Standard Parking Corporation Announces Third Quarter 2013 Results

Standard Parking Corporation

Company Updates 2013 Guidance,
Announces Upcoming Corporate Name Change and Brand Launch;
Merger Integration Maintains Momentum

CHICAGO, Nov. 18, 2013 (GLOBE NEWSWIRE) -- Standard Parking Corporation (Nasdaq:STAN), a leading national provider of parking management, ground transportation and other ancillary services, today announced its third quarter 2013 results, and issued restated historical operating results for fiscal 2012, the first two quarters of 2013 and other prior periods as a result of the completion of the previously announced accounting review of its Bradley Airport contract. The Company also announced that, as part of its long-term branding strategy, it will change its corporate name to SP Plus Corporation on December 2, 2013, though for the near term it will continue to conduct its parking operations under its Standard Parking and Central Parking brands. The Company also announced that on December 2, 2013 its shares will begin trading under a new ticker symbol, SP.

Financial Summary

In millions except per share data Three Months Ended
September 30, 2013
Three Months Ended
June 30, 2013
Three Months Ended
September 30, 2012
Reported Adjusted 1 Reported 2,3 Adjusted 1 Reported 3 Adjusted 1
Gross Profit $40.1 $40.1 $46.0 $46.0 $21.4 $21.4
General and administrative expenses $20.5 $18.6 $26.9 $23.8 $13.8 $10.9
EBITDA4 $18.9 $20.8 $18.4 $21.5 $7.5 $10.4
Income before income taxes $6.9 $8.8 $6.3 $9.4 $4.8 $7.8
Net income attributable to Standard Parking $3.7 $4.8 $3.4 $5.2 $2.2 $3.9
Earnings per share (EPS) $0.17 $0.22 $0.15 $0.24 $0.14 $0.25
EPS dilution due to amortization of merger intangibles2,4 $0.10 $0.10 --
Free Cash Flow4 ($1.0) $10.3 ($0.3)
In millions except per share data Nine Months Ended
September 30, 2013
Nine Months Ended
September 30, 2012
Reported 2,3 Adjusted 1 Reported 3 Adjusted 1
Gross Profit $126.4 $126.4 $66.9 $66.9
General and administrative expenses $75.3 $66.1 $43.8 $33.2
EBITDA4 $49.1 $58.3 $22.9 $33.5
Income before income taxes $13.4 $22.6 $14.7 $25.3
Net income attributable to Standard Parking $6.9 $12.3 $8.0 $14.1
Earnings per share (EPS) $0.31 $0.55 $0.50 $0.89
EPS dilution due to amortization of merger intangibles2,4 $0.33 --
Free Cash Flow4 ($4.0) $7.1

1 Adjusted to eliminate merger and integration related costs, including severance payments, professional fees, divestiture-related costs and amortization of restricted stock units granted in connection with the Company's acquisition of Central Parking through a merger in October 2012 and related tax effects.

2 The previously issued consolidated financial statements have been recast in this table to reflect the impact of the final purchase price allocation with respect to the Company's Central Parking acquisition as if the final purchase price allocation was completed at the date of acquisition. The impact of the finalization of the purchase price allocation is reflected in the tables accompanying this release.

3 The previously issued consolidated financial statements have been restated in this table primarily to reflect a change in the manner in which the Company has accounted for deficiency payments under the Company's agreement with the State of Connecticut under which the Company operates the surface parking and 3,500 space parking garage at Bradley International Airport located in the Hartford, Connecticut metropolitan area (the "Bradley Agreement"). Cumulative deficiency payments under the Bradley Agreement, net of reimbursements, previously had been recorded as a receivable by the Company. Please see the more detailed discussion in the below section entitled "Update Regarding Accounting Review of Bradley Agreement."

4 Refer to accompanying financial tables for a reconciliation of this non-GAAP financial measure.

James A. Wilhelm, President and Chief Executive Officer, stated, "We're pleased with another quarter of solid execution. While our underlying business performance exceeded our expectations, gross profit that otherwise would have been in line with second quarter results was adversely impacted on a sequential basis by insurance program fluctuations, volatility at some of our leased locations and fluctuations in the performance of the Bradley Airport contract that now flow through our operating results. Our third quarter results were the result of a continued focus on consistently executing against our strategic initiatives and driving operational efficiencies to strengthen our competitive position.

"As part of our long term branding strategy, we've set December 2, 2013 as the initial brand launch date on which we'll officially change our corporate name to SP Plus Corporation and launch our new brand and website. For the time being, we'll continue to conduct our parking operations under their original brands. Starting in 2014, we anticipate beginning a phased transition of those operations to a new SP+ Parking brand."

Wilhelm concluded, "We have made excellent progress integrating the two businesses since the merger was completed one year ago. Our two organizations have blended seamlessly, and we continue to explore opportunities to leverage our shared expertise across the business and expand our service capabilities to customers to drive long term, profitable growth. Our staged integration continues its smooth execution and remains on track. We began to integrate locations in eight more states into our combined support office systems and processes at the start of the fourth quarter. We expect to continue converting additional states at an orderly pace and to have completed the integration of all locations by the end of 2014."

Update Regarding Accounting Review of Bradley Agreement

The Company has completed its previously announced accounting review of its Bradley Agreement. The review was isolated to this one agreement, which has been in place for the last 13 years and centered around the application of technical accounting principles to various aspects of the agreement. At the inception of the Bradley Agreement in March 2000, the Company determined, after consultation with and concurrence by Ernst & Young, LLP, that any deficiency payments under the Bradley Agreement should be accounted for as a receivable on the Company's consolidated balance sheet. Based in part on its ongoing consultation with and concurrence by Ernst & Young, LLP throughout the entire contract period to date, the Company believed this to be the proper accounting treatment, and consistently maintained such treatment over the past thirteen years. The Company believed that it would, and continues to believe that it will, ultimately recover the deficiency payments; however, after consultation with and concurrence by Ernst & Young, LLP, the Company now has concluded that the deficiency payments should not have been recognized as a receivable, but rather should have been, and should continue to be, recorded as cost of parking services in the reporting periods in which such payments were made, and that the repayments to the Company of any deficiency payment should have been, and should continue to be, recognized as reimbursements of such cost of parking services in the reporting periods in which such payments were received. This change in accounting does not impact the economics of the Bradley Agreement, including related cash flows as disclosed in the Company's quarterly reports, but may cause increased fluctuations in the Company's future quarterly results of operations. The impact of the restatement on the Company's operating results for the periods presented in this release is reflected in the tables accompanying this release. For further information, see the Company's Current Report on Form 8-K, Quarterly Report on Form 10-Q for the period ended September 30, 2013 and amendments to prior reports filed by the Company contemporaneously with this release.

Third Quarter Operating Results

Gross profit in the third quarter of 2013 was $40.1 million, compared to second quarter 2013 gross profit of $46.0 million, a decrease of 13%. The decrease in sequential quarter gross profit was primarily attributable to the timing of a health insurance dividend that was recorded in the second quarter of 2013, an unfavorable swing in insurance reserve estimates related to prior years, volatility at some of the Company's leased locations and an unfavorable sequential quarter fluctuation in deficiency payments at Bradley Airport as a result of a large repayment to the Company in the second quarter and a large payment by the Company in the third quarter. The $18.7 million year-over-year increase in gross profit was primarily attributable to the addition of Central Parking operations.

Third quarter 2013 general and administrative (G&A) expenses were $20.5 million, including $1.9 million of merger and integration related costs, as compared to $26.9 million in the second quarter of 2013, which included $3.1 million of merger and integration related costs. The sequential quarter decrease of $5.2 million in adjusted G&A, excluding merger and integration related costs, was due primarily to decreases in compensation related costs. Adjusted G&A as a percentage of gross profit improved to 46.4% in the 2013 third quarter as compared to 51.6% in the 2013 second quarter.

Income before income taxes for the third quarter of 2013 was $6.9 million. On a year-over-year basis, excluding the impact of the amortization of merger-related intangible assets of $3.8 million for the third quarter of 2013, adjusted income before income taxes would have increased 62% over the same period of 2012.

The Company generated negative free cash flow of $1.0 million during the third quarter of 2013 and negative $4.0 million for the first nine months of 2013. Free cash flow has been impacted by higher than normal receivables outstanding from some of our large airport clients, and though the Company fully expects to collect on all outstanding balances, the timing of those collections is expected to result in lower than expected free cash flow for 2013. In addition, the Company has paid out approximately $5 million more than expected for merger and integration related costs and capital investments.

Recent Developments

AXS Digital, LLC (AEG Worldwide's ticketing platform) and Standard Parking Corporation executed a multi-year agreement to use the Company's Click and Park® online reservation and payment engine to provide online parking reservation and routing services for parking facilities surrounding AEG venues across the United States. Initially, 21 venues throughout the United States will begin using Click and Park's patented travel demand management system.

Porter Airlines awarded SP Plus® Airport Services a contract to implement shuttle bus operations between Billy Bishop Toronto City Airport and off-site parking locations. As part of its services, the Company will implement its Click and Park® online reservation system to process pre-paid parking reservations for Porter Airlines passengers. This agreement represents the first direct contract between SP Plus® Airport Services and a commercial airline.

Xerox State and Local Solutions, Inc., a contractor to the Texas Department of Transportation, awarded Standard Parking a multi-year subcontract to provide certain Toll Operations and Courtesy Patrol services for a portion of the Texas toll road system serving Austin, TX. The contract includes the remote monitoring of seven toll plazas, coordination of maintenance functions for those toll plazas, and the operation of Courtesy Patrols that provide roadside assistance to stranded or disabled motorists.

2013 Full-Year Outlook

Based on results from the first nine months of 2013, the Company reaffirms its 2013 full-year adjusted earnings per share guidance in the range of $0.75 to $0.85, excluding both merger and integration costs and professional and related fees incurred in connection with the restatement, and in the range of $0.60 - $0.70, excluding only the professional and related fees incurred in connection with the restatement. The change in accounting for deficiency payments under the Bradley Agreement is not expected to have a material impact on full year 2013 earnings per share before professional and related fees incurred in connection with the restatement. The Company is not yet able to estimate the total amount of professional and related fees it will incur in connection with the restatement.

The Company also reduced its full-year 2013 free cash flow expectation by $10 million, to approximately $20 million. As noted in the Third Quarter Operating Results section, free cash flow has been impacted by the combination of higher than normal receivables outstanding from some of the Company's large airport clients and approximately $5 million in additional merger and integration related costs and capital investments.

Conference Call

The Company's quarterly earnings conference call will be held at 10:00 a.m. (Central Time) on November 19, 2013 and will be available live and in replay to all analysts and investors through a webcast service. To listen to the live call, individuals are directed to the Company's Investor Relations page at ir.standardparking.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 the Standard Parking website and can be accessed for 30 days after the call.

About Standard Parking

Standard Parking is a leading national provider of parking facility management, ground transportation and other ancillary services. The Company has approximately 23,000 employees and manages approximately 4,300 facilities with more than 2.1 million parking spaces in hundreds of cities across North America. The operations include parking-related and shuttle bus operations serving 75 airports. USA Parking System, a Company subsidiary, is one of the premier valet operators in the nation, with more four and five diamond luxury properties, including hotels and resorts, than any other valet competitor.

More information about Standard Parking is available at www.standardparking.com. You should not construe the information on that website to be a part of this release. Standard Parking's annual reports filed on Form 10-K, as amended, its quarterly reports on Form 10-Q, as amended, and its current reports on Form 8-K are available on the Internet at www.sec.gov and can also be accessed through the Investor Relations section of the Company's website.

Cautionary Note Regarding Forward-Looking Statements

This release and the attached tables contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including the statements under the caption " 2013 Full-Year Outlook" and other statements regarding expectations, beliefs, plans, intentions and strategies of the Company. The Company has tried to identify these statements by using words such as "expect," "anticipate," "believe," "could," "should," "estimate," "expect," "intend," "may," "plan," "guidance," "will," "are to be" and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. 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 operations and the business environment, all of which are difficult to predict and many of which are beyond management's control. Actual results, performance and achievements could differ materially from those expressed in, or implied by, these forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, the following: risks related to the Company's restatement of its historical financial statements discussed in this release (including, without limitation, the time, costs and expenses associated with the restatement, potential inquiries from the SEC and/or Nasdaq, the potential material adverse effect on the price of the Company's common stock and possible stockholder lawsuits); the Company's ability to integrate Central Parking into the business of the Company successfully and the amount of time and expense spent and incurred in connection with the integration; the risk that the economic benefits, cost savings and other synergies that the Company anticipates as a result of the Central Parking merger are not fully realized or take longer to realize than expected; the Company's substantially increased indebtedness incurred in connection with the Central Parking merger, which may reduce available cash flow, increase vulnerability to adverse economic conditions, and limit flexibility in planning for, or reacting to, changes in or challenges related to the Company's business; unanticipated Central Parking merger and integration expenses; the loss of customers, clients or strategic alliances as a result of the Central Parking merger; the impact of the divestitures of management contracts and leases required by the agreement entered into by the Company with the Department of Justice in connection with the Central Parking merger; other losses, or renewals on less favorable terms, of management contracts and leases; adverse litigation judgments or settlements; adverse economic impact to the Company in areas damaged by Hurricane Sandy; changes in general economic and business conditions or demographic trends; the effect on the Company's strategy and operations due to changes to the Board of Directors that occurred upon the completion of the merger; the impact of public and private regulations; financial difficulties or bankruptcy of major clients; intense competition; insurance losses that are worse than expected or adverse events not covered by insurance; labor disputes; extraordinary events affecting parking at facilities that the Company manages, including emergency safety measures, military or terrorist attacks, cyber terrorism and natural disasters; the risk that state and municipal government clients sell or enter into long-term leases of parking-related assets to competitors or clients of our competitors; uncertainty in the credit markets; availability, terms and deployment of capital; the Company's ability to obtain performance bonds on acceptable terms; and the impact of Federal health care reform.

For a detailed discussion of factors that could affect the Company's future operating results, please see the Company's filings with the Securities and Exchange Commission, including the disclosures under "Risk Factors" in those filings. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason.

Use of Non-GAAP Financial Measures

To supplement its consolidated financial statements presented in accordance with GAAP, the Company considers certain financial measures that are not prepared in accordance with GAAP, including G&A excluding merger and integration related costs (also referred to as adjusted G&A), income before income taxes excluding merger and integration related costs (also referred to as adjusted income before income taxes), net income excluding merger and integration related costs (also referred to as adjusted net income), net income per share excluding merger and integration related costs (also referred to as adjusted EPS), EBITDA and EBITDA excluding merger and integration related costs (also referred to as adjusted EBITDA), and free cash flow. The Company uses these non-GAAP financial measures, in addition to GAAP financial measures, to evaluate its operating and financial performance and to compare such performance to that of prior periods and to the performance of its competitors. Additionally, the Company uses these non-GAAP financial measures in making operational and financial decisions and in the Company's budgeting and planning process.The Company believes that providing these non-GAAP financial measures to investors helps investors evaluate the Company's operating performance, profitability and business trends in a way that is consistent with how management evaluates such performance and consistent with guidance previously provided by the Company. Adjusted G&A, EBITDA and adjusted EBITDA, adjusted income before income taxes, adjusted net income and adjusted EPS, and free cash flow should not be considered as alternatives to, or more meaningful indicators of the Company's operating performance or liquidity than, G&A, income before income taxes, net income, EPS or net cash provided by operating activities, as determined in accordance with GAAP. In addition, the Company's calculation of such non-GAAP measures may not be comparable to similarly titled measures of another company.

Adjusted G&A and adjusted income before income taxes are non-GAAP financial measures of G&A expenses and income before income taxes, respectively, excluding merger and integration related costs. The Company believes these financial measures provide useful information regarding the underlying operating performance of the Company and improve comparability of financial results. Adjusted net income and adjusted EPS are non-GAAP financial measures of net income and EPS excluding merger and integration related costs. In providing EPS guidance, the Company also excludes from adjusted EPS the professional and related fees incurred in connection with the restatement of its financial statements discussed in this release, and the Company also presents adjusted EPS excluding only such professional and related fees. The Company believes its presentation of these financial measures improves comparability of financial results.

EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to the Company before (i) interest expense net of interest income, (ii) provision for income taxes, and (iii) depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding merger and integration related costs.

The Company defines free cash flow as net cash from operating activities, less cash used for investing activities (exclusive of acquisitions), less distribution to noncontrolling interest, plus the effect of exchange rate changes on cash and cash equivalents. The Company believes that the presentation of free cash flow provides useful information regarding its recurring cash provided by operating activities after certain expenditures. It also demonstrates the Company's ability to execute its financial strategy. The Company's presentation of free cash flow has material limitations. The Company's free cash flow does not represent its cash flow available for discretionary expenditures because it excludes certain expenditures that are required or to which the Company has committed, such as debt service requirements. The Company's definition of free cash flow may not be comparable to similarly-titled measures presented by other companies.

For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the accompanying tables to this release.

STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except for share and per share data)
September 30, December 31,
2013 2012
(Unaudited) (Restated)
ASSETS
Current assets:
Cash and cash equivalents $ 22,275 $ 28,450
Notes and accounts receivable, net 122,353 111,498
Prepaid expenses and supplies 13,873 27,823
Deferred taxes 15,265 15,265
Total current assets 173,766 183,036
Leasehold improvements, equipment, land and construction in progress, net 45,120 40,402
Other assets:
Advances and deposits 7,132 8,540
Intangible assets, net 173,869 197,344
Other assets, net 23,731 22,260
Cost of contracts, net 11,836 14,215
Goodwill 439,382 439,486
655,950 681,845
Total assets $ 874,836 $ 905,283
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 110,560 $ 129,034
Accrued and other current liabilities 98,200 109,300
Current portion of unfavorable lease contracts 13,592 17,467
Current portion of long-term debt obligations 21,590 21,837
Total current liabilities 243,942 277,638
Deferred taxes 15,333 19,079
Long-term borrowings, excluding current portion:
Obligations under senior credit facility 286,075 286,727
Other long-term debt obligations 1,872 1,995
287,947 288,722
Unfavorable lease contracts 66,034 74,758
Other long-term liabilities 63,738 58,086
Stockholders' equity:
Preferred Stock, par value $0.01 per share; 5,000,000 shares authorized as of September 30, 2013 and December 31, 2012; no shares issued -- --
Common stock, par value $.001 per share; 50,000,000 shares authorized as of September 30, 2013 and issued and outstanding as of September 30, 2013 and December 31, 2012, respectively 22 22
Additional paid-in capital 239,767 236,375
Accumulated other comprehensive (loss) income 228 (381)
Accumulated deficit (42,841) (49,768)
Total Standard Parking Corporation stockholders' equity 197,176 186,248
Noncontrolling interest 666 752
Total equity 197,842 187,000
Total liabilities and stockholders' equity $ 874,836 $ 905,283
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, 2013 September 30, 2012 September 30, 2013 September 30, 2012
Parking services revenue:
Lease contracts $ 122,771 $ 42,969 $ 367,088 $ 122,927
Management contracts 77,681 49,226 256,435 141,562
200,452 92,195 623,523 264,489
Reimbursed management contract revenue 154,858 100,958 472,737 309,055
Total revenue 355,310 193,153 1,096,260 573,544
Cost of parking services:
Lease contracts 115,696 40,108 339,828 113,495
Management contracts 44,680 30,713 157,250 84,055
160,376 70,821 497,078 197,550
Reimbursed management contract expense 154,858 100,958 472,737 309,055
Total cost of parking services 315,234 171,779 969,815 506,605
Gross profit:
Lease contracts 7,075 2,861 27,260 9,432
Management contracts 33,001 18,513 99,185 57,507
Total gross profit 40,076 21,374 126,445 66,939
General and administrative expenses 20,494 13,846 75,310 43,759
Depreciation and amortization 7,959 1,723 23,704 5,258
Operating income 11,623 5,805 27,431 17,922
Other expenses (income):
Interest expense 4,818 1,093 14,421 3,355
Interest income (108) (61) (347) (181)
4,710 1,032 14,074 3,174
Income before income taxes 6,913 4,773 13,357 14,748
Income tax expense 2,448 2,504 4,359 6,520
Net income 4,465 2,269 8,998 8,228
Less: Net income attributable to
noncontrolling interest 721 75 2,070 232
Net income attributable to Standard
Parking Corporation $ 3,744 $ 2,194 $ 6,928 $ 7,996
Common stock data:
Net income per share:
Basic $ 0.17 $ 0.14 $ 0.32 $ 0.51
Diluted $ 0.17 $ 0.14 $ 0.31 $ 0.50
Weighted average shares outstanding:
Basic 21,911,574 15,668,129 21,890,861 15,632,817
Diluted 22,285,723 15,928,685 22,226,030 15,883,535
STANDARD PARKING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands, except for share and per share data, unaudited)
Nine Months Ended
September 30, 2013 September 30, 2012
Operating activities:
Net income $ 8,998 $ 8,228
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization 22,335 5,215
Net accretion of acquired lease contracts (2,526) --
Loss on sale and abandonment of assets 1,431 56
Amortization of debt issuance costs and original issue discount on borrowings 2,105 446
Non-cash stock-based compensation 3,472 1,114
Excess tax benefit related to stock option exercises -- (221)
Provisions for losses on accounts receivable 232 229
Deferred income taxes (1,675) 3,021
Net change in operating assets and liabilities (24,181) (7,097)
Net cash provided by operating activities 10,191 10,991
Investing activities:
Purchase of leasehold improvements and equipment (11,529) (3,114)
Cost of contracts purchased (365) (572)
Proceeds from sale of assets 143 15
Capitalized interest -- (12)
Contingent payments for businesses acquired (87) (93)
Net cash used in investing activities (11,838) (3,776)
Financing activities:
Proceeds from exercise of stock options -- 154
Earn-out payments made (142) (1,525)
Tax benefit related to stock option exercises -- 221
Payments on senior credit facility (1,525) (8,200)
Distribution to noncontrolling interest (2,156) (202)
Payments on long-term borrowings (115) (108)
Payments for debt issuance costs -- (30)
Payments on capital leases (350) (414)
Net cash used in financing activities (4,288) (10,104)
Effect of exchange rate changes on cash and cash equivalents (240) 55
Decrease in cash and cash equivalents (6,175) (2,834)
Cash and cash equivalents at beginning of period 28,450 13,220
Cash and cash equivalents at end of period $ 22,275 $ 10,386
Supplemental disclosures:
Cash paid during the period for:
Interest $ 12,465 $ 2,415
Income taxes 1,128 3,179
STANDARD PARKING CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION - RECONCILIATION OF ADJUSTED G&A, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME AND ADJUSTED EPS
(in thousands, except for share and per share data, unaudited)
Three months ended Nine months ended
September 30, 2013 June 30, 2013 September 30, 2012 September 30, 2013 September 30, 2012
General and administrative expenses, as reported $20,494 $26,869 $13,846 $75,310 $43,759
Subtract: Merger and integration related costs (1,893) (3,093) (2,978) (9,210) (10,537)
Adjusted G&A $18,601 $23,776 $10,868 $66,100 $33,222
Income before income taxes, as reported $6,913 $6,288 $4,773 $13,357 $14,748
Add: Merger and integration related costs 1,893 3,093 2,978 9,210 10,537
Adjusted income before income taxes $8,806 $9,381 $7,751 $22,567 $25,285
Net income attributable to Standard Parking, as reported $3,744 $3,442 $2,194 $6,928 $7,996
Add: Merger and integration related costs, after tax (1) 1,098 1,794 1,727 5,342 6,111
Adjusted net income $4,842 $5,236 $3,921 $12,270 $14,107
Net income per share, as reported
Basic $0.17 $0.16 $0.14 $0.32 $0.51
Diluted $0.17 $0.15 $0.14 $0.31 $0.50
Adjusted net income per share
Basic $0.22 $0.24 $0.25 $0.56 $0.90
Diluted $0.22 $0.24 $0.25 $0.55 $0.89
Weighted average shares outstanding
Basic 21,911,574 21,889,777 15,668,129 21,890,861 15,632,817
Diluted 22,285,723 22,221,102 15,928,685 22,226,030 15,883,535
(1) Total merger and integration related costs $1,893 $3,093 $2,978 $9,210 $10,537
Statutory tax rate 42.0% 42.0% 42.0% 42.0% 42.0%
Total merger and integration related costs, after tax $1,098 $1,794 $1,727 $5,342 $6,111
STANDARD PARKING CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION - RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
(in thousands, unaudited)
Three months ended
September 30, 2013 June 30, 2013 September 30, 2012
Net income attributable to Standard Parking, as reported $3,744 $3,442 $2,194
Add:
Income tax expense 2,448 2,066 2,504
Interest expense, net 4,710 4,635 1,032
Depreciation and amortization expense 7,959 8,252 1,723
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) $18,861 $18,395 $7,453
Add: Merger and integration related costs 1,893 3,093 2,978
Adjusted EBITDA $20,754 $21,488 $10,431
STANDARD PARKING CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION - CALCULATION OF EPS DILUTION DUE TO AMORTIZATION OF MERGER-RELATED INTANGIBLES
(in thousands, except for share and per share data, unaudited)
Three months ended Nine months ended
September 30, 2013 June 30, 2013 September 30, 2013
Amortization of merger-related intangibles $3,777 $3,857 $12,553
Statutory tax rate 42% 42% 42%
Amortization of merger-related intangibles, after tax $2,191 $2,237 $7,281
Weighted average shares outstanding, diluted 22,285,723 22,221,102 22,226,030
Amortization of merger-related intangibles, after tax, per share $0.10 $0.10 $0.33
STANDARD PARKING CORPORATION
FREE CASH FLOW
(in thousands, unaudited)
Three Months Ended Nine Months Ended
September 30, 2013 September 30, 2012 September 30, 2013 September 30, 2012
Operating income $11,623 $5,805 $27,431 $17,922
Depreciation and amortization expense 7,959 1,723 23,704 5,258
Non-cash compensation 1,004 251 3,472 1,114
Income tax paid (66) (366) (1,128) (3,179)
Income attributable to noncontrolling interest (721) (75) (2,070) (232)
Change in assets and liabilities (12,750) (5,357) (31,006) (7,639)
Purchase of leaseholds, equipment and cost of contracts and contingent purchase payments (3,738) (1,637) (11,981) (3,791)
Operating cash flow $3,311 $344 $8,422 $9,453
Cash interest paid (before payment of debt issuance costs) (4,286) (606) (12,465) (2,385)
Free cash flow (1) ($975) ($262) ($4,043) $7,068
Decrease (increase) in cash and cash equivalents (1,818) (1,331) 6,175 2,834
Free cash flow, net of change in cash ($2,793) ($1,593) $2,132 $9,902
Sources (Uses) of cash:
Proceeds from (Payments) on senior credit facility $2,875 $1,800 ($1,525) ($8,200)
(Payments) on other borrowings (82) (177) (465) (522)
(Payments) on debt issuance -- (30) -- (30)
Proceeds from exercise of stock options -- -- -- 154
Tax benefit related to stock option exercises -- -- -- 221
(Payments) on earn-out -- -- (142) (1,525)
Total sources (uses) of cash $2,793 $1,593 ($2,132) ($9,902)
(1) Reconciliation of Free Cash Flow to Consolidated Statements of Cash Flow
Nine Months Ended
September 30, 2013
Six Months Ended
June 30, 2013
Three Months Ended
September 30, 2013
Net cash provided by operating activities $10,191 $7,007 $3,184
Net cash (used in) investing activities (11,838) (8,191) (3,647)
Acquisitions -- -- --
Distribution to noncontrolling interest (2,156) (1,612) (544)
Effect of exchange rate changes on cash and cash equivalents (240) (272) 32
Free cash flow ($4,043) ($3,068) ($975)
Nine Months Ended
September 30, 2012
Six Months Ended
June 30, 2012
Three Months Ended
September 30, 2012
Net cash provided by operating activities $10,991 $9,680 $1,311
Net cash (used in) investing activities (3,776) (2,139) (1,637)
Acquisitions -- -- --
Distribution to noncontrolling interest (202) (128) (74)
Effect of exchange rate changes on cash and cash equivalents 55 (83) 138
Free cash flow $7,068 $7,330 ($262)
STANDARD PARKING CORPORATION
LOCATION COUNT
September 30, 2013 December 31, 2012 September 30, 2012
Managed facilities 3,420 3,325 1,962
Leased facilities 857 939 199
Total facilities 4,277 4,264 2,161
STANDARD PARKING CORPORATION
ORIGINALLY REPORTED, AS RECAST AND AS REVISED INCOME STATEMENT
(in thousands, except for share and per share data, unaudited)
Three months ended
March 31, 2012
Three months ended
June 30, 2012
Three months ended
September 30, 2012
Three months ended
December 31, 2012
Originally
Reported
Impact
of
Restatement
As
Revised
Originally
Reported
Impact
of
Restatement
As
Revised
Originally
Reported
Impact
of
Restatement
As
Revised
Originally
Reported
Impact
of
Purchase
Price
Accounting
Finalization
As
Recast for
Purchase
Price
Accounting
Finalization
Impact
of
Restatement
As
Revised
Parking services revenue:
Lease contracts 37,544 -- 37,544 42,414 -- 42,414 42,969 -- 42,969 127,428 -- 127,428 -- 127,428
Management contracts 47,964 -- 47,964 44,372 -- 44,372 49,226 -- 49,226 88,939 -- 88,939 -- 88,939
Reimbursed revenue 103,937 -- 103,937 104,160 -- 104,160 100,958 -- 100,958 164,027 -- 164,027 -- 164,027
Total revenue 189,445 -- 189,445 190,946 -- 190,946 193,153 -- 193,153 380,394 -- 380,394 -- 380,394
Cost of parking services:
Lease contracts 35,387 -- 35,387 38,000 -- 38,000 40,108 -- 40,108 116,767 1,519 118,286 -- 118,286
Management contracts 28,492 779 29,271 24,018 53 24,071 30,409 304 30,713 57,924 -- 57,924 (30) 57,894
Reimbursed expenses 103,937 -- 103,937 104,160 -- 104,160 100,958 -- 100,958 164,027 -- 164,027 -- 164,027
Total cost of parking service 167,816 779 168,595 166,178 53 166,231 171,475 304 171,779 338,718 1,519 340,237 (30) 340,207
Gross Profit:
Gross Profit- Lease Contracts 2,157 -- 2,157 4,414 -- 4,414 2,861 -- 2,861 10,661 (1,519) 9,142 -- 9,142
Gross Profit- Mgmt Contracts 19,472 (779) 18,693 20,354 (53) 20,301 18,817 (304) 18,513 31,015 -- 31,015 30 31,045
Total gross profit 21,629 (779) 20,850 24,768 (53) 24,715 21,678 (304) 21,374 41,676 (1,519) 40,157 30 40,187
General and adminstrative 15,045 -- 15,045 14,868 -- 14,868 13,846 -- 13,846 42,904 -- 42,904 (123) 42,781
Depreciation & amortization 1,728 -- 1,728 1,807 -- 1,807 1,723 -- 1,723 7,983 272 8,255 -- 8,255
Operating income 4,856 (779) 4,077 8,093 (53) 8,040 6,109 (304) 5,805 (9,211) (1,791) (11,002) 153 (10,849)
Other expense (income):
Interest expense 1,130 -- 1,130 1,132 -- 1,132 1,093 -- 1,093 5,094 -- 5,094 167 5,261
Interest income (70) -- (70) (135) 85 (50) (61) -- (61) (116) -- (116) -- (116)
1,060 -- 1,060 997 85 1,082 1,032 -- 1,032 4,978 -- 4,978 167 5,145
Income before income taxes 3,796 (779) 3,017 7,096 (138) 6,958 5,077 (304) 4,773 (14,189) (1,791) (15,980) (14) (15,994)
Income tax expense (benefit) 1,528 (313) 1,215 2,856 (55) 2,801 2,623 (119) 2,504 (9,381) (752) (10,133) (7) (10,140)
Net income (loss) 2,268 (466) 1,802 4,240 (83) 4,157 2,454 (185) 2,269 (4,808) (1,039) (5,847) (7) (5,854)
Less: Net income attributable to noncontrolling interest 72 -- 72 85 -- 85 75 -- 75 802 -- 802 -- 802
Net income attributable to Standard Parking 2,196 (466) 1,730 4,155 (83) 4,072 2,379 (185) 2,194 (5,610) (1,039) (6,649) (7) (6,656)
Net income per share:
Basic $0.14 ($0.03) $0.11 $0.27 ($0.01) $0.26 $0.15 ($0.01) $0.14 ($0.26) ($0.04) ($0.30) $0.00 ($0.30)
Diluted $0.14 ($0.03) $0.11 $0.26 $0.00 $0.26 $0.15 ($0.01) $0.14 ($0.26) ($0.04) ($0.30) $0.00 ($0.30)
Weighted average shares outstanding:
Basic 15,563,914 15,563,914 15,665,263 15,665,263 15,668,129 15,668,129 21,836,583 21,836,583 21,836,583
Diluted 15,820,118 15,820,118 15,900,659 15,900,659 15,928,685 15,928,685 22,357,602 22,357,602 22,357,602
STANDARD PARKING CORPORATION
ORIGINALLY REPORTED, AS RECAST AND AS REVISED INCOME STATEMENT
(in thousands, except for share and per share data, unaudited)
Three months ended
March 31, 2013
Three months ended
June 30, 2013
Six months ended
June 30, 2013
Originally
Reported
Impact
of
Purchase
Price
Accounting
Finalization
As Recast
for
Purchase
Price
Accounting
Finalization
Impact
of
Restatement
As
Revised
Originally
Reported
Impact
of
Purchase
Price
Accounting
Finalization
As Recast
for
Purchase
Price
Accounting
Finalization
Impact
of
Restatement
As
Revised
Originally
Reported
Impact of
Purchase
Price
Accounting
Finalization
As Recast
for
Purchase
Price
Accounting
Finalization
Impact
of
Restatement
As
Revised
Parking services revenue:
Lease contracts 123,136 (2,051) 121,085 -- 121,085 123,232 -- 123,232 -- 123,232 246,368 (2,051) 244,317 -- 244,317
Management contracts 87,395 2,700 90,095 -- 90,095 88,659 -- 88,659 -- 88,659 176,054 2,700 178,754 -- 178,754
Reimbursed revenue 159,477 -- 159,477 -- 159,477 158,402 -- 158,402 -- 158,402 317,879 -- 317,879 -- 317,879
Total revenue 370,008 649 370,657 -- 370,657 370,293 -- 370,293 -- 370,293 740,301 649 740,950 -- 740,950
Cost of parking services:
Lease contracts 111,500 618 112,118 -- 112,118 111,566 448 112,014 -- 112,014 223,066 1,066 224,132 -- 224,132
Management contracts 58,334 -- 58,334 403 58,737 54,653 -- 54,653 (820) 53,833 112,987 -- 112,987 (417) 112,570
Reimbursed expenses 159,477 -- 159,477 -- 159,477 158,402 -- 158,402 -- 158,402 317,879 -- 317,879 -- 317,879
Total cost of parking service 329,311 618 329,929 403 330,332 324,621 448 325,069 (820) 324,249 653,932 1,066 654,998 (417) 654,581
Gross Profit:
Gross Profit- Lease Contracts 11,636 (2,669) 8,967 -- 8,967 11,666 (448) 11,218 -- 11,218 23,302 (3,117) 20,185 -- 20,185
Gross Profit- Mgmt Contracts 29,061 2,700 31,761 (403) 31,358 34,006 -- 34,006 820 34,826 63,067 2,700 65,767 417 66,184
Total gross profit 40,697 31 40,728 (403) 40,325 45,672 (448) 45,224 820 46,044 86,369 (417) 85,952 417 86,369
General and adminstrative 27,825 -- 27,825 123 27,948 26,869 -- 26,869 -- 26,869 54,694 -- 54,694 122 54,816
Depreciation & amortization 7,308 185 7,493 -- 7,493 8,074 178 8,252 -- 8,252 15,382 363 15,745 -- 15,745
Operating income 5,564 (154) 5,410 (526) 4,884 10,729 (626) 10,103 820 10,923 16,293 (780) 15,513 295 15,808
Other expense (income):
Interest expense 5,007 -- 5,007 (167) 4,840 4,763 -- 4,763 -- 4,763 9,770 -- 9,770 (167) 9,603
Interest income (111) -- (111) -- (111) (188) -- (188) 60 (128) (299) -- (299) 60 (239)
4,896 -- 4,896 (167) 4,729 4,575 -- 4,575 60 4,635 9,471 -- 9,471 (107) 9,364
Income before income taxes 668 (154) 514 (359) 155 6,154 (626) 5,528 760 6,288 6,822 (780) 6,042 402 6,444
Income tax expense (benefit) 46 (65) (19) (135) (154) 2,049 (262) 1,787 279 2,066 2,095 (327) 1,768 143 1,911
Net income (loss) 622 (89) 533 (224) 309 4,105 (364) 3,741 481 4,222 4,727 (453) 4,274 259 4,533
Less: Net income attributable to noncontrolling interest 569 -- 569 -- 569 780 -- 780 -- 780 1,349 -- 1,349 -- 1,349
Net income attributable to Standard Parking 53 (89) (36) (224) (260) 3,325 (364) 2,961 481 3,442 3,378 (453) 2,925 259 3,184
Net income per share:
Basic $0.00 $0.00 $0.00 ($0.01) ($0.01) $0.15 ($0.01) $0.14 $0.02 $0.16 $0.15 ($0.02) $0.13 $0.02 $0.15
Diluted $0.00 $0.00 $0.00 ($0.01) ($0.01) $0.15 ($0.02) $0.13 $0.02 $0.15 $0.15 ($0.02) $0.13 $0.01 $0.14
Weighted average shares outstanding:
Basic 21,870,771 21,870,771 21,870,771 21,889,777 21,889,777 21,889,777 21,880,274 21,880,274 21,880,274
Diluted 22,170,804 22,170,804 22,170,804 22,221,102 22,221,102 22,221,102 22,195,953 22,195,953 22,195,953

CONTACT: Michael Wolf - Standard Parking Corp. (312) 274-2070 mwolf@spplus.com

Source:Standard Parking Corporation