CHICAGO, Oct. 31, 2007 (PRIME NEWSWIRE) -- Standard Parking Corporation (Nasdaq:STAN), one of the nation's largest providers of parking management services, today announced that third quarter 2007 pre-tax income increased 45% to $7.7 million, or $0.81 per share, as compared with $5.3 million, or $0.52 per share, in the third quarter of 2006. Due to an increase in the Company's effective tax rate to 41% in 2007 from 15% in the third quarter of last year, net income remained flat at $4.5 million, although earnings per share increased 7% to $0.47 from $0.44 due to a decrease in outstanding shares. Cash taxes for both years were under 5% on a year-to-date basis.
Third Quarter Highlights
* Same location revenue growth of 5% (revenue figures exclude
reimbursement of management contract expense)
* Gross profit and operating income growth of 16% and 29%,
respectively
* Free cash flow of $8.4 million or $0.88 per share
* Common stock repurchases of $5.0 million
2007 Full-Year Guidance Raised
* Pre-tax income per share expectation of $2.73 - $2.81, an increase
from $2.50 - $2.70
* EPS expectation of $1.65 - $1.70, an increase from $1.50 - $1.60
* Free cash flow expected to be in the range of $25 million to $30
million, with expected capital expenditures of $6 million
(excluding acquisitions)
Commentary
James A. Wilhelm, President and Chief Executive Officer, said, "We continue to be very pleased with the strong organic growth achieved across our business this quarter. The momentum represented by this organic growth positions us well as we head into the fourth quarter and 2008.
"Our new business activity is strong, and we have completed four acquisitions to date in 2007 as outlined in our October 1st press release. Acquisitions will continue to be an important element of our strategy because they not only assist in expanding our existing operations but also provide us with additional expertise that enhances our ability to bring ancillary services to the marketplace."
Mr. Wilhelm concluded, "We believe our business model helps to shield us from economic fluctuations by virtue of our contract structure, geographic diversity and market competencies. Even as the country's general economic outlook remains uncertain, we expect to continue to grow our business organically while simultaneously executing our disciplined acquisition strategy."
2007 Third Quarter Operating Results
Revenue for the third quarter, excluding reimbursed management contract expense, increased by 2% to $67.3 million from $65.7 million in the year ago period. While lease revenue declined 5% due primarily to the conversion of some leases to management contracts, management contract revenue grew at a healthy 13% rate. On a same location basis, revenue increased by 5% compared with the third quarter of 2006.
Gross profit in the quarter increased by 16% to $22.3 million from $19.2 million a year ago. During the third quarter, the Company recognized a $0.6 million gain related to the sale of a contract right made in conjunction with one of the reported acquisitions. In addition, the third quarter benefited from a $0.7 million favorable change in insurance loss experience reserve estimates relating to prior years. Excluding these items, gross profit increased 9% over the same period last year.
General and administrative expenses increased by 9% to $11.4 million from $10.4 million in the year earlier quarter. The third quarters of 2007 and 2006 were both impacted by expense items that do not typically occur. In 2007, the Company recorded a $0.4 million expense related to reorganizing certain support functions to further enhance productivity, while in 2006 the Company incurred $0.4 million of due diligence expense related to a potential acquisition that was not pursued. Excluding the above item, general and administrative expenses on a quarterly basis have been relatively consistent throughout 2007.
Third quarter operating income increased by 29% to $9.5 million versus $7.4 million a year ago.
The third quarter generated $8.4 million of free cash flow, which together with available cash and draws on the revolving credit facility was used to repurchase $5.0 million of common stock and fund $5.8 million related to acquisitions. On a trailing twelve-month basis, free cash flow was $28.7 million as compared with $29.5 million for the twelve months ended September 30, 2006. This decline was the result of a $2.1 million increase in purchase of leaseholds and equipment for the twelve months ending September 2007 as compared with the previous twelve months. The increase in capital spending, which has been included in the Company's 2007 guidance, relates primarily to previously described investments in IT infrastructure.
Net interest expense decreased by $0.2 million to $1.7 million from $1.9 million in last year's third quarter.
Pre-tax income increased by 45% to $7.7 million, or $0.81 per share, in the third quarter from $5.3 million, or $0.52 per share, in the prior year third quarter, an increase of 56% on a per-share basis.
At the end of 2006, the Company reversed its valuation allowance for deferred tax assets. As a result, the effective tax rate for the third quarter was 41% as compared with 15% in the third quarter of 2006. Consequently, net income for the third quarter was $4.5 million, and is comparable to the third quarter a year ago. Due to continuing share repurchases, however, earnings per share increased to $0.47 for the third quarter, up 7% from $0.44 a year ago.
Recent Developments
New agreements in the 2007 third quarter include:
* Buffalo Niagara International Airport, where the Company was
awarded a five-year contract to provide parking and shuttle bus
services. The airport is one of the fastest growing airports in
the United States, serving more than 2.5 million passengers per
year. The Company will operate a portfolio of 7,000 parking spaces
and a fleet of 18 buses.
* The Grove in Los Angeles, California, a 600,000 square foot retail
center located adjacent to the historic Los Angeles Farmer's
Market. The parking operations at the Grove consist of 3,500
parking spaces and three valet stations.
* The parking operations at the prestigious Gateway mixed-use
development in Salt Lake City, Utah. The parking operation is
comprised of three garages and one surface lot totaling close to
3,000 spaces.
* Several in New York, including:
* The New York Marriott Financial Center in Manhattan, where the
Company will provide valet parking services to hotel guests,
visitors and employees.
* 60 East End Avenue, a 30-story residential tower in Manhattan's
fashionable Upper East Side. The Company will manage 200
parking spaces and a valet operation serving residents, visitors
and the general public.
* Trump Plaza in New Rochelle, a 39-story luxury residence and
hotel where the Company will provide valet parking services for
both residents and visitors.
* The Ritz-Carlton Hotel in Westchester, where the Company will
provide valet service to Hotel guests, visitors and residents.
* Offsetting these wins, the Company ceased operations at parking
locations serving Howard University Hospital in Washington, DC.
The Hospital decided to self-manage six locations, and two
locations were awarded to another operator.
2007 Nine Month Results
Revenue for the first nine months, excluding reimbursed management contract expense, increased slightly to $195.3 million from $194.2 million in the first nine months of 2006.
Gross profit for the first nine months increased by 11% to $63.0 million from $56.8 million in the year earlier period. Contributing to the increase was a $0.6 million gain related to the sale of a contract right. In addition, the positive impact of a $1.9 million favorable change in insurance loss experience reserve estimates relating to prior years was recorded in the first nine months of 2007 versus a $0.4 million unfavorable change in loss experience reserves last year.
General and administrative expenses for the first nine months increased 6% to $33.0 million from $31.1 million for the comparable period last year. General and administrative expenses as a percent of gross profit decreased to 52.4% from 54.8% a year ago.
Depreciation and amortization expense for the nine-month period was $3.9 million, $0.5 million less than the same period last year due to a number of assets becoming fully depreciated. However, further declines in depreciation and amortization expense are not expected in the fourth quarter.
Operating income for the nine-month period grew 23% to $26.1 million from $21.3 million in the same period of 2006.
Total debt at the end of the third quarter was $80.9 million, a decrease of $4.7 million during the year. Net interest expense decreased $1.3 million in the first nine months as compared with 2006 due primarily to lower applicable interest rates under a new Senior Credit Agreement and the repayment of the 9.25% Senior Subordinated Notes in July 2006. Consequently, pre-tax income increased 41% to $20.9 million or $2.15 per share for the first nine months, from $14.8 million or $1.44 per share for the same period of 2006, an increase of 49% on a per-share basis.
Income tax expense was $8.5 million for the first nine months of 2007 as compared with $2.1 million for the year ago period due in large part to the increase in the Company's effective tax rate from 14% during the first nine months of 2006 to 41% in 2007. Cash taxes were under 5% in both years. Due to the Company's continued strong growth and limitations on the use of NOLs in any one year, the Company expects its 2008 cash tax rate to be approximately 15%.
The increase in the effective tax rate resulted in a decrease of 3% in net income to $12.4 million versus $12.7 million for the first nine months of 2006. Earnings per share for the first nine months of 2007 were $1.27 as compared with $1.23 in the year earlier period, due to a reduction in the total number of shares outstanding resulting from the Company's stock repurchase program.
Free cash flow of $22.4 million, an increase of $2.1 million over the same nine-month period a year ago, was used to fund acquisitions, repurchase common stock and repay debt. As of September 30, 2007, the Company has expended $15 million of the previously announced $20 million authorization on its stock repurchase program. Free cash flow per share for the first nine months of 2007 was $2.31 as compared with $1.97 for the same period in 2006, an increase of 17%.
Financial Outlook
Based on the strong year-to-date results, the Company is raising its net earnings guidance for the 2007 year to $1.65 - $1.70 per share. The Company also is raising its pre-tax income per share expectation to $2.73 - $2.81. Free cash flow is expected to be in the range of $25 million to $30 million anticipating capital expenditures to be approximately $6 million, excluding acquisitions.
Conference Call
The Company's quarterly earnings conference call will be held at 10:00 am (CDT) on Thursday, November 1, 2007, 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 is a leading national provider of parking facility management services. The Company provides on-site management services at multi-level and surface parking facilities for all major markets of the parking industry. The Company manages approximately 2,000 facilities, containing over one million parking spaces in more than 320 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 October 31, 2007. The Company assumes no obligation to update any forward-looking statements contained in this document as a result of new information or future events or developments.
This document and the attachments contain forward-looking information about the Company's financial results that involve substantial risks and uncertainties. You can identify these statements by the fact that they use words such as "anticipate," "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 loss, or renewal on less favorable terms, of management contracts and leases; 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; 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; our indebtedness could adversely affect our financial health; availability, terms and deployment of capital; the ability of our majority shareholder to control our major corporate decisions and a majority of our directors are not considered "independent"; 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; changes in general economic and business conditions or demographic trends; 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 periodic reports on Forms 10-Q and 8-K.
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share data)
Sept. 30, Dec. 31,
2007 2006
--------- ---------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,820 $ 8,058
Notes and accounts receivable, net 42,710 40,003
Prepaid expenses and supplies 3,009 2,221
Deferred taxes 8,290 8,290
--------- ---------
Total current assets 60,829 58,572
Advances and deposits 3,599 1,493
Long-term receivables, net 4,633 5,131
Leaseholds, cost of contracts and equipment,
net 20,126 16,902
Intangible and other assets, net 3,992 3,105
Goodwill 119,911 119,078
Deferred taxes 1,899 8,247
--------- ---------
Total assets $ 214,989 $ 212,528
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 38,209 $ 33,167
Accrued and other current liabilities 33,891 29,087
Long-term borrowings 2,131 2,766
--------- ---------
Total current liabilities 74,231 65,020
Long-term borrowings, excluding current
portion 78,805 82,899
Other long-term liabilities 20,789 23,356
Stockholders' equity:
Common stock, par value $.001 per share;
12,100,000 shares authorized; 9,337,181 and
9,621,799 shares issued and outstanding as
of September 30, 2007 and December 31,
2006, respectively 9 10
Additional paid-in capital 157,432 169,633
Accumulated other comprehensive income 373 139
Treasury stock, at cost (1,130) (647)
Accumulated deficit (115,520) (127,882)
--------- ---------
Total stockholders' equity 41,164 41,253
--------- ---------
Total liabilities and stockholders' equity $ 214,989 $ 212,528
========= =========
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share data, unaudited)
Three Months Ended Nine Months Ended
------------------------ ------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Parking services
revenue:
Lease contracts $ 36,182 $ 38,200 $ 107,368 $ 115,231
Management
contracts 31,150 27,542 87,885 78,999
----------- ----------- ----------- -----------
67,332 65,742 195,253 194,230
Reimbursed
management
contract
expense 85,167 86,915 263,252 257,852
----------- ----------- ----------- -----------
Total revenue 152,499 152,657 458,505 452,082
Cost of parking
services:
Lease contracts 31,666 34,765 95,452 104,431
Management
contracts 13,378 11,758 36,805 32,993
----------- ----------- ----------- -----------
45,044 46,523 132,257 137,424
Reimbursed
management
contract
expense 85,167 86,915 263,252 257,852
----------- ----------- ----------- -----------
Total cost of
parking
services 130,211 133,438 395,509 395,276
Gross profit:
Lease contracts 4,516 3,435 11,916 10,800
Management
contracts 17,772 15,784 51,080 46,006
----------- ----------- ----------- -----------
Total gross
profit 22,288 19,219 62,996 56,806
General and
administrative
expenses 11,356 10,393 33,014 31,127
Depreciation and
amortization 1,389 1,438 3,917 4,408
----------- ----------- ----------- -----------
Operating income 9,543 7,388 26,065 21,271
Other expenses
(income):
Interest expense 1,739 2,161 5,312 6,541
Interest income (47) (235) (493) (379)
----------- ----------- ----------- -----------
1,692 1,926 4,819 6,162
Minority interest 109 113 358 311
----------- ----------- ----------- -----------
Income before
income taxes 7,742 5,349 20,888 14,798
Income tax
expense 3,213 821 8,526 2,101
----------- ----------- ----------- -----------
Net income $ 4,529 $ 4,528 $ 12,362 $ 12,697
=========== =========== =========== ===========
Common stock data:
Net income per
common
share:
Basic $ 0.48 $ 0.46 $ 1.30 $ 1.27
Diluted $ 0.47 $ 0.44 $ 1.27 $ 1.23
Weighted average
common
shares
outstanding:
Basic 9,360,320 9,948,454 9,476,311 10,025,564
Diluted 9,579,626 10,217,861 9,709,098 10,287,410
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except for share and per share data, unaudited)
Nine Months Ended
--------------------
Sept. 30, Sept. 30,
2007 2006
-------- --------
Operating activities:
Net income $ 12,362 $ 12,697
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 3,828 4,056
(Gain) loss on sale of assets (533) 352
Amortization of deferred financing costs 204 457
Amortization of carrying value in excess of
principal -- (108)
Non-cash compensation 563 403
Excess tax benefit related to stock option
exercises (1,041) --
Recovery of allowance for doubtful accounts (22) (450)
Write-off of debt issuance costs -- 416
Write-off of carrying value in excess of
principal related to the 9 1/4% senior
subordinated notes -- (352)
Deferred taxes 6,348 1,460
Change in operating assets and liabilities 3,655 2,348
-------- --------
Net cash provided by operating activities 25,364 21,279
Investing activities:
Acquisitions (5,762) --
Purchase of leaseholds and equipment (3,024) (808)
Contingent earn-out payments (102) (225)
-------- --------
Net cash used in investing activities (8,888) (1,033)
Financing activities:
Repurchase of common stock (14,996) (5,997)
Repurchase of convertible redeemable preferred
stock, series D -- (1)
Proceeds from exercise of stock options 848 501
Tax benefit related to stock option exercises 1,041 --
(Payments) proceeds on senior credit facility (2,900) 35,400
Payments on long-term borrowings (103) (291)
Payments on joint venture borrowings -- (521)
Payments of debt issuance costs (35) (732)
Payments on capital leases (1,745) (1,908)
Repurchase of 9 1/4% senior subordinated notes -- (48,877)
-------- --------
Net cash used in financing activities (17,890) (22,426)
Effect of exchange rate changes on cash and cash
equivalents 176 59
-------- --------
Decrease in cash and cash equivalents (1,238) (2,121)
Cash and cash equivalents at beginning of period 8,058 10,777
-------- --------
Cash and cash equivalents at end of period $ 6,820 $ 8,656
======== ========
Supplemental disclosures:
Cash paid during the period for:
Interest $ 5,049 $ 7,521
Income taxes 939 295
Supplemental disclosures of non-cash activity:
Debt issued for capital lease obligation $ 30 $ 2,335
STANDARD PARKING CORPORATION
FREE CASH FLOW
(in thousands, except for share and per share data, unaudited)
Three Months Ended Nine Months Ended
------------------- -------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2007 2006 2007 2006
-------- -------- -------- --------
Operating income $ 9,543 $ 7,388 $ 26,065 $ 21,271
Depreciation and
amortization 1,389 1,438 3,917 4,408
Non-cash compensation 98 78 563 403
Income tax paid (220) (96) (939) (295)
Minority interest (109) (113) (358) (311)
Change in assets and
liabilities (62) 3,813 1,341 3,383
Purchase of leaseholds
and equipment and
contingent earn-out
payments (541) (205) (3,126) (1,033)
-------- -------- -------- --------
Operating cash flow $ 10,098 $ 12,303 $ 27,463 $ 27,826
Cash interest paid (1,677) (2,827) (5,049) (7,521)
-------- -------- -------- --------
Free cash flow (a) $ 8,421 $ 9,476 $ 22,414 $ 20,305
Decrease (increase) in
cash and cash
equivalents 574 (1,831) 1,238 2,121
-------- -------- -------- --------
Free cash flow, net of
change in cash $ 8,995 $ 7,645 $ 23,652 $ 22,426
(Uses)/Sources of cash:
Proceeds from (Payments
on) senior credit
facility and 9 1/4%
Notes $ 2,150 ($ 6,827) ($ 2,900) ($13,477)
(Payments) on other
borrowings (576) (876) (1,848) (2,720)
(Payments) of debt
issuance costs -- (115) (35) (732)
Proceeds from exercise
of stock options 94 174 848 501
Tax benefit related to
stock option exercises 97 -- 1,041 --
(Repurchase) of common
stock (4,998) -- (14,996) (5,997)
(Repurchase) of series D
preferred stock -- (1) -- (1)
(Payments) on
acquisitions (5,762) -- (5,762) --
-------- -------- -------- --------
Total (uses) of cash ($ 8,995) ($ 7,645) ($23,652) ($22,426)
---------------------------------------------------------------------
(a) Reconciliation of Free Cash Flow to Consolidated Statements of
Cash Flow
Nine Months Six Months Three Months
Ended Ended Ended
Sept. 30, June 30, Sept. 30,
2007 2007 2007
------------ ------------ ------------
Net cash provided by
operating activities $25,364 $16,561 $8,803
Net cash (used in)
investing activities (8,888) (2,585) (6,303)
Acquisitions 5,762 -- 5,762
Effect of exchange rate
changes on cash and
cash equivalents 176 17 159
------------ ------------ ------------
Free cash flow $22,414 $13,993 $8,421
Nine Months Six Months Three Months
Ended Ended Ended
Sept. 30, June 30, Sept. 30,
2006 2006 2006
------------ ------------ ------------
Net cash provided by
operating activities $21,279 $12,102 $ 9,177
Net cash (used in)
investing activities (1,033) (828) (205)
Acquisitions -- -- --
Effect of exchange rate
changes on cash and
cash equivalents 59 (445) 504
------------ ------------ ------------
Free cash flow $20,305 $10,829 $ 9,476
Trailing Twelve Month Free Cash Flow
Three Months Ended Twelve Months
--------------------------------------- Ended
Dec. 31, March 31, June 30, Sept. 30, Sept. 30,
2006 2007 2007 2007 2007
-------- -------- -------- -------- --------
Free Cash Flow $ 6,263 $ 5,202 $ 8,791 $ 8,421 $28,677
Three Months Ended Twelve Months
--------------------------------------- Ended
Dec. 31, March 31, June 30, Sept. 30, Sept. 30,
2005 2006 2006 2006 2006
-------- -------- -------- -------- --------
Free Cash Flow $ 9,225 ($2,819) $13,648 $ 9,476 $29,530
STANDARD PARKING CORPORATION
LOCATION COUNT
Sept. 30, Dec. 31, Sept. 30,
2007 2006 2006
--------- --------- ---------
Managed facilities 1,837 1,733 1,743
Leased facilities 234 245 261
--------- --------- ---------
Total facilities 2,071 1,978 2,004