Exhibit 99
Standard Parking Corporation Reports Strong Third Quarter Results;
Pre-Tax Earnings up 55%
CHICAGO--(BUSINESS WIRE)--Nov. 3, 2006--Standard Parking Corporation
(NASDAQ:STAN), one of the nation's largest providers of parking management
services, today announced third quarter 2006 revenue (excluding reimbursed
management contract expense) and gross profit grew approximately 4% and 10%,
respectively, as compared with the third quarter of 2005. Pre-tax income
increased by 55%. Third quarter earnings per share were $0.44, an increase of
10% over the 2005 third quarter.
Third Quarter Highlights
-- Revenue (excluding reimbursed management contract expense) and gross
profit growth of 4% and 10%, respectively
-- Operating income up more than 30%
-- 55% increase in pre-tax income
-- Free cash flow of $9.5 million or $0.93 per share
-- Redemption of remaining 9.25% senior subordinated notes
2006 Year Guidance Reaffirmed
-- EPS expectation of $1.60 - $1.70
-- Pre-tax income per share expectation of $1.84 - $1.94
-- Free cash flow expectation of $20 million or higher
James A. Wilhelm, President and Chief Executive Officer, said, "We are very
pleased with this quarter's results as the business continues to execute on all
levels. We added 23 net new locations during the quarter and now exceed 2,000
total locations. At the same time, we maintained our 92% retention rate for
existing business for the twelve months ended September 30, 2006."
Third Quarter Operating Results
Revenue for the third quarter of 2006, excluding reimbursed management
contract expense, increased by approximately 4% to $65.7 million from $63.0
million in the year ago period. Excluding New Orleans, revenue from same
locations (locations open more than one year) increased by 7% as compared with
the third quarter of 2005.
Gross profit in the quarter increased by more than 10% to $19.2 million
from $17.4 million in the 2005 third quarter. This growth was achieved
notwithstanding the continuing impact of Hurricane Katrina in New Orleans, where
parking volume has not fully recovered at leased locations. Third quarter 2006
gross profit included $0.2 million realized from the integration of the Sound
Parking portfolio. Same location gross profit increased by 3% during the third
quarter.
General and administrative expenses increased by approximately 5% to $10.4
million from $9.9 million a year ago. The increase was due partially to $0.1
million in Sound Parking G&A and partially to stock compensation expense of $0.1
million resulting from the adoption of FAS 123R. The Company also incurred $0.4
million of due diligence expense to evaluate a potential acquisition. Excluding
this due diligence related expense, underlying G&A in the third quarter was in
line with the second quarter 2006 run-rate level.
Moderation in the rate of growth in general and administrative expenses,
coupled with a reduction in depreciation and amortization expense, resulted in
an increase in operating income for the third quarter of more than 30%, to $7.4
million versus $5.7 million in the year ago quarter.
Free cash flow for the third quarter was $9.5 million as compared with $8.6
million a year ago, which was used primarily to reduce borrowings. Consequently,
total debt was $77.3 million at the end of the 2006 third quarter, down $25.8
million from $103.1 million a year ago. The reduced borrowing level, combined
with lower borrowing rates contained in the amended credit agreement signed at
the end of the second quarter, resulted in a decrease in third quarter interest
expense of $0.1 million to $2.2 million, from a year ago. Accordingly, pre-tax
income for the 2006 third quarter increased by more than 55% to $5.3 million, or
$0.52 per share, up from $3.4 million, or $0.33 per share, last year. These
results reflect an increase of $0.6 million in pre-tax income attributable to
New Orleans for the 2006 third quarter as compared to the 2005 third quarter,
which included a $0.5 million insurance deductible charge for Hurricane Katrina.
The Company expects its 2006 book tax provision to be approximately 15% in
the absence of any changes to the valuation allowance for its deferred tax
assets. Given the potential for significant fluctuation in GAAP tax expense, the
Company considers year-over-year growth in pre-tax income to be the most
meaningful measure of its overall earnings performance. The Company continues to
expect its cash tax expense to be under 5% for 2006.
Net income for the 2006 third quarter was $4.5 million, or $0.44 per share,
versus $4.2 million, or $0.40 per share, a year ago.
Mr. Wilhelm continued, "We are very pleased that we have clearly achieved
one of our primary objectives from the time of the IPO, which was to increase
shareholder value through de-levering our balance sheet. From the time of the
IPO to the four quarter period ended September 30, 2006, financial leverage as
measured by net debt to EBITDA has dropped to 2.0x from 4.2x. This rapid
de-levering is the result of a combination of solid EBITDA growth and repayment
of debt. During this same period, the Company repurchased $12 million of its
common stock. A reconciliation of net debt and EBITDA is provided in a table at
the end of this release.
"With our improved financial flexibility and our expectations of consistent
free cash flow, our objective is to continue to increase shareholder value by
aggressively pursuing profitable growth, returning value to shareholders and
reducing financial leverage. As previously reported, in mid-October, our Board
of Directors increased the authorization to repurchase shares of the Company's
common stock during 2006 to $20 million from $7.5 million.
"Going forward, we will focus on aggressively pursuing various growth
avenues, including acquisitions, although the Company will continue to apply its
disciplined analysis in evaluating such opportunities. While the Company's
leverage may temporarily increase from time to time, particularly in connection
with an acquisition or other attractive business opportunity, the Company's
ability to consistently generate free cash flow enables it to support such
additional leverage."
Recent Developments
Significant contract activity during the third quarter includes the
following:
-- Calgary Health Region awarded the Company a contract to manage the
parking operations at its four hospitals and 36 satellite clinics in
Calgary, Alberta, Canada. The parking operations comprise 11,000
parking spaces that serve a 25,000 person staff and their patients.
The Company began its relationship with Calgary Health Region in 2005
with the management of a single garage at the Foothills Hospital. With
this most recent contract award, the Company now manages all of the
Calgary Health Region's parking operations.
-- Standard Parking was awarded a contract to manage over 1,100 spaces in
four separate facilities at Arizona State University's new downtown
Phoenix campus.
-- The Long Island Railroad division of the New York Metropolitan Transit
Authority awarded Standard Parking a contract to manage the parking at
the Mineola, New York commuter rail station. The new self park
facility contains over 1,000 spaces and serves one of the railroad's
busiest commuter centers.
-- Vornado Trust Realty, one of the nation's largest real estate owners
and managers, selected Standard Parking to manage its 1,300-space
self-park facility at Rego Park Mall, located in Queens, New York.
-- The signing by one of the Company's competitors of a lease to become a
major tenant of the City National Plaza located in downtown Los
Angeles. As part of the lease negotiation, the landlord agreed to
transfer management of that property's parking facility to the
Company's competitor, as a result of which the Company's operation of
the facility ended as of October 31, 2006.
Mr. Wilhelm commented, "New business activity remains strong, and continues
to outpace lost business. We are particularly pleased to expand our relationship
with the Calgary Health Region, which is experiencing significant growth and has
chosen to leverage our expertise as a dedicated parking management company to
manage the growth and financial potential of its parking operations. In
addition, we continue to make significant inroads in establishing new core
geographic markets in New York and southern Florida. Both of those areas hold
significant potential, and we are pleased that our operations in those areas
have progressed so expeditiously."
Year-to-Date Results
Revenue for the first nine months of 2006, excluding reimbursed management
contract expense, increased by more than 4% to $194.2 million from $186.0
million in the first nine months of 2005.
Gross profit for the first nine months of 2006 increased over 11% to $56.8
million from $51.0 million in the year ago period. The Sound Parking contract
portfolio in Seattle, acquired earlier this year, generated $0.6 million of
gross profit in the first nine months of 2006.
General and administrative expenses for the first nine months of 2006
increased 10% to $31.1 million from $28.2 million for the first nine months of
2005. Aside from ongoing costs related to permanent resource investment in
growth initiatives, other factors contributing to the increase include $0.4
million of expense associated with the acquired Sound Parking operations, $0.4
million of stock compensation expense, and $0.4 million of due diligence expense
incurred to evaluate a potential acquisition.
Operating income for the first nine months of 2006 increased almost 25% to
$21.3 million from $17.1 million in the first nine months of 2005. Excluding the
$0.9 million valuation allowance taken for a specific receivable in the first
quarter of 2005, nine-month 2006 operating income would have increased 18% over
2005.
Interest expense decreased by $0.5 million to $6.5 million for the first
nine months of 2006, due to a $25.8 million reduction in outstanding borrowings
and applicable interest rates.
Pre-tax income for the first nine months of 2006 was $14.8 million, an
increase of over 49% compared with the same period last year. After adjusting
for last year's valuation allowance for a specific receivable, pre-tax income
for the first nine months of 2006 increased almost 37% as compared with the same
period of 2005.
Income tax expense was $2.1 million for the first nine months of 2006 as
compared with an income tax benefit of ($0.7) million for the nine months of
2005 due to the recording of $0.5 million of quarterly deferred tax expense in
2006 and a 2005 reduction in the valuation allowance for deferred tax assets
that did not re-occur in 2006. Net income for the first nine months of 2006 was
$12.7 million as compared with $10.6 million in the same period of 2005, an
increase of 20%. This translates to earnings per share of $1.23 for the first
nine months of 2006 as compared with $1.00 for the same period last year.
The Company generated $20.3 million of free cash flow during the first nine
months of 2006 as compared with $17.3 million during the first nine months of
2005.
Mr. Wilhelm concluded, "With the significant free cash flow generated by
the Company, we are increasingly investing in information technology with the
goal of reducing overhead and improving our processes and efficiency. We have
upgraded and standardized all of the desktops and laptops used throughout the
organization. We have also made network enhancements that allow for more
efficient communication between the Chicago support office and our various
regional offices and site locations. Other initiatives underway are the
development of monthly parker, tenant lease management and workforce management
systems that will not only benefit our clients by improving revenue controls and
operating efficiency, but also will support the Company's long-term goal of
reducing G&A as a percentage of gross profit to below 50%."
Financial Outlook
Based on the year-to-date results, the Company is reaffirming its full year
2006 net earnings guidance range of $1.60 - $1.70 per share. The Company also is
reaffirming its pre-tax income per share range of $1.84 - $1.94 and free cash
flow expectation of $20 million or higher in 2006.
Conference Call
The Company's quarterly earnings conference call will be held at 10:00 am
(CST) on Monday, November 6, 2006, and will be available live and in replay to
all analyst/investors through a webcast service. To listen to the live call,
individuals are directed to the Company's investor relations page at
www.standardparking.com or www.earnings.com at least 15 minutes early to
register, download and install any necessary audio software. For those who
cannot listen to the live broadcast, replays will be available shortly after the
call on either website and can be accessed for 30 days after the call.
Standard Parking is a leading national provider of parking facility
management services. The Company provides on-site management services at
multi-level and surface parking facilities for all major markets of the parking
industry. The Company manages approximately 2,000 facilities, containing over
one million parking spaces in more than 300 cities across the United States and
Canada, including parking-related and shuttle bus operations serving more than
60 airports.
More information about Standard Parking is available at
www.standardparking.com. You should not construe the information on this website
to be a part of this report. Standard Parking's 2005 annual report filed on Form
10-K, its periodic reports on Form 10-Q and 8-K and its Registration Statement
on Form S-1 (333-112652) are available on the Internet at www.sec.gov and can
also be accessed through the Investor Relations section of the Company's
website.
DISCLOSURE NOTICE: The information contained in this document is as of
November 3, 2006. The Company assumes no obligation to update any
forward-looking statements contained in this document as a result of new
information or future events or developments.
This document and the attachments contain forward-looking information about
the Company's financial results that involve substantial risks and
uncertainties. You can identify these statements by the fact that they use words
such as "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "outlook," and other words and terms of similar meaning in connection
with any discussion of future operating or financial performance. Among the
factors that could cause actual results to differ materially are the following:
an increase in owner-operated parking facilities; changes in patterns of air
travel or automobile usage, including effects of changes in gas and airplane
fuel prices, effects of weather on travel and transportation patterns or other
events affecting local, national and international economic conditions;
implementation of the Company's operating and growth strategy, including
possible strategic acquisitions; the loss, or renewal on less favorable terms,
of management contracts and leases; player strikes or other events affecting
major league sports; changes in general economic and business conditions or
demographic trends; ongoing integration of past and future acquisitions in light
of challenges in retaining key employees, synchronizing business processes and
efficiently integrating facilities, marketing and operations; changes in current
pricing; development of new, competitive parking-related services; changes in
federal and state regulations including those affecting airports, parking lots
at airports and automobile use; extraordinary events affecting parking at
facilities that we manage, including emergency safety measures, military or
terrorist attacks and natural disasters; the Company's ability to renew the
Company's insurance policies on acceptable terms, the extent to which the
Company's clients purchase insurance through us and the Company's ability to
successfully manage self-insured losses; the Company's ability to form and
maintain relationships with large real estate owners, managers and developers;
the Company's ability to provide performance bonds on acceptable terms to
guarantee the Company's performance under certain contracts; the loss of key
employees; the Company's ability to develop, deploy and utilize information
technology; the Company's ability to refinance the Company's indebtedness; the
Company's ability to consummate transactions and integrate newly acquired
contracts into the Company's operations; availability, terms and deployment of
capital; the amount of net operating losses, if any, the Company may utilize in
any year; and the ability of Steamboat Industries LLC and its subsidiary to
control the Company's major corporate decisions. A further list and description
of these risks, uncertainties, and other matters can be found in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2005, in its
periodic reports on Forms 10-Q and 8-K, and in its Registration Statement on
Form S-1 (333-112652).
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share data)
September 30, December 31,
2006 2005
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $8,656 $10,777
Notes and accounts receivable, net 38,332 40,707
Prepaid expenses and supplies 2,607 2,217
Deferred income taxes 1,961 1,961
------------- ------------
Total current assets 51,556 55,662
Leaseholds and equipment, net 15,691 17,416
Long-term receivables, net 5,012 4,953
Advances and deposits 1,385 1,330
Goodwill 119,185 118,781
Other assets, net 3,071 3,211
------------- ------------
Total assets $195,900 $201,353
============= ============
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $33,137 $31,174
Accrued and other current liabilities 26,558 30,153
Current portion of long-term borrowings 2,899 3,763
------------- ------------
Total current liabilities 62,594 65,090
Deferred income taxes 3,021 1,561
Long-term borrowings, excluding current
portion 74,356 88,345
Other long-term liabilities 24,158 21,944
Convertible redeemable preferred stock,
series D 18%, par value $100 per share,
none issued and outstanding as of
September 30, 2006 and 10 shares issued
and outstanding as of December 31, 2005 - 1
Common stockholders' equity:
Common stock, par value $.001 per share;
12,100,000 shares authorized; 9,974,993
shares issued and outstanding as of
September 30, 2006 and common stock, par
value $.001 per share, 12,100,000 shares
authorized; 10,126,482 shares issued and
outstanding as of December 31, 2005 10 10
Additional paid-in capital 182,523 187,616
Accumulated other comprehensive income 174 419
Accumulated deficit (150,936) (163,633)
------------- ------------
Total common stockholders' equity 31,771 24,412
------------- ------------
Total liabilities and common
stockholders' equity $195,900 $201,353
============= ============
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except for share and per share data, unaudited)
Three Months Ended Nine Months Ended
----------------------- -----------------------
September September September September
30, 30, 30, 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Parking services
revenue:
Lease contracts $38,200 $38,659 $115,231 $116,526
Management contracts 27,542 24,347 78,999 69,479
----------- ----------- ----------- -----------
65,742 63,006 194,230 186,005
Reimbursement of
management contract
expense 86,915 85,253 257,852 252,688
----------- ----------- ----------- -----------
Total revenue 152,657 148,259 452,082 438,693
Cost of parking
services:
Lease contracts 34,765 35,546 104,431 106,247
Management contracts 11,758 10,034 32,993 28,791
----------- ----------- ----------- -----------
46,523 45,580 137,424 135,038
Reimbursed management
contract expense 86,915 85,253 257,852 252,688
----------- ----------- ----------- -----------
Total cost of
parking services 133,438 130,833 395,276 387,726
Gross profit:
Lease contracts 3,435 3,113 10,800 10,279
Management contracts 15,784 14,313 46,006 40,688
----------- ----------- ----------- -----------
Total gross profit 19,219 17,426 56,806 50,967
General and
administrative
expenses 10,393 9,937 31,127 28,241
Depreciation and
amortization 1,438 1,814 4,408 4,771
Valuation allowance
related to long-term
receivables - - - 900
----------- ----------- ----------- -----------
Operating income 7,388 5,675 21,271 17,055
Other expenses
(income):
Interest expense 2,161 2,234 6,541 7,081
Interest income (235) (63) (379) (217)
----------- ----------- ----------- -----------
1,926 2,171 6,162 6,864
Income before minority
interest and income
taxes 5,462 3,504 15,109 10,191
Minority interest 113 62 311 270
Income tax expense
(benefit) 821 (799) 2,101 (674)
----------- ----------- ----------- -----------
Net income $4,528 $4,241 $12,697 $10,595
=========== =========== =========== ===========
Common Stock Data:
Net income per common
share:
Basic $0.46 $0.42 $1.27 $1.03
Diluted $0.44 $0.40 $1.23 $1.00
Weighted average
common shares
outstanding:
Basic 9,948,454 10,191,044 10,025,564 10,312,219
Diluted 10,217,861 10,496,786 10,287,410 10,597,100
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except for share and per share data, unaudited)
Nine Months Ended
----------------------------
September 30, September 30,
2006 2005
------------- -------------
Operating activities:
Net income $12,697 $10,595
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation and amortization 4,056 4,304
Loss on sale of assets 352 467
Amortization of debt issuance costs 457 567
Amortization of carrying value in excess
of principal (108) (124)
Non-cash stock option compensation
expense 403 --
(Reversal) provision for losses on
accounts receivable (450) 262
Valuation allowance related to long-term
receivables -- 900
Write-off of debt issuance costs 416 --
Write-off of carrying value in excess of
principal related to the 9 1/4% senior
subordinated notes (352) --
Deferred income taxes 1,460 (915)
Change in operating assets and
liabilities 2,348 4,534
------------- -------------
Net cash provided by operating activities 21,279 20,590
Investing activities:
Purchase of leaseholds and equipment (808) (3,286)
Contingent purchase payments (225) (242)
------------- -------------
Net cash used in investing activities (1,033) (3,528)
Financing activities:
Repurchase of common stock (5,997) (5,963)
Repurchase of convertible redeemable
preferred stock, series D (1) --
Proceeds from exercise of stock options 501 14
Proceeds (payments) on senior credit
facility 35,400 (5,000)
Payments on long-term borrowings (291) (203)
Payments on joint venture borrowings (521) (457)
Payments of debt issuance costs (732) (118)
Payments on capital leases (1,908) (2,339)
Repurchase of 9 1/4% senior subordinated
notes (48,877) --
------------- -------------
Net cash used in financing activities (22,426) (14,066)
Effect of exchange rate changes on cash
and cash equivalents 59 194
------------- -------------
(Decrease) increase in cash and cash
equivalents (2,121) 3,190
Cash and cash equivalents at beginning of
period 10,777 10,360
------------- -------------
Cash and cash equivalents at end of
period $8,656 $13,550
------------- -------------
Supplemental disclosures:
Cash paid during the period for:
Interest $7,521 $7,748
Income taxes 295 362
Supplemental disclosures of non-cash
activity:
Debt issued for capital lease obligation $2,335 $1,647
STANDARD PARKING CORPORATION
FREE CASH FLOW
(in thousands)
Three months ended Nine months ended
September 30 September 30
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Operating income $7,388 $5,675 $21,271 $17,055
Depreciation and amortization 1,438 1,814 4,408 4,771
Valuation allowance related
to long-term receivables - - - 900
Income tax paid (96) (94) (295) (362)
Minority interest (113) (62) (311) (270)
Change in assets and
liabilities 3,891 7,427 3,786 6,438
Capital expenditures and
contingent purchase payments (205) (2,949) (1,033) (3,528)
--------- --------- --------- ---------
Operating cash flow $12,303 $11,811 $27,826 $25,004
Cash interest paid (2,827) (3,213) (7,521) (7,748)
--------- --------- --------- ---------
Free Cash Flow (1) $9,476 $8,598 $20,305 $17,256
Decrease (Increase) in cash
and cash equivalents (1,831) (4,832) 2,121 (3,190)
--------- --------- --------- ---------
Free cash flow, net of change
in cash $7,645 $3,766 $22,426 $14,066
(Uses)/Sources of cash:
(Payments) on senior credit
facility and 9.25% Notes ($6,827) ($1,200) ($13,477) ($5,000)
(Payments) on long-term
borrowings (876) (902) (2,720) (2,999)
(Payments) of debt issuance
costs (115) - (732) (118)
Proceeds from exercise of
stock options 174 - 501 14
(Repurchase) of common stock - (1,664) (5,997) (5,963)
(Repurchase) of series D
preferred stock (1) - (1) -
--------- --------- --------- ---------
Total (uses) of cash ($7,645) ($3,766) ($22,426) ($14,066)
- ----------------------------------------------------------------------
(1) Reconciliation of Free Cash Flow to Consolidated Statements of
Cash Flow
Nine months Six months Three months
ended ended ended
September 30, June 30, September 30,
2006 2006 2006
-----------------------------------------
Net cash provided by
operating activities $21,279 $12,102 $9,177
Net cash (used in) investing
activities (1,033) (828) (205)
Effect of exchange rate
changes on cash and cash
equivalents 59 (445) 504
------------- ------------- -------------
Free cash flow $20,305 $10,829 $9,476
Nine months Six months Three months
ended ended ended
September 30, June 30, September 30,
2005 2005 2005
-----------------------------------------
Net cash provided by
operating activities $20,590 $9,482 $11,108
Net cash (used in) investing
activities (3,528) (579) (2,949)
Effect of exchange rate
changes on cash and cash
equivalents 194 (245) 439
------------- ------------- -------------
Free cash flow $17,256 $8,658 $8,598
STANDARD PARKING CORPORATION
EBITDA AND NET DEBT RECONCILIATION
Twelve months ended
------------------------------------
June 30, 2004 September 30, 2006
----------------- ------------------
Net Income (1) $1,923 $16,821
Add:
Interest expense, net 16,676 7,855
Income tax expense 500 2,761
Depreciation and amortization 6,930 6,064
EBITDA (2) $26,029 $33,501
Long-term borrowings, excluding
current portion $115,547 $74,356
Current portion of long-term
borrowings 2,982 2,899
less: Cash and cash equivalents (8,257) (8,656)
Net Debt $110,272 $68,599
Net Debt to EBITDA multiple 4.2x 2.0x
(1) For the twelve month period ended June 30, 2004, net income is
before preferred stock dividends and increase in value of common
stock subject to put/call.
(2) EBITDA does not represent and should not be considered as an
alternative to net income or cash flow from operations, as determined
by accounting principles generally accepted in the United States
(GAAP), and the Company's calculations thereof may not be comparable
to that reported by other companies. EBITDA is calculated above as it
is a basis upon which the Company assesses its liquidity position and
because we believe that this presents useful information to investors
regarding a company's ability to service and/or incur indebtedness.
This belief is based upon the Company's negotiations with its lenders
who have indicated that the amount of indebtedness it will be
permitted to incur will be based, in part, on measures similar to its
EBITDA. EBITDA does not take into account the Company's working
capital requirements, debt service requirements and other commitments
and, accordingly, is not necessarily indicative of amounts that may
be available for discretionary use.
STANDARD PARKING CORPORATION
LOCATION COUNT
September 30, December 31, September 30,
2006 2005 2005
------------- ------------- -------------
Managed facilities 1,743 1,643 1,631
Leased facilities 261 263 276
------------- ------------- -------------
Total facilities 2,004 1,906 1,907
CONTACT: Standard Parking Corporation
Executive Vice President and Chief Financial Officer
G. MARC BAUMANN, 312-274-2199
mbaumann@standardparking.com