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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended December 31, 1997
Commission file number 001-13950
CENTRAL PARKING CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Tennessee 62-1052916
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(State or Other Jurisdiction of Incorporation (I.R.S. Employer Identification No.)
or Organization)
2401 21st Avenue South,
Suite 200, Nashville, Tennessee 37212
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (615) 297-4255
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Former name, address and fiscal year, if changed since last report: Not Applicable
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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 February 09, 1998
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Common Stock, $0.01 par value 26,316,429
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INDEX
CENTRAL PARKING CORPORATION
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PART 1. FINANCIAL INFORMATION
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Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets
--- December 31, 1997, September 30, 1997 and December 31, 1996............................... 3
Condensed consolidated statements of earnings
--- three months ended December 31, 1997 and 1996............................................. 4
Condensed consolidated statements of cash flows
--- three months ended December 31, 1997 and 1996............................................. 5
Notes to condensed consolidated financial statements.......................................... 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................................................... 8-11
PART 2. OTHER INFORMATION
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Item 4. Submission of Matters to a Vote of Security Holders........................................... 11
Item 6. Exhibits and Reports on Form 8-K.............................................................. 11
SIGNATURES ................................................................................... 12
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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Dollar amounts in thousands
UNAUDITED
DECEMBER 31, SEPTEMBER 30,
1997 1997
---- ----
ASSETS
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Current assets:
Cash and cash equivalents $ 13,288 $ 9,979
Management accounts receivable 11,164 11,004
Accounts and current portion of notes receivable - other 4,790 6,158
Prepaid expenses 11,314 9,394
Deferred income taxes 981 911
Refundable income taxes -- 2,154
------------ ------------
Total current assets 41,537 39,600
Investments, at amortized cost 4,825 4,754
Notes receivable, less current portion 16,402 16,537
Property, equipment, and leasehold improvements, net 80,177 79,057
Contract rights, net 4,807 5,021
Goodwill, net 51,584 31,863
Investment in limited partnerships 1,240 1,240
Investment in general partnerships and joint ventures 48,949 48,955
Other assets 7,223 6,987
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$ 256,744 $ 234,014
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LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt $ 1,292 $ 206
Accounts payable 26,586 25,097
Accrued payroll and related costs 7,262 8,256
Accrued expenses 4,780 4,020
Management accounts payable 9,928 10,381
Income taxes payable 3,690 871
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Total current liabilities 53,538 48,831
Long-term debt 86,899 73,252
Other liabilities 5,293 5,161
Deferred compensation 3,118 3,048
Deferred income taxes 5,693 6,871
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Total liabilities 154,541 137,163
Shareholders' equity :
Common stock, $.01 par value; 50,000,000 shares authorized,
26,316,054 and 26,303,592
issued and outstanding, respectively 263 263
Additional paid-in capital 33,050 32,843
Foreign currency translation adjustment 271 193
Retained earnings 69,172 64,122
Deferred compensation on restricted stock, net (553) (570)
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Total shareholders' equity 102,203 96,851
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$ 256,744 $ 234,014
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See accompanying notes to condensed consolidated financial statements
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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Unaudited
Dollar amounts in thousands, except per share data
Three Months Ended December 31,
1997 1996
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Revenues:
Parking $ 59,005 $ 32,085
Management contract 12,184 9,338
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Total revenues 71,189 41,423
Costs and expenses:
Cost of parking 51,895 29,085
Cost of management contracts 3,252 2,501
General and administrative 7,238 4,708
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Total costs and expenses 62,385 36,294
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Operating earnings 8,804 5,129
Other income (expenses):
Interest income 497 625
Interest expense (1,411) (7)
Net gains on sales of property and equipment 2 3
Equity in partnership and joint venture earnings 1,207 250
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Other income (expenses), net 295 871
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Earnings before income taxes 9,099 6,000
Income taxes 3,457 2,101
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Net earnings $ 5,642 $ 3,899
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Basic earnings per common share $ 0.22 $ 0.15
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Diluted earnings per common share $ 0.21 $ 0.15
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Dividends per basic and diluted weighted average common share $ 0.02 $ 0.01
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See accompanying notes to condensed consolidated financial statements
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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
Dollar amounts in thousands
THREE MONTHS ENDED DECEMBER 31,
1997 1996
---- ----
Cash flows from operating activities:
Net earnings $ 5,642 $ 3,899
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation 1,054 711
Amortization of contract rights 214 214
Amortization of deferred compensation cost 17 17
Amortization of goodwill and non-compete agreements 562 --
Equity in partnership and joint venture (earnings) (1,207) (250)
Distributions from partnerships and joint ventures 1,313 181
Net gains on sales of property and equipment (2) (3)
Deferred income taxes 247 39
Changes in operating assets and liabilities, excluding effects of
acquisitions:
(Increase) decrease in management accounts receivable (157) 388
(Increase) decrease in notes and accounts receivable - other 2,261 (119)
(Increase) decrease in prepaid expenses (1,573) (1,654)
(Increase) decrease in refundable income taxes 2,154 --
(Increase) decrease in other assets 211 (293)
Increase (decrease) in accounts payable, accrued expenses
other liabilities and deferred compensation (372) (4)
Increase (decrease) in management accounts payable (1,321) (1,401)
Increase (decrease) in income taxes payable 2,577 2,406
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Net cash provided by operating activities 11,620 4,131
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Cash flows from investing activities:
Proceeds from sales of property and equipment 62 18
Investments in notes receivable (3) --
Purchase of property, equipment, and leasehold improvements (2,063) (93,611)
Investment in general and limited partnerships (309) (119)
Acquisition of company net of cash acquired (12,258) --
Purchase of investments (71) (68)
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Net cash used by investing activities (14,642) (93,780)
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Cash flows from financing activities:
Dividends paid (395) (349)
Net borrowings under revolving credit agreement 6,550 67,200
Principal repayments on notes payable (109) --
Proceeds from issuance of common stockand exercise of stock options, net 207 166
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Net cash provided by financing activities 6,253 67,017
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Foreign currency translation 78 (123)
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Net increase (decrease) in cash and cash equivalents 3,309 (22,755)
Cash and cash equivalents at beginning of period 9,979 28,605
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Cash and cash equivalents at end of period $ 13,288 $ 5,850
======== ========
Effects of acquisition:
Fair value of assets acquired $ 4,246 $ --
Purchase price in excess of the net assets acquired 20,258 --
Liabilities assumed in acquisitions (2,827) --
Debt issued in acquisitions (8,237) --
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Cash paid 13,440 --
Less cash acquired (1,182) --
-------- --------
Net cash paid for acquisition $ 12,258 $ --
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See accompanying notes to condensed consolidated financial statements
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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
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 intercompany transactions have been eliminated in consolidation.
Operating results for the three months ended December 31, 1997 are not
necessarily indicative of the results that may be expected for the fiscal year
ending September 30, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended September 30, 1997
(included in the Company's Annual Report on Form 10-K). Certain items have been
restated to conform to current year presentation.
Stock Split
On November 21, 1997, the Board of Directors approved a three-for-two
stock split payable to shareholders of record as of December 5, 1997. The stock
split was distributed on December 12, 1997, resulting in the net issuance of
8,771,363 new shares. All shares and per share amounts in this report have been
adjusted to reflect the stock split.
Earnings Per Share
In 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share". Statement 128 replaced the previously reported primary and
fully diluted earnings per share with basic and diluted earnings per share.
Basic earnings per share excludes dilution and is computed by dividing income
available to common shareholders by the weighted-average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity. Diluted earnings
per share is computed similarly to fully diluted earnings per share pursuant to
APB No. 15. SFAS No. 128 is effective for financial statements for both interim
and annual periods ending after December 15, 1997. Earnings per share for all
periods presented have been calculated and presented in accordance with SFAS No.
128.
The following table sets forth the computation of basic and diluted
earnings per share:
Three Months Ended Three Months Ended
December 31, 1997 December 31,1996
Income Common Per-Share Income Common Per-Share
Available Shares Amount Available Shares Amount
Basic earnings per share $5,642 26,042 $0.22 $3,899 25,965 $0.15
Effect of dilutive stock and options:
Stock option plan 233 (0.01) 125
Restricted stock plan 166 170
Deferred stock unit plan - -
Employee stock purchase plan 41 12
Diluted earnings per share $5,642 26,482 $0.21 $3,899 26,272 $0.15
Weighted average common shares used for the computation of basic earnings
per share excludes certain common shares issued pursuant to the Company's
restricted stock plan because under the related deferred
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compensation agreement the officer forfeits such shares if he voluntarily
terminates his employment with the Company.
Options to purchase 12,430 shares of common stock at $39.44 under the
deferred stock unit plan were outstanding during the three months ended December
31, 1997 but were not included in the computation of diluted earnings per share
because the options' exercise price was greater than the average market price of
the common shares and, therefore, the effect would be antidilutive.
Acquisitions
On October 1, 1997, the Company purchased Diplomat Parking Corporation
("Diplomat") for $21.7 million, which was financed through a $12.3 million draw
on the Company's Revolving Credit Facility and an $8.2 million note to the
sellers payable in January 1998 at an interest rate of 5%. The note payment was
financed through a draw on the Revolving Credit Facility. Diplomat operates 164
parking facilities, located primarily in Washington, D.C. and Baltimore,
Maryland. The transaction was accounted for using the purchase method and,
accordingly, the results of operations of Diplomat have been included in the
Company's consolidated financial statements from the date of acquisition. The
purchase price has been allocated to Diplomat's assets and liabilities based on
their estimated fair values at the date of acquisition. The excess of the
purchase price over fair value of the net assets acquired of $20.3 million is
being amortized on a straight-line basis over 25 years. Purchase price
adjustments for Diplomat have not been finalized at December 31, 1997. Final
purchase price adjustments are not expected to be material.
Pro Forma Information
The following unaudited consolidated pro forma condensed results of
operations, give effect to the acquisitions of Square Industries, Inc., Civic
Parking LLC, Car Park Corporation and Diplomat Parking as if such transactions
had occurred at October 1, 1996, as follows (in thousands except for earnings
per share):
Three Months Ended
December 31, 1996
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Total revenues $ 64,542
Earnings before income taxes $ 5,671
Net earnings $ 3,550
Basic earnings per share $ 0.14
Diluted earnings per share $ 0.13
The foregoing unaudited proforma amounts are based upon certain assumptions
and estimates, including, but not limited to, the recognition of estimated cost
savings related to general and administrative expenses to be eliminated
prospectively in connection with the Square acquisition, interest expense on
debt incurred to finance the acquisitions and amortization of goodwill over 25
years. The unaudited proforma amounts do not necessarily represent the results
which would have occurred if the acquisitions had taken place on the basis
assumed above, nor are they indicative of the results of future combined
operations.
Long Term Debt
Long term debt includes the Revolving Credit Facility, which is unsecured,
expires January 31, 2000, and provides that the Lenders may extend the term
until January 31, 2001, upon the request of the Company. Advances under the
Revolving Credit Facility bear interest at one of two rates, at the Company's
option, either (i) the bank's base rate or (ii) the LIBOR plus a margin ranging
from .25% to 1.25% depending on the occurrence of certain dates or events and
achievement of certain financial ratios. In accordance with the loan agreement,
the Company permanently reduced the Revolving Credit Facility from $150 million
to $120 million as of April 16, 1997. The Revolving Credit Facility contains
certain covenants which require the Company and its subsidiaries to maintain
certain financial ratios and restrict further indebtedness. The amount
outstanding under the Company's Revolving Credit Facility was $77.3 million and
$67.2 million at December 31, 1997 and December 31, 1996, respectively. The
weighted average interest rate was 6.6% and 7.3% for the first quarter of fiscal
1998
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and 1997, respectively. The Company will refinance the borrowings under the
Revolving Credit Facility with proceeds of the Acquisition Credit Facility (see
Subsequent Events).
Long term debt includes a note payable to the sellers of Diplomat for $8.2
million, at an interest rate of 5%, which was due and paid in January, 1998. The
note is secured by a letter of credit that will be canceled upon payment of the
note. The note payment was financed through a draw on the Revolving Credit
Facility.
Subsequent Events
On November 7, 1997, the Company announced it had signed a definitive
purchase agreement to acquire Kinney System Holding Corporation ("Kinney").
Management currently estimates a purchase price of approximately $225 million,
which is subject to adjustment, consisting of cash and $37.0 million of the
Company's common stock, plus assumption of approximately $18.6 million of debt.
Management intends to finance the purchase price through the new Acquisition
Credit Facility.
The Company expects to close a loan agreement on February 11, 1998 for an
aggregate $300 million credit facility ("Acquisition Credit Facility")
consisting of a five year $200 million Revolving Credit Facility which will
include a sublimit of $25 million for standby letters of credit and a $100
million five year term loan with scheduled repayment of $25 million per year,
beginning in year two, at an interest rate during the first six months of LIBOR
plus 125 basis points. At the end of an initial six month period, the interest
rate on the Acquisition Credit Facility and the commitment fee will revert to
grid pricing based upon the Company achieving a number of certain financial
ratios. The Acquisition Credit Facility restricts further indebtedness and
limits the amount of dividends paid. The Acquisition Credit Facility will
replace the Revolving Credit Facility (see Long-Term Debt) upon closing of
Kinney.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company provides parking services at multi-level parking facilities and
surface parking lots. It also provides parking consulting services, shuttle
services, valet services, parking meter enforcement services, and billing and
collection services. The Company distinguishes itself from its competitors by
combining a reputation for professional integrity and quality management with
operating strategies designed to increase the revenues of parking operations for
its clients. The Company's clients and landlords include some of the nation's
largest owners and developers of mixed-use projects, major office building
complexes, sports stadiums and hotels. Parking facilities operated by the
Company include, among others, certain terminals operated by BAA Heathrow
International Airport (London), the Prudential Center (Boston), Cinergy Field
(Cincinnati), Coors Field (Denver) and various parking facilities owned by the
Hyatt and Westin hotel chains, the Rouse Company, Faison Associates, May
Department stores, Equity Office Properties, and Crescent Real Estate.
The Company operates parking facilities under three types of arrangements:
- - Management contracts. The Company's responsibilities under a management
contract as a facility manager include hiring, training, and staffing
parking personnel, and providing collections, accounting, record keeping,
insurance, and facility marketing services. In general, the Company is not
responsible for structural, mechanical, or electrical maintenance or
repairs, or providing security or guard services. The Company generally
receives a base monthly fee for managing these facilities plus fees for
ancillary services such as insurance, accounting, equipment leasing, and
consulting and often receives a percentage of facility revenues above a
base amount. Under the Company's typical management contract, the facility
owner pays a minimum management fee and operating expenses such as taxes,
license and permit fees, insurance, payroll and accounts receivable
processing, and wages of personnel assigned to the facility. In addition,
the facility owner also pays for maintenance, repair costs, and capital
improvements. The typical management contract is for a term of one to three
years and is renewable, typically for successive one-year terms.
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- - Lease contracts. In contrast to management contracts, lease arrangements
are typically for terms of three to ten years, with a renewal term, and
provide for a contractually established payment for the facility owner,
regardless of operating earnings of the parking facility. The Company's
rent is generally either a flat annual amount, a percentage of gross
revenues, or a combination thereof. Under its leases, the Company is
responsible for all facets of the parking operations, including utilities
and ordinary and routine maintenance, but is generally not responsible for
major maintenance, repair, or property taxes. The leased facilities require
a longer commitment and a larger capital investment by the Company than
managed facilities, but provide a more stable source of revenue and a
greater opportunity for long term revenue growth.
- - Facility ownership. Ownership of parking facilities, either independently
or through joint ventures, typically requires a larger capital investment
than managed or leased facilities, but provides maximum control over the
operation of the parking facility. All owned facility revenues flow
directly to the Company. Additionally, ownership provides the potential for
realizing capital gains from the appreciation of the value of underlying
real estate. The Company typically targets ownership opportunities in
cities in which it currently operates, focusing on unrelated sites that are
being used as parking facilities.
The Company also seeks joint venture partners who are established local
or regional developers pursuing financing alternatives for development projects.
Joint ventures typically involve a development where the parking facility is a
part of a larger multi-use project, allowing the Company's joint venture
partners to benefit from a capital infusion to the project. Joint ventures offer
the revenue growth potential of ownership with a partial reduction in capital
requirements.
Parking revenues for the first quarter of fiscal 1998 increased to
$59.0 million from $32.1 million in the first quarter of fiscal 1997, an
increase of $26.9 million, or 83.9%. Of the $26.9 million increase, $19.4
million, or 72.1% of the increase, resulted from the acquisition of Square, Car
Park and Diplomat's 162 leased and owned locations. The remaining increase of
$7.5 million, or 27.9%, is a result from the net addition of 57 leased and 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 increased to $5.6 million from $4.0 million, an
increase of $1.6 million or 42.3%. The increase in foreign revenues was a result
of a combination of the addition of 8 leased locations as well as rate increases
and higher utilization of parking spaces at existing facilities.
Management contract revenues for the first quarter of fiscal 1998
increased to $12.2 million from $9.3 million in the first quarter of fiscal
1997, an increase of $2.9 million or 30.5%. Of the $2.9 million increase, $1.3
million, or 46.4%, resulted from the addition of 136 management locations
through the acquisitions of Square, Car Park and Diplomat. The remaining
increase of $1.6 million, or 53.6%, is attributed to the net addition of 79
management contracts and increased management fees on existing locations.
Cost of parking in fiscal first quarter 1998 increased to $51.9 million
from $29.1 million in fiscal first quarter 1997, an increase of $22.8 million or
78.4%. Rent expense increased $12.2 million and payroll increased $5.0 million,
principally as a result of new locations from acquisitions and increases on
existing locations. Cost of parking as a percentage of parking revenues,
decreased to 88.0% in the first quarter of fiscal 1998 from 90.6% in fiscal
first quarter 1997. This decrease of 260 basis points was attributable
predominantly to the spreading of a number of fixed costs, primarily rent and
property costs, over a larger revenue base.
Cost of management contracts in fiscal first quarter 1998 increased to
$3.3 million from $2.5 million in the comparable period in 1997, an increase of
$800 thousand or 30.0%. The increase was attributable to an increase in the
number of managed locations and higher costs incurred at existing locations
associated with increased revenues.
General and administrative expenses increased to $7.2 million for the
first quarter of fiscal 1998 from $4.7 million in fiscal first quarter 1997, an
increase of $2.5 million or 53.7%. The increase is primarily attributable to
increased incentive compensation resulting from increased profits and start-up
costs associated with the opening of new locations and joint ventures. Goodwill
and non-compete amortization for the Square, Car Park and Diplomat acquisitions
accounts for $562 thousand, or 22.2% of the $2.5 million increase. General and
administrative expenses, as a percentage of revenues, were 10.2% for the first
quarter of fiscal 1998 compared to 11.4% for the first quarter of fiscal 1997, a
decrease of 120 basis points. The decrease was attributable to spreading fixed
expenses over a broader base and the implementation of bonus limits on certain
key executives.
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Interest income decreased to $497 thousand for the first quarter of
fiscal 1998, from $625 thousand in the first quarter of fiscal 1997, a decrease
of $128 thousand or 20.5%. The decrease in interest income is a result of
decreased investment balances outstanding during the quarter.
Interest expense increased to $1.4 million for the first quarter of
fiscal 1998 from $6 thousand in the first quarter of fiscal 1997. The increase
in interest expense was attributable to the increase in indebtedness under the
Company's Revolving Credit Facility. The weighted average balance outstanding
was $78.5 million during the quarter ended December 31, 1997 at a weighted
average interest rate of 6.6%. During fiscal first quarter 1997, $67.2 million
indebtedness under the Revolving Credit Facility was outstanding for one day,
with minimal interest expense.
Income taxes increased to $3.5 million for the first quarter of fiscal
1998 from $2.1 million in the first fiscal quarter in 1997, an increase of $1.4
million or 64.6%. The effective tax rate for the fiscal 1998 quarter was 38.0%
compared to 35.0% for the 1997 quarter. The increase in the effective tax rate
is attributable to a combination of decreasing interest income on tax exempt
investments in 1997, an increase in non-tax deductible goodwill amortization and
an increase in effective state income tax rates. The increased trend of this
effective tax rate is expected to continue for the remainder of the year.
Liquidity and Capital Resources
During the first three months ended December 31, 1997 and 1996, the
Company generated cash flow from operating activities of $11.6 million and $4.1
million, respectively. The increase is primarily attributable to increased net
earnings.
The Company utilized cash of $12.3 million, net of cash acquired, in
fiscal first quarter 1998 for the Diplomat acquisition.
The Company purchased properties during the three months ended December
31, 1997 and 1996 in the amounts of $2.0 million and $93.6 million,
respectively. For fiscal quarter 1997, Civic Parking LLC ("Civic"), which
consists of four parking garages totaling approximately 7,500 parking spaces,
was acquired for $91.0 million. The purchase was funded partially through
available cash and the drawing under a revolving credit facility in the amount
of $67.2 million (see Revolving Credit Facility). In April 1997, the Company
sold 50% of its investment in Civic for $46.0 million.
On January 18, 1997, the Company completed its offer to acquire all the
outstanding shares of Square Industries, Inc. The total purchase price,
including assumed debt and transaction costs, totaled $78 million. The funds
required for this acquisition were drawn under a revolving credit facility (see
Revolving Credit Facility).
On May 29, 1997, the Company acquired the assets and related leases of
Car Park Corporation ("Car Park") for $3.5 million; consisting of 18 parking
facilities with approximately 2,600 parking spaces located in the San Francisco
metropolitan region. The purchase price was financed through a draw of
approximately $1.7 million on the Company's Revolving Credit Facility, and $1.8
million payable to the seller's in monthly installments over a four year term,
subject to early payoff at the seller's request (at a discounted rate).
On October 1, 1997, Diplomat Parking Corporation was purchased for $21.7
million. The purchase was financed through a $12.3 million draw on the Company's
Revolving Credit Facility and an $8.2 million note payable to the sellers in
January, 1998. The note is secured by a letter of credit that will be canceled
upon payment of the note. The note payment was financed through the Revolving
Credit Facility (see Revolving Credit Facility). Diplomat operated 164 parking
facilities containing approximately 37,000 parking spaces, located primarily in
Washington D.C. and Baltimore, Maryland.
In November, 1997, the Company signed a definitive agreement to acquire
Kinney System Holding Corporation ("Kinney"). Management estimates a purchase
price of approximately $225 million, which is subject to adjustment, including
cash and $37.0 million of the Company's common stock, plus assumption of $18.6
million of debt (see Acquisition Credit Facility).
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Revolving Credit Facility
The Revolving Credit Facility, which is unsecured, expires January 31,
2000, and provides that the Lenders may extend the term until January 31, 2001,
upon the request of the Company. Advances under the Revolving Credit Facility
bear interest at one of two rates, at the Company's option, either (i) the
bank's base rate or (ii) the LIBOR plus a margin ranging from .25% to 1.25%
depending on the occurrence of certain dates or events and achievement of
certain financial ratios. In accordance with the loan agreement, the Company
permanently reduced the Revolving Credit Facility from $150 million to $120
million as of April 16, 1997. The Revolving Credit Facility contains certain
covenants which require the Company and its subsidiaries to maintain certain
financial ratios and restrict further indebtedness. The amount outstanding under
the Company's Revolving Credit Facility at December 31, 1997 was $77.3 million
with a weighted average interest rate of 6.6% for the first quarter of fiscal
1998. The Company will refinance the borrowings under the Revolving Credit
Facility with proceeds of the Acquisition Credit Facility (see Acquisition
Credit Facility).
Acquisition Credit Facility
The Company expects to close a loan agreement on February 11, 1998 for an
aggregate $300 million facility consisting of a five year $200 million Revolving
Credit Facility which will include a sublimit of $25 million for standby letters
of credit and a $100 million five year term loan with scheduled repayment of $25
million per year, beginning in year two, at an interest rate during the first
six months at LIBOR plus 125 basis points. At the end of an initial six month
period, the interest rate on the facility and the commitment fee will revert to
a grid pricing based upon the Company achieving a number of certain financial
ratios. The Acquisition Credit Facility restricts further indebtedness and
limits the amount of dividends paid. The Acquisition Credit Facility will
replace the Revolving Credit Facility (see Long-Term Debt) upon closing of the
Kinney acquisition.
PART II -- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
No matter was submitted to a vote of the Company's security-holders
during the three months ended December 31, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2.1 Form of $300,000,000 Senior Credit Facility
("Acquisition Credit Facility") dated February 11,
1998 by and among various banks with NationsBanc
Montgomery Securities, Inc., Charlotte, as Agent,
and Central Parking Corporation and its affiliates.
27. Financial Data Schedule (EDGAR Filing Only)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
three months ended December 31, 1997.
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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: February 10, 1998 By: /s/ Stephen A. Tisdell
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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
--------- ----- ----
Chief Financial Officer (Principal
/s/ Stephen A. Tisdell Financial and Accounting Officer) February 10, 1998
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Stephen A. Tisdell
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