Standard Parking Corporation reports strong second quarter results; raises current year guidance

Standard Parking Corporation (NASDAQ:STAN), one of the nation's largest providers of parking management services, today announced its results for the second quarter and first half of 2005.

Second Quarter Highlights


  • Revenue growth drives 9% increase in gross profit

  • Operating income increases by 17% over 2004, with 2004 adjusted for pre-IPO management fees and stock compensation charge

  • EPS of $0.40 per diluted share

  • EPS pro forma for income taxes of $0.29 per diluted share

  • Free cash flow of $2.8 million

  • Repurchased 76,742 shares of common stock for $1.3 million

2005 Guidance Increased

  • EPS expectation of $1.40 - $1.50 (an increase of $0.05)

  • EPS expectation, pro forma for income taxes, of $1.02 - $1.12 (an increase of $0.02)

  • Free cash flow of $17 million or higher (an increase of $2 million)

James A. Wilhelm, President and Chief Executive Officer, said, "This earnings announcement marks the end of our fourth full quarter as a public equity company. We are pleased that we have been able to deliver results that meet our high internal standards, with operating performance that is at or above expectations throughout the Company.

"As we said at the end of the first quarter, ours is a somewhat seasonal business with momentum picking up during the year. Our second quarter performance highlights this phenomenon. We are particularly pleased this quarter with the strong performance of our lower-risk management contract portfolio where gross profit increased by more than 9%."

Second Quarter Operating Results

Gross profit for the second quarter increased by almost 9% to $17.5 million from $16.1 million a year ago. This increase was attributable to continued improvement in performance by locations open for more than one year ("same locations"). General and administrative expenses were up 6% for the quarter over last year, reflecting the expected additional costs of being a public equity company, which Standard Parking did not incur last year until its June 2004 IPO. Compared to the 2005 first quarter, however, general and administrative expenses were flat.

Operating income for the quarter reflects a strong performance, increasing by 17% to $6.8 million after adjusting the 2004 financials for management fees to the former parent that were discontinued at the time of the IPO and an IPO-related non-cash stock option compensation expense.

Net of the change in cash, free cash flow of $2.0 million was generated during the quarter. Of that amount, the Company used $1.3 million to purchase shares under the terms approved by the Board of Directors in early March of this year, and used the remaining $0.7 million to pay down debt. The debt reduction, along with the impact of 2004's IPO and refinancing of the Company's senior credit agreement, resulted in a $1.7 million reduction in interest expense from $4.2 million in last year's second quarter to $2.5 million for the second quarter of 2005.

Net income for the quarter was $4.3 million, or $0.40 per diluted share, versus a loss of $0.8 million a year ago. Last year's reported loss included $3.0 million of accrued dividends on preferred stock issues that have since been retired, as well as a net gain on extinguishment of debt of $3.9 million related to the Company's June 2004 IPO. On a pro forma basis, the statutory tax rate of 39% has been reduced to 30% based on the Company's assumed ability to use its substantial net operating loss carry-forwards to shield income for a period beyond five years. Net income for the quarter, as adjusted for the pro forma effect of income taxes, was $3.1 million, or $0.29 per diluted share. Due primarily to the continued utilization of operating loss carry-forwards, the cash tax rate for federal and state income taxes is expected to be under 5% for 2005.

Total parking services revenue for the quarter, excluding reimbursement of management contract expense, was up by 6% to $62.5 million from $58.7 million a year ago, led by 8% growth in management contract revenue. Reimbursement of management contract expense is excluded because its timing and amount fluctuate substantially for reasons unrelated to the Company's parking services revenue and because it has no impact on gross profit.

Recent Developments

The operating results at Bradley International Airport continue to improve significantly. During the second quarter of this year, the Company received reimbursements of deficiency payments totaling nearly $0.6 million. For the first six months of 2005, the Company has received net repayments of $80,000 compared with $1.4 million of deficiency payments made during the first six months of 2004. The Company expects to receive additional repayments in the future.

New business activity remained strong during the second quarter with significant new contract wins reported across the country, particularly in the airport and university/hospital markets. Second quarter contract awards and developments include:

  • Award of a three-year contract to manage parking operations at the Cincinnati/Northern Kentucky International Airport that includes over 16,000 parking spaces.

  • Commencement in June of skycap service at Rapid City Regional Airport, representing the Company's entry into the skycap / wheelchair assist arena.

  • Award of a contract to operate Valley International Airport in Harlingen, Texas, the Rio Grande Valley's leading airport.

  • Award of two new contracts to operate off-airport "Park Air Express" parking and shuttle operations serving the Dallas/Fort Worth International Airport in Texas and the Burbank Airport in California.

  • Parking management and enforcement contract award by Boston University, encompassing 21 parking facilities and 3,800 spaces.

  • Contract award for George Mason University, encompassing 12,000 total spaces in two garages, up to 15 surface lots, and parking meters. The contract was won from a 10-year incumbent operator through a competitive bid process.

  • Contract award for Foothills Hospital in Calgary, Alberta, which serves more than half a million patients each year with a parking operation encompassing over 1,500 spaces.

  • Google valet parking operation award, to provide valet assistance for overflow parking at Google's California corporate headquarters with over 3,000 parking spaces. The Company currently operates Google's East Bay employee shuttles.

  • Contract award for the Bank of America Plaza in Dallas, Texas, containing the tallest building in downtown Dallas. The contract includes the operation of two garages and three surface lots totaling over 1,750 spaces.

  • Contract to direct traffic for the Lakewood Church in Houston, Texas, the largest church in the United States, which had 57,000 people attend services on opening weekend.

Mr. Wilhelm observed, "While we are seeing an increase in new business activity across the board, we have been especially successful in winning new contracts in the university and hospital markets, where the property owners are increasingly interested in outsourcing the operation of their parking facilities. We see continued growth opportunities in these venues as well as in local municipalities, which are also beginning to pursue outsourcing of their varied parking operations."

Year-to-Date Results

Gross profit for the first six months of 2005 increased by more than 6% to $33.5 million as compared with $31.6 million for the same period last year, due to solid growth in same location profit from both lease and management locations. Top line revenue, excluding reimbursed management contract expenses, also increased year over year by over 7% from $115 million to $123 million. As of June 30, 2005, the Company operated 1,904 locations, an increase of 16 locations since the end of 2004. General and administrative expenses for the first six months of 2005 increased by almost 7% over the same period last year due to additional costs of being a public company such as expenses incurred with meeting the compliance requirements of Sarbanes-Oxley.

Commenting on the Company's first-half performance, Mr. Wilhelm said, "I am pleased that our strong overall business performance during the first half of this year, coupled with the EPS benefit derived from the stock repurchases that we completed in that six-month period, enable us to increase our earnings guidance."

Financial Outlook

Based on the year-to-date results, the Company is increasing its net earnings guidance for the 2005 year to $1.40 - $1.50 per diluted share and $1.02 - $1.12 per diluted share, pro forma for income taxes. The Company's expectation for free cash flow also has increased to $17 million or higher for the year.

For pro forma guidance purposes, the statutory tax rate of 39% has been reduced to 30% based on the Company's assumed ability to use its substantial net operating loss carry-forwards to shield income for a period beyond five years. The Company's reported tax rates are expected to be substantially less than the statutory rates, due to the ability to offset future earnings against net operating loss carry-forwards. In addition, the Company's tax provision may further be affected by adjustments to its valuation allowance for its deferred tax assets. The timing of the recognition of these tax benefits may result in significant fluctuations in reported GAAP results.

Conference Call

The Company's quarterly earnings conference call will be held at 9:00 am (CDT) on Thursday, August 11, 2005 and is available live and in replay to all analyst/investors through a webcast service. To listen to the live call, individuals are directed to the Company's investor relations page at or at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, replays will be available shortly after the call on either website and can be accessed for 30 days after the call.

Standard Parking is a leading national provider of parking facility management services. The Company provides on-site management services at multi-level and surface parking facilities for all major markets of the parking industry. The Company manages approximately 1,900 parking facilities, containing over one million parking spaces in close to 300 cities across the United States and Canada. In addition, the Company manages parking-related and shuttle bus operations serving more than 60 airports.

More information about Standard Parking is available at You should not construe the information on this website to be a part of this report. Standard Parking's 2004 annual report filed on Form 10-K, its periodic reports on Form 10-Q and 8-K and its Registration Statement on Form S-1 (333-112652) are available on the Internet at and can also be accessed through the Investor Relations section of the Company's website.
Standard Parking Corporation
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