Central Parking Reports Fourth Quarter and Fiscal 2005 Results

Central Parking Corporation announced financial results for the fourth quarter and fiscal year ended September 30, 2005.
For the fiscal year ended September 30, 2005, earnings from continuing operations increased to $33.7 million, or $0.92 per diluted share, compared with $18.4 million, or $0.50 per diluted share, in fiscal 2004. Net earnings for fiscal 2005 were $14.2 million, or $0.39 per diluted share, compared with $17.0 million, or $0.46 per diluted share in the prior year.

These results include the effect of the Company's restatement of its quarterly financial statements for the first three quarters of fiscal 2005 relating to its United Kingdom subsidiary. As previously announced, the Company became aware during the fourth quarter of fiscal 2005 of certain unauthorized related party transactions and improper and inaccurate accounting entries made by former management level employees in its United Kingdom subsidiary. The effect of the restatement on the first three quarters of fiscal 2005 is a reduction in net earnings of $10 million, or $0.28 per share. As a result of the issues identified in the United Kingdom, the Company will report material weaknesses in its controls over financial reporting as of September 30, 2005.

Earnings from continuing operations for the fourth quarter of fiscal 2005 were $17.9 million, or $0.49 per diluted share, compared with $1.1 million, or $0.03 per share in the year earlier period. Net earnings for the fourth quarter of fiscal 2005 were $9.6 million, or $0.26 per diluted share, compared with a net loss of $0.9 million or $0.02 per share in the prior year period.

The Company's program of opportunistic property and lease sales generated proceeds of $81.5 million during fiscal 2005. Pre-tax property related gains included in results from continuing operations for fiscal 2005 totaled $53.6 million, or $0.87 per share. For the fourth quarter of fiscal 2005, pre-tax property related gains totaled $38.1 million, or $0.62 per share.

Total revenues in fiscal 2005 increased slightly to $1.1 billion, while revenues excluding reimbursed management expenses declined to $669 million compared with $698 million in the prior year due primarily to the conversion of $15.3 million of revenues, excluding reimbursed management expenses, from leases to management agreements.

"Net earnings for fiscal 2005 were negatively affected by the previously announced issues in the Company's United Kingdom operations," said Emanuel Eads, President and Chief Executive Officer. "Excluding the United Kingdom region, net earnings for fiscal 2005 were $34.3 million, or $0.93 per share. Fourth quarter results also were negatively affected by $2.0 million in costs related to the Company's Sarbanes Oxley compliance initiative and $1.3 million in increased liability claims costs.

"Our program of opportunistic property sales again was accretive, generating proceeds during the quarter of $46.1 million that were used to pay down debt. In total, we reduced indebtedness by $66.8 million in the fourth quarter. Same store sales, which increased 1.9% for the full fiscal year, accelerated to 3.0% in the fourth quarter. Our focus on adding profitable new contracts yielded positive results during the fourth quarter as we were awarded a long-term lease to operate EasyPark, a large off-site airport parking facility serving Los Angeles International Airport. This contract includes a 425 space garage, a 1,628 space surface lot as well as 24/7 shuttle service to LAX. In September, we entered into an agreement to provide valet and shuttle services for the largest retail mall in the Caribbean, Plaza Las Americas in San Juan, Puerto Rico. More recently, we renewed an agreement with improved financial terms to provide parking services for all pay parking areas within Stanley Park and the Vancouver parks system, which consists of over 4,000 parking spaces, for a term of five years.

"We also are making progress in implementing our new strategic plan, which was announced in August, by moving forward with plans to divest marginal and low growth markets and expand the Company's operational excellence initiative. In November, we named industry veteran Bruce LaPree to lead the Company's national accounts program. In addition, the Company's "Dutch Auction" tender offer, which also was announced in August, was successfully completed on October 14, 2005, with the Company purchasing 4,859,674 shares of common stock at a purchase price of $15.50 per share for an aggregate purchase price of $75.3 million.

"Looking ahead to fiscal 2006, we will continue to implement the new strategic plan, pursue opportunistic property sales and focus our efforts on adding profitable locations. Based on the assumptions below, we expect that earnings from continuing operations, which includes property-related gains/losses, for the fiscal year ending September 30, 2006, will be in the range of $0.50 to $0.57 per share," Eads concluded.

The assumptions underlying the financial guidance for fiscal 2006 include:

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