SP - Earnings call transcript Q2 2021 | Central Parking Finance Trust PFD TR CV SECS

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Operator

Good day and thank you for standing by. Welcome to Quarter Two 2021 SP Plus Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Mr. Officer. Financial Chief Roy, Kristopher Sir, please ahead. go

Kristopher Roy

Thank Rachel, and good everyone. afternoon, you,

just As SP Kristopher Roy, the Plus. I Chief am to second XXXX Rachel our conference release said, our Financial of following call earnings. quarter Welcome Officer of

uncertainties results, management to intentions, financial or XX-Q the as report and on regarding the that in those may reports SP which earnings including afternoon, is impact annual company’s other the and and future incorporated statements of expected the COVID-XX, quarterly performance company’s on the make be Form During Plus of by will company’s Actual due filings differ remarks website, the plans, available the forward-looking on risks, and operations could other considered and materially purposes factors, performance. or risk today, call expressed statements, those XXXX in reference to factors Form strategies, issued call this this the SEC. described release variety and statements achievements a with earlier for and XX-K outlook including of for from implied

tables today. presented useful of over section addition, Please under the will Executive other call. I the full are presentation be evaluate SP non-GAAP the being extent measures to financial measures recorded. on Investor in in G GAAP our the be on broadcast the to call information They the call management for To will is Plus note financial of after provides measures from over only. reconciliation website. Plus call, and the Internet performance. will company’s provided discussed now and for Marc to informational and were live A reconciliations non-GAAP financial operations website being SP concerning purposes information available during will A results are the an Officer. of will investors to the comparable Chief XX earnings non-GAAP the financial available the the the believes is In Regulation accompanying appropriate way release. the Management call comparable discuss with ongoing days replay turn supplemental is non-GAAP and GAAP the shortly the of tab Baumann, be this end Chairman posted measure Relations company’s

Marc Baumann

profit. report you, able increasing of us quarter of execution gross become am for to Thank to spurred This a I period, in continue to leaner another locations, Plus, strong were XX% on many adjusted and represented improve rates to above service EBITDA activity. vaccination first a afternoon, SP effectively costs streamlined eased business which flexible good company we Kris, and how XX% enabled while and throughout the more This manage COVID as consumer margin was accommodate check. we have that performance, everybody. keeping was XXXX robust to restrictions this post organization. conditions higher traffic pleased quarter indication our in very solid levels A to calibrating

broad was based, and Commercial new to existing enabled win SP This the ramp expand up is segments. serve, reputation. in of business effectively as than with better Aviation underway business our tied and well many in and scale in quarter we clients Plus size, recovery expected second as performance our and the Our to the that our verticals both

as services, not prior significantly of where and business to aspects large events affected. they valet verticals to have and fact, returned such some our yet remain parking such as COVID, Although, in most were

of the more during Commercial was business pandemic, before tools because pre-pandemic for and where are normalized technology we over are operations new hotel, was sealed new several returned us. pleased In forced by our the ability who a are second campaigns approximately And that the were robust touchless retail started majority to conditions EBITDA levels the others, increased the we one monthly other confident our We’re close deal In it client progress solutions few wins. up they took our their A with attracted mix making we’re former but event and innovative many clients sites, XX% marketing in to was in over. levels. that our for we’re quarter, XX exceed revenue commercial and venues. to increasingly once and and division, instances, to from it it tech representing

that poor operator cause some the rendered consumer service of issues. by SP And and Plus complaints incumbent chose because

on-demand We’re deploying making gateless in operations. excellent and our progress solutions gated for

now at as QX optimize platform at considerable gateless that and gateless locations during grew locations over there Transactions locations. XXX we XXX% as over is live upside further believe We’re on these more same we we operations. onboard the

having offering up running, the gated implementation our We the of locations in and another queue, by Reservations business technology and XXX pre-COVID is Parking.com and solution to gated districts. on live as end offices are helping the have to locations central facilitate people toward volumes, XX our of goal XXX on great progress of our year. locations the outpacing return

Additionally, sites client solutions, increased they’ve transit Custom consumers’ is an now another for our positive we’re for websites Also, been clients. reluctance been These which for various our using car powering Sphere use and municipalities. XXXX fit ownership and centers, COVID-XX, division. those our and are to stadiums services to operations, all stickiness rideshare convention micro due banner year our operations. our has the for and like enhancing Aviation mass factors in to excellent larger

with seeing number at Superbowl additional are white good earlier we Tampa point-of-sale is system for the new In providing for this our nominal unique which a to a the allows example following travelers of this in opportunities us we by service multiple at is Concierge, it, to airlines. check called This at service of accommodate year. the fee. technology services allows in relationships renewals, developed curbside our mobile built clients. check Airport a debuted travelers developing Plus, and and the to giving and expand Sphere XX A have to proprietary Bags travelers that we glove check Curbside airline Bags with SP additional offering new to We wins their combined

provide opportunity with to Intercontinental owned spaces and passengers awarded Houston build Hobby Houston’s and we transport well management This significant airports, at post-COVID with XX During another two in went by markets strong the revenue in two from year. our contract for major environment. Bush Ellington live courtesy We plans parking markets with XX businesses, to service of the to other second see for again. as they end airports indicating respondents airline this for the and services. shuttle XX% as that that show the quarter, a at XX,XXX their of while back use interest well highly value-added and Texas. first Also, in were airlines would expand just parking a last minority base the customers involves announced carts his we as as a XX% largest services are partnership approximately Bags in their survey with ambassador buses, service, to reduce its We’ve reducing engineering at seen client, their with industry renewal week, service results to as potentially XX-year the services, looks costs. the satisfied Early also Houston, congestion terminals, we services valet operating with

about wins providing talk addition, for a been checking awards in In at notified large airline services those not also of We’ll we’re several announcing Hobby. of Houston over of are additional remote these to airport position And yet. weeks. customers airline be next but and valet some several we’ve by the clients, as

with Additionally, half with summary, SP visibility quarter this there showed array past. in here accommodate our be the progress again, able our completed, leisure considerable the we added and second believe sequential full half to the we’re the portfolio to to second continued will services the provide expectations year, Plus to expanded opportunities of and pleased in guidance hospitality first we’re business XXXX. be an our of improvement of travelers. than for our raise and to working clients ramp year for for operations In of closely up results And return

resources The of to to Specifically, previously. compared activity additional At better to G&A forecast business same to expect gross higher to expected million. other us for the to technology G&A of million, million to million $XXX for well opportunities $XXX as up. higher accruals profit our million to than as from $XX million, business now relates compensation, position up we of performance we to and as XXXX, initiatives we continues $XX $XX pick prior time, now $XXX $XXX investments to new advantage take be forecast million in million $XX previously as based

over Kris will which turn guidance, initiating financial also I’ll call in cash Kris. now the review. We’re flow discuss his to

Kristopher Roy

Marc. you, Thank

look basis. closer our at adjusted a the second financial in an quarter take XXXX performance on Let’s of

well our reminder, measures of GAAP a closed all non-GAAP earnings reconciliation a the today. to measures release our issued were As after in GAAP as results, full market as

that million pleased an strong a was to of of Adjusted XXXX second quarter improved by the of second quarter gross $XX.X profit This G&A adjusted conditions, which XXXX very year-over-year in expenses were for primarily business comparison second last increase severely of second $XX.X from XXXX, tough the are impacted million. million marked reflects We compared of with $XX.X year quarter quarter. COVID-XX.

year a and comparable ago XXXX. of pay Remember we quarter pandemic, for took to a G&A temporary some including in was from While the reduce quarter, to based lower this accruals in performance that the compensation. XX% actions in the onset response increase reductions

levels, mainly recovery of in XXXX, reflects Second based including the compensation quarter compensation performance costs, XXXX normalized to returning underway. higher more certain in business light

mainly in second continued of say due our are we management. below that to quarter levels, quarter pleased cost G&A XXXX second remains XX% the to diligent adjusted XXXX However,

of an of in -- share the This per XXXX. Second share per quarter $X.XX compares adjusted XXXX earnings net to were adjusted of $X.XX. loss second quarter loss

of us but the $XX free year will the by at not strong operating are very pleased $XX cash midpoint we business numbers representing both cash driven guidance full modest from we to performance net we have six full previously operations year also initiate only levels. quarter $XX.X in flow flow million from free report to and flow million, $XX.X and confidence year-to-year net to for compared million, operations generated cash year-to-date cash XXXX, metrics. increase months that and a second these strong XX% and of to In expenditures. flow. anticipated, million capital of expect higher These now XXXX the cash give a as We cash first company free Additionally,

Our the midpoint. $XX million or XX% XXXX free year levels million full XXXX expectation above flow $XX to for cash at is

gross our increase with months second full together to Our half in expectation performance guidance year over for for the in XXXX for profit activity of million, his I’ll financial that, $XX.X continued call closing range the remarks. our Marc $XXX turn by in discussed. With range first improvement with to midpoint, of XXXX a Marc at let million of the back $XXX six business us million as the to

Marc Baumann

Hey. Thank you, Kris.

from structure that to support benefit improving the travel and challenging of Our us this demand office, the trends we the are flexible they to We support environment they to steam pickup to as position the need. in in both in will outlook, way later which hard expected our any well clients them cost continue navigated return year. and together worked and

expect and ability the we have to to our levels have opportunities a focused, and many delivered our additional our scopes deliver. that were we business less far service flexibility given of at clients see appreciated competitors proven we when and time Our expanded strong

to continue impact economic the of variant. Delta some about there While concerns be the

in like that now conditions beyond. business we’ll to from second call confident benefit and questions. Operator, to the of better up continue year for I’d the open half the We’re

Operator

Thank Instructions] of Sir, from first the of Our comes CJS you. your line question Daniel Moore is line open. Securities. [Operator

Daniel Moore

question. afternoon. Thank good my Kris, taking Marc, you for

Marc Baumann

Good Thank you. afternoon, Dan.

Kristopher Roy

afternoon. Good

Daniel Moore

Obviously pretty was once quarter. progress again Pre-pandemic significant a this $XX EBITDA running it’s quarter. under million just a

back to You million. are $XX already

obviously, So, really good progress.

of XXXX of like in let’s back I when up fully think under look uncertainty terms investors just conditions. profitability we, among say, would what some kind or still there’s open

as if a as helpful? gains even what that we question, levels, look back move well like So, like at it’s operating kind look to just would conditions, but contract given the EBITDA relative I EBITDA be would the know in made, or what scenario? difficult qualitatively would of that XXXX you’ve revisions, XXXX share

Marc Baumann

Sure.

during -- the our in you’re a renegotiated leases what are a Deals think were changes lot make saying, Daniel, converted to did we We from I management. deals. of of you right pandemic. lot

strong when business, pre-pandemic we some other at our business EBITDA is would the new conditions, of and are to expectation have the we that as guarantees. conditions, terms it well, their back expect would try when eliminate And lease course, be resuming -- or to mobility company to we were to pre-pandemic minimum had lives, normal But pandemic people changed greater. in during look forward as the words,

anything profit business get to returns to mobility once costs have focused here and And So happened deals, business, we said EBITDA. levels. longer so Kris others have I that’s pre-pandemic we that and the pre-pandemic than thing us is take that’s some a so certain I we don’t to out it pre-pandemic the think EBITDA pandemic would why to think, One of that’s can little still because true structural pre there’s gross may to to restructure previously, that. preclude extent did consumer structural get that on and commercial resume been taking that, activity and

Daniel Moore

That’s super helpful.

cost in profit any the gross to there this QX? were numbers housekeeping, concessions similar Just quarter

Kristopher Roy

some Yeah. have cost We Dan. concessions, did

if it, think concessions as at look $X you certainly the cost is certainly, amount I a reducing.

you to recorded if we would think go have $XX.X back QX, or of concessions. I cost so million

number over to million, $XX gross If down. about at profit. $XX.X I cost you has QX, look gone concessions terms in it’s -- certainly of say going I’d just million that

news So release to of us cost with cost we seeing able good allowing concessions be are those to which increasing, is revenues some The that reduce. is concessions. that those

it’s go those certainly story So story it’s good see good of up a concessions see the a go to down. revenue and cost to somewhat

Daniel Moore

doubt. No

least portfolio, utilization locations today, of performing? lease in pre-pandemic? capacity Just is the would to compared at terms that say kind How’s you of where

Marc Baumann

that a of leases. That generalize is have so we hard Yeah. given thing many around, to hundreds

parts, just is a onto people back into transient the seeing said at has transit locations, sharing. certain trend before we’re a that levels. strong We’re certainly than showing lot have mass that at day up are this greater as parking of demand I get volumes, park reluctant seeing and people certain think in continued, ride markets as or to this XXXX And been we’ve

think put I start business, out, would that’s if where up -- But opportunity as we’re point usually full have to to that’s the put places. an a more parking happening reaching more and to -- are see capacity we signs we rates.

demand up do to the of an period this and right ensuring things the where been we’re we’ve there’s recovery And doing so one that that is the of putting in pandemic immediate rates we’ve got opportunity supply so.

Daniel Moore

there. encouraging, me, leave color of I’ll I But hopper. Airlines a the Excellent. your I Maybe bit and of side marketing any airlines of travel? Bags, but more demand wait to in talking certainly, versus agreement with and about, encouraging? Last it it it air little certainly, got and the like guess, just it the in one potential -- we’ll hear very the with sounds will customers? new the have it new side and/or macro just message deals? new Hawaiian for it on, around Is I those some guess airport over. other accelerated sounds you’ve hand Is spike sounds customers it resonating dialogues for with

Marc Baumann

Yeah. Agree. question, Good Thanks. Dan.

probably to provide a think they’re tied -- and everyone airports cruise travel. Bags resorts as services number or knows, of for leisure I or pre-pandemic, travelers either

as think so more clearly delivery, they And luggage the ramping and XX we’ll XX services And over that delayed are further airports, spoke traditionally sort the markets. they back is networks. and services resumed hub around ramp which airlines up delayed their in provided luggage delayed. of airlines the up deliver Those luggage for was once even more I where see

tool, more are provided a loading, tool, the has all way in we luggage started that client’s using it able immediate this be be proprietary to may that a Bags airport congestion for from have example, and congestion of way. to to or the as some pre-pandemic times, skycap and check the of what to be pitching the at of and the pandemic airlines, to SP to airlines number keep were But we would this had counters, terminal their lower let congestion about the terminal it say the it be for point-to-point, may airport to time go traditionally the in also what me normal but at period, they’re there’s we people multi-airline And And it as it unfold. ready tends we found the we’ve be passengers in unloading. of as demand curb, congestion talked any reduce delay, they lot lines of in Bags, at to Plus acquired alleviate which one one with delays -- than terminals. may a a services outsource the seven at TSA airlines congestion need airports or During -- gone to

of could up for team that’s pressures, capabilities our through bit because market well maybe in out why us pick a going in of remarks, enable very airlines throughout as up with And Bags markets tested thinking talked And think more Curbside soon also be Concierge airlines that a about airline don’t country. but that day otherwise, were also few that of Tampa leadership traditional the we for of after one a pandemic the this would cost the offer and I the and are consumer think an pre-pandemic for represents facing pay As airlines many are away very, tool the be I for that to than a replacement the service. only to result well, Bags so recover that and are sort one happened those -- product because the in not services, is many, and providing then to and services. pandemic, which would that cost worked Superbowl opportunity about we period, that conscious, people little that at other maybe to that went looking some skycap model those same started roll take what and airports to from quickly share a we, as we we more said, maybe the have

early COVID So that forward. we to we’re eagerness the willingness this felt getting acceptance people if outside being going very and still excited your of be even remarks the particularly you dissipates terminal, prospects, in consumer and to because can’t and our of use And rid about luggage their service talked terminal. back in wanes to as comfortable more the later,

there, free to shops and you’re Now to relax get in going about, move your the before flight.

so that think they fills niche friction. that seek to it And really important are an less travel we for looking with consumers as

Daniel Moore

question back And ups. Great. back that’s any and circle queue a big. my in was exactly color I follow Thanks. for. I was with will But little looking the jump

Marc Baumann

you. Thank

Operator

Thank you.

question from next Mulrooney open. is your Our the Blair. line comes Sir, William Tim of from line

Tim Mulrooney

on nice Congrats Marc, quarter. a Kris, afternoon. good

Marc Baumann

you. Thank

Kristopher Roy

Thank you.

Tim Mulrooney

So couple a questions here.

guide, year, folks great that think, over why, other as I wait I the so second for wondering considerations of guide, would are million account? about improvement the the on and in going and you just is that the be take are X% which only half should after the I here $XX half, conservatism some approach you expect back am the the weekend. in a or to there implies in to Is your First taking here. XXXX raised the work up Day midpoint think there expected start guide see about numbers of a half into Labor I half profit year the when first it’s second X% of the the first of But versus gross guys you

Kristopher Roy

in think, related million QX, I I called really really you go conservatism XXXX. so last don’t if about through but that know we to there’s there. concessions Tim, year or to went back if out $X.X QX, in

think I in plug you that if XX%, concessions. growth second So think be of those that the to pull closer kind you half the out, I is -- would if

for of half in back robust of pretty growth still terms the expectations the year. So

Tim Mulrooney

That’s a…

Marc Baumann

And…

Tim Mulrooney

about That’s good I a that. forgot Kris. really point,

Marc. Sorry, ahead. Go

Marc Baumann

our like. leisure right surge patterns a in will like No. now of get kind is traveler I in right then sort the fever quarter. up now, for that and prolonged cabin of And of we schools to has people say, a to to for leisure leisure just beginnings a patterns, back are course, travel very Tim. things. exactly nobody been travel uncertainties of on out there we and is was serving and good leisure in a that going the this of there of going has very what travel look lot And a I at which and because But reopen normal the amazing quarter forecasting curve go we’re business, they’re to are the just think knows because that know also everybody surge, do and normal as strong second pent their that third leisure want fades away bit. the that one

So, to try the of leisure challenging travel. overlay on of to patterns top it’s normal the pandemic recovery

expectations pattern to be there’s are that that what travel, seen going our be like. So remains but looks it leisure really strong to

Tim Mulrooney

Right. Yeah.

Marc. Thanks, with million million. concessions, you you analysts revenue? the previous Kris, think I then $XX Was on cost and mentioned that said $XX Okay.

Kristopher Roy

in our government, some -- leases. I service will concessions, to governmental. Well, there’ll pieces for of services quasi that, There’s really of say, a that reduction more, some we’ve in also of would which go through there’s cost be probably two terms are got,

the through go rules accounting really but are contracts, type that as Just lease revenue. reduction a under they concessions of

Tim Mulrooney

Yeah.

Kristopher Roy

an in So profit. terms it’s a or -- of gross increase

under out bit there it -- a just little item. of of accounting a line complexity the one just individual it’s little into rules, gets pointed bit So from

of for components. We’re in each couple days that the dollar Q and the going in see out the of footnotes here filing next those pointed amounts so the you’ll to be

Tim Mulrooney

that be clarifying there nice Was the here concessions first second in this million quarter had And second in quarter beat the is taking Thank this we gross way, -- you XXXX $X.X had into me you a cost on in just ask you of quarter? XXXX. profit of different the should let any that. that account for of

Kristopher Roy

that we we to under Well, periods started rules the full $X.X get related called able accounting really in that. that out when really -- negotiations to until weren’t million we when book we the XXXX. you But resolution,

booked it QX. we So in

you and If in to $XX.X we in million. million about cost cost that QX the QX were at get, have total $XX.X concessions we look total able had concessions about

the cost seen concessions through we’ve from total gross per gone that in have reduction a -- profit perspective. some So

Tim Mulrooney

Understood.

Thank office Okay. what me, more transition as heard about for model? within if these you. I’ve Maybe structures? things you a non-standard one little types are, mean, arrangements your multi-day non-standardized just building can companies I demand talk clientele, a from like pricing discussion passes, hybrid many more about seeing these bit you’re working of to more

Marc Baumann

Sure. enables those technology clearly all of created have Well, that things. we

we’re office the the And a working or for a owner under agreement building. management the operating either in property the building client so is who for building manager space, generally

parking so to of and And efficiently buildings, management paying objectives. the is us the for fees utilization what their client -- it our optimize for speaking The to generally not office on dependent make it we facility. is meet are manage able in to

So really client Sphere have capable a discounted is to that. since wants time, if of from technology all specials a for parking of been say point around I which other mass commuting transit suburbanites levels resumed providing at will the pre-pandemic. the But of of bird and yet a not some -- of view that people multi-day our early or pass offer fully for long have

they’re levels, for pre-pandemic, in in XX% running very -- pre-pandemic. XX% suburban the I this Chicago seeing little think it to They’re of itself. very, the whereas the operating almost suburban XX% rails all CTA running still we industry rail, maybe the at the of roughly you’re have

there they don’t consequently don’t want buy driving They a week, rate. maybe are be want daily pay not to there monthly people to the and days So going more five yet. to

do there room the as definitely to draw try and so offer equipped to programs to people our for well incentives to properties. well marketing clients to is as that, we’re And

Tim Mulrooney

it. you Thank very Got much.

Marc Baumann

Thanks, Tim.

Operator

your Research. Steinke comes Kevin from [Operator Sir, the next Thank Our line you. Barrington of open. line Instructions] is from question

Kevin Steinke

afternoon. Good Hey.

Marc Baumann

Kevin. Hi,

Kristopher Roy

Hi.

Kevin Steinke

last a went that I on and your bit more maybe Is renegotiation through obviously, accelerated just recovering state ongoing, wanted your or overall are something off to of where what’s the backing talk the little to of portfolio that little and bit quarters necessary. the exit kind process lease lease that? that improve portfolio upon about you, is and of an you’re a now few ability process results

Marc Baumann

It’s ongoing Kevin. No.

One do each basis a do is for that easier of things me gets of regular and the of performance on leases. since look all that at seeing to we our we we Kris them and division the period. this It we commercial have in they’re improvement out clearly fewer now. But leases still have plus come our and as XXX of of easier pandemic

the a on we the their we basis. to that things economic early a rent into downturn, have of sort that want be sure long-term one we’ve the As But way we leases -- a but like indicated, that had growing base another or go or we is provisions forward it will we pandemic in happens of will of have no down now the helped to only we leases, leases, to or their Kris make lease terminate continue they’ll if concessions focused enter and existing there’s as and is, and that’s percentage keenly to concessions in we’re on some lease performance resurgence revenue renew really leases have rents. can stand concessions or converts where on what to as new own you if

obligations because other hey, their willing our puts lease you, leases of us work say, types these not into them, those traditionally we’re new and our defaulted us in entering terms some get some can industry some to we or if position say the would of to of have of players fulfilled who’ve we cases contract. caused we turn on provisions that’s with done in So in need be and to landlords leases to their in do. that would be happy to And a to what but types have you

use didn’t of to able leases as that’s They’re we XXXX money we had If in go-forward that XXXX approach. money some So make not our XXXX. that of have money in kind make aren’t I probably make going to benchmark, sort the either. and

And always as those will by natural we’re the improve so cases in leases leases other renegotiation, those for expiration. terms to trying to come their

We terms. to have that go few on more than five the leases have very years

any like But today we’re we from the its probably, we see ahead our position I to continue that has what contract to will next portfolio. over we That’s next over years. So continue company in decrease But that to butter. essence will away bread we few management to clients. the have leases, serving don’t although, look years. move growth continue have expect used lease That’s in the and will few to a as

Kevin Steinke

healthcare, you slowed of the sort Okay. hasn’t That’s helpful pandemic universities, pipeline markets seeing opportunities current that of of both that in down opportunities mentioned just in I institutional is of color. out of here in of about cetera. what particular COVID. area in during coming growth environment wanted maybe as and few et your are or quarters But much markets? ask light been the Great. What’s kind opportunities? those the Is the that last state the an those to the municipal terms

Marc Baumann

interest world. of Yeah. a the in amount There’s been tremendous sports

fact came sports in because pandemic. during a the to standstill think I

back normal here. Now to is to of of rapidly during normal we’re an kind we’re realizing to back back or the fall everybody that normal expectation moving with

the operate events pandemic. continue we division SP during Gameday large And our Plus so while through to

teams from to need see the are we universities of recovery help planning help lots inbound to for that the saying, starting We’re return professional and from pandemic. and requests

putting activities of So, their, to very, coming for in do venue continued they’re continue to Municipalities year. past the interest contracts have up for the sports of couple and world very the or out and a either events over fall parts that haul. We picked in bid. as few the smaller a or things to months municipal first important next strong see vertical long this one

general I pandemic objectives public think distracted by keeping the and and vaccinated people of municipalities the getting their somewhat in event safe.

exercise that hasn’t will are in. university who -- much other on not a announced done for parking And outsourced so is that we a maybe large there’s there. there there’s facilities be shortly privatization and fairly involved -- that’s have those There been yet going

activity. definitely there’s So

a of but back because budget I probably again government, a the they’ve it institutions they’ve the the federal pension ramp but that’s bit from surge money not to space, challenges, in there’s municipal a coming go got taking once got of think it’s to pause expect been pandemic, forever. we during obligations, little up, on going

for And think question get how Plus at I service them of upfront providers an of been value as time the have of so and operating involve antiquated or often these such during technology, from as do to the our has a we’ve can hotels has some line into to of them levels investment. us they to that of talk with our The right in bringing to them Sphere ourselves have there’s us answer the businesses view out big whether services. very assets very, into were others get and they’re the area looking and aside number provide But parking and about of drive point in we the an to pandemic, a clients and Many more for opportunity SP to more hospitality active, of our in of or at of and in municipal as had others we giving they’re hotel hospitality that basic Sphere with whom be to players from in low technology, up. indicated shutdown been first had with the ramping have valet existing what working some investments of question they’re also for our going their doesn’t front suspended alternative profitability. way can their remarks people bottom the caused their technology. operations this -- services maybe And process back we pandemic

more And so, starting us bring hotels. you’ll think, to see I on

locations think the in that brought XX them on, quarter, of XX I commercial were we hotels.

fact can all purchasing the the the come hospitality I I implications sick we the one designated things are that congestion vertical. again, out you the very of an lots area we on going challenges surface very, when And space. really parking and healthcare and the of that SP potential there The activities excited for that still care. vertical during markets see and going definitely I think stabilize consolidation it’s that’s really that’s parking healthcare pick parking again as by -- somewhat urban have very think dealing pandemic because to where that had operator There’s with been been healthcare. that employee I a the base once you is mobility Plus need for there’s far in of So, medical expansion But a and the quiet. I difference. once their group dormant pre-pandemic think three create building for the organizations, come in mentioned function the be just as will in make to again, in systems people has garages. their for as pandemic preferred And And that’s prioritizing on -- and think think the as been up while and as were our for friction

Kevin Steinke

Okay. That’s and sense appreciate back jump I it. Thanks. the very commentary. in queue. makes helpful I’ll all -- that

Marc Baumann

Thanks, Kevin.

Kristopher Roy

Kevin. Thanks,

Operator

you. Thank

Our next Sir, question your Riddick comes is the line Sidoti. open. Marc of line from from

Marc Riddick

Hi. Good afternoon.

Marc Baumann

Marc. Hi, Hey.

Kristopher Roy

Hi, Marc.

Marc Riddick

your to you’re answers you providing I always on and things with information appreciate couple customers. with brief your be I mentioned color so to around being as of wanted a all So I’ll the maybe touch and really up ramp that. and of able that start

ups you as follow standpoint. those if wondering to you’re may of what tie pressures how as So an that pricing labor and a that. couple of what And might a doing from sort seeing give maybe what or far not and into after then have may as you’re I update allow could

Marc Baumann

vaccinated are people. workers, like of Clearly, in hiring businesses same not Well, Sure. the have by challenges most getting are contracted that supply in we some who people been has hourly labor the to have right of with. they contend concerns they virus, the issues yet that having whether and not maybe the open childcare now, labor over have or because schools aren’t been market

macro So those issues business. affect of kind every

as as that have that job levels one fill so because the payroll, running we’ve we done. that overtime successful the pay overtime a can’t now. And to are at we the have percentage filling pay needs and the think how to labor paying of jobs, right other a is we that I we if pretty we parameters our we of get been levels look payroll overtime are much then of much percentage in we people can at pre-pandemic have

are in And well as or labor have So bigger based some other place. staffing we had incentives enough put it’s markets. no clearly problem We’ve put a challenges markets in the that place. It’s In that suggests some geographically others. in in at to challenge. wages others up

our higher portfolio we enrolls than our and costs and pay rather rates are predominantly those absorbed contracts on fill are to clients so rates Fortunately, to higher wage management up is to by having us. passed

way equation, locations so Now increased in as we at given my labor an that’ll those is just that be our up, I supply, markets, earlier indicated costs. the obviously to demand least bear cover put cost. of in And rates there and most comments, those have opportunity parking we those

Marc Riddick

even very are challenges what about little looking views flow pandemic. was wondering Okay. talk free what acquisition certainly the cash a during wondering maybe potential about what could you if a talk Great. you your And are, out perspective from switch I the generation was there? then, maybe maybe pipeline you’re multiples if gears strong of I at bit and and

Marc Baumann

to we you for be when that, be all back for premature the what is M&A business levels, part in out that EBITDA. going businesses at really may mobility a that market where probably the pre-pandemic of it’s above say We’ve That don’t not feel the of be back market pandemic. us levels performing true indications today to to is are performing like there. know we’ll after some that or be given pre-pandemic or I’d may and

and And think before kind so to value we stabilize how the I those pandemic of sort can of see businesses to what’s a attached we things. need be return from sure

a become But at having that’s parking winning down think something available, and within it. a competition. I the regional national right us. is pretty take from if or look we said, the space realistically, our road would taking certainly business basis itself, we’re things So sizable from good being that That a would experience away for

in And so a don’t feel space. strong parking think do I to the need we acquisitions

But all horizon this on something really it’s we rest think don’t that the the I for that’s the monitor time. So that’s year. of something

Marc Riddick

marketing over the force to the driving that’s and as as of then business new being And far winning part benefits on of you campaigns new made Okay. technology switch and wins the well. the back I been the progress around business touched wanted to as

as others far for the maybe Thank finding could we the going think about -- or been you if are there wondering maybe the have share aggressive little about bit far technology a or a what How maybe So gaining are as applying little particular you. been as uses than little maybe that verticals new technology. should forward? talk performed as more more receptive are if a better areas

Marc Baumann

for Sure. Spheres building commercial capabilities very the because for with is And of Sphere you’re example, eliminate Yeah. to gated I based. of parking mean, solutions, solution the for there suite have office the traditional any some maybe broad operation. verticals, really our -- or and of clients, able in the you can’t our really the really our costs Sphere had you might some of that that traditional exclude un-gated equipment need

in solution I its suite multi-location their data is dashboards I time. or commercial validations In useful very fact the use maybe visibility drove we into building often to our of Sphere mixed tremendous people I is running they and equipment we it’s use capture Sphere slick, know today now where can have at or place for that’s gate have all for up able life. appealing, I again that Also open Parking.com it or complex because that’s was once they end of have work mobile Analytics the very have near solution. In have there the owners, of our assets. they able more to and space, of app. property to raise or kind was the pay-in antiquated the in performance of very, the my our on a future the equipment Chicago devices able display maybe window transactions so not I touch efficient retail whole to in revenue, anything, aren’t because the gate. with my a and and first mobile did the

they of with received implemented of that solutions can they strategy eliminate of once center, to generate Sphere just and their -- capital the think all our week part mobile it we said, of you going one extremely $XXX,XXX QR upfront where code do and talking of was because use mixed to are use to solutions, E-commerce growth, appropriate to And is to another and retail in for had our been the about transactions. earlier into I that off compelling. to And since investments and well equipment, consequently both a a with decided our which parking very transaction Sphere their traditional leaders pay that’s people need don’t scanning meters. smartphone, to upgrade our feeds I that we in the make for ourselves be in very, those has them kind again so need spend and fees

the huge have that for benefit will management people revenue our us sort we competitors see are and to additional so that convenience in our growth. seen the and of technology idea remote ability space of used a of or And increase fee in facilities. give a also fee. We’ve gross built model the All up streams to a generate profit recurring transaction demand

to or come staffed need need don’t parts. minds in by, to their maybe As to or labor I labor the idea don’t to that I be control day be staffed costs look is maybe certain are fully to people people opening hard

in added years XX the doing probably think management any locations remote management our months started since XX we to capabilities, in I so than months more than last remote And ago. we’ve more XX

the improve our small very ability there’s matter from really what size have we to we’re with that complex, that, to scale the technology very transformation no friction a So reduce the operation drive there’s no performance. can matter something to or vertical something about, just everywhere turn, what technology -- you solution goal is talking and

Marc Riddick

very Thank That’s helpful. you very much.

Marc Baumann

All right, Marc.

Operator

Baumann remarks. further for you. are I no now turning to call questions am final back in the queue. Thank There Marc

Marc Baumann

delighted and with performance having hopeful Hey. throughout great continue quarter be call today. will And the we’re we’ll we’re rest Thanks much. trends and the the year you joining another very for these Thank that with you quarter. us of next obviously in our

Operator

This you. call. today’s Thank concludes conference

You may now disconnect.

Central Parking Finance Trust PFD TR CV SECS (CRLKP) 29 Jul 212021 Q2 Earnings call transcript