Standard Parking Corporation (Nasdaq:STAN), one of the nation's leading providers of parking management, ground transportation and other ancillary services, today announced 2010 fourth quarter and full-year results.
2010 earnings per share was $1.06, an 18% increase compared with 2009. The Company generated $15.3 million of free cash flow in 2010 as compared with $17.2 million in 2009.
CommentsJames A. Wilhelm, President and Chief Executive Officer, said, "We are encouraged with the strengthening in some key business measures that appear to have taken root in the final quarter of 2010. Same location gross profit in the quarter increased by 10% compared with the fourth quarter of 2009, while same location gross profit for the full year increased by only 1%. Paid exits at same location leases increased 9% over the fourth quarter of 2009, with growth across most vertical markets. We're hopeful that these trends will continue into the future.
"Our free cash flow for the year was somewhat lower than our expectations at $15.3 million, due primarily to a lower than expected improvement in working capital combined with a higher than expected increase in cash paid for income taxes.
"We're extremely pleased with our December acquisition of Expert Parking in Philadelphia, one of the last major metropolitan areas in which we previously had no presence. The acquisition is a wonderful complement to our operations in New York and New Jersey, and provides a solid platform for growth in the Northeast corridor in 2011."
Wilhelm concluded by stating, "We remain cautious in light of the economic challenges that many of our clients and customers continue to face. Nevertheless, we're continuing to invest in people and technology that will enhance our ability to deliver the diverse suite of products and services offered through our SP Plus brand, including the master transportation planning services offered by our SP Plus Gameday and SP Plus Event Services divisions."
Fourth Quarter Operating ResultsGross profit in the 2010 fourth quarter increased by 28% to $22.6 million from $17.7 million a year ago, as the Company incurred a $2.3 million expense in the fourth quarter of 2009 attributable to the settlement of two California labor code cases. The absence of this expense in the 2010 fourth quarter represented 15% of the year-over-year increase in gross profit.
General and administrative expense ("G&A") increased by 21% to $12.6 million from $10.3 million in the 2009 fourth quarter. The 2010 restoration of the Company's performance-based compensation program and annual salary increases represented 16% of the year-over-year increase in G&A.
Net income attributable to the Company for the 2010 fourth quarter was $4.7 million, or $0.29 per share, as compared with $3.3 million, or $0.21 per share. The 2010 EPS of $0.29 is after a $0.06 per share cost due to the restoration of the performance-based compensation bonus program and annual salary increases. The 2009 EPS of $0.21 per share is after a $0.11 per share cost due to the settlement of the California labor code cases.
Recent DevelopmentsNoteworthy recent business activity included the following:
* Emory University in Atlanta, GA awarded the Company a contract to manage visitor parking and customer service as well as provide parking enforcement services for the University's 13,000 parking spaces.
* The Company's SP Plus Gameday division was awarded multi-year contract renewals to continue providing its event transportation and travel demand management services for the NFL Super Bowls, the NCAA Capital One Bowl and Champs Sports Bowl in Orlando, FL, and NASCAR's Daytona 500 and Coke Zero 400 races in Daytona, FL.
* Operationally, during early 2011 SP Plus Gameday provided its services at several high-profile, major sporting events, including:
* Super Bowl XLV in Dallas, where SP Plus Gameday pre-sold 10,000 parking permits, distributed an additional 7,000 parking permits to the workforce, and supervised the flow of 60,000 people.
* The Daytona 500 NASCAR race in Daytona, FL, where SP Plus Gameday managed the ingress and egress of 60,000 people in one day on the track's front and back stretches.
* The NHL All-Star Game in Raleigh-Durham, NC, where SP Plus Gameday managed all contracted bus transportation services and provided automobile fleet management services.
* During the 4th quarter of 2010, the Company ceased its management of the Canadian parking operations for the London Health Sciences Centre in London, Ontario. The Company had managed the parking operations for five hospitals with 8,000 parking spaces since 1999.
Full-Year ResultsGross profit for 2010 increased by 10% to $86.9 million from $78.8 million for the same period of 2009. A reduction in certain legal-related expenses represented 5% of the gross profit growth.
General and administrative expenses in 2010 increased 7% to $47.9 million from $44.7 million a year earlier. The restoration of the performance-based compensation bonuses and annual salary increases in 2010, net of a reduction in certain legal-related expenses, represented 5% of the increase.
Net income attributable to the Company increased by 20% to $16.8 million in 2010 as compared with $14.1 million in 2009. On a per share basis, the year-over-year increase was 18%, from $0.90 in 2009 to $1.06 in 2010.
2011 OutlookThe Company continues to believe that its geographic and vertical market diversity, its predominately fixed-fee management contract structure and the successful completion and integration of tuck-in acquisitions positions it for continued growth in 2011.
2011 earnings per share is expected to be in the range of $1.10 to $1.20, an increase of up to 13% on reported 2010 earnings per share of $1.06. We expect this growth despite the loss of the above-mentioned Canadian client and the absence of two major 2010 Gameday events that will not recur in 2011, which collectively contributed $0.09 to 2010 earnings per share.
This guidance assumes approximately 16.1 million diluted shares. This guidance does not include the impact of any acquisitions that might be completed in 2011.
The Company anticipates an increase in its 2011 cash income tax rate to as much as 35% of pre-tax income as compared with 26% in 2010. As a result, cash taxes are expected to increase by up to $3 million, which will reduce free cash flow. While the Company believes it will have to continue to invest some working capital to win new business and retain existing contracts, it nevertheless expects to generate $15 million to $20 million of free cash flow in 2011.