts collected at all
leased and managed properties, including unconsolidated affiliates. Gross
customer collections increased $29.4 million, or 8%, to $395.5 million in the
first quarter of 2001 compared to $366.1 million in the first quarter of 2000.
This increase is attributable to the addition of 137 locations during the
period.
In analyzing gross margins of APCOA/Standard, it should be noted that
the cost of parking services incurred in connection with the provision of
management services is generally paid by the clients. Margins for lease
arrangements are significantly impacted by variables other than operating
performance, such as variability in parking rates in different cities and widely
varying space utilization by parking facility type.
The following should be read in conjunction with the Condensed
Consolidated Financial Statements.
Three Months ended March 31, 2001 Compared to Three Months ended March 31, 2000
Parking services revenue--lease contracts. Lease revenue decreased $6.1
million, or 13.0 %, to $41.3 million in the first quarter of 2001 as compared to
$47.4 in the first quarter of 2000. This resulted from the net reduction of 27
leases through contract expirations, conversions to management contracts and the
conversion of one large airport property from a lease contract to a management
contract.
Parking services revenue--management contracts. Management contract
revenue increased $4.7 million, or 30.3%, to $20.4 million in the first quarter
of 2001 as compared to $15.7 million in the first quarter of 2000. This resulted
from the net increase of 164 contracts through internal growth and conversions
from lease contracts.
Cost of parking services--lease contracts. Cost of parking services for
leases decreased $5.4 million, or 12.8%, to $37.2 million for the first quarter
of 2001 from $42.6 million in the first quarter of 2000. This decrease resulted
from the reduction of 27 leases through terminations and conversions to
management contracts. Gross margin for lease contracts declined slightly to 9.9%
for the first quarter of 2001 compared to 10.1% for the first quarter of 2000.
This decrease was primarily due to the increases in costs related to snow
removal.
Cost of parking services--management contracts. Cost of parking for
management contracts increased $4.2 million, or 66.2%, to $10.5 million for the
first quarter of 2001 from $6.3 million in the first quarter of 2000. This
increase resulted from the addition of a net total of 164 new contracts through
internal growth and conversions from lease contracts. Gross margin for
management contracts declined to 48.8% in the first quarter of 2001 compared to
59.8% for the first quarter of 2000. Most management contracts have no cost of
parking services related to them, as all costs are reimbursable to the Company.
However, several contracts (primarily large airport properties and several urban
locations) require the Company to pay for certain costs, which are offset by
larger management fees. The increase in cost of parking management contracts was
related to the addition of several contracts of this type.
General and administrative expenses. General and administrative
expenses decreased $0.6 million, or 6.4%, to $8.5 million for the first quarter
of 2001 as compared to $9.1 million, for the first quarter of 2000. This
decrease resulted from cost savings and staff reductions implemented in the
fourth quarter of 2000.
Other special charges. The Company did not record other special charges
in the first quarter of 2001, as compared to $0.1 million in the first quarter
of 2000. The 2000 special charges relate to actions to facilitate the accounting
system consolidation and other support functions.
Liquidity and Capital Resources
As a result of day-to-day activity at the parking locations,
APCOA/Standard collects significant amount of cash. Under lease contracts, this
revenue is deposited into local APCOA/Standard bank accounts, with a portion
remitted to the clients in the form of rental payments according to the terms of
the leases. Under management contracts, some clients require APCOA/Standard to
deposit the daily receipts into a local APCOA/Standard bank account. Others
require the deposit into a client account, and some have a segregated account
for the receipts and disbursements of the location.
10
Locations with revenues deposited into APCOA/Standard bank accounts
enable the Company to operate with a negative working capital. This negative
working capital arises from the liability that is created for the amount of
revenue that will be remitted to the clients in the form of rents or net profit
distributions subsequent to month end, after the books are closed and
reconciled. Since the Company operates with a revolving Senior Credit Facility,
all funds held for future remittance to the clients are used to reduce the
credit line until the payments are made to the clients.
Locations with revenue deposited into client accounts or segregated
accounts can, depending upon timing of rent or net profit distributions, result
in significant amounts of cash being temporarily inaccessible to the Company for
use for operating needs. Additionally, the ability to utilize cash deposited
into local APCOA/Standard accounts is dependent upon the movement of that cash
into the Company's corporate account. For these reasons, the Company from time
to time carries significant cash balances, while utilizing its Senior Credit
Facility.
The Company had cash and cash equivalents of $9.7 million at March 31,
2001 compared to $3.5 million at December 31, 2000.
Three Months ended March 31, 2001 Compared to Three Months ended March 31, 2000
Net cash provided by operating activities totaled $2.7 million for the
first quarter of 2001 compared to cash used of $0.6 million for the first
quarter of 2000. Cash provided during 2001 included a $1.5 million reduction in
accounts receivable, a $0.5 million reduction in prepaid and other assets, a
$3.6 million increase in accounts payable, which was offset by a $3.9 million
decrease in other liabilities due primarily to the $6.5 million interest payment
on the Senior Subordinated Notes. Cash used during 2000 included a $1.2 million
increase in accounts receivable, offset by increases in accounts payable and
other liabilities of $5.0 million and a decrease in other assets of $1.3
million. Cash used during 2000 included a $6.5 million interest payment on the
Senior Subordinated Notes.
Cash used in investing activities totaled $0.5 million for the first
quarter of 2001 compared to $1.4 million for the first quarter of 2000. Cash
used in investing activities in the first quarter of 2001 and the first quarter
of 2000 resulted from capital purchases to secure and/or extend leased
facilities and investments in management information system enhancements.
Cash generated from financing activities totaled $3.5 million in the
first quarter of 2001. The 2001 activity included $3.8 million in borrowings
from the Senior Credit Facility, offset by repayments on long-term and joint
venture borrowings of $0.3 million. The 2000 activity included $3.8 million in
borrowings from the Senior Credit Facility, offset by repayments on long-term
and joint venture borrowings of $0.3 million.
Other Liquidity and Capital Resources Information
The Company's Senior Credit Facility (the "Facility") provides cash
borrowings up to $40.0 million with sublimits for Letters of Credit up to $10.0
million, at variable rates based, at the Company's option, either on LIBOR, the
overnight federal funds rate, or the bank's base rate. The Company utilizes the
Facility to provide readily-accessible cash for working capital purposes. The
Facility includes covenants that limit the Company from incurring additional
indebtedness, issuing preferred stock or paying dividends, and contains certain
other restrictions. At March 31, 2001, the Company had $0.3 million of letters
of credit outstanding under the Facility and borrowings against the Facility
aggregated $30.8 million. The Facility was amended on March 30, 2000, with the
principal changes to the agreement providing for revisions to interest rates
charged on borrowings and certain financial covenants. The Facility was amended
on May 12, 2000, with the principal change to the agreement relating to the
definition of a change in control. The Facility was amended on November 14,
2000, with the principal changes to the agreement providing for revisions to
interest rates charged on borrowings and certain financial covenants. The
Facility was amended on March 30, 2001, with the principal changes to the
agreement providing for revisions to interest rates charged on borrowings,
certain financial covenants, a change to restore the original borrowing limits,
and a change in the expiration date from March 30, 2004 to July 1, 2002. As of
March 31, 2001, the Company was in compliance with the covenants contained in
the Facility or has obtained the necessary waivers on or before March 31, 2001.
The Company's ability to meet its anticipated future requirements for
working capital, capital expenditures, scheduled payments of interest and
principal on its indebtedness depends on the Company's future performance,
which, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors beyonds its
11
control. Based upon the current level of operations and anticipated growth, the
Company believes that, together with available borrowings under its Facility,
its cash flow and available liquidity will be adequate to meet the Company's
anticipated requirements up to the expiration date of the Facility. However,
there can be no assurance that the Company's business will generate sufficient
cash or that future borrowings will be available in an amount sufficient to
enable the Company to meet its future requirements, or that any refinancing of
existing indebtedness (including the Facility) would be available on
commercially reasonable terms, or at all.
If the Company identifies investment opportunities requiring cash in
excess of the Company's cash flows and existing cash, the Company may borrow
under the Senior Credit Facility.
Special Cautionary Notice Regarding Forward-Looking Statements
In addition to historical information, this Quarterly Report on Form
10-Q contains forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially. Factors that might cause
or contribute to such differences include, but are not limited to, those
discussed in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" as well as in this Quarterly Report generally. You should
carefully review the risks described in this Quarterly Report as well as the
risks described in other documents filed by the Company and from time to time
with the Securities and Exchange Commission. In addition, when used in this
Quarterly Report, the words "anticipates," "plans," "believes," "estimates," and
"expects" and similar expressions are generally intended to identify forward-
looking statements. Such statements are subject to a number of risks and
uncertainties. Our actual results, performance or achievements could differ
materially from the results expressed in, or implied by the Company or these
forward looking statements. The Company undertakes no obligation to revise these
forward-looking statements to reflect any future events or circumstances.
Cautionary Statements
The Company continues to be subject to certain factors that could
cause the Company's results to differ materially from expected and historical
results (see the "Risk Factors" set forth in the Company's Registration
Statement on Form S-4 (No. 333-50437) filed on April 17, 1998, as amended on
June 9, 1998, July 15, 1998, August 11, 1998 and August 14, 1998 (the
"Registration Statement") and the Company's 2000 10-K filed on April 2, 2001.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's primary market risk exposure consists of risk related to
changes in interest rates. Historically, the Company has not used derivative
financial instruments for speculative or trading purposes.
The Company entered into a $40.0 million revolving variable rate
Senior Credit Facility (see Note 3 of the Notes to the Condensed Consolidated
Financial Statements). Interest expense on such borrowing is sensitive to
changes in the market rate of interest. If the Company were to borrow the entire
$40.0 million available under the Facility, a 1% increase in the average market
rate would result in an increase in the Company's annual interest expense of
$0.4 million.
This amount is determined by considering the impact of the
hypothetical interest rates on the Company's borrowing cost, but does not
consider the effects of the reduced level of overall economic activity that
could exist in such an environment. Due to the uncertainty of the specific
changes and their possible effects, the foregoing sensitivity analysis assumes
no changes in the Company's financial structure.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In the normal course of business, the Company is involved in disputes,
generally regarding the terms of lease agreements. In the opinion of management,
the outcome of these disputes and litigation will not have a material adverse
effect on the consolidated financial position or operating results of the
Company.
12
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
------ -----------
2.1 Combination Agreement, dated as of January 15, 1998, by and
between APCOA, Inc. and the Standard Owners (incorporated by
reference to Exhibit 2.1 to the Registration Statement)
3.1 Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-4 (No. 333-50437)
filed on April 17, 1998, as amended on June 9, 1998, July 15,
1998, August 11, 1998 and August 14, 1998 (the "Registration
Statement")).
3.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3.2 to the Registration Statement).
3.3 Amended and Restated By-Laws of the Company dated as of
December 29, 2000. (incorporated by reference to Exhibit 3.3
to the Registration Statement).
4.1 Indenture, dated as of March 30, 1998, amended as of July 6,
1998, September 21, 1998 and January 12, 1999 by and among
the Company, the Subsidiary Guarantors and State Street Bank
and Trust Company (incorporated by reference to Exhibit 4.1
to the Registration Statement).
4.2 Form of New Note (included as Exhibit A to Exhibit 4.1).
4.3 Form of New Note Guarantee (included as Exhibit D to
Exhibit 4.1).
4.11 Fifth Amendment to the Senior Credit Facility dated March 30,
2001 by and among the Company, the Lenders and Bank One,
N.A., as agent for the Lenders. (incorporated by reference to
Exhibit 4.11 to the Company's Annual Report on Form 10-K
field for December 31, 2000).
b) Reports on Form 8-K
On March 8, 2001, the Company filed a Current Report on Form
8-K. This report disclosed that on March 5, 2001, Holberg
restructured certain of its debt and eliminated the defaults
thereunder, thereby eliminating the possibility of a change
of control of APCOA/Standard under the APCOA/Standard debt
instruments as a result of such defaults.
13
SIGNATURES
Pursuant to the requirements 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.
APCOA/Standard Parking, Inc.
(Registrant)
May 10, 2001
By:______________________________________________
Myron C. Warshauer
Director and Chief Executive Officer
May 10, 2001
By:______________________________________________
G. Marc Baumann
Executive Vice President,
Chief Financial Officer, and Treasurer
14
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
2.1 Combination Agreement, dated as of January 15, 1998, by and between
APCOA, Inc. and the Standard Owners (incorporated by reference to
Exhibit 2.1 to the Registration Statement)
3.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-4 (No. 333-50437) filed on April
17, 1998, as amended on June 9, 1998, July 15, 1998, August 11, 1998
and August 14, 1998 (the "Registration Statement")).
3.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3.2 to the Registration Statement).
3.3 Amended and Restated By-Laws of the Company dated as of December 29,
2000. (incorporated by reference to Exhibit 3.3 to the Registration
Statement).
4.1 Indenture, dated as of March 30, 1998, amended as of July 6, 1998,
September 21, 1998 and January 12, 1999 by and among the Company,
the Subsidiary Guarantors and State Street Bank and Trust Company
(incorporated by reference to Exhibit 4.1 to the Registration
Statement).
4.2 Form of New Note (included as Exhibit A to Exhibit 4.1).
4.3 Form of New Note Guarantee (included as Exhibit D to Exhibit 4.1).
4.11 Fifth Amendment to the Senior Credit Facility dated March 30, 2001
by and among the Company, the Lenders and Bank One, N.A., as agent
for the Lenders. (incorporated by reference to Exhibit 4.11 to the
Company's Annual Report on Form 10-K filed for December 31, 2000).
15