<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission file number: 333-50437
APCOA/STANDARD PARKING, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 16-1171179
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
900 N. Michigan Avenue, (312) 274-2000
Chicago, Illinois 60611-1542 (Registrant's Telephone Number,
(Address of Principal Executive Offices) Including Area Code)
Former name, address and fiscal year, if changed since last report:
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
<PAGE>
APCOA/STANDARD PARKING, INC.
FORM 10-Q INDEX
Part I. Financial Information
Item 1. Financial Statements (Unaudited):
<TABLE>
<CAPTION>
<S> <C> <C>
Condensed Consolidated Balance Sheets as of March 31, 2000
and December 31, 1999.................................................................. 3
Condensed Consolidated Statements of Operations for the three
months ended March 31, 2000 and March 31, 1999......................................... 4
Condensed Consolidated Statements of Cash Flows for the three
months ended March 31, 2000 and March 31, 1999......................................... 5
Notes to Condensed Consolidated Financial Statements................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk............................. 12
Part II. Other Information
Item 1. Legal Proceedings...................................................................... 13
Item 2. Changes in Securities and Use of Proceeds.............................................. 13
Item 3. Defaults upon Senior Securities........................................................ 13
Item 4. Submission of Matters to a Vote of Security Holders.................................... 13
Item 5. Other Information...................................................................... 13
Item 6. Exhibits and Reports on Form 8-K....................................................... 13
Signatures........................................................................................ 14
Exhibits.......................................................................................... 15
</TABLE>
2
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
APCOA/STANDARD PARKING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
ASSETS --------------- -----------------
(Unaudited) (see Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents......................................................... $ 6,080 $ 5,215
Notes and accounts receivable, net................................................ 43,885 42,715
Prepaid expenses and supplies..................................................... 1,579 1,645
-------- --------
Total current assets............................................................... 51,544 49,575
Leaseholds and equipment, net...................................................... 32,263 32,659
Advances and deposits.............................................................. 1,530 2,040
Cost in excess of net assets acquired.............................................. 115,196 114,923
Intangible and other assets........................................................ 13,266 14,073
-------- --------
Total assets...................................................................... $213,799 $213,270
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.................................................................. $ 28,807 $ 25,289
Accrued and other current liabilities............................................. 33,413 35,138
Current portion of long-term borrowings........................................... 1,324 1,328
-------- --------
Total current liabilities.......................................................... 63,544 61,755
Long-term borrowings, excluding current portion.................................... 169,992 166,141
Other long-term liabilities........................................................ 8,821 11,116
Redeemable preferred stock......................................................... 50,646 49,280
Common stock subject to put/call rights;
5.01 shares issued and outstanding............................................. 4,589 4,589
Common stockholders' deficit:
Common stock, par value $1.00 per share; 1,000 shares authorized;
26.3 shares issued and outstanding............................................. 1 1
Additional paid-in capital........................................................ 11,422 11,422
Advances to and deposits with affiliates.......................................... (10,824) (10,553)
Accumulated other comprehensive income............................................ (206) 428
Accumulated deficit............................................................... (84,186) (80,909)
-------- --------
Total common stockholders' deficit................................................. (83,793) (79,611)
-------- --------
Total liabilities and stockholders' deficit....................................... $213,799 $213,270
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
3
<PAGE>
APCOA/STANDARD PARKING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------
March 31, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Gross customer collections............................................ $366,100 $316,600
======== ========
Parking services revenue:
Lease contracts..................................................... $ 47,431 $ 49,877
Management contracts................................................ 15,660 10,992
-------- --------
63,091 60,869
Cost of parking services:
Lease contracts.................................................. 42,640 44,019
Management contracts............................................. 6,288 3,880
-------- --------
48,928 47,899
-------- --------
Gross profit.......................................................... 14,163 12,970
General and administrative expenses................................... 9,110 7,006
Restructuring and other special charges............................... 119 150
Depreciation and amortization......................................... 2,541 1,799
-------- --------
Operating income...................................................... 2,393 4,015
Interest expense (income):
Interest expense................................................. 4,421 3,756
Interest income.................................................. (207) (161)
-------- --------
4,214 3,595
-------- --------
(Loss) income before minority interest and income taxes............... (1,821) 420
Minority interest..................................................... 73 167
Income tax expense.................................................... 17 153
-------- --------
Net (loss) income..................................................... (1,911) 100
Preferred stock dividends............................................. (1,366) (1,225)
-------- --------
Net loss available for common stockholders............................ $ (3,277) $ (1,125)
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
APCOA/STANDARD PARKING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------
March 31, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Operating activities:
Net (loss) income..................................................... $(1,911) $ 100
Adjustments to reconcile nete (loss) income to net cash
used in operations:
Depreciation and amortization........................................ 2,541 1,799
Change in operating assets and liabilities, net of
acquisitions......................................................... (1,244) (12,816)
------- --------
Net cash used in operating activities................................. (614) (10,917)
Investing activities:
Purchase of leaseholds and equipment.................................. (1,393) (2,386)
Purchase of leaseholds and equipment by
joint ventures...................................................... -- (159)
------- --------
Net cash used in investing activities................................. (1,393) (2,545)
Financing activities:
Proceeds from long-term borrowings.................................... 3,800 5,000
Payments on long-term borrowings...................................... (107) (1,080)
Payments on joint venture borrowings.................................. (187) --
------- --------
Net cash provided by financing activities............................. 3,506 3,920
Effect of exchange rate on cash and cash equivalents.................. (634) --
------- --------
Increase (decrease) in cash and cash equivalents...................... 865 (9,542)
Cash and cash equivalents at beginning of period...................... 5,215 19,183
------- --------
Cash and cash equivalents at end of period............................ $ 6,080 $ 9,641
======= ========
Supplemental disclosures:
Cash paid during the period for:
Interest............................................................. $ 7,277 $ 7,005
Taxes................................................................ 456 52
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
APCOA/STANDARD PARKING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
(in thousands, unaudited)
1. Interim Financial Data
The accompanying unaudited condensed consolidated financial statements of
APCOA/Standard Parking, Inc., ("APCOA/Standard" or "the Company"), have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, all adjustments (consisting only of
adjustments of a normal and recurring nature) considered necessary for a fair
presentation of the financial position and results of operations have been
included. Operating results for the three-month period ended March 31, 2000 are
not necessarily indicative of the results that might be expected for the fiscal
year ending December 31, 2000. The financial statements presented in this Report
should be read in conjunction with the consolidated financial statements and
footnotes thereto included in APCOA/Standard's 1999 Form 10-K filed March 30,
2000.
Certain reclassifications have been made to the 1999 financial information
to conform to the 2000 presentation.
2. Restructuring and Other Special Charges
Included in "Restructuring and other special charges" in the accompanying
condensed consolidated statements of operations are the following:
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
March 31, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Incremental integration costs and other..... $119 $150
==== ====
</TABLE>
The integration costs relate primarily to actions to facilitate the
accounting system consolidation and activities to realign, centralize and
reorganize administrative and other support functions.
3. Borrowing Arrangements
APCOA/Standard's $140,000 9 1/4% Senior Subordinated Notes were issued in
September of 1998 and are due in March of 2008. The Notes are registered with
the Securities and Exchange Commission. The Notes were exchanged for
unregistered notes with substantially identical terms, which had been issued
earlier in 1998 to finance the acquisition of Standard and retire certain
existing indebtedness, and for general working capital purposes.
In March of 1998, the Company entered into a $40,000 revolving Senior
Credit Facility (the "Facility") with a group of banks. Rates of interest on
borrowings against the Facility are indexed to certain key variable rates. At
March 31, 2000, borrowings under the Facility aggregated $21,900 and there were
letters of credit outstanding against this Facility of $1,250.
The Notes and Senior Credit Facility contain covenants that limit
APCOA/Standard from incurring additional indebtedness and issuing preferred
stock, restrict dividend payments, limit transaction with affiliates and
restrict certain other transactions. Substantially all of APCOA/Standard's net
assets are restricted under these provisions and covenants (See Note 4).
6
<PAGE>
4. Subsidiary Guarantors
All of the Company's direct or indirect wholly owned domestic subsidiaries,
other than inactive subsidiaries, fully, unconditionally, jointly and severally
guarantee the Senior Subordinated Notes. Separate financial statements of the
guarantor subsidiaries are not separately presented because, in the opinion of
management, such financial statements are not material to investors. The non-
guarantor subsidiaries include joint ventures, wholly owned subsidiaries of the
Company organized under the laws of foreign jurisdictions and inactive
subsidiaries, all of which are included in the consolidated financial
statements. The following is summarized combining financial information for the
Company, the guarantor subsidiaries of the Company and the non-guarantor
subsidiaries of the Company:
<TABLE>
<CAPTION>
Guarantor Non-Guarantor
APCOA/Standard Subsidiaries Subsidiaries Eliminations Total
-------------- ------------ ------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
- -------------------
March 31, 2000
Cash and cash equivalents............................. $ 3,300 $ 577 $ 2,203 $ -- $ 6,080
Notes and accounts receivable......................... 39,779 1,676 2,430 -- 43,885
Current assets........................................ 44,238 2,514 4,792 -- 51,544
Leaseholds and equipment, net......................... 17,522 8,892 5,849 -- 32,263
Cost in excess of net assets acquired, net............ 19,382 90,402 5,412 -- 115,196
Investment in subsidiaries............................ 103,977 -- -- (103,977) --
Total assets.......................................... 193,689 107,230 16,857 (103,977) 213,799
Accounts payable...................................... 15,125 9,348 4,334 -- 28,807
Current liabilities................................... 41,336 12,404 9,804 -- 63,544
Long-term borrowings, excluding current portion....... 164,428 185 5,379 -- 169,992
Redeemable preferred stock............................ 50,646 -- -- -- 50,646
Common stock subject to put/call rights............... 4,589 -- -- -- 4,589
Total stockholders' equity (deficit).................. (73,532) 92,564 1,152 (103,977) (83,793)
Total liabilities and stockholders' equity (deficit).. 193,689 107,230 16,857 (103,977) 213,799
December 31, 1999
Cash and cash equivalents............................. 2,569 $ 1,963 683 $ -- $ 5,215
Notes and accounts receivable......................... 34,973 2,606 5,136 -- 42,715
Current assets........................................ 39,130 4,608 5,837 -- 49,575
Leaseholds and equipment, net......................... 17,204 9,263 6,192 -- 32,659
Cost in excess of net assets acquired, net............ 19,536 92,590 2,797 -- 114,923
Investment in subsidiaries............................ 102,639 -- -- (102,639) --
Total assets.......................................... 187,655 112,225 16,029 (102,639) 213,270
Accounts payable...................................... 15,860 5,962 3,467 -- 25,289
Current liabilities................................... 41,423 10,439 9,893 -- 61,755
Long-term borrowings, excluding current portion....... 160,667 371 5,103 -- 166,141
Redeemable preferred stock............................ 49,280 -- -- -- 49,280
Common stock subject to put/call rights............... 4,589 -- -- -- 4,589
Total stockholders' equity (deficit).................. (76,402) 98,889 541 (102,639) (79,611)
Total liabilities and stockholders' equity (deficit).. 187,655 112,225 16,029 (102,639) 213,270
Income Statement Data:
- ----------------------
Three Months Ended March 31, 2000
Parking Revenue....................................... $ 29,073 $ 23,158 $10,860 $ -- $ 63,091
Gross profit.......................................... 7,775 4,472 1,916 -- 14,163
Restructuring and other unusual costs................. 119 -- -- -- 119
Depreciation and amortization......................... 948 1,252 341 -- 2,541
Operating income...................................... 5,517 (4,547) 1,423 -- 2,393
Interest expense, net................................. 4,062 (7) 159 -- 4,214
Equity in earnings of subsidiaries.................... (3,362) -- -- 3,362 --
Net income (loss)..................................... (1,911) (4,529) 1,167 3,362 (1,911)
Three Months Ended March 31, 1999
Parking Revenue....................................... $ 26,919 $ 23,644 $10,306 $ -- $ 60,869
Gross profit.......................................... 6,684 5,782 504 -- 12,970
Restructuring and other unusual costs................. 150 -- -- -- 150
Depreciation and amortization......................... 965 607 227 -- 1,799
Operating income...................................... 3,115 880 20 -- 4,015
Interest expense, net................................. 3,408 27 160 -- 3,595
Equity in earnings of subsidiaries.................... 601 -- -- (601) --
Net income (loss)..................................... 100 775 (174) (601) 100
</TABLE>
7
<PAGE>
APCOA/STANDARD PARKING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statement of Cash Flow Data:
- ----------------------------
Three Months Ended March 31, 2000
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating activities......... $ (748) $(1,386) $ 1,520 $ -- $ (614)
Investing activities:
Purchase of leaseholds and equipment................... (1,393) -- -- -- (1,393)
------- ------- ------- ---- --------
Net cash provided by (used in) investing activities.........
Financing activities:
Proceeds from long-term borrowings..................... 3,800 -- -- -- 3,800
Payments on long-term borrowings....................... (107) -- -- -- (107)
------- ------- ------- ---- --------
Net cash provided by (used in) financing activities......... 3,506 3,506
Effect of exchange rate changes............................. (634) -- -- -- (634)
Proceeds on Joint Venture borrowings........................ (187) -- -- -- (187)
Three Months Ended March 31, 1999
Net cash provided by (used in) operating activities........ $(8,984) $ (369) $(1,564) $ -- $(10,917)
Investing activities:
Purchase of leaseholds and equipment...................... (2,264) (122) -- -- (2,386)
Purchase of leaseholds and equipment by joint
ventures.................................................. -- -- (159) -- (159)
Net cash used in investing activities...................... (2,264) (122) (159) -- (2,545)
Financing activities:
Proceeds from long-term borrowings........................ 5,000 -- -- -- 5,000
Payments on long-term borrowings.......................... (1,080) -- -- -- (1,080)
Net cash provided by financing activities.................. 3,920 -- -- -- 3,920
</TABLE>
8
<PAGE>
PART I FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
APCOA/Standard Parking, Inc. ("APCOA/Standard" or "the Company") operates
in a single reportable segment operating parking facilities under two types of
arrangements: management contracts and leases. Under a management contract,
APCOA/Standard typically receives a base monthly fee for managing the property,
and may also receive an incentive fee based on the achievement of facility
revenues above a base amount. In some instances, APCOA/Standard also receives
certain fees for ancillary services. Typically, all of the underlying revenues,
expenses and capital expenditures under a management contract flow through to
the property owner, not to APCOA/Standard. Under lease arrangements,
APCOA/Standard generally pays to the property owner either a fixed annual
rental, a percentage of gross customer collections or a combination thereof.
APCOA/Standard collects all revenues under lease arrangements and is responsible
for most operating expenses, but it is typically not responsible for major
maintenance or capital expenditures. As of March 31, 2000, APCOA/Standard
operated approximately 78% of its 1,834 parking facilities under management
contracts and approximately 22% under leases.
Parking services revenue--leases. Lease parking services revenues consist
of all gross customer collections received at a leased facility.
Parking services revenue--management contracts. Management contract
revenues consist of management fees, including both fixed and revenue-based, and
fees for ancillary services such as accounting, equipment leasing, consulting,
and other value-added services with respect to managed locations, but exclude
gross customer collections at such locations. Management contracts generally
provide APCOA/Standard a management fee regardless of the operating performance
of the underlying facility.
Cost of parking services--leases. Cost of parking services under lease
arrangements consist of (i) contractual rental fees paid to the facility owner
and (ii) all operating expenses incurred in connection with operating the leased
facility. Contractual fees paid to the facility owner are based on either a
fixed contractual amount or a percentage of gross revenue, or a combination
thereof. Generally under a lease arrangement, APCOA/Standard is not responsible
for major capital expenditures or property taxes.
Cost of parking services--management contracts. Cost of parking services
under management contracts is generally passed through to the facility owner,
therefore these costs are not included in the results of operations of the
Company. Several APCOA/Standard contracts, however, require APCOA/Standard to
pay for certain costs that are offset by larger management fees. These contracts
tend to be large airport properties with high cost structures.
General and administrative expenses. General and administrative expenses
include primarily salaries, wages, travel and office related expenses for the
headquarters and field office and supervisory employees.
Summary of Operating Facilities
The following table reflects the Company's facilities at the end of the
periods indicated:
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999 March 31, 1999
-------------- ----------------- --------------
<S> <C> <C> <C>
Managed facilities....... 1,439 1,436 1,207
Leased facilities........ 395 398 447
----- ----- -----
Total facilities......... 1,834 1,834 1,654
===== ===== =====
</TABLE>
The Company's strategy is to add locations in core cities where a
concentration of locations improves customer service levels and operating
margins. In general, contracts added as set forth in the table above followed
this strategy.
9
<PAGE>
Results of Operations
Gross customer collections consist of gross receipts collected at all
leased and managed properties, including unconsolidated affiliates. Gross
customer collections increased $49.5 million, or 15.6%, to $366.1 million in the
first quarter of 2000 compared to $316.6 million in the first quarter of 1999.
This increase is attributable to the addition of 180 locations during the
period.
In analyzing gross margins of APCOA/Standard, it should be noted that the
cost of parking services incurred in connection with the provision of management
services is generally paid by the clients. Margins for lease arrangements are
significantly impacted by variables other than operating performance, such as
variability in parking rates in different cities and widely varying space
utilization by parking facility type.
The following should be read in conjunction with the Condensed Consolidated
Financial Statements and notes thereto in Item 1.
Three Months Ended March 31, 2000 Compared to Three Months ended March 31, 1999
Parking services revenue--leases. Lease revenue decreased $2.5 million, or
4.9% to $47.4 million in the first quarter of 2000 as compared to $49.9 million
in the first quarter of 1999. This resulted from the net reduction of 52 leases
through contract expirations, conversions to management contracts and the loss
of one large airport contract in the second half of 1999.
Parking services revenue--management contracts. Management contract revenue
increased $4.7 million, or 42.5%, to $15.7 million in the first quarter of 2000
as compared to $11.0 million in the first quarter of 1999. This resulted from
the net increase of 232 contracts through internal growth and 1999 acquisitions.
Cost of parking services--leases. Cost of parking for leases decreased $1.4
million, or 3.1%, to $42.6 million for the first quarter of 2000 from $44.0
million in the first quarter of 1999. This decrease resulted from the reduction
of 52 leases through terminations and conversions to management contracts. Gross
margin for leases declined to 10.1% for the first quarter of 2000 compared to
11.7% for the first quarter of 1999.
Cost of parking services--management contracts. Cost of parking for
management contracts increased $2.4 million, or 62.1%, to $6.3 million for the
first quarter of 2000 from $3.9 million in the first quarter of 1999. This
increase resulted from the addition of a net total of 232 new contracts through
internal growth and acquisitions. Gross margin for management contracts declined
to 59.8% in the first quarter of 2000 compared to 64.7% for the first quarter of
1999. Most management contracts have no cost of parking services related to them
as all costs are reimbursable to the Company. However, several contracts
(primarily large airport properties and several urban locations) require the
Company to pay for certain costs which are offset by larger management fees. The
increase in cost of parking management contracts was related to the addition of
several contracts of this type.
General and administrative expenses. General and administrative expenses
increased $2.1 million, or 30.0%, to $9.1 million for the first quarter of 2000
as compared to $7.0 million, for the first quarter of 1999. This increase
resulted from costs associated with acquired companies in 1999, inflation, and
investment in the Company's infrastructure.
Restructuring and other special charges. The Company recorded $0.1 million
of incremental integration costs in the first quarter of 2000, as compared to
$0.2 million in the first quarter of 1999, relating primarily to actions to
facilitate the accounting system consolidation and other support functions.
Liquidity and Capital Resources
As a result of day-to-day activity at the parking locations, APCOA/Standard
collects significant amount of cash. Under lease contracts, this revenue is
deposited into local APCOA/Standard bank accounts, with a portion remitted to
the clients in the form of rental payments according to the terms of the leases.
Under management contracts, some clients require APCOA/Standard to deposit the
daily receipts into a local APCOA/Standard bank account. Others require the
deposit into a client account, and some have a segregated account for the
receipts and disbursements of the property.
Locations with revenues deposited into the APCOA/Standard banks enable the
Company to operate with a negative working capital. This negative working
capital arises from the liability that is created for the amount of revenue
10
<PAGE>
that will be remitted to the clients in the form of rents or net profit
distributions subsequent to month end, after the books are closed and
reconciled. Since the Company operates with a revolving Senior Credit Facility,
all funds held for future remittance to the clients are used to reduce the
credit line until the payments are made to the clients.
Locations with revenue deposited into client accounts or segregated
accounts can, depending upon timing of rent or net profit distributions, result
in significant amounts of cash being temporarily inaccessible to the Company for
use for operating needs. Additionally, the ability to utilize cash deposited
into local APCOA/Standard accounts is dependent upon the movement of that cash
into the Company's corporate account. For these reasons, the Company from time
to time carries significant cash balances, while utilizing its Senior Credit
Facility.
The Company had cash and cash equivalents of $6.1 million at March 31, 2000
compared to $5.2 million at December 31, 1999.
Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999
Net cash used in operating activities totaled $0.6 million for the first
quarter of 2000 compared to $10.9 million for the first quarter of 1999. Cash
used during 2000 included a $6.5 million interest payment on the Senior Credit
Facility, a $1.2 million increase in accounts receivable due to an increase in
the number of locations, offset by increases in accounts payable and other
liabilities of $5.0 million and a decrease in other assets of $1.3 million. Cash
used during 1999 included $5.5 million for the purchase of an insurance tail
policy to cover claims for all years prior to 1999 under APCOA's previous
insurance program, $1.7 million for cash restructuring charges and increases in
accounts receivable relating to acquired contracts and existing locations of
$3.3 million.
Cash used in investing activities totaled $1.4 million for the first
quarter of 2000 compared to $2.5 million for the first quarter of 1999. Cash
used in investing activities in the first quarter of 2000 resulted from capital
purchases to secure and/or extend leased facilities and investments in
management information system enhancements. Cash used in the first quarter of
1999 resulted from capital purchases including the furnishing and improvement of
the Company's combined office space in Chicago, investment in management
information system enhancements, and capital investments to secure and/or extend
leased facilities.
Cash generated from financing activities totaled $3.5 million in the first
quarter of 2000. The 2000 activity included $3.8 million in borrowings from the
revolving Senior Credit Facility, partially offset by repayments on long-term
and joint venture borrowings of $0.3 million. The 1999 activity included $5.0
million in borrowings from the revolving Senior Credit Facility, partially
offset by repayments on long-term borrowings of $1.1 million.
Other Liquidity and Capital Resources Information
The Company's Senior Credit Facility ("the Facility") provides for cash
borrowings up to $35 million and Letters of Credit up to $5 million, at variable
rates based, at the Company's option, either on LIBOR, the overnight federal
funds rate, or the bank's base rate. From time to time the Company utilizes the
Facility to provide readily-accessible cash for working capital purposes. The
Facility includes covenants that limit the Company from incurring additional
indebtedness, issuing preferred stock or paying dividends, and contains certain
other restrictions. At March 31, 2000, the Company had $1.3 million of letters
of credit outstanding under the Facility and borrowings against the Facility
aggregated $21.9 million. The Facility was amended on March 30, 2000, with the
principle changes to the agreement providing for revisions to interest rates
charged on borrowings and certain financial covenants.
The Company's primary capital requirements are for working capital, capital
expenditures and debt service. The Company believes that cash flow from
operating activities, cash and cash equivalents and borrowings under the Senior
Credit Facility will be adequate to meet the Company's short-term liquidity
requirements prior to the maturity of its long-term indebtedness, although no
assurance can be provided in this regard.
If the Company identifies investment opportunities requiring cash in excess
of the Company's cash flows and existing cash, the Company may borrow under the
Senior Credit Facility, or may seek additional sources of capital including the
sale or issuance of common stock. From time to time the Company utilizes the
Facility to provide readily-accessible cash for working capital purposes.
Year 2000
11
<PAGE>
In prior years, the Company discussed the nature and progress of its plans
to become Year 2000 ready. In late 1999, the Company completed its remediation
and testing of systems. As a result of those planning and implementation
efforts, the Company experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes those
systems successfully responded to the Year 2000 date change. The Company is not
aware of any material problems resulting from Year 2000 issues, with its
products, its internal systems, or the products and services of third parties.
The Company will continue to monitor its mission critical computer applications
and those of its suppliers and vendors throughout the year 2000 to ensure that
any latent Year 2000 matters that may arise are addressed promptly.
Special Cautionary Notice Regarding Forward-Looking Statements
This quarterly report contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are
intended to be covered by the safe harbors created thereby. Those statements
include, but may not be limited to, the discussions of the Company's
expectations concerning its future profitability, the discussion of the
Company's strategic relationships, discussions about Year 2000 compliance plans,
and the Company's operating and growth assumptions regarding certain matters,
including anticipated cost savings, in preparation of the unaudited financial
information. Investors are cautioned that forward-looking statements involve
risks and uncertainties. Although the Company believes that the assumptions
underlying the forward-looking statements contained herein are reasonable, any
of the assumptions could be inaccurate and, therefore, there can be no assurance
that the forward-looking statements included will prove to be accurate. In light
of the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
Cautionary Statements
The Company continues to be subject to certain factors that could cause the
Company's results to differ materially from expected and historical results (see
the "Risk Factors" set forth in the Company's Registration Statement on Form S-4
(No. 333-50437) filed on April 17, 1998, as amended on June 9, 1998, July 15,
1998, August 11, 1998 and August 14, 1998 (the "Registration Statement")).
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's primary market risk exposure consists of risk related to
changes in interest rates. Historically, the Company has not used derivative
financial instruments for speculative or trading purposes.
The Company entered into a $40 million revolving variable rate Senior
Credit Facility (see Note D of the Notes to the Consolidated Financial
Statements). Interest expense on such borrowing is sensitive to changes in the
market rate of interest. If the Company were to borrow the entire $40 million
available under the Facility, a 1% increase in the average market rate would
result in an increase in the Company's annual interest expense of $0.4 million.
This amount is determined by considering the impact of the hypothetical
interest rates on the Company's borrowing cost, but does not consider the
effects of the reduced level of overall economic activity that could exist in
such an environment. Due to the uncertainty of the specific changes and their
possible effects, the foregoing sensitivity analysis assumes no changes in the
Company's financial structure.
APCOA/Standard's indirect parent company is Holberg Industries, Inc.
("Holberg"); a privately held diversified service company located in Greenwich,
Connecticut. Holberg also owns AmeriServe Food Distribution, Inc.
("AmeriServe"), one of the nation's largest food service distributors servicing
quick-service and casual dining restaurants in the United States, Canada and
Mexico. AmeriServe filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code on January 31, 2000.
APCOA/Standard and AmeriServe are separate and distinct companies with
independent sources of funding. However, the AmeriServe Chapter 11 filing is a
default under certain debt instruments of Holberg. As a result of such defaults,
the creditors of Holberg could take control of Holberg or its subsidiary, AP
Holdings, Inc. ("Holdings"). A change in control of Holberg or Holdings would
also constitute a change in control of APCOA under the APCOA/Standard debt
instruments and of Holdings under its bond indenture. In the event of such a
change in control of APCOA/Standard or Holdings, the terms of APCOA/Standard's
senior bank credit facility and subordinated bond indenture and of Holdings'
bond indenture permit the APCOA/Standard and Holdings creditors, if they
believed it were in their interest to do so, to
12
<PAGE>
call, for immediate payment under such instruments, and APCOA/Standard's or
Holdings failure to pay on such terms would constitute a default thereunder.
Holberg and its creditors are negotiating to restructure the debt and eliminate
the defaults created as a result of the AmeriServe Chapter 11 filing. Although
Holberg currently expects to complete the restructuring of the debt, and further
currently expects that its creditors will not in any event seek to obtain
control of Holberg or Holdings, there can be no assurance that Holberg will be
successful in restructuring its debt and eliminating the existing defaults, or
that Holberg's creditors will not seek to obtain control of Holberg or Holdings,
and should APCOA/Standard's or Holdings' indebtedness be accelerated as a result
of any action by Holberg's creditors, there is no assurance that APCOA/Standard
or Holdings would have sufficient funds to satisfy such obligations.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In the normal course of business, the Company is involved in disputes,
generally regarding the terms of lease agreements. In the opinion of management,
the outcome of these disputes and litigation will not have a material adverse
effect on the consolidated financial position or operating results of the
Company.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
------ -----------
3.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-4 (No. 333-50437) filed on
April 17, 1998, as amended on June 9, 1998, July 15, 1998,
August 11, 1998 and August 14, 1998 (the "Registration
Statement")).
3.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3.2 to the Registration Statement).
4.1 Indenture, dated as of March 30, 1998, amended as of July 6,
1998, September 21, 1998 and January 12, 1999 by and among the
Company, the Subsidiary Guarantors and State Street Bank and
Trust Company (incorporated by reference to Exhibit 4.1 to the
Registration Statement).
4.2 Form of New Note (included as Exhibit A to Exhibit 4.1).
4.3 Form of New Note Guarantee (included as Exhibit D to
Exhibit 4.1).
4.7 First Amendment to Senior Credit Facility dated November 12,
1999 by and among the Company, the Lenders, and N.A. Bank One as
agent for Lenders (incorporated by reference to Exhibit 4.7 of
the Company's September 10, 1999 Form 10Q).
4.8 Second Amendment to the Senior Credit Facility dated March 30,
2000 by and among the Company, the Lenders and Bank One N.A., as
agent for the Lenders. (corrected copy)
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
No current report on Form 8-K was filed by the Company during
the quarter ended March 31, 2000.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
APCOA/Standard Parking, Inc.
(Registrant)
May 12, 2000
By:
_________________________________________________
Myron C. Warshauer
Chief Executive Officer
May 12, 2000
By:
_________________________________________________
Theodore C. Pulkownik
Executive Vice President
and Chief Financial Officer
14
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
3.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-4 (No. 333-50437) filed on April
17, 1998, as amended on June 9, 1998, July 15, 1998, August 11,
1998 and August 14, 1998 (the "Registration Statement")).
3.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3.2 to the Registration Statement).
4.1 Indenture, dated as of March 30, 1998, amended as of July 6, 1998,
September 21, 1998 and January 12, 1999 by and among the Company,
the Subsidiary Guarantors and State Street Bank and Trust Company
(incorporated by reference to Exhibit 4.1 to the Registration
Statement).
4.2 Form of New Note (included as Exhibit A to Exhibit 4.1).
4.3 Form of New Note Guarantee (included as Exhibit D to Exhibit 4.1).
4.7 First Amendment to Senior Credit Facility dated November 12, 1999
by and among the Company, the Lenders, and N.A. Bank One as agent
for Lenders (incorporated by reference to Exhibit 4.7 of the
Company's September 10, 1999 form 10Q).
4.8 Second Amendment to the Senior Credit Facility dated March 30,
2000 by and among the Company, the Lenders and Bank One N.A., as
agent for the Lenders. (corrected copy)
27.1 Financial Data Schedule.
15
<PAGE>
SECOND AMENDMENT TO CREDIT AGREEMENT
------------------------------------
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of March 30, 2000 (this
"Amendment"), is among APCOA/STANDARD PARKING, INC., a Delaware corporation (the
"Company"), the Lenders set forth on the signature pages hereof (collectively,
the "Lenders") and BANK ONE, NA, as agent for the Lenders (in such capacity, the
"Agent").
RECITALS
--------
A. The Company, the Guarantors, the Agent and the Lenders are parties
to a Credit Agreement dated as of March 30, 1998 (as clarified by letter
agreement dated March 30, 1999, and amended by a First Amendment to Credit
Agreement dated as of November 12, 1999, the "Credit Agreement").
B. The Company desires to amend the Credit Agreement, and the Agent
and the Lenders are willing to do so in accordance with the terms hereof.
TERMS
-----
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in
Article III hereof, the Credit Agreement shall be amended as follows:
1.1 The definition of "Applicable Margin" in Section 1.1 shall be
amended by deleting the table set forth therein and the paragraph following such
table and inserting the table and paragraph set forth below in place thereof:
<TABLE>
<CAPTION>
Applicable Margin for all Advances and fees
-------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted Total Debt to Adjusted Corporate LIBOR Loan and Letter Commitment Fees
Adjusted EBITDA Base Rate Loan of Credit Fees
Ratio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(greater than or equal to) 6.5:1.0 225 bps 350 bps 75 bps
- ------------------------------------------------------------------------------------------------------------------------------------
(greater than or equal to) 6.0:1.0 but (less than) 6.50:1.0 175 bps 300 bps 62.5 bps
- ------------------------------------------------------------------------------------------------------------------------------------
(greater than or equal to) 5.5:1.0 but (less than) 6.0:1.0 150 bps 275 bps 62.5 bps
- ------------------------------------------------------------------------------------------------------------------------------------
(greater than or equal to) 5.0:1.0 but (less than) 5.5:1.0 125 bps 250 bps 62.5 bps
- ------------------------------------------------------------------------------------------------------------------------------------
(greater than or equal to) 4.5:1.0 but (less than) 5.0:1.0 100 bps 225 bps 50 bps
- ------------------------------------------------------------------------------------------------------------------------------------
(greater than or equal to) 4.5:1.0 75 bps 200 bps 50 bps
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notwithstanding anything in this Agreement to the contrary, as of the Second
Amendment Effective Date the Applicable Margin shall be based on an Adjusted
Total Debt to Adjusted EBITDA Ratio of greater than or equal to 6.5:1.0
pursuant to the above table until adjusted for the first time after the Second
Amendment Effective Date.
1.2 The following definitions are hereby added to Section 1.1 in
appropriate
<PAGE>
alphabetical order:
"Second Amendment" shall mean the Second Amendment to this
Agreement dated as of March 30, 2000.
"Second Amendment Effective Date" shall mean the date of the
Second Amendment.
1.3 Section 2.1(c) is amended by adding the following to the end
thereof: "and (iii) the aggregate principal amount of Revolving Credit Loans
shall not exceed $35,000,000 at any time."
1.4 Section 5.1(g) is amended by adding the following to the end
thereof: "At all times on and after the date requested by the Agent in its
discretion and to the extent practical as determined by the Agent, the Company
and the Guarantors shall direct all clients and other account debtors to make
all payments in connection with any obligations of the Company or any Guarantor
directly to a lock-box account, which account shall be a non-interest bearing
account over which the Agent shall have the power of application and withdrawal,
and all amounts received in such lock-box account shall be applied to the Lender
Indebtedness on such terms required by the Agent, and the Company and the
Guarantors shall promptly execute such lock-box agreements, dominion of funds
agreements and related agreements in connection therewith, each in form and
substance satisfactory to the Agent.
1.5 Sections 5.2(a), (b) and (c) shall be amended and restated as
follows:
(a) Adjusted Total Debt to Adjusted EBITDA Ratio. Permit or
suffer the Adjusted Total Debt to Adjusted EBITDA Ratio to be greater than
(i) 6.95 to 1.0 at any time from and including the Effective Date to and
including September 29, 1999, (ii) 6.75 to 1.0 at any time from and
including September 30, 1999 to and including December 31, 1999, (iii) 8.0
to 1.0 at any time from and including January 1, 2000 to and including
September 30, 2000, (iv) 6.50 to 1.0 at any time from and including October
1, 2000 to and including March 30, 2001, (v) 6.35 to 1.00 at any time from
and including March 31, 2001 to and including June 29, 2001, (vi) 6.20 to
1.00 at any time from and including June 30, 2001 to and including
September 29, 2001, (vii) 6.00 to 1.00 at any time from and including
September 30, 2001 to and including December 30, 2001, (viii) 5.80 to 1.00
at any time from and including December 31, 2001 to and including March 30,
2002 or (ix) 5.50 to 1.0 at any time thereafter.
(b) Interest Coverage Ratio. Permit or suffer the Interest
Coverage Ratio to be less than (i) 1.5 to 1.0 as of the end of any fiscal
quarter of the Company ending on or before December 31, 1999, (ii) 1.30 to
1.0 as of the end of the fiscal quarter of the Company ending March 31,
2000, (iii) 1.27 to 1.0 as of the end of each of the fiscal quarters of the
Company ending June 30, 2000 and September 30, 2000, (iv) 1.45 to 1.0 as of
the end of the fiscal quarter of the Company ending December 31, 2000, (v)
1.6 to 1.0 as of the end of each of the fiscal quarters of the Company
ending March 31, 2001 and June 30, 2001, (vi) 1.65 to 1.0 as of the end of
any fiscal quarter of the Company ending on or after September 30, 2001 but
on or before March 31, 2002, or (vii) 1.75 to 1.0 as of the end of any
fiscal quarter of the Company ending thereafter.
(c) Fixed Charge Coverage Ratio. Permit or suffer the Fixed
Charge Coverage Ratio to be less than (i) 0.9 to 1.0 as of the end of any
fiscal quarter of the Company ending on or before March 31, 1999, (ii) 1.0
to 1.0 as of the end of any fiscal
-2-
<PAGE>
quarter ending on or after June 30, 1999 but on or before December 31,
1999, (iii) 0.92 to 1.0 as of the end of the fiscal quarter of the Company
ending March 31, 2000, (iv) 0.91 to 1.0 as of the end of each of the fiscal
quarters of the Company ending June 30, 2000 and September 30, 2000, (v)
1.05 to 1.0 as of the end of any fiscal quarter of the Company ending on or
after December 31, 2000 but on or before March 31, 2002 or (vi) 1.10 to 1.0
as of the end of any fiscal quarter of the Company ending thereafter.
1.6 Section 5.2(d)(x) is amended by deleting reference therein to
"14%" and substituting "5%" in place thereof.
1.7 Section 5.2(f) shall be amended and restated as follows:
(f) Merger; Acquisitions; Etc. Make any Acquisition; nor merger
or consolidate or amalgamate with any other Person or take any other action
having a similar effect; provided, however, that this Section 5.2(f) shall
not prohibit (i) any merger of any Subsidiary with or into another
Subsidiary or any merger of any Subsidiary into the Company, provided that
(A) there is no Unmatured Event or Event of Default either before or after
such merger, (B) if any such merger involves the Company or a Guarantor,
the Company shall be the surviving corporation and (C) any such merger
involves the Company or any Guarantor, the net worth of the Company or such
Guarantor involved in such merger immediately after the merger would be
equal to or greater than its net worth immediately preceding such merger,
or (ii) any Acquisition completed prior to the Second Amendment Effective
Date and identified on Schedule 5.2(f) hereto.
1.8 Section 5.2(g)(i) is amended by deleting reference therein to
"10%" and substituting "1%" in place thereof.
1.9 Section 5.2(i) is amended by adding the following after the
phrase "covenants and conditions in this Agreement" in each place such phrase
appears: "without giving effect to any amendment or modification of Sections
5.2(a), (b) or (c) made at any time after the Effective Date which would make
the covenants contained therein less restrictive on the Company and its
Subsidiaries".
1.10 Section 5.2(j) is amended and restated as follows:
(j) Investments, Loans and Advances. Purchase or otherwise
acquire any Capital Stock of or other ownership interest in, or debt
securities of or other evidence of Indebtedness of, any other Person; nor
make any loan or advance of any of its funds or property or make any other
extension of credit to, or make any other investment or contribution or
acquire any interest whatsoever in, any other Person; nor incur any
Contingent Liability except to the extent permitted under Section 5.2(d);
nor permit any Subsidiary to do any of the foregoing; other than:
(i) extensions of trade credit made in the ordinary course of business
on customary credit terms and commission, relocation, travel and similar
advances made to officers and employees in the ordinary course of business,
provided that advances to officers and employees for purposes other than
commission, relocation and travel shall not exceed $250,000 in aggregate
amount outstanding at any time,
(ii) investments in Cash Equivalents,
-3-
<PAGE>
(iii) investments, loans and advances in and to any existing
Guarantor,
(iv) those investments, loans, advances and other transactions
described in Schedule 5.2(j) hereto, having the same terms as existing on
the date of this Agreement, but no extension or renewal thereof shall be
permitted,
(v) investments, loans and advances in an aggregate amount outstanding
not to exceed $1,000,000 to Affiliates of the Company (excluding, among
others, Holberg and its Affiliates other than the Company or a Guarantor,
and such investments, loans and advances may not be sent directly or
indirectly to or for the benefit of Holberg or its Affiliates other than
the Company or a Guarantor) described on Schedule 5.2(j)-2 or otherwise
approved by the Agent, provided that both before and after giving effect to
any such investment, loan and advance (w) no Unmatured Event or Event of
Default shall exist or shall have occurred and be continuing, (x) the
representations and warranties contained in the Loan Documents shall be
true and correct in all material respects as if made on the date such
investment, loan or advance is made, and (y) the aggregate amount of cash
and Cash Equivalents on hand of the Company plus the amount that the
Company is able to borrow in Revolving Credit Loans after giving effect to
such investment, loan or advance is and will be at least $5,000,000 above
the amount of working capital required for the Company over such twelve
month period of time, as demonstrated to the Agent's reasonable
satisfaction by such pro forma financial statements and projections as
required by the Agent, and
(vi) acquiring and owning stock, obligations or securities received in
settlement of debts owing to the Company or its Subsidiaries or as
consideration for Asset Sales otherwise permitted under Section 5.2(g).
1.11 Section 5.2(p) is amended (a) by adding the following: "without
giving effect to any amendment or modification of Sections 5.2(a), (b) or (c)
made at any time after the Effective Date which would make the covenants
contained therein less restrictive on the Company and its Subsidiaries" after
the phrase "Sections 5.2(a), (b) and (c)" appearing in Section 5.2(p) and (b) by
adding the following to the end thereof:
In addition to the foregoing, the Company also will not pay, or permit any
Subsidiary or, to the extent the Company is able to do so, any other
Affiliate, to pay, directly or indirectly, any management, consulting,
investment banking, advisory or other fees or payments under any leases,
any expense reimbursement or similar payments or any other payments of any
kind (including, without limitation, any amounts paid or payable by the
Company or any of its Subsidiaries to Holberg in respect of overhead
expense allocations among members of the affiliate corporate group) to
Holberg or any Affiliates thereof other than the Company or any Guarantor;
provided, however, that the Company and its Subsidiaries may reimburse
Holberg for any payments made by Holberg for out of pocket expenses
actually incurred by the Company and which reimbursements are in the
ordinary course of business and consistent with past practices.
1.12 Section 5.2(q) shall be amended by adding the following to the
end thereof: "Notwithstanding anything in this Section 5.2(q) to the contrary,
the Net Capital Expenditures (i) for the four consecutive fiscal quarters of the
Company ending March 31, 2000 shall be allowed up to, but not in excess of,
$5,638,000, (ii) for the four consecutive fiscal quarters of the Company ending
June 30, 2000 shall be allowed up to, but not in excess of, $5,010,000, and
(iii) for the four consecutive fiscal quarters of
-4-
<PAGE>
the Company ending September 30, 2000 shall be allowed up to, but not in excess
of, $5,333,000.
1.13 Schedule 5.2(j) attached hereto is substituted for Schedule
5.2(j) to the Credit Agreement and Schedule 5.2(j)-2 attached hereto is added as
Schedule 5.2(j)-2 to the Credit Agreement.
1.14 The restructuring charges taken in connection with the Standard
Acquisition to the extent such charges do not exceed $18,500,000 for the
Calculation Period ending December 31, 1998, do not exceed $5,577,000 for the
Calculation Period ending December 31, 1999, and do not exceed $700,000 for the
Calculation Period ending December 31, 2000 shall be deemed "consistent with
the restructuring charges identified in the Pro Forma Financial Statements" for
purposes of clause I(xii)(A) of the definition of Adjusted EBITDA contained in
Section 1.1 of the Credit Agreement, provided that no other restructuring
charges shall be deemed "consistent with the restructuring charges identified in
the Pro Forma Financial Statements" for purposes of clause I(xii)(A) of such
definition of Adjusted EBITDA or for any other purpose without the prior written
approval of the Required Lenders.
ARTICLE II. REPRESENTATIONS AND AGREEMENTS. The Company represents and
warrants to, and agrees with, the Agent and the Lenders that:
2.1 The execution, delivery and performance of this Amendment are
within its powers, have been duly authorized and are not in contravention of any
statute, law or regulation known to it or of any terms of its Articles of
Incorporation or By-laws, or of any material agreement or undertaking to which
it is a party or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligations of the
Company and each Guarantor enforceable against each in accordance with the
respective terms thereof.
2.3 After giving effect to the amendments contained herein, the
representations and warranties contained in Article IV of the Credit Agreement
are true in all material respects on and as of the date hereof with the same
force and effect as if made on and as of the date hereof.
2.4 After giving effect to the amendments contained herein, no Event
of Default or Unmatured Default exists or has occurred and is continuing on the
date hereof.
2.5 The Company and Parent have not, and will not without the prior
written consent of the Lenders, consummate the Company Acquisition.
2.6 The aggregate amount of any payment, transfer or other
consideration paid or otherwise transferred in any way to Holberg or any of
Holberg's Affiliates (other than the Company or Guarantor), whether directly or
indirectly, and whether constituting any management, consulting, investment
banking, advisory or other fees or payments under any leases or any expense
reimbursement or similar payments or any other payments of any kind (including,
without limitation, any amounts paid or payable by the Company or any of its
Subsidiaries in respect of overhead expense allocations among the members of the
affiliate corporate group) or constituting any loans, advances, dividends,
distributions, forgiveness of debt or other transfer of any kind to Holberg or
any of Holberg's Affiliates (other than the Company or Guarantor) since
September 30, 1999 is equal to $570,000.
ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective as of the date hereof when each of the following conditions is
satisfied or waived by the Lenders:
-5-
<PAGE>
3.1 The Company, the Guarantors and the Required Lenders shall have
signed this Amendment.
3.2 The Company and the Guarantors shall have delivered such
resolutions, officer's certificates and legal opinions as the Agent may request.
3.3 The Company shall have paid to the Agent, for the benefit of the
Lenders, an amendment fee equal to 15 basis points on the amount of the
Commitment of each Lender.
3.4 The Company and the Guarantors and Firstar Bank shall have
executed such agreements satisfactory to the Agent pursuant to which the Agent
is granted a first priority security interest in all bank accounts of the
Company and the Guarantors and such other rights with respect thereto as
required by the Agent.
3.5 The Company shall have delivered to the Agent such other documents
and satisfied such other conditions, if any, as requested by the Agent.
ARTICLE IV. MISCELLANEOUS.
4.1 References in the Credit Agreement or in any other Loan Document
to the Credit Agreement shall be deemed to be references to the Credit Agreement
as amended hereby and as further amended from time to time.
4.2 The Company agrees to pay and to save the Agent harmless for the
payment of all reasonable documented costs and expenses arising in connection
with this Amendment, including the reasonable documented fees of counsel to the
Agent in connection with preparing this Amendment and the related documents.
4.3 The Company and each Guarantor acknowledge and agree that, to the
best of their knowledge, the Agent and the Lenders have fully performed all of
their obligations under all documents executed in connection with the Credit
Agreement. The Company and each Guarantor represent and warrant that they are
not aware of any claims or causes of action against the Agent or any Lender.
4.4 The Lenders and the Agent waive the Event of Default (the
"Existing Default") caused by the breach of Section 5.2(a), (b) and (j) which
occurred prior to the date hereof to the extent described by the Company to the
Lenders prior to the date hereof, provided that it is acknowledged and agreed
that this is a one time waiver only for the Existing Default, and shall not
waive any other breach at any other time of Section 5.2(a), (b) or (j) or any
other term or covenant of the Credit Agreement.
4.5 Except as expressly amended hereby, the Company and each Guarantor
agree that the Credit Agreement, the Notes, the Security Documents and all other
documents and agreements executed by the Company in connection with the Credit
Agreement in favor of the Agent or any Lender are ratified and confirmed, as
amended hereby, and shall remain in full force and effect in accordance with
their terms and that they are not aware of any set off, counterclaim, defense or
other claim or dispute with respect to any of the foregoing. Terms used but not
defined herein shall have the respective meanings ascribed thereto in the Credit
Agreement. This Amendment may be signed upon any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument, and telecopied signatures shall be effective as originals.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties signing this Amendment have caused
this Amendment to be executed and delivered as of the day and year first above
written.
APCOA/STANDARD PARKING, INC.
By: /s/ XXXXXXXX XXXXXXXXXX
-----------------------------------------
Its: EVP, CEO
----------------------------------------
BANK ONE, NA, as a Lender and as Agent, formerly
known as The First National Bank of Chicago
By: /s/ William J. McCaffrey
-----------------------------------------
Its: William J. McCaffrey, First Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Mary Lou Bartlett
-----------------------------------------
Its: Mary Lou Bartlett, First Vice President
----------------------------------------
-7-
<PAGE>
CONSENT AND AGREEMENT
---------------------
As of the date and year first above written, each of the undersigned
hereby:
(a) fully consents to the terms and provisions of the above Amendment and
the consummation of the transactions contemplated hereby and agrees to all terms
and provisions of the above Amendment applicable to it;
(b) agrees that each Guaranty and all other agreements executed by any of
the undersigned in connection with the Credit Agreement or otherwise in favor of
the Agent or the Lenders (collectively, the "Security Documents") are hereby
ratified and confirmed and shall remain in full force and effect, and each of
the undersigned acknowledges that it has no setoff, counterclaim or defense with
respect to any Security Document;
(c) acknowledges that its consent and agreement hereto is a condition to
the Banks' obligation under this Amendment and it is in its interest and to its
financial benefit to execute this consent and agreement;
(d) agrees that it will not make any payment, transfer or give or transfer
any other consideration in any way to Holberg or any of Holberg's Affiliates
(other than the Company or a Guarantor), whether directly or indirectly, and
whether constituting any management, consulting, investment banking, advisory or
other fees or payments under any leases or any expense reimbursement or similar
payments or any other payments of any kind (including, without limitation, any
amounts paid or payable by the Company or any of its Subsidiaries in respect of
overhead expense allocations among the members of the affiliate corporate group)
or constituting any loans, advances, dividends, distributions, forgiveness of
debt or other transfer of any kind to Holberg or any of Holberg's Affiliates
(other than the Company or a Guarantor); provided, however, that the Parent may
make payments or transfers to Holberg if such payments or transfers are solely
from new common equity proceeds or new Indebtedness (which new Indebtedness
incurred by the Parent after the Second Amendment Effective Date shall not
exceed $3,000,000 in aggregate amount until the Company is in compliance with
all covenants contained in the Credit Agreement without giving effect to the
above Amendment or any amendment or modification thereafter and no Event of
Default or Unmatured Event has occurred and is continuing) received by the
Parent after the Second Amendment Effective Date from the owners of the Parent
or other Persons (but not from the Company or any Guarantor, directly or
indirectly) and that any such transaction could not result in the Company or any
Guarantor making any additional payments or transfers of any kind to the Parent
or incurring any additional obligations of any kind; and
(e) the Parent agrees that it will not incur any Indebtedness in excess of
$3,000,000 until after the Company is in compliance with all covenants contained
in the Credit Agreement without giving effect to the above Amendment or any
amendment or modification thereafter and no Event of Default or Unmatured Event
has occurred and is continuing or grant any Liens on any of its assets other
than in favor of the Company.
A-1 AUTO PARK, INC.
By:/s/ Michael J. Celebrezze
-------------------------
Name: Michael J. Celebrezze
Title: Vice President
-8-
<PAGE>
AP HOLDINGS, INC.
By:/s/ Michael J. Celebrezze
-------------------------
Name: Michael J. Celebrezze
Title: Treasurer
-9-
<PAGE>
APCOA CAPITAL CORPORATION
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
APCOA-HAWAII, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
EVENTS PARKING CO., INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Treasurer
HAWAII PARKING MAINTENANCE, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
METROPOLITAN PARKING SYSTEM, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Treasurer
SENTINEL PARKING CO. OF OHIO, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
TOWER PARKING, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
-10-
<PAGE>
STANDARD AUTO PARK, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
STANDARD PARKING CORPORATION
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
APCOA LASALLE PARKING, LLC
By: APCOA/Standard Parking Inc.
as Manager
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Senior Vice President
S & S PARKING, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
STANDARD PARKING CORPORATION, IL
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
CENTURY PARKING, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
SENTRY PARKING CORPORATION
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
VIRGINIA PARKING SERVICES, INC.
By:/s/ Michael J. Celebrezze
------------------------------
Name: Michael J. Celebrezze
Title: Vice President
-11-
<PAGE>
Schedule 5.2(j)
Investments, Loans, and Advances
Investments existing as of the Second Amendment Effective Date in Joint Ventures
in an aggregate amount of $273,200
-12-
<PAGE>
Schedule 5.2(j)-2
Permitted Affiliates
Joint Ventures of the Company, provided that such Joint Ventures shall exclude
Holberg, the Parent or any Person in which Holberg or the Parent has any direct
or indirect interest other than solely due to any ownership interest in the
Company
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 6,080
<SECURITIES> 0
<RECEIVABLES> 46,008
<ALLOWANCES> (2,123)
<INVENTORY> 0
<CURRENT-ASSETS> 51,544
<PP&E> 83,986
<DEPRECIATION> 51,723
<TOTAL-ASSETS> 213,799
<CURRENT-LIABILITIES> 63,413
<BONDS> 169,992
50,646
0
<COMMON> 1
<OTHER-SE> (83,663)
<TOTAL-LIABILITY-AND-EQUITY> 213,799
<SALES> 63,091
<TOTAL-REVENUES> 63,091
<CGS> 48,928
<TOTAL-COSTS> 48,928
<OTHER-EXPENSES> 11,770
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,421
<INCOME-PRETAX> (1,894)
<INCOME-TAX> 17
<INCOME-CONTINUING> (1,911)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,911)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
