Standard Parking Corporation (Nasdaq:STAN), one of the nation's leading providers of parking management, ground transportation and other ancillary services, today announced second quarter 2012 results. The Company reported second quarter 2012 earnings per share of $0.26, which includes $0.16 per share of costs incurred during the quarter related to the proposed merger with Central Parking Corporation announced on February 29, 2012. First half 2012 adjusted free cash flow was $13.3 million before the impact of merger-related costs of $6.0 million. This compares to $16.3 million of adjusted free cash flow generated on the same basis during the first half of 2011.Comments
"We are pleased with our results for the second quarter and the first half of 2012, as our underlying business continues to perform well while we continue to prepare for our proposed merger with Central Parking," said James A. Wilhelm, President and Chief Executive Officer.
"Gross profit increased 12% in the second quarter compared to last year's second quarter. A larger than usual health insurance dividend that the Company received in the second quarter of 2012 contributed five percentage points of the increase. Our location and operating profit retention rates were strong at 90% and 96%, respectively. So all in all, I'm pleased that we're continuing to successfully execute on our growth strategy, which gives us the confidence to reaffirm our 2012 guidance.
"As anticipated, the second quarter's growth of same location gross profit and paid exits at same location leases has moderated from the past few quarters, consistent with the country's recent macro-economic conditions. Same location gross profit was flat as compared to the same period last year, which also reflects the impact of the renegotiation at the end of last year of five large contracts. However, the aforementioned health dividend and a favorable year-over-year swing in prior year insurance reserves contributed to the second quarter's overall strong gross profit growth, reflecting the Company's growing expertise in the area of risk management."
Wilhelm concluded by stating, "We continue to make steady progress regarding the proposed merger with Central Parking, which is still expected to close by the end of the third quarter of 2012. Once the merger is closed, we expect to add more than 2,200 locations and approximately one million parking spaces to our portfolio. Until the transaction closes, the two companies will continue to operate independently."
Second Quarter Operating Results
Revenue of $86.8 million for the second quarter of 2012, excluding reimbursement of management contract expense, increased by 9% compared to $79.5 million in the second quarter of 2011. Both lease and management revenue contributed to the solid growth.
Gross profit increased 12% in the 2012 second quarter to $24.8 million, from $22.0 million in the same period last year. Among the factors contributing to this growth were an incremental year-over-year increase in health insurance dividends and a favorable swing in year-over-year prior year insurance reserves.
General and administrative (G&A) expenses for the 2012 second quarter were $14.9 million, an increase of 28% compared to $11.6 million in the second quarter of 2011. This increase was due primarily to $4.4 million of acquisition and merger-related costs incurred in the quarter as compared with $0.4 million of such costs in the second quarter of 2011. Partially offsetting the impact of these costs was a portion of the health insurance dividend, which reduced 2012 G&A expenses by $1.2 million.
Net income attributable to the Company was $4.2 million, or $0.26 per share, for the second quarter of 2012 compared to $4.5 million, or $0.28 per share, for the same period of 2011. Excluding the quarter's $0.16 per share of merger-related costs incurred, 2012 second quarter adjusted net income attributable to the Company would have been $6.8 million, or $0.42 per share. Similar adjustments to the 2011 second quarter net income attributable to the Company results in adjusted earnings of $0.30 per share for that quarter.
The Company generated $20.8 million of adjusted free cash flow during the second quarter of 2012 before the cash flow impact of $3.5 million from merger-related costs, as compared with $10.3 million of adjusted free cash flow generated during the second quarter of 2011, which was before a $0.2 million cash flow impact from acquisition-related costs. For the first six months of 2012, adjusted free cash flow was $13.3 million before the cash flow impact of $6.0 million from merger-related costs. For the first six months of 2011, adjusted free cash flow was $16.3 million before the cash flow impact of $0.2 million from acquisition-related costs.
A special meeting of the Company's stockholders will be held on September 11, 2012 at 8:30 a.m., Chicago time, to vote on a proposal to approve the issuance of the Company's common stock in connection with the Central Parking merger. Only stockholders of record of the Company's common stock at the close of business on July 19, 2012, the record date, are entitled to vote at the special meeting. The proposed merger is conditional upon approval of the proposal by the Company's stockholders at the special meeting and also remains subject to antitrust review, consummation of financing and other customary closing conditions. The Company continues to expect the transaction to close by the end of the Company's third fiscal quarter. For further information, see the Company's definitive proxy statement filed with the SEC on August 3, 2012 in connection with the special meeting of stockholders.
Noteworthy contract activity during the quarter included:
- SP Plus® Gameday was awarded a multi-year contract to design, implement and manage a Master Parking and Traffic Plan for the new Barclay's Center in downtown Brooklyn, New York, the future home of the Brooklyn Nets NBA team.
- SP Plus® Gameday also was awarded a contract for the 2012 season of the Greek Theater in Los Angeles, California. The contract includes management of the surface parking lots as well as shuttle and VIP valet services. The Company expects to use its Click and Park online reservation system in conjunction with the parking operation.
- The Company's relationship with Mount Sinai Medical Center in New York, New York was further expanded to include the management of a newly developed parking facility that will accommodate additional staff and visitors.
First Half Results
Gross profit for the first half of 2012 increased 10% to $46.4 million from $42.2 million for the same period of 2011. The incremental 2012 benefit of the health insurance dividend contributed four percentage points of this growth. Contributing to overall gross profit growth was total same location gross profit growth of 1%.
G&A expenses in the first half of 2012 increased 31% to $29.9 million from $22.8 million in the same period last year. This increase was due primarily to first half 2012 merger-related costs of $7.6 million, as compared to $0.4 million in acquisition and merger related costs in the first half of 2011, offset by the $1.2 million 2012 health insurance dividend benefit.
Net income attributable to the Company decreased 24% to $6.4 million in 2012 as compared with $8.3 million in the first six months of 2011. Excluding the acquisition and merger related costs from the first half of both years, adjusted earnings per share for the first half of 2012 increased 30% as compared to the year ago period, from $0.53 per share in the first half of 2011 to $0.69 per share in first half of 2012.
Reaffirms 2012 Outlook
Based on year-to-date results, the Company reaffirms its full-year adjusted earnings per share guidance in the range of $1.25 to $1.35 and its full-year adjusted free cash flow guidance between $20 - $25 million. These numbers exclude year-to-date costs, as well as future revenue and costs, related to the proposed Central Parking merger.