Imperial Parking Corporation Announces Second Quarter Results

VANCOUVER, British Columbia--(BUSINESS WIRE)--Aug. 13, 2003--Imperial Parking Corporation ("Impark") (AMEX:IPK - News) today reported revenues of $40.2 million for the quarter ended June 30, 2003, an 11.6% increase over revenues of $36.0 million for the quarter ended June 30, 2002. The Company reported parking and management contract revenues of $31.6 million for the quarter ended June 30, 2003, an 11.6% increase over parking and management contract revenues of $28.3 million for the quarter ended June 30, 2002. The Company reported net income of $0.8 million, or $0.41 per diluted share, for the second quarter, compared to net income of $1.0 million, or $0.53 per diluted share, in the prior year period.
impark.jpgOf the $3.3 million increase in parking and management contract revenues this quarter, the Company's Canadian operations contributed $1.8 million and the United States operations contributed $1.5 million. The increase in revenue from the Company's Canadian operations was primarily attributable ($1.5 million) to the stronger Canadian dollar with an average exchange rate for the second quarter of 2003 of C$1.00=US$0.72 compared to $0.64 in the prior year period. Revenues from the Company's U.S. operations were higher this quarter compared to the prior year mainly due to the opening of new locations. The Company commenced operating Miller Park, the baseball stadium of the Milwaukee Brewers and increased the number of facilities operating in Miami from two to seven, resulting in a combined increase in revenues of $2.1 million.

The Company's net income declined $0.2 million this quarter due to a $0.3 million decline in operating income combined with an increase in other expenses of $0.2 million offset in part by reduced income tax expense of $0.3 million. The Company reported operating income of $1.6 million for the second quarter, a $0.3 million decrease from operating income of $1.9 million in the prior year period. The decline in operating income is due to a lower gross margin of $0.2 million, and increased general and administrative expenses of $0.2 million. The increase in general and administrative expenses is primarily attributable to growth of the new expansion cities of Chicago, Miami and Philadelphia, and the relocation of the Company's U.S. headquarters from Minneapolis to Philadelphia. The increase in other expense is entirely due to $0.2 million in legal and professional fees incurred this quarter to assist the Special Committee of the Board of Directors in its previously announced review of the strategic alternatives available to the Company in the context of the decision by Gotham Partners to sell its ownership interest in the Company.

Commenting on Impark's second quarter, Charles Huntzinger, the Company's Chief Executive Officer and President, stated, "While we were satisfied that revenues this quarter grew by 11.6% over the same period last year, the parking industry this quarter continued to be affected by economic weakness in both Canada and the U.S., poor weather in Eastern Canada and the U.S. and other factors adversely affecting tourism and local traffic in many of our markets (e.g. SARS, War in Iraq). Accordingly, our revenues, direct costs and net income have been negatively impacted by these challenges."

Mr. Huntzinger continued, "We are pleased with recent new business development. In January 2003, we began an initiative to target stadiums, arenas and institutional parking. In this quarter we opened "Miller Park" in Milwaukee, home of the Milwaukee Brewers baseball team and also RFK Stadium in Washington, DC, home of professional mens' and womens' soccer teams United and Freedom. To secure these contracts so swiftly is a reflection on the effectiveness of our management team's efforts to implement this important marketing strategy and is significant to the long-term profitability of the Company."

Mr. Huntzinger also stated, "We added a net of 19 new locations this quarter, reflecting a 92% annualized lot retention rate. We are continuing our growth strategy in the U.S. and in Eastern Canada. We believe that with our solid base of operations and strong balance sheet we are well positioned to realize improving profitability when the economic and other challenges affecting our industry improve."
Within the total of 588 leased locations operating at June 30, 2003, 134 of these locations incurred a combined loss of $1.4 million in the six months ended June 30, 2003. Of these 134 locations, 20 were opened in 2003 and incurred an aggregate loss of $0.2 million and 15 were opened in 2002 and incurred an aggregate loss of $0.2 million.

For the six months ended June 30, 2003, the Company reported revenues of $73.4 million representing a 7.3% increase over revenues of $68.4 million for the six months ended June 30, 2002. The Company reported parking and management contract revenues of $56.6 million for the six months ended June 30, 2003, representing a 6.5% increase over parking and management contract revenues of $53.1 million for the six months ended June 30, 2002. The Company reported net income of $8,000, or $0.00 per diluted share, for the six months ended June 30, 2003, compared to earnings of $1.0 million, or $0.50 per diluted share, in the prior year period. Also, the Company reported operating income of $1.2 million for the six months ended June 30, 2003, representing a 47.0% decrease from operating income of $2.2 million in the prior year period. In addition, the Company reported other expenses of $0.7 million for the six months ended June 30, 2003 entirely due to legal and professional fees incurred to assist the Special Committee of the Board of Directors with the decision of Gotham Partners to sell its ownership interest in the Company.

During the six months, cash and cash equivalents increased by $3.1 million from $15.1 million at December 31, 2002 to $18.2 million. The increased cash position resulted from cash flow from operations of $2.4 million, a decrease in net cash flow from financing and investing activities of $0.5 million and an increase in cash flow due to the effect of foreign exchange rates of $1.2 million.

(1) In 2002, the Company adopted for all periods EITF 01-14, the new accounting pronouncement that requires the reimbursement of expenses by its management contract clients to be recorded as both a revenue and an expense. This is an accounting change that has no impact on net income, or the related per share amounts. This accounting change results only in the reclassification of expenses reimbursed under management contracts to be included as both revenue and expense, whereas previously these amounts were netted against those expenses in Direct Costs.
Imperial Parking Corporation, headquartered in Vancouver, B.C., Canada is the largest parking operator in Canada and is one of the four largest in North America. Impark currently operates more than 1,670 parking locations and over 325,000 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.
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Imperial Parking Corporation
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www.impark.com
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