SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended: JUNE 30, 1997
Commission file number: 001-13950
Exact Name of Registrant as
Specified in Its Charter: CENTRAL PARKING CORPORATION
State or Other Jurisdiction of
Incorporation or Organization: TENNESSEE
I.R.S. Employer Identificiation No.: 62-1052916
Address of Principal Executive Offices: 2401 21ST AVENUE SOUTH, SUITE 200
NASHVILLE, TENNESSEE
Zip Code: 37212
Registrant's Telephone Number,
Including Area Code: (615)297-4255
Former name, address and fiscal
year, if changed since last report: NOT APPLICABLE
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
[ ]
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date.
Class: COMMON STOCK, $0.01 PAR VALUE
Outstanding at August 8, 1997: 17,532,717
<PAGE>
INDEX
CENTRAL PARKING CORPORATION
PAGE
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets
--- June 30, 1997, September 30, 1996 and June 30, 1996 3
Condensed consolidated statements of earnings
--- three and nine months ended June 30, 1997 and 1996 4 - 5
Condensed consolidated statements of cash flows
--- nine months ended June 30, 1997 and 1996 6
Notes to condensed consolidated financial statements 7 - 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 12
PART 2. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
EXHIBIT INDEX 15
<PAGE>
PART I ITEM 1
<TABLE>
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Dollar amounts in thousands
<CAPTION>
Unaudited Unaudited
June 30, 1997 September 30, 1996 June 30, 1996
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 476 $ 28,605 $ 28,614
Management accounts receivable 9,753 8,982 7,417
Accounts and current portion of notes receivable 7,630 3,016 2,937
Prepaid expenses 7,257 4,549 3,682
Deferred income taxes 416 270 -
- -----------------------------------------------------------------------------------------------------------------
Total current assets 25,532 45,422 42,650
Investments, at amortized cost 4,676 4,483 4,427
Notes receivable, less current portion 8,511 8,248 6,236
Property, equipment, and leasehold improvements, net 90,586 38,188 38,056
Contract rights, net 5,234 5,815 6,029
Goodwill, net 31,493 - -
Investment in limited partnerships 1,240 1,234 1,235
Investment in general partnerships 47,670 1,705 1,307
Other assets 6,917 2,117 2,270
- -------------------------------------------------------------------------------------------------------------------
$ 221,859 $ 107,212 $ 102,210
===================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 218 $ - $ -
Accounts payable 17,017 11,275 10,994
Accrued payroll and related costs 7,260 5,059 5,349
Accrued expenses 2,324 900 2,219
Management accounts payable 8,703 7,788 5,312
Income taxes payable 154 693 1,073
- -------------------------------------------------------------------------------------------------------------------
Total current liabilities 35,676 25,715 24,947
Long-term debt 82,178 - -
Other liabilities 5,022 - -
Deferred compensation 3,102 3,095 2,996
Deferred income taxes 5,440 1,609 1,114
- -------------------------------------------------------------------------------------------------------------------
Total liabilities 131,418 30,419 29,057
===================================================================================================================
Shareholders' equity :
Common stock, $.01 par value; 50,000,000 shares
authorized, 17,530,467, 17,477,088 and
17,460,781 issued and outstanding, respectively 175 175 175
Additional paid-in capital 32,647 31,747 31,239
Foreign currency translation adjustment 305 59 31
Retained earnings 57,901 45,449 42,363
Deferred compensation on restricted stock, net (587) (637) (655)
- -------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 90,441 76,793 73,153
===================================================================================================================
$ 221,859 $ 107,212 $ 102,210
===================================================================================================================
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Unaudited
Dollar amounts in thousands, except per share data
Three Months Ended June 30,
1997 1996
- --------------------------------------------------------------------------------
Revenues:
Parking $ 49,194 $ 28,805
Management contract 10,836 8,699
- --------------------------------------------------------------------------------
Total revenues 60,030 37,504
Costs and expenses:
Cost of parking 43,123 25,709
Cost of management contracts 3,471 2,416
General and administrative 5,730 4,509
- --------------------------------------------------------------------------------
Total costs and expenses 52,324 32,634
- --------------------------------------------------------------------------------
Operating earnings 7,706 4,870
Other income (expenses):
Interest income 341 566
Interest expense (1,617) -
Net gains on sales of property
and equipment 3 (1)
Equity in partnership and joint
venture earnings 1,809 233
- --------------------------------------------------------------------------------
Other income (expenses), net 536 798
- --------------------------------------------------------------------------------
Earnings before income taxes 8,242 5,668
Income taxes 2,967 1,961
- --------------------------------------------------------------------------------
Net earnings $ 5,275 $ 3,707
================================================================================
Weighted average common shares and
common share equivalents 17,632,547 17,575,442
Net earnings per common share $ 0.30 $ 0.21
================================================================================
Dividends per common share $ 0.02 $ 0.02
================================================================================
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Unaudited
Dollar amounts in thousands, except per share data
Nine Months Ended June 30,
1997 1996
- --------------------------------------------------------------------------------
Revenues:
Parking $ 126,981 $ 81,568
Management contract 30,397 24,867
- --------------------------------------------------------------------------------
Total revenues 157,378 106,435
Costs and expenses:
Cost of parking 111,605 73,169
Cost of management contracts 9,163 7,642
General and administrative 16,666 13,024
- --------------------------------------------------------------------------------
Total costs and expenses 137,434 93,835
- --------------------------------------------------------------------------------
Operating earnings 19,944 12,600
Other income (expenses):
Interest income 1,206 1,685
Interest expense (2,937) -
Net gains on sales of property and
equipment 8 1,182
Equity in partnership and joint
venture earnings 3,014 462
- --------------------------------------------------------------------------------
Other income (expenses), net 1,291 3,329
- --------------------------------------------------------------------------------
Earnings before income taxes 21,235 15,929
Income taxes 7,645 5,529
- --------------------------------------------------------------------------------
Net earnings $ 13,590 $ 10,400
================================================================================
Weighted average common shares and
common share equivalents 17,615,490 17,446,055
Net earnings per common share $ 0.77 $ 0.60
================================================================================
Dividends per common share $ 0.06 $ 0.06
================================================================================
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Unaudited
Dollar amounts in thousands
Nine Months Ended June 30
1997 1996
- --------------------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 13,590 $ 10,400
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation 2,935 1,828
Amortization of contract rights 626 638
Amortization of deferred compensation cost 50 51
Amortization of goodwill 522 -
Equity in partnership and joint venture (earnings) (3,014) (462)
Net gains on sales of property and equipment (8) (1,182)
Deferred income taxes 1,159 360
Changes in operating assets and liabilities,
net of effects of acquisition of companies:
(Increase) decrease in management accounts receivable (840) (646)
(Increase) decrease in notes and accounts
receivable - other (2,255) 3,193
(Increase) decrease in prepaid expenses (884) 118
(Increase) decrease in other assets (1,046) 61
Increase (decrease) in accounts payable,
accrued expenses and deferred compensation (3,298) 1,954
Increase (decrease) in management accounts payable (1,746) (320)
Increase (decrease) in income taxes payable (658) (492)
- --------------------------------------------------------------------------------
Net cash provided by operating activities 5,133 15,501
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of property and equipment 9,609 1,429
Investments in notes receivable (1,682) (2,252)
Purchase of assets held for resale (45,962) -
Proceeds from sale of assets 45,962 -
Purchase of property, equipment, and
leasehold improvements (6,205) (15,852)
Purchase of contract rights (45) (300)
Investment in or return on general
and limited partnerships (43,412) 234
Acquisition of company net of cash acquired (50,601) -
Purchase of investments (193) (181)
- --------------------------------------------------------------------------------
Net cash used by investing activities (92,529) (16,922)
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Dividends paid (1,094) (697)
Net borrowings under revolving
credit agreement 78,260 -
Principal repayments on notes payable (19,045) -
Proceeds from issuance of common stock, net 900 20,534
- --------------------------------------------------------------------------------
Net cash provided by financing activities 59,021 19,837
- --------------------------------------------------------------------------------
Foreign currency translation 246 (20)
- --------------------------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents (28,129) 18,396
Cash and cash equivalents at beginning of period 28,605 10,218
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 476 $ 28,614
================================================================================
Non-cash transactions:
Exchange of properties, net $ - $ 2,644
================================================================================
Conversion of deferred compensation payable to
restricted stock $ - $ 1,874
================================================================================
Effects of acquisition:
Fair value of assets acquired $ 71,388 $ -
Purchase price in excess of the net assets acquired 32,015 -
Debt issued or assumed in acquisitions (46,137) -
- --------------------------------------------------------------------------------
Cash paid 57,266 -
Less cash acquired (6,665) -
- --------------------------------------------------------------------------------
Net cash paid for acquisition $ 50,601 $ -
================================================================================
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CENTRAL PARKING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1997
(1) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. All
significant inter-company transactions have been eliminated in
consolidation. Operating results for the three and nine months
ended June 30, 1997 are not necessarily indicative of the results
that may be expected for the fiscal year ending September 30, 1997.
For further information, refer to the consolidated financial
statements and footnotes thereto for the year ended September 30,
1996 (included in the Company's Annual Report on Form 10-K).
(a) INITIAL PUBLIC OFFERING
On October 10, 1995, the Company completed an initial public
offering of common stock in which 1,864,500 shares (adjusted for
the three-for-two stock split in March 1996) were sold by the
Company for net proceeds of $20.0 million. In addition, 2,755,500
shares of common stock (adjusted for the three-for-two stock split
in March 1996) were sold by certain shareholders of the Company.
(b) THREE-FOR-TWO STOCK SPLIT
On February 21, 1996, the Board of Directors approved a
three-for-two stock split payable to shareholders of record as of
March 4, 1996. The stock split was distributed on March 19, 1996
resulting in the net issuance of 5,805,816 new shares. Actual
shares outstanding after the split were 17,417,481.
All shares and per share amounts in this report have been adjusted
to reflect the stock split, unless otherwise noted.
(c) EARNINGS PER SHARE
Earnings per share has been computed by dividing net earnings for
each period by the weighted average number of common shares and
common share equivalents outstanding during the applicable period.
Fully diluted per share data is not presented since the effect would
dilute earnings per share by less than three percent (3%).
In February 1997, the Financial Accounting Standards Board issued
SFAS No. 128, "Earnings Per Share". SFAS No. 128 supersedes
Accounting Principles Bulletin (APB) No. 15 and establishes
standards for the computation, presentation, and disclosures
required for earnings per share. SFAS No. 128 replaces the
<PAGE>
presentation of primary earnings per share with a presentation of
basic earnings per share and fully diluted earnings per share with
diluted earnings per share. It also requires dual presentation of
basic and diluted earnings per share on the income statement for all
entities with complex capital structures.
Basic earnings per share excludes dilution and is computed by
dividing income available to common shareholders by the
weighted-average number of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution that
could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the
entity. Diluted earnings per share is computed similarly to fully
diluted earnings per share pursuant to APB No. 15. SFAS No. 128 is
effective for financial statements for both interim and annual
periods ending after December 15, 1997. Earlier application is not
permitted. Upon adoption, all calculations of prior period earnings
per share will be restated to conform with SFAS No. 128.
Pro forma calculations of basic and diluted earnings per share for
the three and nine months ended June 30, 19997 are not presented
since the impact is immaterial.
(2) ACQUISITIONS
(a) CIVIC PARKING, L.L.C.
On December 31, 1996, the Company purchased for cash Civic Parking,
L.L.C. ("Civic Parking"), a limited liability company, which owns
four parking garages in St. Louis: Kiener East, Kiener West,
Stadium East and Stadium West. The four garages, which had
previously been operated by the Company under management agreements,
have a total of 7,464 parking spaces. The purchase price was
approximately $91.0 million which was financed through working
capital and a draw of $67.2 million on the Company's revolving
credit facility (see Long Term Debt). The transaction was accounted
for under the purchase method. The estimated fair value of the
garages at the date of the acquisition was equal to the purchase
price and, accordingly, management has allocated the purchase price
to the land and buildings acquired.
On April 16, 1997, the Company sold 50% of the membership units of
Civic Parking to an affiliate of Equity Capital Holdings, L.L.C. for
$46.0 million in cash. In the initial allocation of the purchase
price, the Company assigned $45.8 million to the membership units
that were sold; consisting of an estimated sale price of $46.0
million and estimated net cash inflows for the holding period of
$638 thousand offset by interest on incremental debt during the
holding period of $801 thousand. The difference between the sales
price of $46.0 million and the amount initially assigned to the
membership units that were sold of $45.8 million, was recorded as an
adjustment to the purchase price of the units retained by the
Company. Accordingly, no gain or loss was recognized. The
membership units retained by the Company have been accounted for in
the accompanying consolidated financial statements under the equity
method and are included in the Company's consolidated financial
statements from December 31, 1996.
<PAGE>
The Company will continue to operate these garages pursuant to a
lease and operating agreement with Civic Parking, L.L.C.
(b) SQUARE INDUSTRIES, INC.
On January 18, 1997, the Company completed a cash tender to acquire
all of the outstanding shares of Square Industries, Inc. ("Square")
for $54.8 million, including transaction fees and other related
expenses. In addition, the Company assumed $23.2 million of existing
Square debt. The purchase price was financed through a draw on the
Company's revolving credit facility (see Long Term Debt). As of
June 30, 1997, the Company has refinanced $18.9 million of the debt
assumed from Square through a draw on the revolving credit facility.
Square operated 116 parking facilities containing over 61,000 spaces
located primarily in the Northeast; New York City 48, Philadelphia
30, Newark 17, Pittsburgh 11, and other cities 10. The Square
acquisition was accounted for under the purchase method and,
accordingly, the results of operations of Square have been included
in the Company's consolidated financial statements from January 18,
1997 and the purchase price has been allocated to Square's assets
and liabilities based on their estimated fair values at the date of
acquisition. The excess of the purchase price over the fair value of
the net assets acquired of $28.6 million is being amortized on a
straight-line basis over 25 years. Purchase price adjustments for
Square are based upon preliminary purchase price allocations. Final
purchase price allocations are not expected to be materially
different from the preliminary allocations.
(c) CAR PARK
On May 29, 1997, the Company acquired the assets and related leases
of Car Park Corporation ("Car Park") for $3.5 million; consisting of
18 parking facilities with approximately 2,600 spaces located in the
San Francisco metropolitan region. The purchase price was financed
through a draw of approximately $1.7 million on the Company's
revolving credit facility, and $1.8 million payable to the seller's
in equal monthly installments over a four year term. The
acquisition was accounted for as a purchase and, accordingly, the
results of operations of Car Park have been included in the
Company's consolidated financial statements from the date of
acquisition.
<PAGE>
(d) PRO FORMA INFORMATION
The following unaudited pro forma condensed results of operations
give effect to the acquisitions of Square, Civic Parking and Car
Park as if such transactions had occurred at the beginning of each
period presented (in thousands except for earnings per share):
Nine Months Ended June 30,
1997 1996
------------------------------
Total revenues $181,227 $158,138
Earnings before income taxes 22,410 19,439
Net earnings 13,981 12,079
Earnings per share 0.79 0.69
Weighted average common shares
and common share equivalents 17,615 17,446
The foregoing unaudited pro forma condensed statements of operations
give effect to, among other pro forma adjustments, the following:
(i) Interest expense on debt incurred to finance the acquisitions.
(ii) Amortization over 25 years of the excess of cost over net
assets acquired related to the Square and Car Park
acquisitions.
(iii) Depreciation and amortization adjustments related to the
fair value of assets acquired.
(iv) Recognition of the effect of estimated cost savings
relating to general and administrative expenses, including
excess personnel, to be eliminated prospectively in
connection with the Square acquisition.
(v) Elimination of the effect of Square's historical costs
directly related to Square's sale to the Company,
scheduled amortization of deferred expenses and financing
costs, and the write off of deferred financing costs
directly related to the acquisition.
(vi) Adjustments to income tax expense related to the above.
(3) LONG TERM DEBT
The Company financed the acquisitions noted above from current
working capital and borrowings against a $120 million revolving
credit facility (the "Acquisition Facility") with a commercial
bank.
The Acquisition Facility, which is unsecured, expires January 31,
2000, provided that the Lenders may extend the term until January
31, 2001, upon the request of the Company. Revolving loans under
the Acquisition Facility bear interest at one of two rates, at the
Company's option, either (i) the bank's base rate or (ii) the LIBOR
plus a margin ranging from .25% to 1.25% depending on the
occurrence of certain dates or events, achievement of certain
financial ratios and the Company's senior unsecured debt rating
from Standard and Poor's or Moody's. In accordance with the loan
<PAGE>
agreement, the Company permanently reduced the Acquisition Facility
from $150 million to $120 million as of April 16, 1997. The
Company anticipates that the borrowings under the Acquisition
Facility will be repaid out of cash flow, a refinancing, or the
proceeds of a debt or equity offering. The Acquisition Facility
contains certain covenants which require the Company and its
subsidiaries to maintain certain financial ratios and restrict
further indebtedness. The amount outstanding at June 30, 1997 of
$78.3 million is reflected as long term debt on the accompanying
condensed consolidated balance sheets. Such debt had a 7.2%
weighted average interest rate for the nine months ended June 30,
1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------
THREE MONTHS ENDED JUNE 30,1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
Parking revenues for the third quarter of fiscal 1997 increased to $49.2
million from $28.8 million in the third quarter of fiscal 1996, an
increase of $20.4 million or 70.8%. Of the $20.4 million increase,
$13.0 million resulted from the addition of 76 leased and owned Square
locations, and $7.4 million is attributable to an additional net
increase of 101 leased and owned locations over the same quarter last
year. Revenues from foreign operations increased to $5.3 million from
$3.7 million. The increase in foreign revenues was primarily due to the
net addition of 18 facilities in the United Kingdom..
Management contract revenue for the third quarter of fiscal 1997
increased to $10.8 million from $8.7 million in the third quarter of
fiscal 1996, an increase of $2.1 million or 24.6%. The increase
consists of $1.1 million resulting from the addition of 40 Square
contracts and $1.0 million attributable to an additional net increase of
81 management contracts over the same period last year.
Cost of parking for the third quarter of fiscal 1997 increased to $43.1
million from $25.7 million in the third quarter of fiscal 1996, an
increase of $17.4 million or 67.7%. Of the $17.4 million increase,
$11.0 million resulted from the addition of 76 leased and owned Square
locations, and $6.4 million is attributable to an additional net
increase of 101 leased and owned locations over the same quarter last
year. Rent and payroll expenses represented $14.2 million of the $17.4
million increase which was attributable to the increase in owned and
leased facilities from 563 to 740. The decrease in cost of parking as a
percentage of parking revenue to 87.7% in the third quarter of fiscal
1997 from 89.2% for the same period in fiscal 1996 resulted primarily
from lower rent expense as a percentage of parking revenues attributable
to the Square facilities.
Cost of management contracts for the third quarter of fiscal 1997
increased to $3.5 million from $2.4 million for the third quarter of
fiscal 1996, an increase of $1.1 million or 43.7%. This increase
reflects higher employment taxes and insurance costs associated with the
increase from 751 to 872 management locations.
<PAGE>
General and administrative expenses increased to $5.7 million for the
third quarter of 1997 from $4.5 million for the third quarter of fiscal
1996, an increase of $1.2 million or 27.1%. Of the $1.2 million
increase, $700 thousand is attributable to increased general and
administrative expenses resulting from the addition of Square, $289
thousand is goodwill amortization arising from the acquisitions of
Square and Car Park, and $213 thousand is attributable to increased
overhead resulting from corporate office expansion. General and
administrative expenses were, as a percentage of revenues, 9.5% for the
third quarter of fiscal 1997 compared to 12.0% for the third quarter of
fiscal 1996, a decrease of 2.5% as a percentage of revenues. The
decrease resulted from spreading fixed expenses over a larger revenue
base which was primarily attributable to the addition of Square
facilities.
Interest income decreased to $341 thousand for the third quarter of
fiscal 1997 from $566 thousand for the third quarter of fiscal 1996, a
decrease of $225 thousand or 39.8%. Interest expense for the third
quarter of fiscal 1997 was $1.6 million compared to $0 for the third
quarter of fiscal 1996. The increase in interest expense resulted
primarily from borrowings against the Company's revolving credit
facility. The reduction in interest income resulted from reduced
investment balances. The reduced investment balances and borrowings
against the revolving credit facility were attributable to funding the
acquisitions noted above.
There were no material gains from sales of property and equipment for
the third quarter of fiscal 1997 or fiscal 1996.
Equity in partnership and joint venture earnings increased to $1.8
million for the third quarter of fiscal 1997 compared to $233 thousand
for the same period in 1996. The increase is primarily attributable to
earnings from Civic Parking of $1.4 million.
Income taxes increased to $3.0 million in the third quarter of fiscal
1997 compared to $2.0 million for the same period in 1996, an increase
of $1.0 million or 51.3%. The effective tax rate for the 1997 quarter
was 36.0% compared to 34.6% for the 1996 quarter. The increase in
effective tax rate is primarily attributable to a decrease in income
from tax exempt investments and non-deductible expenses arising from the
amortization of intangible assets in the 1997 quarter compared to the
1996 quarter.
NINE MONTHS ENDED JUNE 30,1997 COMPARED TO NINE MONTHS ENDED JUNE 30, 1996
Parking revenues for the first nine months of fiscal 1997 increased to
$127.0 million from $81.6 million in the first nine months of fiscal
1996, an increase of $45.4 million or 55.7%. Of the $45.4 million
increase, $26.1 million resulted from the addition of 76 leased and
owned Square locations, and $19.3 million is attributable to an
additional net increase of 101 leased and owned locations over the same
period last year. Revenues from foreign operations increased to $13.4
million from $9.6 million. The increase in foreign revenues was
primarily due to the net addition of 18 facilities in the United
Kingdom.
<PAGE>
Management contract revenue for the first nine months of fiscal 1997
increased to $30.4 million from $24.9 million in the first nine months
of fiscal 1996, an increase of $5.5 million or 22.2%. The increase
consists of $2.4 million resulting from the addition of 40 Square
contracts and $3.1 million attributable to an additional net increase of
81 management contracts over the same period last year.
Cost of parking for the first nine months of fiscal 1997 increased to
$111.6 million from $73.2 million in the first nine months of 1996, an
increase of $38.4 million or 52.5%. Of the $38.4 million increase, $21.4
million resulted from the addition of 76 leased and owned Square
locations, and $17.0 million is attributable to an additional net
increase of 101 leased and owned locations over the same period last
year. Rent, property taxes and payroll expenses represented $32.3
million of the $38.4 million increase which was attributable to the
increase in owned and leased facilities from 563 to 740. The decrease
in cost of parking as a percentage of parking revenue to 87.9% for the
first nine months of fiscal 1997 from 89.7% for the same period in 1996
resulted primarily from lower rent expense as a percentage of parking
revenues attributable to the Square facilities.
Cost of management contracts for the first nine months of fiscal 1997
increased to $9.2 million from $7.6 million for the first nine months of
fiscal 1996, an increase of $1.6 million or 19.9%. This increase
reflects higher employment taxes and insurance costs associated with the
increase from 751 to 872 management locations.
General and administrative expenses increased to $16.7 million for the
first nine months of 1997 from $13.0 million for the first nine months
of fiscal 1996, an increase of $3.7 million or 28.0%. Of the $3.7
million increase, $1.5 million is primarily attributable to increased
general and administrative expenses resulting from the addition of
Square, $522 thousand is goodwill amortization arising from the
acquisitions of Square and Car Park, and $1.7 million is attributable to
increased overhead resulting from corporate office expansion. General
and administrative expenses were, as a percentage of revenues, 10.6% for
the nine months of 1997 compared to 12.2% for the nine months of 1996, a
decrease of 1.6% as a percentage of revenues. The decrease resulted
from spreading fixed expenses over a larger revenue base which was
primarily attributable to the addition of Square facilities.
Interest income decreased to $1.2 million for the first nine months of
fiscal 1997 from $1.7 million for the first nine months of fiscal 1996,
a decrease of $479 thousand or 28.4%. Interest expense for the first
nine months of fiscal 1997 was $2.9 million compared to $0 for the same
period in fiscal 1996. The increase in interest expense resulted from
borrowings against the Company's revolving credit facility. The
reduction in interest income resulted from reduced investment balances.
The reduced investment balances and borrowings against the revolving
credit facility were attributable to funding the acquisitions noted
above.
There were no material gains from sales of property and equipment for
the first nine months of fiscal 1997 compared to a gain of $1.2 million
for the same period in fiscal 1996. The gain in 1996 was primarily from
the condemnation of a property in January, 1994 that was in dispute and
settled during the first quarter of fiscal 1996.
<PAGE>
Equity in partnership and joint venture earnings increased to $3.0
million for the first nine months of fiscal 1997 compared to $462
thousand for the same period in 1996, an increase of $2.5 million. The
increase is primarily attributable to earnings from Civic Parking of
$2.0 and an increase in earnings from $58 thousand to $291 thousand
attributable to the joint venture in Mexico.
Income taxes increased to $7.6 million in the first nine months of
fiscal 1997 compared to $5.5 million for the same period in 1996, an
increase of $2.1 million or 38.3%. The effective tax rate for the first
nine months of fiscal 1997 was 36.0% compared to 34.7% for the same
period in 1996. The increase in effective tax rate is primarily
attributable to a decrease in income from tax exempt investments and
non-deductible expenses arising from the amortization of intangible
assets in the first nine months of fiscal 1997 compared to the same
period in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for the first nine months of
fiscal 1997 was $5.1 million, a decrease of $10.4 million from the net
cash of $15.5 million provided by operating activities during the same
period in fiscal 1996. The primary factors which contributed to this
decrease were changes in various working capital components, partially
offset by increased net earnings.
Net cash used in investing activities was $92.5 million for the first
nine months of fiscal 1997. The acquisitions of Square and Car Park
totaled $50.6 million; investments in general partnerships, primarily
Civic Parking, were $43.4 million; and property and equipment purchases
represented $6.2 million. These investment activities were partially
offset by the sale of a property for $9.3 million that was acquired in
the Square transaction. No gain or loss was recognized on the sale of
the Square property.
Net cash provided by financing activities for the first nine months of
fiscal 1997 was $59.0 million. Net borrowings from the Company's
revolving credit facility represented $78.3 million which was used to
fund, in part, the acquisitions of Square, Civic Parking and Car Park
and to refinance $18.9 million of debt assumed in the acquisition of
Square.
Depending on the timing and magnitude of the Company's future
investments (either in the form of lease or purchase of parking
properties, joint ventures, or acquisitions), the working capital
necessary to satisfy current obligations is anticipated to be generated
from operations and the revolving credit facility. On March 24, 1997,
the Company filed a registration statement with the Securities Exchange
Commission registering an additional 3.3 million shares of Common Stock.
The Company has not determined if it will proceed with the offering of
such Common Stock. If the Company identifies investment opportunities
requiring cash in excess of the Company's cash flows and the existing
credit facility, the Company may seek additional sources of capital,
including the sale or issuance of Common Stock.
ACQUISITION FACILITY
The Acquisition Facility, which is unsecured, expires January 31, 2000,
<PAGE>
provided that the Lenders may extend the term until January 31, 2001,
upon the request of the Company. Revolving loans under the Acquisition
Facility bear interest at one of two rates, at the Company's option,
either (i) the bank's base rate or (ii) the LIBOR plus a margin ranging
from .25% to 1.25% depending on the occurrence of certain dates or
events, achievement of certain financial ratios and the Company's senior
unsecured debt rating from Standard and Poor's or Moody's. In accordance
with the loan agreement, the Company permanently reduced the Acquisition
Facility from $150 million to $120 million as of April 16, 1997. The
Company anticipates that the borrowings under the Acquisition Facility
will be repaid out of cash flow, a refinancing, or the proceeds of a
debt or equity offering. The Acquisition Facility contains certain
covenants which require the Company and its subsidiaries to maintain
certain financial ratios and restrict further indebtedness. As of June
30, 1997 the Company had $78.3 million outstanding, and $40.4 million
available for borrowing, under the Acquisition Facility.
<PAGE>
PART II
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The exhibits filed as a part of this report are listed
in the exhibit index immediately following the signature
page.
(b) REPORTS ON FORM 8-K
The Company filed a Current Report on Form 8-K on April
30, 1997 in relation to the disposition of 50% of Civic
Parking, L.L.C. This report included Item 2 and Item 7.
Financial information presented under Item 7 included
pro forma financial information for Central Parking
Corporation.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
CENTRAL PARKING CORPORATION
Date: August 13, 1997 By: /s/ Stephen A. Tisdell
Stephen A. Tisdell
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant in the capacities and on the dates indicated.
Signature Title Date
/s/ Stephen A. Tisdell Chief Financial Officer August 13, 1997
Stephen A. Tisdell (Principal Financial and
Accounting Officer)
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT
2.1 Agreement for Sale and Purchase of Membership Interests, dated
as of November 22, 1996, by and among Central Parking System
Realty, Inc., Central Parking System Realty of Missouri, Inc. ,
Gateway Group, Inc., and SLC Holdings, L.L.C. (Incorporated by
reference herein to Exhibit 2.2 to the Company's Current Report
on Form 8-K as filed on January 14, 1997)
2.2 Agreement and Plan of Merger dated as of December 6, 1996, by
and among Central Parking Corporation, Central Parking System --
Empire State, Inc., and Square Industries, Inc. (incorporated by
reference to Exhibit (c)(1) to the Company's Tender Offer
Statement on Schedule 14D-1 filed by Central Parking Corporation
on December 13, 1996)
2.3 Agreement for Purchase and Sale of Membership Interests, dated
as of April 16, 1997, by and among EOP-St. Louis Parking
Garages, L.L.C. and Central Parking System Realty of Missouri,
Inc. (Incorporated by reference herein to Exhibit 2.3 to the
Company's Current Report on Form 8-K as filed on April 30, 1997)
3 Amended and Restated Charter of Central Parking Corporation
restated to incorporate the Amendment adopted February 28, 1997
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement No. 333-23869 on Form S-3 as filed on
March 23, 1997)
10.1 Form of $150,000,000 Credit Agreement Dated December 12, 1996 by
and among various banks with SunTrust Bank, Nashville, N.A. as
Agent, and Central Parking Corporation and certain of its
subsidiaries (incorporated by reference to the Company's Tender
Offer Statement on Schedule 14D-1 as filed on December 13, 1996)
10.2 First Amendment to Credit Agreement dated August 13, 1997 by and
among various banks with SunTrust Bank, Nashville, N.A. as Agent
and Central Parking Corporation and certain subsidiaries
27 Financial Data Schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000949298
<NAME> CENTRAL PARKING CORPORATION
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<CASH> 476 476
<SECURITIES> 0 0
<RECEIVABLES> 17383 17383
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 25532 25532
<PP&E> 90586 90586
<DEPRECIATION> 2935 2935
<TOTAL-ASSETS> 221859 221859
<CURRENT-LIABILITIES> 35676 35676
<BONDS> 0 0
0 0
0 0
<COMMON> 175 175
<OTHER-SE> 90266 90266
<TOTAL-LIABILITY-AND-EQUITY> 221859 221859
<SALES> 60030 157378
<TOTAL-REVENUES> 62183 161606
<CGS> 46594 120768
<TOTAL-COSTS> 52324 137434
<OTHER-EXPENSES> 5730 16666
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1617 2937
<INCOME-PRETAX> 8242 21235
<INCOME-TAX> 2967 7645
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 5275 13590
<EPS-PRIMARY> .30 .77
<EPS-DILUTED> .30 .77
</TABLE>
EXHIBIT NUMBER 10.2
FIRST AMENDMENT TO CREDIT AGREEMENT
ENTERED INTO by and between CENTRAL PARKING CORPORATION,
a Tennessee corporation ("CPC"), CENTRAL PARKING SYSTEM, INC., a
Tennessee corporation ("CPS"), and CENTRAL PARKING SYSTEM REALTY, INC.,
a Tennessee corporation ("CPSR") (herein CPC, CPS, and CPSR are jointly
and severally referred to as "Borrower"), SUNTRUST BANK, NASHVILLE,
AGENT in its capacity as agent for the Lenders (the "Agent"), and
SUNTRUST BANK, NASHVILLE, N.A. ("STB"), NATIONSBANK OF TENNESSEE, N.A.
("NBT"), TEXAS COMMERCE BANK, NATIONAL ASSOCIATION ("TCB"), FIRST UNION
NATIONAL BANK OF TENNESSEE ("FUNB"), FIRST AMERICAN NATIONAL BANK
("FANB"), and AMSOUTH BANK OF TENNESSEE ("ABT") (herein STB, NBT, TCB,
FUNB, FANB, and ABT shall be collectively referred to as "Lenders") as
of this 13th day of August, 1997.
RECITALS:
1. Borrowers, Agent, and Lenders are parties to a Credit Agreement
dated as of December 12, 1996 (the "Credit Agreement").
2. The Borrowers, Agent, and Lenders desire to amend the Credit
Agreement as provided herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the parties hereto agree as follows:
1. The definition of "Maximum Total Amount" as set forth in Article I
of the Credit Agreemen shall be amended and restated as follows:
"MAXIMUM TOTAL AMOUNT" means the principal amount of $120,000,000
less the aggregate face amount of all outstanding Letters of Credit,
less the aggregate outstanding principal amount of the Swing Line Note.
2. Section 2.01(c) of the Credit Agreement is hereby deleted.
3. Section 2.15 of the Credit Agreement is amended and restated in its
entirety as follows:
Section 2.15 COMMITMENT FEE. Commencing on September 30, 1997 and
on the last day of each Fiscal Quarter thereafter (or if the last day of
the Fiscal Quarter is not a Business Day, then on the next succeeding
Business Day) and on the Maturity Date, the Borrowers shall pay to the
Agent on or before 1:00 P.M. (Nashville, Tennessee time) for
distribution to the Lenders based on their Pro Rata Share a Commitment
Fee equal to: (a) the average unused portion of the Revolving Credit
Loan (less the face amount of Letters of Credit outstanding during such
time period issued by Agent pursuant to Section 2.02 herein) for the
preceding Fiscal Quarter (or portion thereof), multiplied by (b) the
Commitment Fee Percentage determined in accordance with the table below.
The Commitment Fee shall be calculated based on a year of 360 days for
the actual number of days in each year.
<PAGE>
The Commitment Fee Percentage shall be determined by reference to
the corresponding calculation of the Applicable Margin as shown below.
The commitment Fee Percentage shall change upon any correspondfing
change in Applicable Margin.
APPLICABLE MARGIN COMMITMENT FEE PERCENTAGE
----------------- -------------------------
1.250% .325%
1.000% .275%
.750% .225%
.625% .1875%
.500% .150%
.375% .125%
.250% .100%
4. Section 6.14(a) of the Credit Agreement is amended and restated as follows:
(a) Acquisitions for a value of $25,000,000 or less of Property to be owned
by any of the Borrowers, or acquisitons for a value of $25,000,000 or
less of any Person to be a wholly-owned Subisdiary of any of the
Borrowers; or
5. Section 7.01(f) of the Credit Agreement is amended and restated as follows:
(f) Unsecured indebtedness (direct or contingent) to others in
excess of $20,000,000; and
6. The Credit Agreement is not amended in any other respect.
7. The Borrowers represent that no Event of Default or Default
Condition has occurred under the Credit Agreement. The Borrowers
agree that their obligations under the Credit Agreement, as
amended, are their joint and several obligations, binding and
enforceable in accordance with their terms, subject to no defense,
counterclaim, or objection.
ENTERED INTO as of the date first above written.
BORROWERS:
CENTRAL PARKING CORPORATION
CENTRAL PARKING SYSTEM, INC.
CENTRAL PARKING SYSTME REALTY SYSTEM, INC.
AGENT:
SUNTRUST BANK, NASHVILLE, N.A., AGENT
LENDERS:
SUNTRUST BANK, NASHVILLE, N.A., AGENT
NATIONSBANK OF TENNESSEE, N.A.
TEXAS COMMERCE BANK, NATIONAL ASSOCIATION
FIRST UNION NATIONAL BANK OF TENNESSEE
FIRST AMERICAN NATIONAL BANK
AMSOUTH BANK OF TENNESSEE
