FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 13 or 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
CENTRAL PARKING CORPORATION
(Exact name of registrant as specified in charter)
AMENDMENT
The undersigned registrant hereby ammends the following items, financial
statements, exhibits or other portions of its current report dated
January 31, 1997 related to the acquisition of Square Industries, Inc.
on Form 8-K as set forth in the pages attached hereto:
Item 7 (a) FINANCIAL STATEMENTS OF SQUARE INDUSTRIES, INC.
Independent Auditors' Report
Consolidated Balance Sheets as of December 31, 1996 and 1995
Consolidated Statements of Operations for the Years ended
December 31, 1996 and 1995 and the ten months ended
December 31, 1994
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1996 and 1995, and the Ten-Month
Period Ended December 31, 1994
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1996 and 1995, and the Ten-Month Period
Ended December 31, 1994
Notes to Financial Statements
Item 7 (b) PRO FORMA FINANCIAL STATEMENTS
Pro Forma Condensed Consolidated Balance Sheet at
December 31, 1996
Pro Forma Condensed Consolidated Statement of Earnings for
the Year Ended September 30, 1996 and Quarter Ended December
31, 1996
Notes to Consolidated Pro Forma Financial Information
<PAGE> 1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amnedment to be signed on its behalf
by the undersigned, thereunto duly authorized.
CENTRAL PARKING CORPORATION
(Registrant)
March 17, 1997 By:/s/ Stephen A. Tisdell
Stephen A. Tisdell
Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE> 2
ITEM 7 (a) FINANCIAL STATEMENTS OF SQUARE INDUSTRIES INC.
SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
Financial Statements as of
December 31, 1996 and 1995 (as restated)
and for the Years Then Ended, and the
Ten-Month Period Ended December 31, 1994
(as restated), and Independent Auditors' Report
----------------------------------------------------------
CONTENTS
----------------------------------------------------------
Independent Auditors' Report [ 1 ]
Consolidated Balance Sheets as of
December 31, 1996 and 1995 [ 2 ]
Consolidated Statements of Operations
for the Years Ended December 31, 1996
and 1995 and the Ten-Month Period Ended
December 31, 1994 [ 3 ]
Consolidated Statements of Stockholders'
Equity for the Years Ended December 31,
1996 and 1995, and the Ten-Month Period
Ended December 31, 1994 [ 4 ]
Consolidated Statements of Cash Flows
for the Years Ended December 31, 1996
and 1995, and the Ten-Month Period
Ended December 31, 1994 [ 5 ]
Notes to Consolidated Financial Statements
for the Years Ended December 31, 1996
1995 and the Ten-Month Period Ended
December 31, 1994 [6-19]
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
Board of Directors
Square Industries, Inc.
Jersey City, New Jersey
We have audited the accompanying consolidated balance sheets of Square
Industries, Inc. and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the years then ended and for the ten-month period ended December 31,
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Square Industries, Inc. and
subsidiaries as of December 31, 1996 and December 31, 1995, and the results of
their operations and their cash flows for the years then ended and for the ten-
month period ended December 31, 1994, in conformity with generally accepted
accounting principles.
As discussed in Note 14, the accompanying 1995 and 1994 consolidated financial
statements have been restated.
March 11, 1997
[Page 1 of 19]
<PAGE> 4
SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
1996 1995
(as restated)
--------------- ---------------
ASSETS
CURRENT ASSETS:
Cash $ 2,266,153 $ 1,532,909
Trade and other receivables 1,586,028 1,346,172
Prepaid expenses 2,619,411 2,804,090
Other current assets 445,434 478,707
Deferred tax asset 419,000 -
Refundable income taxes 48,066 134,841
--------------- ---------------
Total current assets 7,384,092 6,296,719
--------------- ---------------
PROPERTY, EQUIPMENT AND IMPROVEMENTS-Net 30,098,200 24,633,189
--------------- ---------------
OTHER ASSETS:
Deferred tax asset 2,464,000 1,400,533
Deferred expenses 1,949,132 2,571,347
Security deposits and other assets 3,198,484 2,319,791
--------------- ---------------
7,611,616 6,291,671
--------------- ---------------
$ 45,093,908 $ 37,221,579
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,169,875 $ 1,448,940
Accrued expenses 9,676,166 4,917,352
Accrued local rent tax 2,025,510 1,251,508
Current portion of long-term debt 3,762,449 785,409
Deferred tax liability - 105,000
Other liabilities 372,875 464,772
--------------- ---------------
Total current liabilities 17,006,875 8,972,981
--------------- ---------------
DEFERRED RENT 3,629,447 3,247,454
--------------- ---------------
LONG-TERM DEBT, LESS CURRENT PORTION 19,418,865 18,474,052
--------------- ---------------
SECURITY DEPOSITS - Customers 329,866 291,716
--------------- ---------------
COMMITMENTS AND CONTIGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value;
authorized, 2,000,000 shares;
issued, 1,252,889 and
1,218,389 shares 12,529 12,184
Additional paid-in capital 3,407,565 3,278,004
Retained earnings 1,736,166 3,424,670
--------------- ---------------
5,156,260 6,714,858
Less:
Treasury stock at cost, 52,033 shares 235,757 235,757
Cumulative translation adjustment 211,648 243,725
--------------- ---------------
4,708,855 6,235,376
--------------- ---------------
$ 45,093,908 $ 37,221,579
=============== ===============
See notes to consolidated financial statements.
[Page 2 of 19]
<PAGE> 5
SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995, AND THE
TEN-MONTH PERIOD ENDED DECEMBER 31, 1994
Ten-Month
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
1996 1995 1994
(as restated) (as restated)
------------ ------------ ------------
PARKING SERVICE REVENUE $ 63,426,212 $ 61,772,058 $ 50,935,794
SERVICE STATION REVENUE 4,442,925 4,158,992 3,494,337
------------ ------------ ------------
Total revenues 67,869,137 65,931,050 54,430,131
------------ ------------ ------------
COSTS AND EXPENSES:
Cost of parking services 51,710,277 49,947,616 42,317,870
Operating costs - service station 4,412,189 4,176,053 3,543,497
General and administrative expenses 8,781,477 7,471,389 5,910,695
Provision for local rent tax 760,000 60,000 50,000
Interest 1,295,686 1,890,052 1,528,754
Write-down of assets 964,070 315,598 124,168
Expenses related to sale
of the Company 2,863,795 - -
Reimbursement of previously
incurred fixed costs (1,049,292) - -
------------ ------------ ------------
Total costs and expenses 69,738,202 63,860,708 53,474,984
------------ ------------ ------------
(LOSS) EARNINGS FROM PARKING AND
SERVICE STATION OPERATIONS (1,869,065) 2,070,342 955,147
GAIN FROM LITIGATION SETTLEMENT 650,708 - -
------------ ------------ ------------
(LOSS) EARNINGS BEFORE INCOME TAXES (1,218,357) 2,070,342 955,147
PROVISION (BENEFIT) FOR INCOME TAXES 470,147 (142,340) 291,627
------------ ------------ ------------
NET (LOSS) EARNINGS $ (1,688,504) $ 2,212,682 $ 663,520
(LOSS) EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary $ (1.43) $ 1.73 $ 0.55
============ ============ ============
Assuming full dilution $ (1.43) $ 1.49 $ 0.51
============ ============ ============
SHARES USED IN COMPUTING EARNINGS
PER COMMON AND COMMON
EQUIVALENT SHARE:
Primary 1,180,842 1,281,866 1,205,352
============ ============ ============
Assuming full dilution 1,180,842 1,481,866 1,293,882
============ ============ ============
See notes to consolidated financial statements.
[Page 3 of 19]
<PAGE> 6
SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS YEAR ENDED DECEMBER 31, 1996 AND 1995, AND THE
TEN-MONTH PERIOD ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Common Additional Notes Cumulative
Common Stock Paid-in Retained Treasury Receivable Translation
Stock Subscribed Capital Earnings Stock for Stock Adjustment Total
-------- ---------- ----------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
MARCH 1, 1994 (as restated) $12,055 $ 118,750 $ 3,157,957 $ 548,468 $ (59,375) $(118,750) $(190,389) $3,468,716
Exercise of stock options 2 - 711 - - - - 713
Net earnings (as restated) - - - 663,520 - - - 663,520
Translation
adjustment - - - - - - (16,401) (16,401)
-------- ---------- ----------- ----------- ---------- ----------- ----------- ----------
BALANCE,
DECEMBER 31, 1994
(as restated) 12,057 118,750 3,158,668 1,211,988 (59,375) (118,750) (206,790) 4,116,548
Issuance of subscribed
stock in exchange for
treasury stock 125 (118,750) 118,625 - (176,382) 118,750 - (57,632)
Exercise of stock options 2 - 711 - - - - 713
Net earnings (as restated) - - - 2,212,682 - - - 2,212,682
Translation adjustment - - - - - - (36,935) (36,935)
-------- ---------- ----------- ----------- ---------- ----------- ----------- ----------
BALANCE, DECEMBER 31, 1995
(as restated) 12,184 - 3,278,004 3,424,670 (235,757) - (243,725) 6,235,376
Exercise of stock options 345 - 129,561 - - - - 129,906
Net loss - - - (1,688,504) - - - (1,688,504)
Translation adjustment - - - - - - 32,077 32,077
-------- ---------- ----------- ----------- ---------- ----------- ----------- ----------
BALANCE, DECEMBER 31, 1996 $12,529 $ - $3,407,565 $ 1,736,166 $(235,757) $ - $(211,648) $4,708,855
======== ========== =========== =========== ========== =========== =========== ==========
</TABLE>
See notes to consolidated financial statements.
[Page 4 of 19]
<PAGE> 7
SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995, AND THE
TEN-MONTH PERIOD ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION> Ten-Month
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
1996 1995 1994
(as restated) (as restated)
-------------- --------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) earnings $(1,688,504) $ 2,212,682 $ 663,520
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Amortization of:
Deferred expenses 44,794 38,341 27,984
Lease acquisition costs 30,408 17,399 54,100
Excess of cost over fair market value of net
assets acquired - - 71,037
Depreciation and amortization 1,467,275 1,509,845 1,379,844
Deferred tax asset (1,482,467) (1,075,533) 509,000
Reversal of accrued expense - (410,000) -
Write-down of assets 964,070 315,598 124,168
Equity adjustment for foreign currency translation 32,077 (36,935) (16,401)
Increase (decrease) in cash from changes in
assets and liabilities:
Trade and other receivables (239,856) (564,807) 460,086
Prepaid expenses and other current assets (133,355) (1,151,872) 356,735
Refundable income taxes 86,775 218,000 287,472
Deferred expenses - net 115,346 (1,719,583) 26,110
Security deposits and other assets (878,693) (387,829) (253,224)
Accounts payable, accrued expenses, accrued
local rent tax, deferred tax liability and
other liabilities 5,056,854 883,630 (758,652)
Deferred rent 381,993 814,311 (248,581)
Security deposits - customers 38,150 34,761 19,404
-------------- --------------- --------------
Net cash provided by operating activities 3,794,867 698,008 2,702,602
-------------- --------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, equipment and improvements (7,113,382) (1,382,746) (990,098)
-------------- --------------- --------------
Net cash used in investing activities (7,113,382) (1,382,746) (990,098)
-------------- --------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 4,833,985 2,223,000 5,510,000
Payments of long-term debt (912,132) (1,231,919) (8,227,338)
Proceeds from exercise of stock options 129,906 713 713
-------------- --------------- --------------
Net cash provided by (used in)
financing activities 4,051,759 991,794 (2,716,625)
-------------- --------------- --------------
NET INCREASE (DECREASE) IN CASH 733,244 307,056 (1,004,121)
CASH, BEGINNING OF PERIOD 1,532,909 1,225,853 2,229,974
-------------- --------------- --------------
CASH, END OF PERIOD $ 2,266,153 $ 1,532,909 $ 1,225,853
============== =============== ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 1,647,876 $ 1,629,761 $ 1,505,995
============== =============== ==============
Income taxes-net of refunds received $ 2,014,124 $ 566,236 $ 15,000
============== =============== ==============
</TABLE>
See notes to consolidated financial statements.
[Page 5 of 19]
<PAGE> 8
SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 AND THE
TEN-MONTH PERIOD ENDED DECEMBER 31, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BUSINESS SEGMENT INFORMATION AND PRINCIPLES OF CONSOLIDATION - Square
Industries, Inc. and its subsidiaries (collectively, the "Company") are
engaged in the operation and management of parking lots and garages, and
a self-service gasoline station. The consolidated financial statements
include the accounts of the Company and its subsidiaries, all of which
are wholly-owned. All intercompany accounts and transactions have been
eliminated. Certain reclassifications have been made to prior years
financial statements to conform to the current year presentation.
b. BASIS OF PRESENTATION - Effective March 1, 1994, the Company changed its
fiscal year-end from the last day in February to December 31. As a
result, the financial statements include the consolidated operations of
the Company for the ten-month period ended December 31, 1994. The
operating results for the year ended December 31, 1994 are set forth
below:
1994
(Unaudited)
--------------
Parking service revenue $ 59,797,708
Service station revenue 4,072,910
--------------
Total revenues 63,870,618
--------------
Costs and expenses:
Cost of parking services 51,194,662
Operating costs - service station 4,115,099
General and administrative expenses 7,080,318
Provision for local rent tax 60,000
Interest 1,793,162
Write-down of assets 601,797
--------------
Total costs and expenses 64,845,038
--------------
Loss from parking and service
station operations (974,420)
Provision for income taxes 221,627
--------------
Net loss $ (1,196,047)
==============
Net loss per share $ (1.00)
==============
Shares used in computation 1,192,820
==============
[Page 6 of 19]
<PAGE> 9
c. ALLOWANCE FOR DOUBTFUL ACCOUNTS - The Company records provisions for
trade and other receivables when, in the opinion of management, they are
not collectible. Due to the nature of the Company's operations, no
provision for doubtful accounts was required at December 31, 1996 and
1995.
d. DEPRECIATION AND AMORTIZATION - Leasehold costs, improvements and
equipment, carried at cost, are amortized or depreciated over the
estimated useful lives of the related assets. The useful lives are three
to seven years for equipment and the life of the lease or ten years,
whichever is less, for leasehold costs and improvements. Buildings are
depreciated over a life of twenty-five years. Depreciation and
amortization expense is computed by the straight-line method.
e. DEFERRED EXPENSES - Deferred expenses represent commissions, legal fees
and lease acquisition costs in connection with the acquisition of certain
parking lot leases and fees paid in connection with the Company's debt
agreements. These expenses are being amortized over the lives of such
leases and debt agreements, respectively. In the year ended December 31,
1996, an additional $612,230 of deferred fees paid in connection with the
Company's debt agreements have been charged to expense as the related
debt outstanding was paid off in January 1997.
f. INCOME TAXES - The Company and its subsidiaries file a consolidated
federal income tax return.
Under Statement of Financial Accounting Standards (SFAS) No. 109
"Accounting for Income Taxes", deferred tax assets/liabilities are
recorded for revenue and expense items which are recognized for tax
purposes in years other than those in which they are reported in the
consolidated financial statements. Deferred income taxes are reflected
in the consolidated financial statements for these temporary differences.
g. WRITE-DOWN OF ASSETS - For parking locations which experience poor
operating results and, in the estimate of management, there is no or
little reasonable expectation for improvement of a magnitude to permit
recovery of the related deferred expenses, lease acquisition costs and
fixed assets, these assets are written down to their fair value. The
carrying value would be reduced if it is probable that management's best
estimate of future cash flow from the related operations over the
remaining depreciation or amortization period will be less than the
carrying amount of the deferred expenses, lease acquisition costs and
fixed assets.
h. (LOSS) EARNINGS PER SHARE - Primary (loss) earnings per common and common
equivalent share and (loss) earnings per common and common equivalent
share assuming full dilution are computed using the weighted average
number of shares outstanding adjusted for the incremental shares
attributed to outstanding options and warrants to purchase common stock.
i. USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
[Page 7 of 19]
<PAGE> 10
j. RECENTLY ISSUED ACCOUNTING STANDARDS - During the fourth quarter of 1995,
the Financial Accounting Standards Board issued SFAS No. 123, "
Accounting for Stock-Based Compensation," which was effective for the
Company's fiscal year beginning January 1, 1996. The Company has elected
to continue to use the intrinsic value based method prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees." In accordance with SFAS No. 123, the Company provides pro
forma disclosure of net (loss) earnings and net (loss) earnings per share
as if the fair value based method had been applied.
Management periodically evaluates recoverability of long-lived assets
based upon current and forecasted net earnings. The Company adopted SFAS
No. 121, " Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed of," which was issued in March 1995 and
was effective for the Company as of January 1, 1996. Adoption of SFAS
No. 121 had no impact on the Company's financial statements.
k. FAIR VALUE OF FINANCIAL INSTRUMENTS - The Company's financial instruments
consist of trade accounts receivable, other receivables, accounts
payable, and long-term debt comprising notes payable, credit facilities,
notes payable to officers and mortgages payable. The Company's financial
instruments are carried in the balance sheet at amounts which approximate
fair value, except for long-term debt disclosed in Note 5 whose fair
value at December 31, 1995 was approximately $19,657,000, as determined
by discounting the expected cash flows of the obligation by an assumed
market discount rated at the end of the year, which is commensurate with
the risk involved with the obligation. At December 31, 1996 the carrying
amount of the long-term debt approximated market value.
l. EXPENSES RELATED TO THE SALE OF THE COMPANY - As of December 31, 1996,
the Company has recognized approximately $2.9 million of costs,
consisting of investment banking, legal and accounting fees which were
incurred related to the sale of the Company to Central Parking System
(see Note 15). Under the terms of the tender offer agreement, such costs
will be paid by the Company. The Company does not receive a tax benefit
for such costs.
2. PROPERTY, EQUIPMENT AND IMPROVEMENTS
Property, equipment and improvements consist of the following:
December 31,
----------------------------------
1996 1995
--------------- --------------
Land $ 20,937,409 $ 17,714,289
Buildings 6,238,507 5,512,764
Leasehold costs and improvements 7,636,439 6,590,546
Furniture, fixtures and equipment 2,847,083 1,567,324
-------------- -------------
37,659,438 31,384,923
--------------- --------------
Less accumulated depreciation and
amortization 7,561,238 6,751,734
--------------- --------------
$ 30,098,200 $24,633,189
=============== ==============
[Page 8 of 19]
<PAGE> 11
3. LOCAL RENT TAX
The Company has received notices of determination from a municipal
authority for commercial rent taxes for the period from June 1, 1978 through
May 31, 1991. During 1997, the Company has made payments against some of
these assessments. Based on the notices of determination and the unaudited
periods through 1996, the Company has revised its previous estimates by
providing an additional $760,000 including interest, in the current year.
Management believes that amounts accrued as of December 31, 1996 will be
adequate to cover any remaining liability.
4. ACCRUED EXPENSES Accrued expenses consist of the following:
December 31,
--------------------------------
1996 1995
-------------- -------------
Professional fees related to
the sale of the Company $ 2,744,385 $ -
Sales and parking taxes 838,132 728,389
Vacation and sick pay 433,890 408,770
Payroll and payroll taxes 270,925 382,657
Profit remittance on leases 1,543,696 759,880
Employee bonuses 1,100,774 276,868
Vehicle damage claims 660,000 600,000
Other 2,084,364 1,760,788
-------------- -------------
$ 9,676,166 $ 4,917,352
============== =============
5. LONG-TERM DEBT
Long-term debt consist of the following:
December 31,
-------------------------------
Interest Rate 1996 1995
-------------- ------------- ------------
Credit Agreements:
Facility I Prime + 2% $ 11,730,108 $ 11,730,108
Facility II Prime + 2% 938,100 1,688,100
Other credit
agreements Prime + 2% 1,600,000 -
Notes payable 6.46% - 8.5% 2,207,006 1,162,747
Notes payable to
Officers Prime + 2% 500,000 500,000
Mortgages payable 7% - 11% 5,668,569 4,178,506
Other 9.77% - 10% 537,531 -
-------------- --------------
23,181,314 19,259,461
Less current
portion 3,762,449 785,409
-------------- --------------
$ 19,418,865 $ 18,474,052
============== ==============
[Page 9 of 19]
<PAGE> 12
Facility I provides for a line of credit of $12,800,000, and is subject to
the aggregate face amount of outstanding letters of credit plus unpaid
drawings not exceeding $1,500,000. Borrowings under the letter of credit
facility reduce amounts available for borrowing under the line of credit.
Facility II is a term loan that was payable in consecutive quarterly payments
of $225,425. On October 31, 1995, Amendment No. 10 to the Company's bank
loan agreement was executed. The amendment provides for an extension of the
maturity dates of the Facility I principal to June 30, 1998 with respect to
$61,900, to September 30, 1998 with respect to $150,000 and to December 31,
1998 with respect to $11,518,208 and extended the quarterly installment
payment dates for Facility II to calendar quarters ending in the period June
30, 1996 to June 30, 1998. The amendment provides for prepayment of
principal to the extent of 50% of the Company's cash flow above designated
levels. The amendment also provides that commencing November 1, 1995
interest is to be paid at the rate of 4% per annum with the balance of the
interest rate (the Bank's prime plus 2% per annum) to be accrued and
deferred. The portion deferred will be paid or forgiven depending on the
Company achieving reductions in its operating expenses from those for the
year ended December 31, 1994 as follows: if the amount of the reduction as
of December 31, 1995 is at least $500,000, the amounts deferred following the
end of November and December 1995 will be forgiven; if the amount of the
reduction as of December 31, 1995 is at least $600,000, the amounts deferred
during 1996 will be forgiven; and if the amount of the reduction as of
December 31, 1997 is at least $700,000, the amounts deferred during 1997 and
1998 will be forgiven. The failure to achieve the designated level of
reduction for any period will result in the obligation to pay the amount
deferred during the applicable period. The Company achieved the required
operating expense reductions as of December 31, 1996 and 1995 and as such the
deferred interest has been forgiven.
In July 1995, the Company entered into a one-year agreement with another bank
providing for a $1,000,000 line of credit which was increased to $1,750,000
in June 1996, of which $1,600,000 was borrowed as of December 31, 1996.
On June 28, 1995, two officers loaned the Company $500,000 with interest
payable at the same rate as the Facility I loan. As a condition of Amendment
No. 10, the officers agreed to a revision of their loans, changing the terms
from demand loans to loans to be repaid following the payment of the credit
agreement loans with provisions for prepayment to the extent of 50% of the
principal payments paid to the Bank under the credit agreement after the Bank
has received post - October 31, 1995 principal payments of at least
$1,000,000 and for the deferral of the interest in excess of 3.99% per annum
(the loan interest rate to December 31, 1995 is 10.25% and prime plus 2%
thereafter) until the Facility loans have been paid in full. Under their
amended loan agreement, the officers surrendered their rights to collateral
which was to be provided under the original loan agreement and subordinated
their loans to the Company's obligations under the Credit Agreement. In
consideration of the original extension of the loans and the foregoing
amendment, the Company issued to each of the officers a five year,
nontransferable Warrant to purchase 75,000 shares of the Company's Common
Stock at a price of $6.40 per share, the average of the closing sales prices
of the Common Stock on NASDAQ for June 28, 1995, and the two immediately
prior days in which trades were effected in the stock.
Certain subsidiaries of the Company periodically acquire land and/or
buildings with a view to their future use, in whole or in part, as parking
facilities. The properties are generally purchased subject to long-term
mortgages. The mortgages vary in their payment terms and interest rates,
some requiring only the payment of interest during the first five years.
[Page 10 of 19]
<PAGE> 13
The mortgages payable are collateralized by the underlying assets which have
a book value of $9,963,600. Facility I and II are collateralized by first
mortgages as to certain properties and by the stock of subsidiaries of the
Company, except those whose stock may not be pledged because of prohibitions
in leases and mortgages.
Debt covenants under the Credit Agreement, as amended, include maximum
indebtedness under mortgage obligations and financial covenants as to
maintenance of minimum net worth, total liabilities to net worth and
operating cash flow ratios. The Company is in compliance with its debt
covenants. The Company believes that the funds available under Facility I,
additional mortgage loans with respect to properties acquired or developed
and funds generated from its operations will be sufficient to finance its
capital and operational requirements through December 31, 1997.
Certain debt owed by the Company is collateralized by shares of common stock
in subsidiaries owned by the Company.
Aggregate maturities of long-term debt are as follows:
Year Ending
December 31, Amount
------------ --------------
1997 $ 3,762,449
1998 13,514,015
1999 4,050,763
2000 226,812
2001 185,324
Thereafter 1,441,951
-------------
$ 23,181,314
=============
During January and February 1997, the Company paid off certain long-term
debt, as follows:
Credit agreements:
Facility I $ 11,730,108
Facility II 938,100
Other credit agreements 1,600,000
Notes payable to officers 500,000
Mortgages payable 4,150,000
-------------
$ 18,918,208
=============
6. COMMITMENTS AND CONTINGENCIES
LETTERS OF CREDIT - As of December 31, 1996, the Company had contingent
debt of $575,500 under standby letters of credit issued pursuant to
terms of its line of credit.
[Page 11 of 19]
<PAGE> 14
LEASES - The Company has numerous lease agreements, primarily for parking
facilities. Leases with rent escalations are expensed on a straight-line
basis in accordance with Statement of Financial Accounting Standard No. 13-
"Accounting for Leases" ("SFAS 13"). Deferred rent represents the
difference between the straight-line basis and actual rent paid in
accordance with the terms of the lease. Net lease rental expense for
each of the three years ended December 31, 1996 was $24,560,585,
$23,155,990, and $18,789,244 including $2,563,043 as of December 31, 1996,
$2,106,337 as of December 31, 1995 and $1,788,254 as of December 31, 1994,
paid under clauses which require the payment of additional rent based
on revenue levels at the various facilities. The net lease rental
expense is exclusive of real estate taxes and maintenance and repairs
which are paid by the Company.
Included in the Company's parking revenues are $1,229,600, $1,023,300 and
$799,900 of sublease rental earnings for each of the three years ended
December 31, 1996.
Approximately 31.1% of the Company's parking service revenues for the year
ended December 31, 1996 were derived in the aggregate from seven locations,
each of which accounted for not less than 3.3% of the parking service
revenues for the period. Four of the locations are held under noncancelable
long-term leases. Three are held under leases - two long-term and one
medium-term cancelable on short notice under certain circumstances.
Cancellation of any of the three leases by the lessor may have a materially
adverse effect upon the Company's results of operations in the event the
Company fails to obtain another or other materially profitable locations.
At December 31, 1996, the Company's future minimum net rentals under
operating leases are as follows:
Year Ending
December 31, Amount
--------------- ---------------
1997 $ 24,190,000
1998 24,340,000
1999 22,151,000
2000 20,370,000
2001 19,043,000
Thereafter 139,769,000
--------------
$ 249,863,000
==============
LITIGATION - Various lawsuits against the Company have arisen in the course
of the Company's business, some of which are covered by insurance. In
certain of these matters, large or indeterminate amounts are sought. In the
opinion of the Company, any ultimate liability which could result from such
litigation would not have a material effect on the Company's financial
position or the results of its operations.
[Page 12 of 19]
<PAGE> 15
On March 29, 1996, the United States District Court for the Eastern
District of Pennsylvania approved a net cash settlement of $1,700,000
plus interest payable to the Company as one of several plaintiffs
in a class action brought against the owner, manager, and tenant of a
building in midtown Philadelphia which suffered a fire in February 1991
causing substantial disruption of the operations of the plaintiffs.
The settlement was received by the Company in May, 1996. The portion
of the proceeds representing recovery of costs previously charged
($1,049,292) has been recorded as a reduction of total costs and
expenses for the year ended December 31, 1996. The remainder of
the settlement ($650,708) has been recorded as a gain from litigation
settlement for the year ended December 31, 1996.
7. INCENTIVE STOCK OPTION PLAN
The Company has an incentive stock option plan (the "1992 Plan") under which
the Company has reserved 525,000 shares of common stock for the granting of
options. Under an earlier plan, there were outstanding options to purchase
21,600 shares. Options are granted at prices not less than the fair market
value on the date granted. Options granted become exercisable at various
dates dependent upon the option agreement and expire five years from the date
of grant.
If compensation cost for plan awards made in 1996 and 1995 had been
determined based on the fair value at the grant dates, net (loss) earnings
and net (loss) earnings per share would have been reduced to the pro forma
amounts shown below for the years ended December 31, 1996 and 1995.
December 31,
-------------------------------
1996 1995
-------------- ------------
Net (loss) earnings:
As reported $ (1,688,504) $ 2,212,682
Pro forma (1,843,743) 2,170,950
Net (loss) earnings per share:
As reported $ (1.43) $ 1.49
Pro forma (1.56) 1.47
The pro forma effect of applying SFAS No. 123 is not necessarily indicative
of the effect on reported net earnings for future years.
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1996 and 1995, respectively: dividend yield
of 0 percent for both years (as the Company did not pay and does not expect
to pay dividends), expected volatility of 47 and 48 percent, risk-free
interest rates of 5.4 and 5.7 percent and expected lives of 0.5 and 1.5
years.
A summary of the 1992 plan's status and changes during the years ended
December 31, 1996 and 1995. is presented below:
[Page 13 of 19]
<PAGE> 16
1996 1995
--------------------- -----------------------
Weighted Weighted
Average Average
Exercise Exercise
Fixed Options Shares Price Shares Price
- - -------------------------------------------------------------------------------
Outstanding, at beginning
of year 401,900 $ 4.30 327,600 $ 3.76
Granted 47,000 9.94 90,000 6.16
Exercised (34,500) 3.77 (200) 3.56
Forfeited (9,000) 5.10 (15,500) 3.75
--------- ---------
Outstanding at end of year 405,400 4.98 401,900 4.30
========= =========
Options exercisable at
year-end 313,000 230,600
Weighted average
fair value of options
granted during year
(per option) $ 1.40 $ 1.46
On January 17, 1997, the Company allowed the exercise of all outstanding
options, including those that were not currently vested. As such, subsequent
to that date no options are outstanding.
8. OTHER RELATED PARTY TRANSACTIONS
The Company provides bookkeeping services to three private entities owned by
officers of the Company. Fees paid to the Company for such services were
$24,602, $32,640 and $28,486 for the years ended December 31, 1996 and 1995,
and the ten-month period ended December 31, 1994, respectively.
[Page 14 of 19]
<PAGE> 17
9. INCOME TAXES
The provision (benefit) for income taxes is comprised of the following:
Ten-Month
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
1996 1995 1994
- - ------------------------------------------------------------------------------
Federal:
Current $ 1,481,000 $ 808,000 $ 130,000
Deferred (1,354,853) (1,071,000) (40,000)
------------------------------------------------------------
126,147 (263,000) 90,000
------------------------------------------------------------
State and City:
Current 594,000 308,660 208,627
Deferred (250,000) (188,000) (7,000)
------------------------------------------------------------
344,000 120,660 201,627
------------------------------------------------------------
$ 470,147 $ (142,340) $ 291,627
============================================================
The tax effects of significant items comprising the Company's deferred tax
assets (liabilities) are as follows:
December 31,
1996 1995
--------------------------------
Short-term deferred tax
assets (liabilities):
Reserves and write-offs of
assets not currently deductible $ 786,000 $ 512,000
Prepaid expenses (367,000) (617,000)
---------------------------------
Total short-term deferred
tax asset (liability) 419,000 (105,000)
---------------------------------
Long-term deferred tax assets:
Deferred expenses 1,440,000 920,000
Property, equipment and improvements 990,000 964,000
Operating loss carryforwards 354,000 659,000
Tax credit carryforwards - 73,000
---------------------------------
Long-term deferred tax asset 2,784,000 2,616,000
Valuation allowance (320,000) (1,215,467)
---------------------------------
Total long-term deferred tax asset 2,464,000 1,400,533
---------------------------------
Net deferred tax asset $ 2,883,000 $ 1,295,533
=================================
The realization of the deferred tax assets relates directly to the Company's
ability to generate taxable income for Federal, state, and foreign tax
purposes. Management has concluded that partial realization of these
[Page 15 of 19]
<PAGE> 18
deferred tax assets is more likely than not as a result of the Company's
earnings history for the past two years, and has thus reduced the valuation
accordingly. Additional reductions to the valuation allowance will be
recorded when, in the opinion of management, the utilization of such is more
likely than not.
At December 31, 1996, the Company has available net operating loss
carryforwards of approximately $723,000 to offset future taxable income of
the Canadian subsidiary. The total Canadian loss carryforward consists of
$160,000, $363,000 and $200,000 expiring in the years 2000, 2001 and 2002,
respectively. The Company also has available net operating loss and credit
carryforwards for a state which expire in various amounts through 2008.
Reconciliation of the U.S. statutory rate with the effective tax rates is
summarized as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended Ten-Month Period Ended
December 31, 1996 December 31, 1995 December 31, 1994
Amount Percent Amount Percent Amount Percent
-------------------- -------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Federal statutory rate $(414,241) 34.0 % $ 703,916 34.0 % $ 324,750 34.0%
State and city taxes - net of
federal benefit 170,000 (14.0) 26,000 1.3 187,000 19.6
Utilization of tax credits 85,000 (7.0) (187,000) (9.0) (23,000) (2.4)
Change in valuation allowance (793,000) 65.1 (884,000) (42.7) - -
Refund of prior years
state taxes 86,000 (7.1) - - (30,000) (3.2)
Rate differential on foreign
subsidiary - - 79,000 3.8 75,000 7.9
Expired foreign net operating
loss - - 91,000 4.4 - -
Goodwill - - - - 24,000 2.5
Utilization of losses not
previously recognized for
temporary differences - - - - (144,000) (15.1)
Nondeductible expenses related
to sale of the Company 973,690 (79.9) - - - -
IRS settlement 186,000 (15.3) - - - -
Basis in fixed assets 178,000 (14.5) - - - -
Other (1,302) 0.1 28,744 1.3 (122,123) (12.8)
-------------------- ------------------- ----------------------
$ 470,147 (38.6)% $(142,340) (6.9)% $ 291,627 30.5 %
==================== =================== ======================
</TABLE>
10. PENSION PLANS
The Company contributes to a multiemployer pension plan which covers
employees under collective bargaining agreements. Pension expense for the
years ended December 31, 1996 and 1995 and the ten-month period ended
December 31, 1994 was $189,042, $290,596 and $226,331, respectively.
[Page 16 of 19]
<PAGE> 19
Effective July 1, 1993, the Company established a 401(k) plan which covers
all employees who are not members of a union. Under the terms of the Plan,
the Company matches 15% up to $666.67 of employee contributions to a maximum
contribution of $100. Company contributions to this plan were $12,323 and
$14,789 for the years ended December 31, 1996 and 1995 and $11,646 for the
ten-month period ended December 31, 1994.
The Company's Board of Directors approved the termination of the Plan
effective January 16, 1997. Participants' accounts are considered fully
vested and nonforfeitable as of the Plan termination date. Lump sum
distributions of participants' accounts will not be made until a favorable
determination is received from the Internal Revenue Service that the Plan is
tax qualified upon its termination.
11. FOREIGN OPERATIONS
A summary of the Canadian subsidiary's financial information is as follows:
Ten-Month
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
1996 1995 1994
------------- ------------- --------------
Assets $ 1,515,000 $ 769,000 $ 589,000
Liabilities 2,162,000 1,672,000 1,231,000
Stockholder's
deficiency in assets (647,000) (903,000) (642,000)
Revenues 535,000 281,000 215,000
Net earnings (loss) 220,000 (237,000) (285,000)
[Page 17 of 19]
<PAGE> 20
12. SEGMENT INFORMATION
The following table sets forth the contributions to revenues, operating
earnings, identifiable assets, capital expenditures and depreciation expense
by business segment:
Ten-Month
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
1996 1995 1994
------------- ------------ -------------
Revenues:
Parking $ 63,426,212 $ 61,772,058 $ 50,935,794
Service station 4,442,925 4,158,992 3,494,337
------------- ------------ -------------
$ 67,869,137 $ 65,931,050 $ 54,430,131
============= ============ =============
Operating (loss) earnings:
Parking $ (1,249,093) $ 2,087,403 $ 1,004,307
Service station 30,736 (17,061) (49,160)
------------- ------------ -------------
$ (1,218,357) $ 2,070,342 $ 955,147
============= ============ =============
Identifiable assets:
Parking $ 42,790,045 $ 35,656,844 $ 31,520,294
Service station 37,710 31,826 42,821
Corporate (cash) 2,266,153 1,532,909 1,225,853
------------- ------------ -------------
$ 45,093,908 $ 37,221,579 $ 32,788,968
============= ============ =============
Capital expenditures:
Parking $ 7,113,382 $ 1,379,682 $ 990,098
Service station - 3,064 -
------------- ------------ -------------
$ 7,113,382 $ 1,382,746 $ 990,098
============= ============ =============
Depreciation and
amortization expense:
Parking $ 1,459,698 $ 1,502,001 $ 1,373,067
Service station 7,577 7,844 6,777
------------- ------------ -------------
$ 1,467,275 $ 1,509,845 $ 1,379,844
============= ============ =============
13. WRITE-DOWN OF ASSETS
During the twelve months ended December 31, 1996 and 1995, and the ten-month
period ended December 31, 1994, the Company recorded charges of $964,070,
$315,598 and $124,168, respectively, to write down certain assets. The
write-downs related to locations in the New York and Philadelphia
metropolitan areas and were due to poor operating results and management's
estimate that future cash flows from the related operations over the
remaining depreciation or amortization period would be less than the carrying
amount of the related deferred expenses, lease acquisition costs and fixed
assets.
[Page 18 of 19]
<PAGE> 21
14. RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS
Subsequent to the issuance of the Company's 1995 financial statements, the
Company's management determined that accrued vehicle damage claims was
understated as the Company's process for estimating such claims did not
consider all information which was available to the Company at the time the
estimate was made. As a result, accrued expenses and cost of parking
services have been restated from the amounts previously reported. A summary
of the effects of the restatement is as follows:
As previously
reported As restated
-------------- -------------
Year ended December 31, 1995:
Earnings before income taxes $ 2,113,692 $ 2,070,342
Income tax benefit 125,000 142,340
Net earnings 2,238,692 2,212,682
Earnings per share:
Primary 1.75 1.73
Fully diluted 1.55 1.49
Ten-month period ended
December 31, 1994:
Earnings before income taxes 716,080 955,147
Provision for income taxes (196,000) (291,627)
Net earnings 520,080 663,520
Earnings per share:
Primary 0.43 0.55
Fully diluted 0.42 0.51
Balance at March 1, 1994:
Retained earnings $ 1,008,749 $ 548,468
15. SUBSEQUENT EVENT
Pursuant to a tender offer agreement dated December 6, 1996 between the
Company and Central Parking System - Empire State, Inc. ("Central"), an
indirect wholly-owned subsidiary of Central Parking Corporation, all of the
Company's issued and outstanding common stock was purchased by Central at a
price of $31.00 per share on January 18, 1997. The purchase price payable at
$28.50 per share net to the Company in cash at the closing, without interest,
and an additional $2.50 per share was deposited in escrow as contingent
consideration for distribution either to the Company's shareholders or
Central based on the resolution of certain contingencies outstanding at the
date of purchase. All options and warrants outstanding as of the completion
of the offer were cashed out under the same terms as the outstanding and
issued common stock.
[Page 18 of 19]
<PAGE> 22
Item 7 (b) PRO FORMA FINANCIAL STATEMENTS
CENTRAL PARKING CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information of
Central Parking Corporation ("Company") is based on (a) the historical
consolidated financial statements of the Company, (b) the historical statements
of direct revenues and expenses of Civic Center Corporation ("Civic Center"),
(c) the historical financial statements of Civic Parking, L.L.C. ("Civic"), and
(d) the historical consolidated financial statements of Square Industries, Inc.
("Square").
The historical consolidated balance sheet of the Company as of December 31, 1996
presents the consolidated financial position of the Company on such date, and
reflects the Company's acquisition of Civic on December 31, 1996 using the
purchase method of accounting, based on a preliminary allocation of the
purchase price. The unaudited pro forma consolidated balance sheet as of
December 31, 1996 assumes that the Company's acquisition of Square on January
18, 1997 had occurred on December 31, 1996. The Company's acquisitions of
Civic and Square are hereinafter referred to as the Acquisitions.
The historical statements of earnings for the year ended September 30, 1996
reflects (a) the historical results of operations of the Company for its fiscal
year then ended, (b) the historical direct revenues and expenses of the parking
garages of Civic Center, which were managed by the Company and ultimately
acquired by the Company from Civic, for the period from January 1, 1996 to
March 20, 1996, (c) the historical results of operations of Civic for the period
from March 21, 1996 to December 31, 1996, Civic's fiscal year end, and (d) the
historical results of operations of Square for its fiscal year ended
December 31, 1996.
The historical statements of earnings for the quarter ended December 31, 1996
reflects the historical results of operations of the Company for the first
quarter of its fiscal year 1997 and the historical results of operations of
Civic and Square for their respective quarters ended December 31, 1996.
The unaudited pro forma consolidated statements of earnings were prepared
assuming that the Acquisitions were consummated on October 1, 1995.
The unaudited pro forma consolidated financial information has been prepared
based on the historical financial statements of the Company and the acquired
entities, reclassified as necessary to conform with the presentation used in the
consolidated financial statements of the Company, and give effect to (a) the
Acquisitions under the purchase method of accounting, based on preliminary
allocations of the respective purchase prices, (b) the financing of the
Acquisitions, (c) certain estimated operational and financial combination
benefits which are a direct result of the Square acquisition, and (d) the
assumptions and adjustments which are deemed appropriate by management of the
Company and which are described in the accompanying notes to the pro forma
consolidated financial information.
This pro forma consolidated financial information may not be indicative of
the results that would have occurred if the Acquisitions had been in effect
on the dates indicated or which may be obtained in the future. Such pro forma
consolidated financial information should be read in conjunction with such
historical financial statements and notes thereto.
<PAGE> 23
CENTRAL PARKING CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 1996
(All dollar amounts are expressed in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Effects of
Square
Acquisition
Historical and Pro Forma
Related Consolidated
Company Square Financing Totals
--------- -------- -------------- -------------
<C> <S> <S> <S> <S>
ASSETS
Current assets:
Cash and cash equivalents $ 5,850 $ 2,266 $ - $ 8,116
Management accounts receivable 8,594 - - 8,594
Accounts and current portion of
notes receivable - other 3,356 1,586 - 4,942
Prepaid expenses 6,203 2,619 - 8,822
Other current assets - 446 - 446
Deferred income taxes 8 419 - 427
Refundable income taxes - 48 - 48
--------- -------- -------------- -------------
Total current assets 24,011 7,384 - 31,395
Investments, at amortized cost 4,551 - - 4,551
Notes receivable, less current portion 8,027 - - 8,027
Property, equipment, and leasehold
improvements, net 131,073 30,098 30,847 192,018
Contract rights, net 5,601 - - 5,601
Goodwill, net - - 27,724 27,724
Investment in limited partnerships 1,240 - - 1,240
Investment in general partnerships 1,772 - - 1,772
Non-current deferred taxes - 2,464 (2,464) -
Other assets 2,525 5,148 500 6,224
(1,949)
--------- -------- -------------- -------------
$ 178,800 $ 45,094 $ 54,658 $278,552
========= ======== ============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ - $ 3,762 $ - $ 3,762
Accounts payable 11,318 1,170 1,559 14,047
Accrued expenses 6,023 9,676 1,343 17,042
Accrued local rent tax - 2,026 - 2,026
Management accounts payable 6,387 - - 6,387
Income taxes payable 3,099 - - 3,099
Other current liabilities - 373 - 373
--------- -------- -------------- -------------
Total current liabilities 26,827 17,007 2,902 46,736
Long-term debt 67,200 19,419 52,681 139,300
Other liabilities 2,984 3,959 - 6,943
Deferred income taxes 1,386 - 3,784 5,170
--------- -------- -------------- -------------
Total liabilities 98,397 40,385 59,367 198,149
Shareholders' equity :
Common Stock 175 13 (13) 175
Additional paid-in capital 31,913 3,408 (3,408) 31,913
Foreign currency
translation adjustment (64) (212) 212 (64)
Retained earnings 48,999 1,736 (1,736) 48,999
Deferred compensation on
restricted stock, net (620) - - (620)
Treasury stock at cost - (236) 236 -
--------- -------- -------------- -------------
Total shareholders' equity 80,403 4,709 (4,709) 80,403
--------- -------- -------------- -------------
$ 178,800 $ 45,094 $ 54,658 $278,552
========= ======== ============== =============
</TABLE>
See accompanying notes to pro forma consolidated financial information.
<PAGE> 24
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
Three months ended December 31, 1996
(All dollar amounts are expressed in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Company Square Pro Forma Civic Pro Forma
Historical Historical Adjustments Consolidated Historical Adjustments Consolidated
----------- ---------- ----------- ------------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Parking $ 32,085 $ 18,921 $ - $ 51,006 $ 2,448 $ (55) (J) $ 53,399
Management contract 9,338 - - 9,338 - (53) (A) 9,285
----------- ---------- ----------- ------------- ----------- -------------- -------------
Total revenues 41,423 18,921 - 60,344 2,448 (108) 62,684
Costs and expenses:
Cost of parking 29,085 15,990 (23) (C) 45,052 1,313 (85) (C) 46,194
(53) (A)
(33) (J)
Cost of management contracts 2,501 - - 2,501 - - 2,501
Amortization of intangibles - - 302 (B) 302 - - 302
Acquisition Costs - 2,864 (2,864) (F) - - - -
General and administrative 4,708 2,300 (1,164) (H) 5,747 173 - 5,920
(97) (G)
----------- ---------- ----------- ------------- ----------- -------------- -------------
Total costs and expenses 36,294 21,154 (3,846) 53,602 1,486 (171) 54,917
----------- ---------- ----------- ------------- ----------- -------------- -------------
Operating earnings (loss) 5,129 (2,233) 3,846 6,742 962 63 7,767
Other income (expenses):
Interest income 625 - - 625 2 (285) (D) 342
Interest expense (7) 232 (1,357) (E) (1,132) (1,008) (135) (E) (2,275)
Net gains on sales of
property and equipment 3 - - 3 - - 3
Equity in partnership and
joint venture earnings 250 - - 250 - - 250
Write-off of Assets - (964) 612 (G) (352) - - (352)
Earnings (loss) before
income taxes 6,000 (2,965) 3,101 6,136 (44) (357) 5,735
----------- ---------- ----------- ------------- ----------- -------------- -------------
Income tax expense 2,101 38 179 (I) 2,318 - (145) (I) 2,173
----------- ---------- ----------- ------------- ----------- -------------- -------------
Net earnings (loss) 3,899 (3,003) 2,922 3,818 (44) (212) 3,562
=========== ========== =========== ============= =========== ============== =============
Weighted average shares and
share equivalents 17,620 17,620 17,620
=========== ============= =============
Net earnings per share $ 0.22 $ 0.22 $ 0.20
=========== ============= =============
</TABLE>
See accompanying notes to pro forma consolidated financial information.
<PAGE> 25
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
Year ended September 30, 1996
(All dollar amounts are expressed in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION> Civic Civic
Company Square Pro Forma 1/1-3/20/96 3/21-12/31/96 Pro Forma
Historical Historical Adjustments Consolidated Historical Historical Adjustments Consolidated
---------- ---------- ----------- ------------- ----------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
Parking $ 109,272 $67,869 $ - $177,141 $ 1,980 $ 8,866 $ 188 (K) $ 187,855
(320)(J)
Management
contract 34,044 - - 34,044 - - (317)(A) 33,727
---------- ---------- ----------- ------------- ----------- -------------- ------------- --------------
Total
revenues 143,316 67,869 - 211,185 1,980 8,866 (449) 221,582
Costs and
expenses:
Cost of
parking 99,196 56,882 (92) (C) 155,986 626 3,884 73 (C) 160,118
Cost of
management
contracts 9,769 - - 9,769 - - - 9,769
Amortization
of - 1,208
intangibles - - 1,208 (B) 1,208 - -
Acquisition - -
Costs - 2,864 (2,864) (F) - - -
General and
administra-
tive 17,419 8,781 (4,356) (H) 21,457 - 307 15 (K) 21,779
(387) (G)
---------- ---------- ----------- ------------- ----------- -------------- ------------- --------------
Total costs
and expenses 126,384 68,527 (6,491) 188,420 626 4,191 (363) 192,874
---------- ---------- ----------- ------------- ----------- -------------- ------------- --------------
Operating
earnings
(loss) 16,932 (658) 6,491 22,765 1,354 4,675 (86) 28,708
Other
income
(expenses):
Interest 7 (1,130)(D) 1,180
income 2,303 - - 2,303 -
Interest
expense - (1,296) (3,359) (E) (4,655) - (3,250) (1,286)(E) (9,191)
Net gains
on sales of
property and
equipment 1,192 - - 1,192 - - - 1,192
Equity in
partnership
and joint
venture
earnings 641 - - 641 - - - 641
Write-off of
assets - (964) 612 (G) (352) - - - (352)
Reimbursement
of previously
incurred
fixed costs - 1,049 - 1,049 - - - 1,049
Gain from
litigation
settlement - 651 - 651 - - - 651
---------- ---------- ----------- ------------- ----------- -------------- ------------- --------------
Earnings
(loss)
before
income
taxes 21,068 (1,218) 3,744 23,594 1,354 1,432 (2,502) 23,878
Income
tax
expense 7,232 470 1,227 (I) 8,929 - - 103 (I) 9,032
---------- ---------- ----------- ------------- ----------- -------------- ------------- --------------
Net
earnings
(loss) 13,836 (1,688) $ 2,517 $ 14,665 $ 1,354 $ 1,432 $ (2,605) $ 14,846
========== ========== =========== ============= =========== ============== ============= ==============
Weighted
average
shares
and share
equivalents 17,491 17,491 17,491
========== =========== ==============
Net
earnings
per share $ 0.79 $ 0.84 $ 0.85
========== =========== ===============
</TABLE>
See accompanying notes to pro forma consolidated financial information.
<PAGE> 26
CENTRAL PARKING CORPORATION
Unaudited Pro Forma Consolidated Financial Information
BASIS OF PRESENTATION
The accompanying pro forma consolidated balance sheet as of
December 31, 1996 and the related pro forma consolidated
statements of earnings for the three months ended December 31,
1996 and the fiscal year ended September 30, 1996 give effect to
all completed fiscal 1997 acquisitions as if they occurred on the
first day of fiscal 1997 and 1996. The pro forma information is
based on the historical financial statements of the Company and
the acquired entities, giving effect to the acquisitions under the
purchase method of accounting, and the assumption adjustments in
the accompanying notes to the pro forma consolidated financial
information.
The pro forma statements have been prepared by Central Parking
Corporation ("CPC") management based on the audited financial
statements of the acquired entities reclassified where necessary,
with respect to pre-acquisition periods, to the presentation
used in the historical financial statements of the Company. These
pro forma statements may not be indicative of the results that
would have occurred if the acquisitions had been in effect on the
dates indicated or which may be obtained in the future. The pro
forma financial statements should be read in conjunction with the
consolidated financial statements and notes of Central Parking
Corporation.
<PAGE> 27
CENTRAL PARKING CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The accompanying pro forma financial information presents the pro
forma consolidated financial condition of Central Parking
Corporation as of December 31, 1996 and the pro forma consolidated
results of operations for the three months ended December 31, 1996
and the fiscal year ended September 30, 1996.
On December 31, 1996, the Company acquired for cash 100% of the
ownership units in Civic Parking, LLC, a Missouri limited
liability company ("Civic"). On January 18, 1997, the Company
completed the acquisition of Square Industries, Inc., a New York
corporation ("Square"), through a cash tender offer for all the
outstanding shares of common stock of Square. The Company's
historical consolidated balance sheet reflects the acquired net
assets and effects of financing of Civic, and the accompanying pro
forma consolidated balance sheet includes the acquired assets and
liabilities and effects of the related financing, as if Square
had been acquired on December 31, 1996. The accompanying pro
forma consolidated statements of earnings reflect the pro forma
results of operations of the Company, as adjusted, as if Civic and
Square had been acquired on October 1, 1995.
PRO FORMA CONSOLIDATED BALANCE SHEET
The adjustments in the pro forma consolidated balance sheet are to
reflect (i) the preliminary allocation of the purchase price of
Square based upon estimates of fair value of the assets and
liabilities acquired, (ii) the effects of related borrowings,
$1.6 million of transaction costs, and $1.3 million estimated
severance costs, (iii) the recording of intangible assets acquired
(goodwill of $27.7 million and non-compete agreements of $500
thousand), (iv) the elimination of deferred expenses, and (v) the
related tax effects. The effect of the Company's acquisition of
Civic is reflected in the Company's historical information, based
upon preliminary purchase price allocations, as the acquisition
was completed December 31, 1996. Final purchase price allocations
are not expected to be materially different from the preliminary
allocations.
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
The adjustments reflected in the pro forma consolidated statements
of earnings are as follows:
THREE MONTHS ENDED DECEMBER 31, 1996
(A) To eliminate management contract revenue and expense
related to the prior management
agreement between Civic and the Company.
(B) To record amortization of the intangible assets. The
goodwill and non-compete are being amortized over
periods of 25 and 5 years, respectively.
(C) To reflect the net change in depreciation resulting
from the fair value adjustments and changes
in estimated asset lives.
(D) To reflect a decrease in income earned on cash
investments used for purposes of the
acquisition of Civic.
(E) To reflect interest on acquisition related borrowings.
Interest is calculated at an annual rate of 6.75%.
(F) To eliminate the effect of acquisition costs reflected
in Square's historical results of operations
and directly related to Square's sale to the Company.
(G) To eliminate the effect of Square's (i) scheduled
amortization of deferred expenses and
financing costs, and (ii) the write-off of $612
thousand deferred financing costs directly
related to the acquisition.
(H) To record 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.
(I) To record estimated federal and state income taxes at a
combined rate of 36%.
(J) To eliminate the revenues and expenses related to a bus
lot not acquired, but included in the
historical financial statements of Civic for the
period from March 21, 1996 through
December 31, 1996.
YEAR ENDED SEPTEMBER 30, 1996
(A) To eliminate management contract revenue and expense
related to the prior management
agreement between Civic and the Company.
(B) To record amortization of the intangible assets. The
goodwill and non-compete are being
amortized over periods of 25 and 5 years,
respectively.
(C) To reflect the net change in depreciation resulting
from the fair value adjustments and changes
in estimated asset lives.
(D) To reflect a decrease in income earned on cash
investments used for purposes of the
acquisition of Civic.
(E) To reflect interest on acquisition related borrowings.
Interest is calculated at an annual rate
of 6.75%.
(F) To eliminate the effect of acquisition costs reflected
in Square's historical results of operations
and directly related to Square's sale to the Company.
(G) To eliminate the effect of Square's (i) scheduled
amortization of deferred expenses and
financing costs, and (ii) the write-off of $612
thousand deferred financing costs directly
related to the acquisition.
(H) To record 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.
(I) To record estimated federal and state income taxes at a
combined rate of 36%.
(J) To eliminate the revenues and expenses related to a bus
lot not acquired, but included in the
historical financial statements of Civic for the
period March 21, 1996 through
December 31, 1996.
(K) To record commercial rental income and certain property
expenses excluded from the Civic Center historical
statement of direct revenues and expenses for the
period January 1 through March 20, 1996.
<PAGE> 28
