CHICAGO, Nov. 2, 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 third quarter 2009 earnings of $0.27 per share, a decline of 7% from the third quarter of 2008. The Company's year-over-year growth in third quarter EPS was 25% after adjusting for certain insurance and legal related items and a prior year gain. Year-to-date free cash flow of $11 million is in line with the Company's full-year expectation of $15 million to $20 million.
Comments
James A. Wilhelm, President and Chief Executive Officer, said, "We are encouraged by our third quarter results. In particular, our location retention rate increased to 90%, reinforcing our belief that our clients recognize the added value we bring to their operations."
Wilhelm continued, "As we've noted in the past, our business model is diversified in terms of geography and the sectors of the economy represented by our clients and is based predominantly on fixed-fee management contracts, providing us with a measure of protection against economic downturns. We continue to experience some softness across our lease and reverse management portfolio in markets that tend to be more susceptible to discretionary consumer spending. However, we are encouraged by recent trends and remain focused on our long-term strategic goals, which include both organic growth and growth through acquisition, such as our third quarter purchase of the Gameday event, transportation and traffic management business and its Click and Park(SM) online parking reservation product. Our strong financial position and our experienced, proven management team should enable us to continue to deliver solid results in these tough economic times while building toward higher levels of sustainable growth in the future."
Third Quarter Operating Results
Revenue for the third quarter of 2009, excluding reimbursed management contract expense, decreased by $0.7 million to $74.8 million from $75.5 million in the year-ago period, due to lower revenue at leased locations. On a sequential basis, revenue increased almost 3% over the second quarter of 2009 and paid exits at leased same locations increased modestly.
Gross profit in the 2009 third quarter declined by 9% to $21.2 million from $23.5 million a year ago. Favorable changes in insurance reserve estimates, an insurance dividend and a gain from the sale of certain contract rights in the third quarter of 2008 accounted for over two-thirds of the year-over-year decline, as these factors either did not recur in the third quarter of 2009 or were not significant. Additionally, certain legal-related expenses incurred during the 2009 third quarter accounted for the remaining one-third of the year-over-year decline in gross profit. The underlying gross profit, after adjusting for these items, was essentially unchanged on a year-on-year basis. On a sequential basis, reported gross profit was up 6% from the second quarter of this year, aided in part by the Gameday acquisition in July.
General and administrative expense ("G&A") decreased by 6% to $11.3 million from $12.0 million in the 2008 third quarter, primarily as a result of steps taken this year to reduce certain compensation expenses. On a sequential quarter basis, G&A expense increased 9% over the second quarter of 2009, driven primarily by the Gameday acquisition and the Company's annual grant of stock to members of its Board of Directors. As a result of the foregoing, operating income was $8.4 million, compared with $9.9 million in the year ago quarter. Lower interest rates resulted in a $0.2 million decrease in year-over-year interest expense for the third quarter.
Net income attributable to the Company for the 2009 third quarter was $4.2 million, or $0.27 per share, versus $5.1 million, or $0.29 per share, for the same period of 2008, a decline of 7% in EPS. The Company's year-over-year growth in third quarter EPS was 25% after adjusting for certain insurance and legal related items and a prior year gain.
The Company generated $6.4 million of free cash flow during the third quarter of 2009, as compared with $1.3 million generated in the third quarter of 2008. The year-over-year increase was attributable primarily to the timing of fluctuations in the movement of working capital. The Company continues to expect free cash flow to be in a range of $15 - $20 million for the full year.
Recent Developments
New Business
The Company was awarded a parking management contract for the Boston University Medical Center. This win expands the Company's relationship with the University where we also manage their main campus parking. The Medical Center operation consists of over 3,000 spaces spread across nine locations.
The Company was awarded a parking management contract for Sky View Parc, a multi-million square foot retail and condominium complex in Flushing, New York. The parking operation will consist of a 2,000 space self-park facility as well as a 400 space garage that will provide first-class valet service to the condo residents. With the addition of Sky View Parc, the Company will be the parking operator at three of New York's largest retail centers.
The Company commenced its parking management duties for 2,200 parking spaces at Union Station in Kansas City, a converted historic train terminal that now houses restaurants, retail, theatres, a planetarium and Science City Children's Museum.
The Company also was officially awarded the parking and shuttle management contract at the Hartsfield-Jackson Atlanta International Airport during the third quarter and commenced operations on October 1.
Changes to Board of Directors
Several changes recently occurred to the Company's Board of Directors.
* Timothy J. White, an affiliate of the Company's largest
shareholders, was elected to the Board of Directors.
* At the Company's annual shareholder meeting in July, the total
number of directors elected was reduced from nine to six.
* Robert S. Roath was elected non-executive Chairman of the Board,
having served as a director and Chairman of the Company's
Audit Committee since its May 2004 IPO. Formerly the Chief
Financial Officer of RJR Nabisco, Inc., he also serves as a
director of Interdigital Communications Corp.
S-3 Shelf Registration
During the 2009 third quarter, the Company filed a shelf registration of 7.6 million shares of its common stock owned by its largest shareholders. The registration subsequently was declared effective by the Securities and Exchange Commission.
Year-to-Date Results
Revenue for first nine months of 2009, excluding reimbursed management contract expense, decreased by 2% to $220.8 million from $225.5 million in 2008.
Gross profit for the first nine months of 2009 decreased by 11% to $61.0 million from $68.7 million for the same period of 2008. Two percentage points of the year-over-year decline is largely attributable to the continuing impact of the economic downturn on certain areas of the business that are more sensitive to discretionary spending than our predominant fixed-fee contract business. The remaining 9% of the year-over-year decline is attributable to the Company's receipt in 2008 of $1.6 million in settlement proceeds relating to its Hurricane Katrina insurance claim, changes in insurance loss reserve estimates relating to prior years, a 2008 insurance dividend, a gain from the sale of certain assets in 2008, and certain 2009 legal-related expenses.
General and administrative expenses for the first nine months of 2009 decreased 3% to $34.4 million from $35.5 million a year earlier as steps taken to reduce certain compensation expenses were partially offset by expenses related to: (1) the transfer of shares by the Company's former majority shareholder; (2) certain other legal-related expenses in 2009; and (3) six additional months of costs related to the July 2008 restricted stock unit grant to senior management. Adjusting for these three items, general and administrative expenses for the first nine months of 2009 would have decreased by 12% compared to the first nine months of 2008.
As a result of the foregoing, operating income for the first nine months of 2009 decreased by 23% to $22.2 million from $28.7 million in the same period of 2008. Operating income for the first nine months of 2009 would have increased by 11% compared to the first nine months of 2008 after adjusting for the above-mentioned insurance and legal items, the impact of the timing of the RSU grant, the gain on the sale of certain contract rights and the costs attributable to the former majority shareholder's transfer of its stake in the Company.
Net income attributable to the Company decreased by 26% to $10.8 million for the first nine months of 2009 as compared with $14.7 million for the first nine months of last year. On a per share basis, the year-over-year decrease from $0.81 last year to $0.69 in 2009 was only 15% because of fewer shares outstanding due to share repurchases by the Company. Net income attributable to the Company for the first nine months of 2009 would have increased by 14% and earnings per share would have increased by 32% compared to the first nine months of 2008 after adjusting for the above-mentioned insurance and legal items, the impact of the timing of the RSU grant, the gain on the sale of certain contract rights and the costs attributable to the former majority shareholder's transfer of its stake in the Company.
The Company generated $11.0 million of free cash flow during the first nine months of 2009 as compared with $15.5 million in the same period of 2008.
Maintains Full-Year Guidance
The Company is expecting full year earnings per share to be at the low end of its previously announced guidance range of $1.05 - $1.11 per share. This range continues to exclude the $0.04 per share charge incurred in the first nine months of this year for costs associated with the transfer of shares by the Company's former majority shareholder and does not anticipate any additional costs related to the transfer or subsequent sale of those shares. Free cash flow is expected to be in the range of $15 - $20 million.
Conference Call
The Company's quarterly earnings conference call will be held at 10:00 a.m. (CT) on Monday, November 2, 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 nearly 12,000 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 press release. Standard Parking's annual reports filed on Form 10-K, its quarterly reports on Form 10-Q, its current reports on Form 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 2, 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 recession and recent turmoil in the credit markets and financial services industry; changes in general economic and business conditions or demographic trends; the financial difficulties or bankruptcy of our major clients, including the 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 largest shareholders; 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; seasonal trends, especially in the first quarter of the year; 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. 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 quarterly reports on Form 10-Q and its current reports on Form 8-K.
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)
Sept. 30, Dec. 31,
--------- --------
2009 2008
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 8,641 $ 8,301
Notes and accounts receivable, net 44,930 45,198
Prepaid expenses and supplies 1,946 2,496
Deferred taxes 3,253 3,253
---------- ----------
Total current assets 58,770 59,248
Leasehold improvements, equipment and
construction in progress, net 17,388 17,542
Advances and deposits 4,044 4,433
Long-term receivables, net 9,480 6,680
Intangible and other assets, net 6,613 6,916
Cost of contracts, net 13,254 10,872
Goodwill 126,535 123,550
---------- ----------
Total assets $ 236,084 $ 229,241
========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 45,523 $ 46,446
Accrued and other current
liabilities 29,636 31,416
Current portion of long-term
borrowings 722 1,068
---------- ----------
Total current liabilities 75,881 78,930
Deferred taxes 7,600 3,305
Long-term borrowings, excluding
current portion 119,879 123,996
Other long-term liabilities 22,502 22,052
Stockholders' equity:
Common stock, par value $.001 per
share; 21,300,000 shares authorized;
15,312,089 and 16,110,781 shares
issued and outstanding as of
September 30, 2009 and December 31,
2008, respectively 15 16
Additional paid-in capital 90,565 103,541
Accumulated other comprehensive
income 357 85
Treasury stock, at cost 627,423
shares as of December 31, 2008 -- (11,161)
Accumulated deficit (80,652) (91,464)
---------- ----------
Total Standard Parking Corporation
stockholders' equity 10,285 1,017
Noncontrolling interest (63) (59)
---------- ----------
Total stockholders' equity 10,222 958
---------- ----------
Total liabilities and
stockholders' equity $ 236,084 $ 229,241
========== ==========
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share data, unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Parking services
revenue:
Lease contracts $ 35,576 $ 38,634 $ 105,963 $ 116,331
Management
contracts 39,266 36,858 114,870 109,153
-------- -------- --------- ---------
74,842 75,492 220,833 225,484
Reimbursed
management
contract
expense 97,480 101,919 297,632 300,687
-------- -------- --------- ---------
Total revenue 172,322 177,411 518,465 526,171
Cost of parking
services:
Lease contracts 32,899 35,506 98,780 105,110
Management
contracts 20,696 16,510 61,025 51,718
-------- -------- --------- ---------
53,595 52,016 159,805 156,828
Reimbursed
management
contract
expense 97,480 101,919 297,632 300,687
-------- -------- --------- ---------
Total cost of
parking
services 151,075 153,935 457,437 457,515
Gross profit:
Lease contracts 2,677 3,128 7,183 11,221
Management
contracts 18,570 20,348 53,845 57,435
-------- -------- --------- ---------
Total gross
profit 21,247 23,476 61,028 68,656
General and
administrative
expenses 11,295 12,017 34,376 35,457
Depreciation and
amortization 1,582 1,539 4,482 4,489
-------- -------- --------- ---------
Operating income 8,370 9,920 22,170 28,710
Other expenses
(income):
Interest expense 1,546 1,777 4,510 4,381
Interest income (54) (106) (216) (189)
-------- -------- --------- ---------
1,492 1,671 4,294 4,192
Income before
income taxes 6,878 8,249 17,876 24,518
Income tax expense 2,654 3,144 6,920 9,734
-------- -------- --------- ---------
Net income 4,224 5,105 10,956 14,784
Less: Net income
attributable to
noncontrolling
interest 38 (4) 144 121
-------- -------- --------- ---------
Net income
attributable to
Standard Parking
Corporation $ 4,186 $ 5,109 $ 10,812 $ 14,663
======== ======== ========= =========
Common stock data:
Net income per share:
Basic $ 0.27 $ 0.30 $ 0.71 $ 0.83
Diluted $ 0.27 $ 0.29 $ 0.69 $ 0.81
Weighted average
shares outstanding:
Basic 15,277,601 17,244,932 15,274,214 17,753,188
Diluted 15,696,136 17,694,208 15,659,351 18,165,087
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Nine Months Ended
-----------------
Sept. 30, Sept. 30,
--------- ---------
2009 2008
---- ----
Operating activities:
Net income $ 10,956 $ 14,784
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation and amortization 4,173 4,147
Loss on sale of assets 286 291
Amortization of debt issuance costs 481 287
Write off of debt issuance cost -- 13
Non-cash stock-based compensation 1,754 985
Excess tax benefit related to stock
option exercises (136) (878)
Provision (reversal) for losses on
accounts receivable (174) 79
Deferred income taxes 4,295 6,247
Change in operating assets and
liabilities (6,856) (6,302)
--------- ---------
Net cash provided by operating
activities 14,779 19,653
Investing activities:
Acquisitions (2,500) (5,463)
Purchase of leaseholds improvements
and equipment (2,820) (3,539)
Proceeds from sale of assets 39 264
Cost of contracts purchased (904) (446)
Contingent purchase payments (259) (64)
--------- ---------
Net cash used in investing activities (6,444) (9,248)
Financing activities:
Repurchase of common stock (3,885) (37,512)
Proceeds from exercise of stock options 125 722
Tax benefit related to stock option
exercises 136 878
(Payments on) proceeds from senior
credit facility (3,600) 32,450
Distribution to noncontrolling interest (148) (207)
Payments on long-term borrowings (90) (110)
Payments of debt issuance costs (30) (2,349)
Payments on capital leases (775) (1,233)
--------- ---------
Net used in financing activities (8,267) (7,361)
Effect of exchange rate changes on cash
and cash equivalents 272 (159)
--------- ---------
Increase in cash and cash equivalents 340 2,885
Cash and cash equivalents at beginning
of period 8,301 8,466
--------- ---------
Cash and cash equivalents at end of
period $ 8,641 $ 11,351
========= =========
Supplemental disclosures:
Cash paid during the period for:
Interest $ 4,516 $ 6,960
Income taxes 2,449 2,392
STANDARD PARKING CORPORATION
FREE CASH FLOW
(in thousands, except for share and per share data, unaudited)
Three Months Nine Months
Ended Ended
------------------ -------------------
September 30, September 30,
2009 2008 2009 2008
------- ------- -------- -------
Operating income $ 8,370 $ 9,920 $ 22,170 $28,710
Depreciation and
amortization
expense 1,582 1,539 4,482 4,489
Non-cash compensation 681 520 1,754 985
Income tax paid (679) (778) (2,449) (2,392)
Income attributable to
noncontrolling interest (38) 4 (144) (121)
Change in other assets
and liabilities (1,200) (7,036) (6,424) (7,773)
Net purchase of
leaseholds, equipment
and cost of contracts
and contingent purchase
payments (861) (1,038) (3,944) (3,785)
------ ------ ------- -------
Operating cash flow $7,855 $3,131 $15,445 $20,113
Cash interest paid
(before payment of debt
issuance) (1,481) (1,840) (4,486) (4,611)
------ ------ ------- -------
Free cash flow(1) $6,374 $1,291 $10,959 $15,502
(Increase) Decrease in
cash and cash equivalents 1,880 244 (340) (2,885)
------ ------ ------- -------
Free cash flow, net of
change in cash $8,254 $1,535 $10,619 $12,617
Sources (Uses) of cash:
(Payments) Proceeds from
senior credit facility ($5,750) $25,000 ($3,600) $32,450
(Payments) on other
borrowings (235) (396) (865) (1,343)
(Payments) of debt
issuance costs (30) (2,314) (30) (2,349)
Proceeds from exercise
of stock options 125 380 125 722
Tax benefit related to
stock option exercises 136 387 136 878
(Repurchase) of common
stock -- (24,586) (3,885) (37,512)
(Payments) on
acquisitions (2,500) (6) (2,500) (5,463)
------ ------ ------- -------
Total (uses) of cash ($8,254) ($1,535) ($10,619) ($12,617)
---------------------------------------------------------------------
(1) Reconciliation of Free Cash Flow to Consolidated Statements of
Cash Flow
Nine Six Three
Months Months Months
Ended Ended Ended
Sept. 30, June 30, Sept. 30,
2009 2009 2009
-------- -------- ---------
Net cash provided by operating
activities $14,779 $ 7,833 $6,946
Net cash (used in) investing
activities (6,444) (3,083) (3,361)
Acquisitions 2,500 -- 2,500
Distribution to noncontrolling
interest (148) (108) (40)
Effect of exchange rate changes
on cash and cash equivalents 272 (57) 329
------- ------- --------
Free cash flow $10,959 $4,585 $6,374
Nine Six Three
Months Months Months
Ended Ended Ended
Sept. 30, June 30, Sept. 30,
2008 2008 2008
------- ------- --------
Net cash provided by operating
activities $19,653 $17,151 $2,502
Net cash (used in) investing
activities (9,248) (8,204) (1,044)
Acquisitions 5,463 5,457 6
Distribution to noncontrolling
interest (207) (133) (74)
Effect of exchange rate
changes on cash and cash
equivalents (159) (60) (99)
------- ------- --------
Free cash flow $15,502 $14,211 $1,291
STANDARD PARKING CORPORATION
LOCATION COUNT
Sept. 30, Dec. 31, Sept. 30,
2009 2008 2008
-------- -------- ---------
Managed facilities 1,976 1,986 1,947
Leased facilities 220 229 238
------- ------- --------
Total facilities 2,196 2,215 2,185