Standard Parking Corporation, one of the nation's leading providers of parking management, ground transportation and other ancillary services, today announced second quarter 2011 results. Net income attributable to the Company was $4.5 million and earnings per share was $0.28, unchanged from the year ago second quarter. Second quarter earnings per share grew 7%, to $0.30, excluding the $0.02 per share impact of costs related to an acquisition the Company ultimately did not pursue. The Company generated $16.1 million of free cash flow in the first half of 2011, $16.1 million more than the same period of 2010.
CommentsJames A. Wilhelm, President and Chief Executive Officer, said, "I'm pleased to report a successful second quarter with results that were in line with expectations. With a 4% increase in our revenue and a 10% increase in paid exits at same location leases, we believe that the improving trends we noted in the past several quarters are continuing. Total gross profit decreased by 3%, as a 3% increase in same location gross profit was more than offset by the impact of certain anticipated location terminations. Our location and operating profit retention remain strong at 91% and 96% respectively. On the expense side, we're pleased to note that our G&A expense for the second quarter decreased by 5% as we continue to reap the benefits of the technology and process enhancements that we've spoken about repeatedly in the past. In fact, the second quarter G&A decrease would have been 9% had we not spent $0.4 million in the quarter for acquisition-related expenses on a transaction that we did not pursue. While this particular transaction did not proceed, we remain focused on enhancing our underlying, organic growth through significant strategic acquisitions."
Commenting on the Company's recently announced $20 million share repurchase authorization, Wilhelm stated, "We believe our current share price is significantly undervalued, and that buying Company shares therefore is one of the best current uses of our substantial free cash flow. For the year-to-date through the end of July, we have repurchased $2.2 million of common stock. Our relatively low cost of capital, low leverage and strong balance sheet, coupled with ongoing confidence in the business, enable us to return value to our shareholders through the share repurchases while we pursue strategic acquisitions."
Wilhelm concluded by stating, "Based on our first-half results and expectations for the remainder of the year, we're reaffirming our earnings per share guidance of $1.10 - $1.20. With strong first-half free cash flow, we're now expecting full year free cash flow to exceed $20 million."
Recent DevelopmentsHighlights on municipal, institutional and event venue wins:
- SP Plus Municipal Services was awarded a contract to help manage the City of Miami Beach's parking assets. The Miami Beach Parking Department is the City's single largest provider of parking spaces. The operation includes eight parking garages and a number of City surface lots. In total, SP Plus Municipal Services will manage over 8,000 parking spaces with approximately 60 employees.
- SP Plus Municipal Services also has been awarded a contract to manage the on-street parking program for the City of Chelsea, Massachusetts, marking the first on-street parking program that SP Plus Municipal Services will manage in the Boston market. Services to be provided by SP Plus Municipal Services include the enforcement, collection and maintenance of 568 single-space meters as well as various enforcement duties for all on-street parking throughout the City.
- SP Plus University Services was selected by Sinclair College in Dayton, Ohio to manage a total of 5,522 spaces in 14 campus garages and surface lots. The award represents the Company's initial foray into Dayton.
- Virginia Commonwealth University Health System awarded Standard Parking a contract to manage a 1,200 space visitors' garage and four valet stations. The valet stations comprise one of the busiest hospital valet programs in the country, parking approximately 900 vehicles per day.
- The Mount Sinai Hospital and Medical Center, one of the largest and busiest medical centers in New York City, selected SP Plus Transportation to manage its transportation system, consisting of six buses on five routes serving Manhattan and the other city boroughs. The shuttle system will transport patients, medical students, residents and employees. The award follows on the heels of the Medical Center's December 2010 award to Standard Parking of a contract to manage the Medical Center's six parking facilities.
- The Hudson County Improvement Authority in New York awarded Standard Parking and its SP Plus Gameday Division a multi-year contract to operate two parking lots with 1,500 spaces adjacent to the Red Bull Arena. The Arena serves as home of the Major League Soccer New York Red Bulls as well as a concert venue.
- The London Organizing Committee of the Olympic and Paralympic Games (LOCOG) selected SP Plus Gameday to oversee transport planning and operations for the Summer Games of 2012. SP Plus Gameday is responsible for oversight of the Fleet and Bus Systems which will transport 17,000 athletes and 20,000 working media as well as technical officials, marketing partners and the Olympic family to over 35 competition venues hosting 26 Olympic sports. SP Plus Gameday is also responsible for the integration of the Venue Transport, Traffic and Parking plans for all competition, training and non-competition venues. This will be the fifth Olympic and Paralympic Games at which SP Plus Gameday has had a role in transport planning and operations.
First Half ResultsGross profit for the first half of 2011 increased by 1% to $42.2 million from $41.9 million for the same period of 2010. Same location gross profit increased by 6%, but the effect of terminated locations, non-recurring Gameday events and costs incurred to close out a long-term lease reduced the overall gross profit increase.
G&A expense in the first half of 2011 decreased 4% to $22.8 million from $23.8 million a year earlier. The previously described $0.4 million in 2011 acquisition-related costs tempered the year-over-year decrease. The Company believes that its G&A expense for the second half of 2011 will be comparable to the first half.
Net income attributable to the Company increased by 13% to $8.3 million in 2011 as compared with $7.4 million in the first six months of 2010. On a per share basis, the year-over-year increase was also 13%, up from $0.46 in 2010 to $0.52 in 2011.