Imperial Parking Corporation Announces 2001 Year End Results
VANCOUVER, British Columbia--Feb. 27, 2002-- Imperial Parking Corporation (AMEX:IPK) reported revenues of $87.8 million for the year ended December 31, 2001, a 29.5% increase over pro forma revenues of $67.8 million for the prior year. Impark reported net income of $0.7 million, or $0.39 per diluted share, for the year ended December 31, 2001, compared to pro forma net income of $1.3 million, or $0.64 per diluted share, for the prior year. As described further below, pro forma earnings are presented for fiscal 2000 to present the business of the Company on a more comparable basis to fiscal 2001.The Company reported cash net income (see footnote1 below) of $4.4 million, or $2.34 per diluted share, for the year ended December 31, 2001, representing a 35.3% increase (on a per share basis) over pro forma cash net income of $3.7 million, or $1.73 per diluted share, in the prior year.
For the quarter ended December 31, 2001, the Company reported revenues of $23.5 million, a 39.7% increase over revenues of $16.8 million for the quarter ended December 31, 2000. The Company reported a net loss of $(133,000), or $(0.06) per diluted share, for the fourth quarter of 2001, compared to a net loss of $(21,000), or $(0.01) per diluted share, in the prior year. Cash net income was $0.5 million, or $0.26 per diluted share, compared to a cash net income of $0.5 million, or $0.25 per diluted share, in the prior year.
Net cash flow from operations for 2001 was $10.7 million compared to net cash flow from operations of $(2.7) million in the prior year. Adjusting for a $2.7 million increase in restricted cash in 2000, which was released in 2001, net cash flow from operations was $8.0 million in 2001 versus $0.0 million in 2000.
The Company's increased revenues are attributable primarily to its continuing expansion in select cities in the United States, the July 1, 2001 acquisition of DLC Management Group, Inc. ("DLC"), and strengthening operations in Canada. Impark's U.S. expansion cities-San Francisco, Seattle, Cincinnati, Cleveland, New York, Atlanta and Chicago-contributed an additional $10.6 million of revenue during 2001 while its mid-year acquisition of DLC contributed $5.7 million of revenue during the year. The Company's revenues from its Canadian operations increased significantly as the Company benefited from mild winter weather in the first and fourth quarters of 2001 and increased parking rates at many of its existing Canadian facilities.
(1) Cash net income is defined as net earnings plus non-cash stock compensation expenses, goodwill amortization and deferred income taxes. Beginning this quarter, management revised the definition of cash net income to add back non-cash stock compensation expenses because these non-cash expenses primarily result from the fact that the strike price of management's stock options increase by 10% per annum. Generally accepted accounting principles ("GAAP") require non-cash stock compensation expenses to be deducted in determining net income. Accordingly, the greater the increase in the Company's stock price, the greater the non-cash stock compensation expense. While the Company believes that there is a true economic cost to stock options, it believes that cash net income adjusted for non-cash stock compensation expense is a better measure to track the Company's economic progress because it is based on the Company's fundamental business performance rather than its stock price performance. Cash net income and cash income per diluted share are not measures that have established meanings under GAAP and should not be considered as a substitute for measures of performance prepared in accordance with GAAP. Our method of computing cash net income and cash income per diluted share may not be comparable to similarly titled measures reported by other companies.
Operating income for 2001 increased to $1.3 million, a 35.0% increase over $0.9 million reported in the prior year. Operating income increased primarily as a result of higher revenues in Impark's Canadian operations and strong results from its DLC acquisition. The increase in operating income was achieved despite a decline in the Company's gross margin to 23.4% in 2001 from 25.2% in prior year. The gross margin decline is due to the Company's increasing emphasis on leased, as opposed to managed, parking facility operations. Much of Impark's U.S. expansion has been through long-term leases rather than management contracts. Typically long-term leases have lower margins in their first few years but are expected to become significantly more profitable than management contracts over their full term. The improvement in lease margins over their term is illustrated by the table below which groups our leased locations active at December 31, 2001 by the year that we opened the location:
Year ended December 31, 2001
Number of Gross
Year opened locations Revenue Margin Coverage
($'000) ($'000)
Before 1997 296 $ 26,521 $ 5,133 1.24
1997 28 2,579 522 1.25
1998 55 8,279 777 1.10
1999 28 3,151 578 1.22
2000 53 13,300 1,255 1.10
2001 99 13,156 145 1.01
Total 559 $ 66,986 $ 8,410 1.14
Coverage is calculated by dividing Revenue by the difference of Revenue less Gross margin.
Within the total of 559 locations, 83 of these locations incurred a combined loss of $1.1 million in 2001. Of these 83 loser locations, 49 were opened in 2001 and incurred a total loss of $0.7 million.
General and administrative ("G&A") expenses increased 25.7% from $11.4 million in 2000 to $14.4 million in 2001. This increase resulted primarily from: (1) the acquisition and operation of the Company's DLC subsidiary-($1.2 million); (2) the start-up and support costs for the Company's U.S. expansion operations-($1.1 million); and (3) non-cash stock compensation expense-($0.7 million).
G&A expenses as a percentage of revenues declined to 16.4% during 2001 from 16.8% in the prior year. G&A costs declined as percentage of revenues as a result of increasing operation efficiencies and economies of scale.
Commenting on Impark's operating results for the year, Charles Huntzinger, the Company's Chief Executive Officer and President, stated, "We are pleased with the Company's expansion efforts in 2001. We were able to increase the number of locations operated at December 31, 2001 to 1,599, a 9.1% increase over the 1,465 locations operating at the end of 2001. We are confident that our new locations, while depressing our profitability in 2001, have great value and will add to the Company's profitability as our operations at these locations mature."
Mr. Huntzinger further stated, "We continue to follow our growth strategy of pursuing acquisition and growth opportunities in existing markets and in targeted markets in the U.S. and Canada. The July 2001 acquisition of DLC, our largest acquisition to date, was important for several reasons. First, we gained an immediate presence in the Philadelphia marketplace-the 5th largest city by population in the U.S. Second, Philadelphia's location in the Mid-Atlantic will serve as an excellent base from which to grow new operations in the Northeast and Mid-Atlantic-an area we have targeted for continued growth. Third, DLC has the talent and critical mass to anchor our operations on the East Coast of the United States."
Mr. Huntzinger continued, "We believe that our strong cash position at $11.0 million, additional borrowing capacity, and operating cash flow will enable us to proceed aggressively with our expansion plans. Our cash enabled us to repurchase 1.5% of the Company's outstanding common stock, 30,858 shares for an aggregate purchase price of $544,000, during 2001. Since October 2000, we have repurchased approximately 15% of the Company's outstanding common stock, or 315,620 shares, for $5.3 million."
Imperial Parking Corporation was spun-off from First Union Real Estate Equity and Mortgage Investments on March 27, 2000 and began trading on the American Stock Exchange on March 28, 2000. The spin-off was essentially the result of a detailed plan of organization that included several transactions ultimately resulting in the combination of two entities to form Impark. Because Impark, as presently constituted, existed for just four days in the first quarter of 2000, we have presented our financial statements on a pro forma basis, assuming that the spin-off had occurred at the beginning of that year. The pro forma results of operations are not necessarily indicative of what the actual results of the Company would have been for the periods presented if the transactions had actually been consummated on January 1, 2000, nor do they purport to represent the Company's future results of operations. For further details on the spin-off, refer to Imperial Parking Corporation's Information Statement (Form 10) dated March 27, 2000.
Imperial Parking Corporation, headquartered in Vancouver, B.C., Canada is the largest parking operator in Canada and is one of the fourth largest in North America. Impark currently operates more than 1,590 parking locations and 300,000 parking spaces in Canada and the United States.
This press release contains projections and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the Company's current views with respect to future events and financial performance. No assurance can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected, as a result of certain factors. A discussion of these factors is included in the Company's filings with the Securities and Exchange Commission.
Imperial Parking Corporation
Consolidated Statements of Operations (Unaudited)
In thousands of U.S. dollars, except earnings per share
Three months Year ended
ended Dec 31 Dec 31
------------------ ------------------
2001 2000 2001 2000
(pro forma)
Revenues $ 23,450 $ 16,788 $ 87,824 $ 67,809
Direct costs 18,413 12,856 67,303 50,688
-------- -------- -------- --------
Gross margin 5,037 3,932 20,521 17,121
Other operating expenses
General and
administrative 3,852 2,835 14,362 11,425
Depreciation and
amortization 1,322 1,296 4,729 4,761
Equity share in Limited
Liability company
losses 54 - 168 -
-------- -------- -------- --------
Total other operating
expenses 5,228 4,131 19,259 16,186
-------- -------- -------- --------
Operating income (loss) (191) (199) 1,262 935
Other income(expense) (22) 205 279 744
-------- -------- -------- --------
Earnings before income
taxes (213) 6 1,541 1,679
Income tax expense (80) 27 822 333
-------- -------- -------- --------
Net earnings (loss) $ (133) $ (21) $ 719 $ 1,346
======== ======== ======== ========
Diluted earnings (loss)
per share $ (0.06) $ (0.01) $ 0.39 $ 0.64
======== ======== ======== ========
Imperial Parking Corporation
Consolidated Balance Sheet
In thousands of U.S. dollars
Dec 31, 2001 Dec. 31, 2000
------------ -------------
ASSETS (unaudited)
Current assets
---------------
Cash $ 10,991 $ 5,615
Restricted cash - 2,688
Accounts receivable 6,875 3,561
Inventory 781 748
Deposits and prepaid expenses 1,135 821
Current portion of recoverable
development costs 880 969
Deferred income taxes 2,412 1,700
-------- --------
Total current assets 23,074 16,102
Recoverable development costs 3,940 4,614
Fixed assets 14,661 14,299
Management and lease agreements 336 416
Other assets 2,975 2,829
Goodwill 44,259 41,131
-------- --------
$ 89,245 $ 79,391
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
-------------------
Rents payable $ 7,288 $ 6,871
Trade accounts payable and other
accrued liabilities 5,007 4,345
Payable to employees and former
employees 1,936 1,703
Sales tax payable 1,367 1,370
Bank indebtedness 3,900 -
Current portion of other long-term
liabilities 1,204 -
Deferred revenue 2,081 1,717
-------- --------
Total current liabilities 22,783 16,006
Other long-term liabilities 4,921 1,656
Deferred income taxes 3,280 1,700
-------- --------
Total liabilities 30,984 19,362
Stockholders' equity
--------------------
Common stock, $.01 par value,
10,000,000 shares authorized
1,818,017 shares issued and outstanding 18 18
Additional paid-in capital 60,718 59,991
Retained earnings 2,183 1,464
Accumulated other comprehensive loss
Foreign currency translation adjustment (4,658) (1,444)
-------- --------
Total stockholders' equity 58,261 60,029
-------- --------
$ 89,245 $ 79,391
======== ========
Imperial Parking Corporation
Consolidated Statements of Cash Flow
In thousands of U.S. dollars
Three months ended Year ended
31-Dec-01 31-Dec-00 31-Dec-01 31-Dec-00
(unaudited) (unaudited)
---------------------------------------
Cash flows from
operations
Net earnings (loss) $ (133) $ (21) $ 719 $ 1,740
Adjustments to reconcile
net earnings to cash
provided by operating
Activities
Depreciation and
amortization of
management and
lease agreements 781 753 2,523 2,009
Amortization of goodwill 541 543 2,206 1,701
Recovery of recoverable
development costs 251 333 1,057 811
Equity share of limited
liability company losses 54 - 168 -
Deferred income taxes (180) - 649 -
Stock-based compensation 264 - 780 114
Non-cash interest expense 77 - 154 -
Interest income capitalized
to note receivable - - - (697)
Interest expense capitalized
to note payable - - - 786
Changes in non-cash working
capital items, excluding
acquisitions
Restricted Cash - (2,688) 2,688 (2,688)
Accounts receivable (862) (270) (1,026) (714)
Inventory (61) 121 (80) 135
Deposits and prepaid
expenses 199 59 (126) (156)
Rents payable (630) (1,389) 681 (397)
Trade accounts payable and
other accrued liabilities 780 755 468 571
Payable to employees and
former employees (57) 103 (486) (11)
Sales tax payable (290) 206 (97) (1,578)
Deferred revenue 249 (167) 444 (4,211)
Interest receivable on
notes receivable from
related parties - - - 8
Receivables from related
parties - - - (127)
---------------------------------------------------------------
Net cash provided by (used in)
operating activities 983 (1,662) 10,722 (2,704)
---------------------------------------------------------------
Cash flow from investing activities
Purchase of fixed assets (830) (404) (2,624) (1,115)
Increase in recoverable
development costs (81) (1,443) (266) (1,852)
Change in other assets (184) 105 (686) 1,597
Acquisition of parking
business, net of cash
acquired (37) - (4,601) (1,219)
Acquisition of minority
interests in FUMI parking
related business - - - (453)
Cash position of business
acquired - - - 8,123
---------------------------------------------------------------
Net cash used in investing
activities (1,132) (1,742) (8,177) 5,081
---------------------------------------------------------------
Cash flow from financing activities
Purchase of common shares - (4,063) (543) (4,720)
Options exercised 23 - 84 -
Increase in bank indebtedness - - 3,900 -
Repayment of outstanding
credit facilities - - - (26,369)
Change in other liabilities (22) 68 (75) (25)
Cash contributions - - - 32,701
---------------------------------------------------------------
Net cash provided by financing
activities 1 (3,995) 3,366 1,587
---------------------------------------------------------------
Effect of exchange rate
changes on cash & cash
equivalents (97) (19) (535) (333)
---------------------------------------------------------------
Increase in cash and cash
equivalents (245) (7,418) 5,376 3,631
---------------------------------------------------------------
Cash and cash equivalents,
beginning of period 11,236 13,033 5,615 1,984
---------------------------------------------------------------
Cash and cash equivalents,
end of period $ 10,991 $ 5,615 $ 10,991 $ 5,615
===============================================================
Imperial Parking Corporation
Other Information (Unaudited)
In thousands of U.S. dollars
Three months ended Year ended Dec 31
Dec 31
--------------------------------------
2001 2000 2001 2000
(pro forma)
Net earnings (loss) $ (133) $ (21) $ 719 $ 1,346
Non-cash stock
compensation $ 264 $ - $ 780 $ 114
Amortization of goodwill $ 541 $ 543 $ 2,206 $ 2,194
Deferred income taxes $ (180) $ - $ 649 $ -
Cash net income (1) $ 492 $ 522 $ 4,354 $ 3,654
Cash income per diluted
share (1) $ 0.26 $ 0.25 $ 2.34 $ 1.73
Weighted average number
of shares outstanding
(diluted basis) $ 1,907 $ 2,069 $ 1,861 $ 2,108
(1) see footnote on page 1 of press release