CHICAGO, March 11, 2009 (GLOBE NEWSWIRE) -- Standard Parking Corporation (Nasdaq:STAN), one of the nation's leading providers of parking management, ground transportation and other ancillary services, today announced financial results for the 2008 fourth quarter and full year. Fourth quarter 2008 earnings per share of $0.27 was unchanged from the fourth quarter of 2007. Full year 2008 earnings per share was $1.07, an increase of 19% over 2007.
2008 Highlights
* Total number of locations increased to 2,215, up 4% over 2007 * Total revenue reached $300 million, an increase of 13% over 2007 (revenue figures exclude reimbursement of management contract expense) * Gross profit and operating income growth of 6% and 4%, respectively * Earnings per share of $1.07, a 19% increase over 2007 * Free cash flow of $22.2 million * Signed amended and restated credit agreement that increased total credit facility by $75 million, to $210 million, and extended maturity to July 2013 * Completed common stock repurchases of $60 million * Completed two strategic acquisitions in existing core markets
James A. Wilhelm, President and Chief Executive Officer, said, "We are pleased that our business model, which relies predominantly on fixed fee management contracts spread over a geographically diverse clientele across multiple vertical markets, continues to hold up reasonably well in these challenging economic times. As a result, in 2008 we once again delivered on our announced expectations. While our business model is not recession-proof, to this point it has enabled us to better withstand the economic downturn than most companies.
"Despite the country's economic pressures, we won the most new business ever in 2008, and our pipeline remains strong for 2009. We continue to win new contracts and add new locations, while at the same time reducing our exposure to underperforming leases. We have begun to leverage our investment in the security business in the West through cross-selling our parking management services to security clients and vice versa."
Wilhelm ended by stating, "We realize that during these difficult times, we must demonstrate our value to clients more than ever. In this context, we are pleased with our location retention and profit retention rate of 89% and 96%, respectively. As we continue to work closely with our clients to maximize their revenue and operating profitability, we are continuing our investments in technology and productivity initiatives that will allow us to continue to improve our own operating efficiencies and reduce costs."
Fourth Quarter 2008 Results
Revenue for the fourth quarter of 2008, excluding reimbursed management contract expense, increased by 7% to $74.7 million from $69.7 million in the fourth quarter of 2007. New and acquired locations contributed to the overall revenue performance.
Gross profit in the quarter decreased by 2% to $22.1 million from $22.7 million in the year-ago quarter primarily due to reduced activity at leased locations, particularly in the airport and hotel vertical markets. In addition, favorable changes in insurance loss reserve estimates relating to prior years contributed only $0.1 million in the fourth quarter of 2008 versus $0.9 million in 2007's fourth quarter.
General and administrative expenses for the fourth quarter of 2008, which included $0.5 million related to the restricted stock units granted to senior management in mid-2008, increased by 3% to $12.2 million from $11.8 million in the fourth quarter of 2007. Without the $0.5 million cost associated with the restricted stock unit grant, general and administrative expenses for the fourth quarter declined 1% as compared to the same period in 2007. The combined impact of a modest decline in gross profit and increase in G&A coupled with an almost 11% increase in depreciation attributable primarily to amortization of acquired contract rights, resulted in operating income decreasing by 11% to $8.4 million from $9.5 million in the final quarter of 2007.
Net interest expense for the fourth quarter of 2008 increased $0.5 million over the same period of 2007 as increased borrowings to fund stock repurchases offset lower borrowing rates.
Accordingly, net income decreased 13% to $4.4 million in the fourth quarter of 2008 from $5.0 million in the fourth quarter of 2007. Due to the decreased number of shares outstanding resulting from the stock repurchase program, earnings per share for the fourth quarter of 2008 was $0.27, unchanged from the 2007 fourth quarter.
The Company generated $6.7 million of free cash flow during the fourth quarter of 2008, as compared with $9.7 million generated in the year-ago quarter. The 2007 fourth quarter benefited from working capital changes, primarily related to accounts receivable and accounts payable, which generated $3 million in free cash flow that, as expected, did not recur in 2008. Free cash flow generated in the fourth quarter of 2008, along with available cash and draws on the revolving credit facility, was used to repurchase $22.5 million of common stock.
Recent Developments
On February 6, 2009, the Company was informed by its parent company, Steamboat Industries LLC ("Steamboat"), that Steamboat intends to sell a majority (and potentially all or substantially all) of its stake in the Company. Steamboat, which is controlled by the Company's chairman, John V. Holten, and which currently controls a majority of the voting power of the Company's common stock, intends that such sale would occur through one or more transactions, the result of which may be that the public float of the common stock of the Company will be increased.
Noteworthy new business activity includes the following:
* During the fourth quarter of 2008, the Company commenced operations to manage the parking at Denver International Airport (DIA). The DIA parking operation is one of the largest in the world, with over 40,000 parking spaces in two garages, four surface lots and two separate valet services. * Also during the 2008 fourth quarter, the Company began managing the parking operations at Richmond International Airport, which is comprised of 7,300 parking spaces in two garages and three remote surface lots. In addition, the Company operates a fleet of fifteen shuttle buses to transport passengers and Airport employees between the terminal and the three surface lots. * The Company was awarded a multi-year contract to manage campus parking operations for Columbia University in New York City. The operation comprises over 750 parking spaces in four garages that offer both self-park and valet services to students and faculty. * The Company has expanded its relationship with the CIM Group, the largest commercial landlord in Hollywood. Under separate awards, the Company now manages the parking operations at The Strand in Huntington Beach and Hollywood Center, The Galaxy and the Petersen Building, all in Hollywood. The Hollywood portfolio of three garages contains approximately 1,250 parking spaces and sits strategically in the center of the Hollywood tourist center. * In Chicago, the Company was awarded a contract to manage the automated nine-story self-park garage located at 201 W. Madison in the Loop. The Company also took over the parking operations at the Drake Hotel on Chicago's Magnificent Mile. * In the 2008 fourth quarter, the Company expanded its relationship with Jamison Services, Inc. with the addition of 12 parking locations and two security operations. The Company has been a service provider to Jamison, one of the largest privately held real estate firms in California, for over 15 years.
Full Year 2008 Results
Revenue for fiscal 2008, excluding reimbursed management contract expense, increased by 13% to $300.1 million from $264.9 million in fiscal 2007.
Gross profit for 2008 increased by 6% to $90.8 million from $85.7 million in 2007. 2008 results included $1.6 million in proceeds from the Company's settlement of its Hurricane Katrina insurance claim.
General and administrative expenses for 2008 increased 6% to $47.6 million from $44.8 million a year earlier. The 2008 G&A expense includes $1.0 million attributable to the restricted stock units granted to senior management. Without the $1.0 million cost associated with the restricted stock unit grant, general and administrative expenses for 2008 increased by 4% compared to 2007. General and administrative expenses as a percent of gross profit was virtually unchanged at 52.4% for 2008 compared with 52.3% the previous year. The Company continues to work toward its goal of reducing this ratio to 50% or less.
Operating income for 2008 increased by 4% to $37.1 million from $35.5 million in 2007 despite an almost 14% increase in depreciation primarily attributable to amortization of acquired contract rights.
Net income increased by 10% to $19.0 million in 2008 as compared with $17.4 million in 2007. Earnings per share in 2008 were $1.07, which is $0.17 or 19% higher than 2007.
The Company generated $22.2 million of free cash flow during 2008 as compared with $32.1 million in 2007. Free cash flow of $22.2 million in 2008 was in line with expectations as certain fluctuations in working capital were expected to consume free cash flow in 2008. Additionally, in 2008 the Company made $6.9 million in capital investments, or $2.4 million more than during 2007, and paid $1.4 million more in income taxes than in 2007. Free cash flow generated in 2008, along with borrowings under the revolving credit facility, was used to complete the acquisition of G.O. Parking in Chicago and Downtown Valet in Seattle, and repurchase common stock.
2009 Outlook
The Company remains cautiously optimistic given the current economic environment, in large part due to the geographic and vertical market diversity of its client base. The Company also believes that its predominant reliance on fixed fee management contracts provides it with greater visibility and predictability in its business.
* 2009 earnings per share expected to be in the range of $1.05 - $1.11, an increase of up to 4% over 2008, despite an increase in the Company's implied effective tax rate to 40.0% in 2009 from 37.9% in 2008. * This guidance assumes approximately 16 million diluted shares outstanding and does not include (i) the impact of any acquisitions or mergers that might be completed during 2009, (ii) any 2009 stock repurchases beyond the 0.2 million shares purchased to date in the 2009 first quarter, (iii) any costs associated with the potential sale of the Steamboat shares, or (iv) the recurrence of certain items in 2008 that benefitted 2008 earnings per share, including the Company's final settlement of its Hurricane Katrina insurance claim. * Due to limitations on the use of NOLs in any one year, the 2009 cash tax rate is expected to be approximately 18% as compared with 8% in 2008, resulting in an expected increase in cash taxes of up to $2.8 million. * 2009 free cash flow is expected to be in the range of $20 million to $25 million. * The Company's priorities for using its free cash flow remain: -- Fund growth opportunities, including acquisitions -- Return value to shareholders -- Maintain appropriate debt levels
Conference Call
The Company's earnings conference call will be held at 10:00 a.m. (Central Time) on Thursday, March 12, 2009, and will be available live and in replay to all analysts/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, with more than 13,000 employees, manages approximately 2,200 facilities, containing over one million parking spaces in more than 330 cities across the United States and Canada, including parking-related and shuttle bus operations serving approximately 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 annual reports 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 March 11, 2009. 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 tables 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," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" and similar terms and phrases in connection with any discussion of future operating or financial performance. These forward-looking statements are made based on management's expectations and beliefs concerning future events affecting the Company and are subject to uncertainties and factors relating to the operations and business environment, all of which are difficult to predict and many of which are beyond management's control. These uncertainties and factors could cause actual results to differ materially from those matters expressed in or implied by these forward-looking statements. The following factors are among those that may cause actual results to differ materially from forward-looking statements: the financial difficulties or bankruptcy of our major clients, including its impact on our ability to collect receivables; availability, terms and deployment of capital; potential impact on the market price of our common stock from the sale or offer of a substantial amount of our common stock by our majority shareholder and the ability of our majority shareholder to control our major corporate decisions; potential for change of control default under our credit agreement if an unaffiliated person obtains a majority of our common stock; the loss, or renewal on less favorable terms, of management contracts and leases; our ability to renew our insurance policies on acceptable terms, the extent to which our clients choose to obtain insurance coverage through us and our ability to successfully manage self-insured losses; the impact of public and private regulations; our ability to form and maintain relationships with large real estate owners, managers and developers; integration of future acquisitions in light of challenges in retaining key employees, synchronizing business processes and efficiently integrating facilities, marketing and operations; the ability to obtain performance bonds on acceptable terms to guarantee our performance under certain contracts; extraordinary events affecting parking at facilities that we manage, including emergency safety measures, military or terrorist attacks and natural disasters; changes in federal and state regulations including those affecting airports, parking lots at airports or automobile use; the loss of key employees; and development of new, competitive parking-related services; changes in general economic and business conditions or demographic trends. A further list and description of these risks, uncertainties, and other matters can be found in the Company's Annual Reports on Form 10-K and in its periodic reports on Forms 10-Q and 8-K.
STANDARD PARKING CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share data)
December 31
------------------
2008 2007
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $8,301 $8,466
Notes and accounts receivable, net 45,198 42,706
Prepaid expenses and supplies 2,496 2,765
Deferred taxes 3,253 6,247
-------- --------
Total current assets 59,248 60,184
Leasehold improvements, equipment and construction
in progress, net 17,542 15,695
Other assets:
Advances and deposits 4,433 1,382
Long-term receivables, net 6,680 4,854
Intangible and other assets, net 6,916 4,350
Cost of contracts, net 10,872 7,688
Goodwill 123,550 119,890
Deferred taxes -- 1,345
-------- --------
152,451 139,509
-------- --------
Total assets $229,241 $215,388
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $46,446 $42,941
Accrued rent 4,279 5,438
Compensation and payroll withholdings 9,331 10,017
Property, payroll and other taxes 2,891 2,137
Accrued insurance 6,840 6,949
Accrued expenses 8,016 8,654
Current portion of obligations under credit
agreements and other 120 139
Current portion of capital lease obligations 948 1,799
-------- --------
Total current liabilities 78,871 78,074
Deferred taxes 3,305 --
Long-term borrowings, excluding current portion:
Obligations under credit agreements 120,600 74,150
Capital lease obligations 2,091 2,850
Other 1,305 1,425
-------- --------
123,996 78,425
Other long-term liabilities 22,052 19,550
Stockholders' equity:
Common stock, par value $.001 per share;
21,300,000 shares authorized; 16,110,781 and
18,371,308 shares issued and outstanding as of
December 31, 2008, and 2007, respectively 16 18
Additional paid-in capital 103,541 150,520
Accumulated other comprehensive income 85 482
Treasury stock, at cost, 627,423 and 48,474 shares
as of December 31, 2008 and 2007, respectively (11,161) (1,172)
Accumulated deficit (91,464) (110,509)
-------- --------
Total stockholders' equity 1,017 39,339
-------- --------
Total liabilities and stockholders' equity $229,241 $215,388
======== ========
STANDARD PARKING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share data)
Three Months Ended Twelve Months Ended
---------------------- ----------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Parking services
revenue:
Lease contracts $37,980 $37,959 $154,311 $145,327
Management contracts 36,675 31,727 145,828 119,612
---------- ---------- ---------- ----------
74,655 69,686 300,139 264,939
Reimbursed management
contract expense 99,934 93,530 400,621 356,782
---------- ---------- ---------- ----------
Total revenue 174,589 163,216 700,760 621,721
Cost of parking
services:
Lease contracts 34,948 34,098 140,058 129,550
Management contracts 17,567 12,921 69,285 49,726
---------- ---------- ---------- ----------
52,515 47,019 209,343 179,276
Reimbursed management
contract expense 99,934 93,530 400,621 356,782
---------- ---------- ---------- ----------
Total cost of parking
services 152,449 140,549 609,964 536,058
Gross profit:
Lease contracts 3,032 3,861 14,253 15,777
Management contracts 19,108 18,806 76,543 69,886
---------- ---------- ---------- ----------
Total gross profit 22,140 22,667 90,796 85,663
General and
administrative
expenses 12,162 11,782 47,619 44,796
Depreciation and
amortization 1,570 1,418 6,059 5,335
---------- ---------- ---------- ----------
Total costs and
expenses 166,181 156,267 663,642 588,707
Operating income 8,408 9,467 37,118 35,532
Other expenses (income):
Interest expense 2,095 1,744 6,476 7,056
Interest income 16 (117) (173) (610)
---------- ---------- ---------- ----------
2,111 1,627 6,303 6,446
Minority interest 27 88 148 446
---------- ---------- ---------- ----------
Income before income
taxes 6,270 7,752 30,667 28,640
Income tax expense
(benefit) 1,888 2,741 11,622 11,267
---------- ---------- ---------- ----------
Net income $4,382 $5,011 $19,045 $17,373
========== ========== ========== ==========
Common Stock Data:
Net income per common
share:
Basic $0.27 $0.27 $1.10 $0.92
Diluted $0.27 $0.27 $1.07 $0.90
Weighted average common
shares outstanding:
Basic 16,041,375 18,468,803 17,325,235 18,831,667
Diluted 16,430,630 18,901,321 17,731,473 19,289,076
STANDARD PARKING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except for share and per share data)
Year Ended
December 31,
------------------
2008 2007
-------- --------
Operating activities
Net income $19,045 $17,373
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 5,475 5,187
Loss (gain) on sale of assets 525 (474)
Amortization of debt issuance costs 449 275
Non-cash stock-based compensation 1,509 463
Write off of debt issuance costs 13 --
Provision for losses on accounts receivable 250 202
Excess tax benefit related to stock option
exercises (878) (1,030)
Deferred income taxes 7,644 8,945
Changes in operating assets and liabilities:
Notes and accounts receivable (4,568) (2,682)
Prepaid assets 386 (473)
Other assets (3,020) (2,171)
Accounts payable 3,505 9,389
Accrued liabilities (1,006) 1,269
-------- --------
Net cash provided by operating activities 29,329 36,273
Investing activities
Purchase of leasehold improvements and equipment (6,303) (4,517)
Proceeds from the sale of assets 264 165
Acquisitions (6,318) (6,202)
Cost of contracts purchased (566) --
Contingent purchase payments (64) (102)
-------- --------
Net cash used in investing activities (12,987) (10,656)
Financing activities
Proceeds from exercise of stock options 722 996
Repurchase of common stock (60,024) (22,119)
Proceeds from (payments on) senior credit facility 46,450 (2,900)
Payments on long-term borrowings (139) (130)
Payments of debt issuance costs (2,352) (73)
Payments on capital leases (1,550) (2,285)
Tax benefit related to stock option exercise 878 1,030
-------- --------
Net cash used in financing activities (16,015) (25,481)
Effect of exchange rate changes on cash and cash
equivalents (492) 272
-------- --------
(Decrease) increase in cash and cash equivalents (165) 408
Cash and cash equivalents at beginning of year 8,466 8,058
-------- --------
Cash and cash equivalents at end of year $8,301 $8,466
======== ========
Cash paid for:
Interest $8,686 $7,240
Income taxes 2,564 1,145
Supplemental disclosures of non-cash activity:
Debt issued for capital lease obligations $0 $30
STANDARD PARKING CORPORATION
FREE CASH FLOW
(in thousands, except for share and per share data, unaudited)
Three Months Ended Twelve Months Ended
------------------ --------------------
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
-------- -------- -------- --------
Operating income $8,408 $9,467 $37,118 $35,532
Depreciation and amortization,
net of gain (loss)
on sale of assets 1,570 1,418 6,059 4,713
Non-cash compensation 524 41 1,509 463
Income tax paid (172) (206) (2,564) (1,145)
Minority interest (27) (88) (148) (446)
Change in assets and
liabilities 970 2,526 (6,803) 4,595
Purchase of leaseholds,
equipment and cost of
contracts and contingent
purchase payments (2,884) (1,328) (6,669) (4,454)
-------- -------- -------- --------
Operating cash flow $8,389 $11,830 $28,502 $39,258
Cash interest paid (before
payment of debt issuance) (1,723) (2,153) (6,334) (7,167)
-------- -------- -------- --------
Free cash flow(1) $6,666 $9,677 $22,168 $32,091
Decrease (increase) in cash
and cash equivalents 3,050 (1,646) 165 (408)
-------- -------- -------- --------
Free cash flow, net of change
in cash $9,716 $8,031 $22,333 $31,683
(Uses)/Sources of cash:
Proceeds from (Payments on)
senior credit facility $14,000 $0 $46,450 ($2,900)
(Payments) on other borrowings (346) (567) (1,689) (2,415)
(Payments) of debt issuance
costs (3) (38) (2,352) (73)
Proceeds from exercise of
stock options -- 148 722 996
Tax benefit related to stock
option exercises -- (11) 878 1,030
(Repurchase) of common stock (22,512) (7,123) (60,024) (22,119)
(Payments) on acquisitions (855) (440) (6,318) (6,202)
-------- -------- -------- --------
Total (uses) of cash ($9,716) ($8,031) ($22,333) ($31,683)
(1) Reconciliation of Free Cash Flow to Consolidated Statements of
Cash Flow
Twelve Months Nine Months Three Months
Ended Ended Ended
December 31, September 30, December 31,
2008 2008 2008
-------------- -------------- --------------
Net cash provided by
operating activities $29,329 $19,446 $9,883
Net cash (used in)
investing activities (12,987) (9,248) (3,739)
Acquisitions 6,318 5,463 855
Effect of exchange
rate changes on cash
and cash equivalents (492) (159) (333)
-------------- -------------- --------------
Free cash flow $22,168 $15,502 $6,666
Twelve Months Nine Months Three Months
Ended Ended Ended
December 31, September 30, December 31,
2007 2008 2007
-------------- -------------- --------------
Net cash provided by
operating activities $36,273 $25,364 $10,909
Net cash (used in)
investing activities (10,656) (8,888) (1,768)
Acquisitions 6,202 5,762 440
Effect of exchange
rate changes on cash
and cash equivalents 272 176 96
-------------- -------------- --------------
Free cash flow $32,091 $22,414 $9,677
STANDARD PARKING CORPORATION
LOCATION COUNT
December 31, December 31, December 31,
2008 2007 2006
------------ ------------ ------------
Managed facilities 1,986 1,893 1,733
Leased facilities 229 238 245
------------ ------------ ------------
Total facilities 2,215 2,131 1,978