Central Parking Corporation Reports Fiscal 2006 First Quarter Results
NASHVILLE, Tenn.--Feb. 9, 2006--Central Parking Corporation today announced earnings from continuing operations for the first quarter ended December 31, 2005 of $17.0 million, or $0.51 per diluted share, compared with $6.6 million, or $0.18 per diluted share earned in the first quarter of the previous fiscal year. Net earnings for the first quarter of fiscal 2006 were $18.0 million, or $0.54 per diluted share, compared with $2.9 million or $0.08 per diluted share in the year earlier period."Earnings from continuing operations for the first quarter of fiscal 2006 exceeded our expectations," said Emanuel Eads, President and Chief Executive Officer. "Our program of opportunistic property sales again was accretive, generating approximately $41 million in proceeds and $23.0 million in pre-tax, property related gains during the quarter. Our efforts to reduce costs also produced positive results as cost of management contracts decreased by $4.4 million, resulting in a significant improvement in management contract margins. Excluding $2.8 million in costs relating to the recently completed United Kingdom investigation, general and administrative costs decreased from $18.9 million in the first quarter of last year to $18.1 million, or 11.0 percent of revenues (excluding reimbursed management contract costs).
"As planned, revenues were lower than the first quarter of last year primarily due to closed locations, including a number of low margin and unprofitable locations that were closed as part of our initiative to improve profit margins. Revenues also were reduced by several other factors, including the reclassification of certain locations from leased to management and the effects of Hurricanes Katrina and Wilma ($2.2 million). The Dutch Auction tender offer was successfully completed during the quarter resulting in the purchase of approximately 13% of the Company's outstanding shares of common stock for an aggregate purchase price of $75.3 million. Proceeds from property sales were used to reduce debt incurred in connection with the tender offer resulting in a net increase in debt of $49.1 million in the quarter.
"We are moving ahead with the execution of other components of the strategic plan we announced in August. Several marginal and low growth markets have been divested and we expect to divest additional domestic and international markets in the coming months. Our initiative to target non-traditional parking market segments with significant growth potential continues on track with the recent renewal of two major privatized toll road contracts, the Chicago Skyway and the Orange County toll road system. The extension of these two contracts is a strong endorsement of our ability to manage toll collection services for major toll road systems. Additionally, our USA Parking subsidiary, which targets the hospitality valet market, continues its expansion with the recent signing of contracts to manage parking operations at the LAX Sheraton, the Westin Ft. Lauderdale and the new Mandarin Hotel currently under construction in Chicago.
"Overall, we are pleased with the results of the quarter. Operating earnings, excluding property gains, were on plan for the first quarter but we still have much work ahead as we continue the execution of our strategic plan. We expect to exceed our earlier guidance of $0.50 to $0.57 for earnings from continuing operations, including property-related gains or losses, for fiscal 2006 due primarily to the higher than expected property gains during the first quarter," Eads concluded.
A conference call regarding this release is scheduled for today, February 9, 2006, beginning at 10:00 a.m. (ET). Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast and rebroadcast of the call at www.parking.com or www.earnings.com.
Central Parking Corporation, headquartered in Nashville, Tennessee, is a leading provider of parking and transportation-related services. As of December 31, 2005, the Company operated more than 3,300 parking facilities containing over 1.5 million spaces at locations in 37 states, the District of Columbia, Canada, Puerto Rico, the United Kingdom, the Republic of Ireland, Chile, Colombia, Germany, Mexico, Peru, Poland, Spain, Switzerland, Venezuela and Greece.
This press release contains historical and forward-looking information. The words "expect," "guidance," "looking ahead," "assumptions," "estimates," "anticipates," "goal," "outlook," "intend," "plan," "continue to expect," "should," "believe," "project," "objective," "outlook," "forecast," "will likely result," or "will continue" and similar expressions identify forward-looking statements. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company believes the assumptions underlying these forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in the forward-looking statements. The factors that may result in actual results differing from such forward-looking information include, but are not limited to: the Company's ability to achieve the goals described in this release and other communications, including but not limited to, the Company's ability to implement its strategic plan, maintain reduced operating costs, reduce indebtedness and sell real estate at projected values as well as continued improvement in same store sales, which is dependent on improvements in general economic conditions and office occupancy rates; the loss or renewal on less favorable terms, of management contracts and leases; the timing of pre-opening, start-up and break-in costs of parking facilities; the Company's ability to cover the fixed costs of its leased and owned facilities and its overall ability to maintain adequate liquidity through its cash resources and credit facilities; the Company's ability to comply with the terms of the Company's credit facilities (or obtain waivers for non-compliance); interest rate fluctuations; acts of war or terrorism; changes in demand due to weather patterns and special events including sports events and strikes; higher premium and claims costs relating to the Company's insurance programs, including medical, liability and workers' compensation; the Company's ability to renew and obtain performance and surety bonds on favorable terms; the impact of claims and litigation; and increased regulation or taxation of parking operations and real estate.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statements contained herein to reflect events or circumstances occurring after the date of this release or to reflect the occurrence of unanticipated events. We have provided additional information in our Annual Report on Form 10-K for our fiscal year ended September 30, 2005, filed with the Securities and Exchange Commission and other filings with the Securities and Exchange Commission, which readers are encouraged to review, concerning other factors that could cause actual results to differ materially from those indicated in the forward-looking statements.
Central Parking Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Amounts in thousands, except per share data
YTD ended
December 31,
2005 2004
-------- --------
Revenues:
Parking $135,108 $140,300
Management contracts and Other 28,855 30,641
-------- --------
163,963 170,941
Reimbursement of management contract expenses 115,496 112,682
-------- --------
Total revenues 279,459 283,623
Costs and expenses:
Cost of parking 123,722 125,495
Cost of management contracts 10,890 15,262
General and administrative 20,878 18,900
-------- --------
155,490 159,657
Reimbursed management contract expenses 115,496 112,682
-------- --------
Total costs and expenses 270,986 272,339
Property-related gains, net 23,043 1,881
-------- --------
Operating earnings 31,516 13,165
Other income (expenses):
Interest income 302 1,206
Interest expense (3,957) (4,958)
(Loss) gain on derivative instruments (71) 555
Equity in partnership and joint venture losses 421 302
-------- --------
Earnings from continuing operations before minority
interest and income taxes 28,211 10,270
Minority interest (355) (303)
-------- --------
Earnings from continuing operations before income
taxes 27,856 9,967
Income tax expense (10,893) (3,331)
-------- --------
Earnings from continuing operations 16,963 6,636
-------- --------
Discontinued operations, net of tax 992 (3,765)
-------- --------
Net earnings $ 17,955 $ 2,871
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Basic earnings (loss) per share:
Earnings from continuing operations $ 0.52 $ 0.18
Discontinued operations, net of tax 0.03 (0.10)
-----------------
Net earnings $ 0.55 $ 0.08
======== ========
Diluted earnings (loss) per share:
Earnings from continuing operations $ 0.51 $ 0.18
Discontinued operations, net of tax 0.03 (0.10)
-----------------
Net earnings $ 0.54 $ 0.08
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Weighted average shares used for basic per share
data 32,908 36,564
Effect of dilutive common stock options 62 85
-------- --------
Weighted average shares used for dilutive per share
data 32,970 36,649
======== ========
Central Parking Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Amounts in thousands
Dec. 31, Sept. 30,
2005 2005
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 33,561 $ 26,055
Management accounts receivable 49,031 51,931
Accounts receivable - other 17,948 15,537
Current portion of notes receivable 5,855 5,818
Prepaid expenses 12,369 8,630
Assets held for sale 37,803 49,048
Available for sale securities 4,617 4,606
Deferred income taxes 21,817 19,949
-------- --------
Total current assets 183,001 181,574
Notes receivable, less current portion 9,936 10,480
Property, equipment and leasehold improvements,
net 319,608 327,391
Contract and lease rights, net 78,584 80,064
Goodwill, net 232,443 232,443
Investment in and advances to partnerships and
joint ventures 4,209 4,443
Other assets 28,936 31,419
-------- --------
Total Asset $856,717 $867,814
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital
lease obligations $ 2,172 $ 1,764
Accounts payable 88,219 83,604
Accrued expenses 49,787 52,809
Management accounts payable 24,482 25,532
Income taxes payable 9,330 12,389
-------- --------
Total current liabilities 173,990 176,098
Long-term debt and capital lease obligations, less
current portion 146,863 98,212
Subordinated convertible debentures 78,085 78,085
Deferred rent 21,774 22,113
Deferred income taxes 20,380 19,565
Other liabilities 21,219 21,152
-------- --------
Total liabilities 462,311 415,225
-------- --------
Minority interest 436 528
Shareholders' equity:
Common stock 320 368
Additional paid-in capital 177,123 251,784
Accumulated other comprehensive income, net 2,574 3,432
Retained earnings 214,658 197,182
Other (705) (705)
-------- --------
Total shareholders' equity 393,970 452,061
-------- --------
Total Liabilities and Shareholders' Equity $856,717 $867,814
======== ========
Central Parking Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Amounts in thousands
YTD YTD
Dec.31, Dec.31,
2005 2004
-------- --------
Cash flows from operating activities:
Net earnings $ 17,955 $ 2,871
(Gain) loss from discontinued operations (992) 3,765
-------- --------
Earnings from continuing operations 16,963 6,636
Adjustments to reconcile earnings from
continuing operations to net cash used by
operating activities - continuing
operations:
Depreciation and amortization 7,754 7,286
Equity in partnership and joint venture
losses (421) (302)
Distributions from partnerships and joint
ventures 1,111 827
Property-related gains, net (23,043) (1,881)
Loss (gain) on derivative instruments 71 (555)
Deferred income taxes (1,054) (130)
Minority interest 355 303
Changes in operating assets and liabilities:
Management accounts receivable 2,440 (18,616)
Accounts receivable - other (2,496) (2,424)
Prepaid expenses (3,830) (2,470)
Other assets 1,652 (3,319)
Accounts payable, accrued expenses and other
liabilities 1,874 (2,149)
Management accounts payable (953) 12,976
Deferred rent (339) (730)
Refundable income taxes - 1,442
Income taxes payable (3,042) 281
-------- --------
Net cash used by operating activities -
continuing operations (2,958) (2,825)
Net cash used by operating activities -
discontinued operations (518) (105)
-------- --------
Net cash used by operating activities (3,476) (2,930)
-------- --------
Cash flows from investing activities:
Proceeds from disposition of property and
equipment 40,730 6,177
Purchase of equipment and leasehold
improvements (3,890) (2,186)
Purchase of lease rights - (3,679)
Other investing activities 46 (1,098)
-------- --------
Net cash provided (used) by investing
activities 36,886 (786)
-------- --------
Cash flows from financing activities:
Dividends paid (479) (549)
Net borrowings under revolving credit
agreement 49,438 2,500
Proceeds from issuance of notes payable, net
of issuance costs 433 5,481
Principal repayments on long-term debt and
capital lease obligations (360) (438)
Payment to minority interest partners (95) -
Repurchase of common stock (75,324) -
Proceeds from issuance of common stock and
exercise of stock options 615 250
-------- --------
Net cash (used) provided by financing
activities (25,772) 7,244
-------- --------
Foreign currency translation (132) (121)
-------- --------
Net increase in cash and cash equivalents 7,506 3,407
Cash and cash equivalents at beginning of
period 26,055 27,628
-------- --------
Cash and cash equivalents at end of period $ 33,561 $ 31,035
======== ========
Key Financial Metrics
(Includes continuing and discontinued operations)
(In thousands)
YTD Ended
September 30,
2005 2004
------ --------
Net earnings $17,955 $2,871
Interest expense 3,957 4,964
Income tax expense 11,276 1,989
Depreciation/amortization 7,130 6,822
Minority interest 355 388
--------- --------
EBITDA $40,673 $17,034
========= ========
In addition to disclosing financial results prepared in accordance
with U.S. generally accepted accounting principles, the Company
discloses information regarding EBITDA. EBITDA is a non-GAAP
financial measure defined as earnings before interest, taxes,
depreciation/amortization and minority interest. The Securities and
Exchange Commission ("SEC") adopted new rules concerning the use of
non-GAAP financial measures. As required by the SEC, the Company
provides the above reconciliation to net earnings which is the most
directly comparable GAAP measure. The Company presents EBITDA as it
is a common alternative measure of performance which is used by
management as well as investors when analyzing the financial position
and operating performance of the Company. As EBITDA is a non-GAAP
financial measure, it should not be considered in isolation or as a
substitute for net earnings or any other GAAP measure. Because EBITDA
is not calculated in the same manner by all companies, the Company's
definition of EBITDA may not be consistent with that of other
companies.