Central Parking Corporation Reports Earnings for First Fiscal Quarter.Business Editors NASHVILLE Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. , Tenn.--(BUSINESS WIRE)--Feb. 14, 2003 Central Parking Corporation (NYSE NYSE See: New York Stock Exchange :CPC (1) (Central Processing Complex) An IBM mainframe that has two or more central processors (CPs) that share memory. It is the collection of processors, memory and I/O subsystems manufactured with a single serial number, typically all contained in one cabinet. ) today announced GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net earnings of $0.19 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the quarter ended December December: see month. 31, 2002. This compares to reported GAAP net earnings for the quarter ended December 31, 2001 of $0.18 per diluted share. Revenues for the first quarter of fiscal 2003 excluding reimbursed management costs increased to $183.0 million compared to $177.0 million in the year-earlier period. The Company previously indicated that it expected pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. of $0.30 to $0.33 per diluted share. As a result of new regulations issued by the SEC to respond to provisions of the Sarbanes-Oxley Act See SOX. of 2002 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the reporting of non-GAAP financial measures, Central Parking announced that it is discontinuing the practice of reporting pro forma earnings. Impacting the Company's net earnings for the first quarter of 2003 is a $1.5 million increase in accounts payable to correct an error in the process for recording vendor invoices, which impacted net earnings per diluted share by $.03. This error was in a large part attributed to the Company's decentralized de·cen·tral·ize v. de·cen·tral·ized, de·cen·tral·iz·ing, de·cen·tral·iz·es v.tr. 1. To distribute the administrative functions or powers of (a central authority) among several local authorities. payables Payables Related: Accounts payable process. A rigorous process has been established to capture and record vendor invoices on a more timely basis and to estimate the liabilities for vendor invoices not yet received. The Company believes that this improved process has resulted in a more accurate accounts payable balance and does not anticipate further adjustments. Plans are underway to centralize cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. the accounts payable process. Also impacting net earnings in the first quarter of 2003 was a $1.1 million increase in bad debt expense including reserves. This increase in the bad debt expense was attributed to the Company aggressively pursuing collections, identifying deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in aging accounts, customers who have filed for bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most and balances being disputed by customers whose resolution is in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Additionally, the Company implemented a reconciliation software system to monitor credit card transactions throughout the corporation. During the quarter this system highlighted specific technical problems resulting in exposures related to aged transactions for which a reserve of $500,000 was established. The Company does not believe that these levels of bad debt expense will be experienced in the future. These actions to boost reserves impacted net earnings per diluted share by $0.03. William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack J. Vareschi, Jr., chief executive officer, said, "Our operating results are being affected by the difficult economic environment that has led to increased unemployment, deteriorating de·te·ri·o·rate v. de·te·ri·o·rat·ed, de·te·ri·o·rat·ing, de·te·ri·o·rates v.tr. To diminish or impair in quality, character, or value: office occupancy rates Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) and a decline in overall activity in key central business districts. In addition, December was an especially challenging month with a decided slowing in our same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. growth from earlier in the quarter, exacerbated by severe weather over much of the country. For the quarter, same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of were up 2.1%, with the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of area showing approximately a 10% increase, while the balance of the country was down about 2% from prior year levels. As we noted in our year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. earnings announcement, our guidance for the first quarter and full fiscal year was based on an assumption of modest economic growth in the 2-2.5% range. Unfortunately, GDP GDP (guanosine diphosphate): see guanine. growth in the quarter ended December 31, 2002 was a lackluster lack·lus·ter adj. Lacking brightness, luster, or vitality; dull. See Synonyms at dull. Adj. 1. lackluster - lacking brilliance or vitality; "a dull lackluster life"; "a lusterless performance" 0.7% resulting in lower revenues below our earlier guidance. Total costs related to the parking segment increased to 87.8% of revenues from 86.8% of revenues a year earlier. This deterioration was driven by: -- The absence of price increases (flat to negative pricing) to offset cost inflation driven by higher rent, property taxes and payroll and payroll related costs, -- Start up costs related to new business brought on since last year, -- A $400 thousand write-down of an employee medical stop loss receivable -- Increased snow removal costs totaling $800 thousand, and -- The previously discussed increase in bad debt expense "These costs could not be offset by productivity gains. "With respect to the management contract segment, revenues were close to our expectations and up approximately 3% over the same period last year. However, the margin rate fell by about two hundred basis points. This decline in margin was principally due to the settlement of two employment litigation claims and a year-over-year increase of approximately $1 million in employee health care costs. We are aggressively seeking to pass along these higher insurance costs and have increased our charge to management clients by an average of 18% effective January January: see month. 1, 2003. In addition, the Company's general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. were higher than the prior year primarily due to one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. consulting costs related to tax initiatives and our program to centralize sourcing, along with program costs related to technology and quality assurance. In addition, we experienced unusually high litigation costs and upfront commissions associated with several new lease agreements. "While we are disappointed with our results, the fundamentals of the business remain solid. We had another quarter with a strong new/lost business ratio of 2.41. The continued strength of this new business is good news, however, it does come on board fully burdened with costs and margins generally at levels lower than existing, more mature, business. Also, our debt to total capital ratio improved to .448 from .479 a year ago. The Company's credit facility is reflected as current on the balance sheet for the first quarter. The Company is negotiating a refinancing Refinancing An extension and/or increase in amount of existing debt. of its credit facility which it anticipates closing on or before February February: see month. 28. "Looking forward, we are reevaluating our growth initiatives, especially internationally, given the current geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. and economic conditions. We are reallocating more of our capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. to projects that will increase efficiency through lower labor costs and increased revenues. We remain focused on improving our business through "Operational Excellence" and believe we are well positioned to deal with what is likely to be a tough economy for much of 2003. However, given the uncertainty in the economy due to the potential for conflict in the Middle East, we will not provide earnings guidance for the second quarter or the balance of fiscal 2003." Central Parking Corporation also announced that Hiram Hiram (hī`rəm). 1 In the Bible, king of Tyre, c.969–936 B.C., a friend of David and Solomon. Solomon and Hiram shared in trade with India and the Mediterranean, and Hiram sent much material for the Temple. A. Cox, senior vice president and chief financial officer, has resigned from his position with the Company. The Board of Directors has named William J. Vareschi, Jr., as acting chief financial officer in the interim. The Company is aggressively seeking to hire a replacement. Vareschi said, "The entire Board appreciates Hiram's numerous contributions over the last 18 months and wish him well in his future endeavors." Central Parking Corporation, headquartered in Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. , is a leading provider of parking and transportation services. The Company operates approximately 3,900 parking facilities containing approximately 1.6 million spaces at locations in 39 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , the United Kingdom, the Republic of Ireland, Chile, Germany, Switzerland, Mexico, Poland, Spain, Venezuela and Greece. This press release contains projections and other forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section21E of the Securities and Exchange Act of 1934. These projections and statements reflect the Company's current views with the 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 periodic reports filed with Securities and Exchange Commission.
Central Parking Corporation and Subsidiaries
Consolidated Statements of Earnings
(Unaudited)
Amounts in thousands, except per share data
Three months ended
December 31,
2002 2001
--------- ---------
Revenues:
Parking $152,432 $147,372
Management contract and other 30,564 29,579
--------- ---------
182,996 176,951
Reimbursement of management contract expenses 101,981 97,704
--------- ---------
Total revenues 284,977 274,655
Costs and expenses:
Cost of parking 136,835 127,970
Cost of management contracts 13,475 12,009
General and administrative 20,591 18,109
--------- ---------
170,901 158,088
Reimbursed management contract expenses 101,981 97,704
--------- ---------
Total costs and expenses 272,882 255,792
Property-related gain, net - 4,008
--------- ---------
Operating earnings 12,095 22,871
Other income (expenses):
Interest income 1,144 1,352
Interest expense (2,941) (3,258)
Dividends on company-obligated mandatorily
redeemable
convertible securities of a subsidiary trust (1,045) (1,471)
Gain on repurchase of company-obligated
mandatorily
redeemable convertible securities of a
subsidiary trust (12) 5,520
Equity in partnership and joint venture earnings 675 1,388
--------- ---------
Earnings from continuing operations before income
taxes and minority interest 9,916 26,402
Income tax expense 3,127 9,446
--------- ---------
Earnings from continuing operations before minority
interest, and cumulative effect of accounting
change 6,789 16,956
Minority interest, net of tax (1,286) (1,271)
Cumulative effect of accounting change, net of tax - (9,341)
--------- ---------
Net earnings from continuing operations 5,503 6,344
--------- ---------
Discontinued Operations:
Property-related gain, net 2,324 -
Income tax expense 961 -
--------- ---------
Gain on discontinued operations 1,363 -
--------- ---------
Net earnings $6,866 $-
Basic earnings per share:
Earnings from continuing operations before
cumulative effect of accounting change $0.15 0.44
Cumulative effect of accounting change, net of tax - (0.26)
Discontinued operations, net of tax 0.04 -
--------- ---------
Net earnings $0.19 $0.18
========= =========
Diluted earnings per share:
Earnings from continuing operations before
cumulative effect of accounting change $0.15 0.44
Cumulative effect of accounting change, net of tax - (0.26)
Discontinued operations, net of tax 0.04 -
--------- ---------
Net earnings $0.19 $0.18
========= =========
Weighted average shares used for basic per share
data 35,969 35,754
Effect of dilutive common stock options 314 251
--------- ---------
Weighted average shares used for dilutive per
share data 36,283 36,005
========= =========
Central Parking Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Amounts in thousands
December September
31, 30,
2002 2002
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents $24,965 $33,498
Management accounts receivable 45,653 39,664
Accounts receivable - other 13,495 15,714
Current portion of notes receivable 5,075 11,549
Prepaid expenses 15,755 9,835
Deferred income taxes 72 72
----------- ----------
Total current assets 105,015 110,332
Notes receivable, less current portion 41,257 41,210
Property, equipment and leasehold improvements,
net 445,729 434,733
Contract and lease rights, net 112,218 108,406
Goodwill, net 242,141 242,141
Investment in and advances to partnerships and
joint ventures 13,120 12,836
Other assets 45,248 49,226
Minority interest 29,817 31,572
----------- ----------
Total Assets $1,004,728 $998,884
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital
lease obligations $229,374 $53,318
Accounts payable 75,824 73,638
Accrued expenses 39,969 43,659
Management accounts payable 21,243 22,671
Income taxes payable 11,761 9,851
----------- ----------
Total current liabilities 378,171 203,137
Long-term debt and capital lease obligations,
less current portion 34,798 207,098
Deferred rent 29,281 29,104
Deferred income taxes 12,483 13,825
Other liabilities 19,563 20,259
----------- ----------
Total liabilities 474,296 473,423
----------- ----------
Company-obligated mandatorily redeemable
securities of
subsidiary holding solely parent debentures 78,085 78,085
Minority interest 29,817 31,572
Shareholders' equity:
Common stock 360 360
Additional paid-in capital 242,366 242,112
Accumulated other comprehensive loss, net (2,389) (2,377)
Retained earnings 183,252 176,924
Other shareholders' equity (1,059) (1,215)
----------- ----------
Total shareholders' equity 422,530 415,804
----------- ----------
Total Liabilities and Shareholders' Equity $1,004,728 $998,884
=========== ==========
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