<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
Commission file number 001-13950
CENTRAL PARKING CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Tennessee 62-1052916
- --------------------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2401 21st Avenue South,
Suite 200, Nashville, Tennessee 37212
- ---------------------------------------- --------------------
(Address of Principal Executive Offices) (Zip Code)
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 Outstanding at August 10,1998
- ------------------------------ -----------------------------
Common Stock, $0.01 par value 29,560,941
<PAGE> 2
INDEX
CENTRAL PARKING CORPORATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets
--- June 30, 1998, September 30, 1997, and June 30, 1997...................................... 3
Condensed consolidated statements of earnings
--- three and nine months ended June 30, 1998 and 1997........................................ 4
Condensed consolidated statements of cash flows
--- nine months ended June 30, 1998 and 1997.................................................. 5
Notes to condensed consolidated financial statements.......................................... 6 - 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................................................... 11 - 17
PART 2. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders........................................... 18
Item 6. Exhibits and Reports on Form 8-K.............................................................. 18
SIGNATURES ................................................................................... 19
</TABLE>
<PAGE> 3
PART 1
Item 1. Financial Statements
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Dollar amounts in thousands
<TABLE>
<CAPTION>
Unaudited Unaudited
June 30, September 30, June 30,
1998 1997 1997
--------- --------- ---------
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 20,582 $ 9,979 $ 476
Management accounts receivable 17,061 11,004 9,753
Accounts and current portion of notes receivable - other 8,924 6,158 7,630
Prepaid expenses 13,014 9,394 7,257
Deferred income taxes 1,279 911 416
Refundable income taxes -- 2,154 --
--------- --------- ---------
Total current assets 60,860 39,600 25,532
Investments, at amortized cost 4,978 4,754 4,676
Notes receivable, less current portion 31,039 16,537 8,511
Property, equipment, and leasehold improvements, net 127,839 79,057 90,586
Contract and lease rights, net 11,165 5,021 5,234
Goodwill, net 239,879 31,863 31,493
Investment in partnerships and joint ventures 31,641 50,195 48,910
Other assets 19,512 6,987 6,917
--------- --------- ---------
$ 526,913 $ 234,014 $ 221,859
========= ========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt and capital lease obligations $ 1,191 $ 206 $ 218
Accounts payable 39,049 25,097 17,017
Accrued payroll and related costs 13,177 8,256 7,260
Accrued expenses 10,325 4,020 2,324
Management accounts payable 16,422 10,381 8,703
Income taxes payable 450 871 154
--------- --------- ---------
Total current liabilities 80,614 48,831 35,676
Long-term debt and capital lease obligations 64,359 73,252 82,178
Other liabilities 15,802 5,161 5,022
Deferred compensation 3,740 3,048 3,102
Deferred income taxes 5,605 6,871 5,440
--------- --------- ---------
Total liabilities 170,120 137,163 131,418
Company-obligated mandatorily redeemable convertible securities of
subsidiary whose sole assets are convertible subordinated
debentures of the Company 110,000 -- --
Shareholders' equity:
Common stock, $.01 par value; 50,000,000 shares authorized,
29,503,487, 26,303,592 and 26,295,700
issued and outstanding, respectively 296 263 263
Additional paid-in capital 164,163 32,843 32,559
Foreign currency translation adjustment 315 193 305
Retained earnings 82,538 64,122 57,901
Deferred compensation on restricted stock (519) (570) (587)
--------- --------- ---------
Total shareholders' equity 246,793 96,851 90,441
--------- --------- ---------
$ 526,913 $ 234,014 $ 221,859
========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements
Page 3 of 19
<PAGE> 4
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Unaudited
Dollar amounts in thousands, except per share data
<TABLE>
<CAPTION>
Three Months Ended June 30, Nine Months Ended June 30,
1998 1997 1998 1997
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Parking $ 96,454 $ 49,194 $ 231,988 $ 126,981
Management contract 15,734 10,836 42,611 30,397
--------- -------- --------- ---------
Total revenues 112,188 60,030 274,599 157,378
Costs and expenses:
Cost of parking 81,817 43,123 199,639 111,605
Cost of management contracts 4,217 3,471 11,328 9,163
General and administrative 9,733 5,398 24,319 16,098
Goodwill and non-compete amortization 2,566 332 4,620 568
--------- -------- --------- ---------
Total costs and expenses 98,333 52,324 239,906 137,434
--------- -------- --------- ---------
Operating earnings 13,855 7,706 34,693 19,944
Other income (expenses):
Interest income 785 341 1,894 1,206
Interest expense (1,487) (1,617) (6,243) (2,937)
Dividends on company-obligated mandatorily
redeemable convertible securities of a subsidiary trust (1,478) -- (1,684) --
Net gains on sales of property and equipment (17) 3 -- 8
Equity in partnership and joint venture earnings 1,265 1,809 3,678 3,014
--------- -------- --------- ---------
Other income (expenses), net (932) 536 (2,355) 1,291
--------- -------- --------- ---------
Earnings before income taxes 12,923 8,242 32,338 21,235
Income taxes 4,975 2,967 12,420 7,645
--------- -------- --------- ---------
Net earnings $ 7,948 $ 5,275 $ 19,918 $ 13,590
========= ======== ========= =========
Basic weighted average common shares
outstanding 29,228 25,987 27,373 25,988
========= ======== ========= =========
Basic earnings per common share $ 0.27 $ 0.20 $ 0.73 $ 0.52
========= ======== ========= =========
Diluted weighted average common shares and
dilutive potential common shares 29,694 26,301 27,838 26,303
========= ======== ========= =========
Diluted earnings per common share $ 0.27 $ 0.20 $ 0.72 $ 0.52
========= ======== ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements
Page 4 of 19
<PAGE> 5
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
Nine Months Ended June 30,
1998 1997
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 19,918 $ 13,590
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation 4,373 2,935
Amortization of contract rights 712 626
Amortization of deferred compensation cost 51 50
Amortization of goodwill and non-compete agreements 4,620 568
Equity in partnership and joint venture (earnings) (3,678) (3,014)
Distributions from partnerships and joint ventures 2,315 --
Net gains on sales of property and equipment -- (8)
Deferred income taxes 620 1,159
Changes in operating assets and liabilities, excluding effects
of acquisitions:
(Increase) decrease in management accounts receivable (2,206) (840)
(Increase) decrease in notes and accounts receivable - other 3,545 (2,255)
(Increase) decrease in prepaid expenses (2,098) (884)
(Increase) decrease in refundable income taxes 2,154 --
(Increase) decrease in other assets (423) (1,092)
Increase (decrease) in accounts payable, accrued expenses
other liabilities and deferred compensation (1,315) (3,298)
Increase (decrease) in management accounts payable 5,023 (1,746)
Increase (decrease) in income taxes payable 3,884 (658)
--------- --------
Net cash provided by operating activities 37,495 5,133
--------- --------
Cash flows from investing activities:
Proceeds from sales of property and equipment 121 9,609
Investments in notes receivable (350) (1,682)
Purchase of assets held for resale -- (45,962)
Proceeds from sale of assets -- 45,962
Purchase of property, equipment, and leasehold improvements (21,409) (6,205)
Purchase of contract rights -- (45)
Investment in and partnerships and joint ventures (2) (43,412)
Acquisitions of companies net of cash acquired (210,444) (50,601)
Purchase of investments (224) (193)
--------- --------
Net cash used by investing activities (232,308) (92,529)
--------- --------
Cash flows from financing activities:
Dividends paid (1,429) (1,094)
Net borrowings (repayments) under revolving credit agreement (17,250) 78,260
Proceeds from issuance of company-obligated mandatorily redeemable securities 106,000 --
Proceeds from issuance of notes payable 100,000 --
Principal repayments on notes payable (103,456) (19,045)
Distribution from partnerships and joint ventures 30,286 --
Proceeds from issuance of common stock and exercise of stock options, net 91,143 900
--------- --------
Net cash provided by financing activities 205,294 59,021
--------- --------
Foreign currency translation 122 246
--------- --------
Net increase (decrease) in cash and cash equivalents 10,603 (28,129)
Cash and cash equivalents at beginning of period 9,979 28,605
--------- --------
Cash and cash equivalents at end of period $ 20,582 $ 476
========= ========
Non-cash transactions:
Issuance of stock in acquisitions $ 40,185 $ --
========= ========
Fair value of assets acquired $ 93,481 $ 71,388
Purchase price in excess of the net assets acquired 212,440 32,015
Liabilities assumed in acquisitions (47,079) (46,137)
Stock issued in acquisitions (40,185) --
--------- --------
Cash paid 218,657 57,266
Less cash acquired (8,213) (6,665)
--------- --------
Net cash paid for acquisition $ 210,444 $ 50,601
========= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
Page 5 of 19
<PAGE> 6
CENTRAL PARKING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
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 intercompany transactions have been eliminated in consolidation.
Operating results for the three and nine months ended June 30, 1998 are not
necessarily indicative of the results that may be expected for the fiscal year
ending September 30, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended September 30, 1997
(included in the Company's Annual Report on Form 10-K). Certain items have been
restated to conform to current year presentation.
Stock Split
On November 21, 1997, the Board of Directors approved a three-for-two
stock split payable to shareholders of record as of December 5, 1997. The stock
split was distributed on December 12, 1997, resulting in the net issuance of
8,771,363 new shares. All shares and per share amounts in this report have been
adjusted to reflect the stock split.
Earnings Per Share
In 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share". Statement 128 replaced the previously reported primary and
fully diluted earnings per share with basic and diluted earnings per share.
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. Earnings per share
for all periods presented have been calculated and presented in accordance with
SFAS No. 128.
The following tables set forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
June 30, 1998 June 30,1997
Income Common Per-Share Income Common Per-Share
Available Shares Amount Available Shares Amount
($000's) (000's) ($000's) (000's)
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per share $19,918 27,373 $0.73 $13,590 25,988 $0.52
Effect of dilutive stock and options:
Stock option plan 247 (0.01) 110
Restricted stock plan 151 145
Deferred stock unit plan 12 --
Employee stock purchase plan 55 60
Diluted earnings per share $19,918 27,838 $0.72 $13,590 26,303 $0.52
</TABLE>
Page 6 of 19
<PAGE> 7
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
June 30, 1998 June 30,1997
Income Common Per-Share Income Common Per-Share
Available Shares Amount Available Shares Amount
($000's) (000's) ($000's) (000's)
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per share $ 7,948 29,228 $0.27 $ 5,275 25,987 $0.20
Effect of dilutive stock and options:
Stock option plan 256 99
Restricted stock plan 152 143
Deferred stock unit plan 12 --
Employee stock purchase plan 46 72
Diluted earnings per share $ 7,948 29,694 $0.27 $ 5,275 26,301 $0.20
</TABLE>
Weighted average common shares used for the computation of basic
earnings per share excludes certain common shares issued pursuant to the
Company's restricted stock plan because under the related deferred compensation
agreement the officer forfeits such shares if he voluntarily terminates his
employment with the Company. The effect of the conversion of the
company-obligated mandatorily redeemable securities of the subsidiary trust has
not been included in the diluted earnings per share calculation since such
securities are anti-dilutive. At June 30, 1998, such securities were convertible
into 2,000,000 shares of common stock.
Acquisitions
Turner Parking
On April 1, 1998, the Company purchased substantially all of the assets
of Turner Parking Systems, Inc, ("Turner") a privately-held parking company
headquartered in Dallas, Texas, for $3.8 million, including $3.0 million in cash
and $800 thousand (16,842 shares) in common stock of the Company. The Company
financed the cash portion of the Turner purchase with borrowings under the New
Credit Facility described below. The transaction was accounted for using the
purchase method and, accordingly, the results of operations of Turner have been
included in the Company's consolidated financial statements from the date of
acquisition. The purchase price has been allocated to Turner's assets and
liabilities based on their estimated fair values at the date of acquisition. The
excess of the purchase price over fair value of the net assets acquired of $3.7
million is being amortized on a straight-line basis over 10 years. Turner
operates 34 parking facilities in Texas, Florida, California, Georgia and
Washington D.C.
Central Parking System of Louisiana, Inc.
The Company has historically owned 50% of Central Parking System of
Louisiana, Inc. ("CPS of LA") and on March 30, 1998 purchased the remaining 50%
from Property Service Corporation for $2.4 million in common stock (52,631
shares). CPS of LA manages and operates leased parking facilities, manages and
operates parking facilities owned or leased by other parties, and provides
financial and other advisory services. The Company's facilities are located in
Louisiana. The transaction was accounted for using the purchase method and,
accordingly, the purchase price has been allocated to CPS of LA's assets and
liabilities based on their estimated fair market values at the date of
acquisition. Since the date of acquisition, the results of operations have been
included in the Company's consolidated financial statements. Prior to the
acquisition, results of operation have been accounted for on the Company's books
under the equity method as an investment. The excess of the purchase price over
fair value of the net assets acquired of $2.3 million is being amortized on a
straight-line basis over 5 years.
Kinney System Holding, Corp.
On February 12, 1998, the Company purchased Kinney System Holding Corp.
("Kinney"), a privately-held parking company headquartered in New York City, for
$208.8 million, including $171.8 million in cash and other
Page 7 of 19
<PAGE> 8
consideration, and $37.0 million (882,422 shares) in common stock of the
Company. Kinney operated 403 parking facilities at the date of acquisition,
including facilities in New York, Boston, Philadelphia, and Washington D.C. In
connection with this transaction, the Company assumed $8.1 million in
capitalized leases, refinanced $24.2 million in existing Kinney debt and assumed
$4.6 million of Kinney debt. The purchase price is subject to adjustment based
on the outcome of an independent evaluation of Kinney's February 12, 1998
balance sheet. The Company financed the Kinney acquisition with borrowings under
the New Credit Facility described below. The transaction was accounted for using
the purchase method and, accordingly, the results of operations of Kinney have
been included in the Company's consolidated financial statements from the date
of acquisition. The preliminary purchase price has been allocated to Kinney's
assets and liabilities based on their estimated fair market values at the date
of acquisition. The excess of the preliminary purchase price over fair value of
the net assets acquired of $186.3 million is being amortized on a straight-line
basis over 30 years. Purchase price adjustments for Kinney have not been
finalized.
Diplomat Parking Corporation
On October 1, 1997, the Company purchased Diplomat Parking Corporation
("Diplomat") for $21.7 million, which was financed through a $12.3 million draw
on a revolving credit facility and an $8.2 million note to the sellers, that was
subsequently paid, at an interest rate of 5%. The note payment was financed
through a draw on the revolving credit facility. Diplomat operates 164 parking
facilities, located primarily in Washington, D.C. and Baltimore, Maryland. The
transaction was accounted for using the purchase method and, accordingly, the
results of operations of Diplomat have been included in the Company's
consolidated financial statements from the date of acquisition. The purchase
price has been allocated to Diplomat's assets and liabilities based on their
estimated fair values at the date of acquisition. The excess of the purchase
price over fair value of the net assets acquired of $20.1 million is being
amortized on a straight-line basis over 25 years.
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. 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 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 membership units retained by the Company
have been accounted for in the accompanying financial statements under the
equity method.
On March 17, 1998, Civic Parking obtained financing with a financial
institution for $60 million. The Company received net proceeds of $30.3 million
from this transaction which reduced the Company's investment in partnerships and
joint ventures. The proceeds from the refinancing were used to pay down the New
Credit Facility mentioned below. The Company will continue to operate these
garages pursuant to a lease and operating agreement with Civic Parking.
Pro Forma Information
The following unaudited consolidated pro forma condensed results of
operations, give effect to the acquisition of Kinney, CPS of LA, and Turner as
if such transactions had occurred at October 1, 1997, as follows (in thousands
except for earnings per share):
<TABLE>
<CAPTION>
Nine Months Ended
June 30, 1998
--------------
<S> <C>
Total revenues $325,412
Earnings before income tax 30,347
Net earnings 17,995
Basic earnings per common share $ 0.65
Diluted earnings per common share $ 0.64
</TABLE>
Page 8 of 19
<PAGE> 9
The foregoing unaudited proforma amounts are based upon certain
assumptions and estimates, including, but not limited to, the recognition of
estimated cost savings related to general and administrative expenses to be
eliminated prospectively in connection with the Kinney acquisition, interest
expense on debt incurred to finance the acquisition and amortization of goodwill
over 30 years for Kinney, 5 years for Louisiana, and 10 years for Turner. The
unaudited proforma amounts do not necessarily represent the results, which would
have occurred if the acquisition had taken place on the basis assumed above, nor
are they indicative of the results of future combined operations.
Long Term Debt
On February 11, 1998, the Company established a new credit facility
(the "New Credit Facility") providing for an aggregate availability of up to
$300 million, consisting of a five-year $200 million revolving credit facility,
including a sub-limit of $25 million for standby letters of credit, and a $100
million term loan. The New Credit Facility bears interest until June 30, 1998 at
a rate of LIBOR plus 1.25%. On June 30, 1998 the interest rate on the New Credit
Facility and the commitment fee on the unused portion reverted to a grid pricing
based upon the achievement of various financial ratios. The New Credit Facility
contains certain covenants including those that require the Company to maintain
certain financial ratios, restrict further indebtedness, and limit the amount of
dividends payable. On March 18, 1998, the Company completed offerings of equity
and convertible trust issued preferred securities, from which the Company
obtained $195.3 million in net proceeds. The Company repaid and terminated the
$100 million term loan with proceeds from these offerings. The remaining $95.3
million in proceeds was applied to reduce the outstanding balance under the $200
million revolving credit facility. The amount outstanding under the Company's
New Credit Facility as of June 30, 1998 is $53.5 million, at an interest rate of
7.0%. The Company used borrowings under the New Credit Facility to replace the
Company's prior revolving credit facility and to finance the Kinney and Turner
acquisitions.
The prior credit facility, which was unsecured, was scheduled to expire
January 31, 2000. Credit available under the prior facility amounted to $120
million. The amount outstanding under the Company's prior credit facility was
$70.8 million, which is reflected as long term debt on the accompanying
condensed consolidated balance sheet as of September 30, 1997. Such debt had a
7.1% weighted average interest rate for the period from December 31, 1996 to
September 30, 1997, during which the Company had debt outstanding. At June 30,
1997, the Company had $78.3 million outstanding under its credit facilities at
an interest rate of 7.1%. The weighted average balance outstanding was $227.4
million during the nine months ended June 30, 1997 with a weighted average
interest rate of 7.2%.
Convertible Trust Issued Preferred Securities and Equity Offerings
On March 18, 1998, the Company completed an offering of 2,137,500
shares of common stock. The Company received net proceeds from the offering of
$89.3 million. Concurrent with the common stock offering, the Company created
Central Parking Finance Trust ("Trust") which completed a private placement of
4,400,000 shares at $25.00 per share of 5.25% convertible trust issued preferred
securities ("Preferred Securities") pursuant to an exemption from registration
under the Securities Act of 1933, as amended. The Preferred Securities represent
preferred undivided beneficial interests in the assets of Central Parking
Finance Trust, a statutory business trust formed under the laws of the State of
Delaware. The Company owns all of the common securities of the Trust. The Trust
exists for the sole purpose of issuing the Preferred Securities and investing
the proceeds thereof in an equivalent amount of 5.25% Convertible Subordinated
Debentures ("Convertible Debentures") of the Company due 2028. The net proceeds
to the Company from the Preferred Securities private placement were $106.0
million. Each Preferred Security is entitled to receive cumulative cash
distributions at an annual rate of 5.25% (or $1.312 per share) and will be
convertible at the option of the holder thereof into shares of Company common
stock at a conversion rate of 0.4545 shares of Company common stock for each
Preferred Security (equivalent to $55.00 per share of Company common stock),
subject to adjustment in certain circumstances. The Preferred Securities do not
have a stated maturity date but are subject to mandatory redemption upon the
repayment of the Convertible Debentures at their stated maturity (April 1, 2028)
or upon acceleration or earlier repayment of the Convertible Debentures. The
proceeds of the equity and preferred security offerings were used to repay
indebtedness.
Page 9 of 19
<PAGE> 10
The Company's consolidated balance sheets reflect the Preferred
Securities of the Trust as company-obligated mandatorily redeemable convertible
securities of subsidiary whose sole assets are convertible subordinated
debentures of the Company.
Subsequent Events
On July 1, 1998, the Company purchased substantially all of the assets
of Sterling Parking, Inc, ("Sterling") a privately-held parking company
headquartered in Dallas, Texas, for $4.48 million, including $2.24 million in
cash and $2.24 million (54,358 shares) in common stock of the Company. The
Company financed the cash portion of the Sterling purchase with borrowings under
the New Credit Facility described above. Sterling operates 31 parking facilities
in Georgia, Florida, Virginia, California, and Kentucky.
Page 10 of 19
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Special Cautionary Notice Regarding Forward-Looking Statements
This quarterly report contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are
intended to be covered by the safe harbors created thereby. Those statements
include, but may not be limited to, the discussions of the company's
expectations concerning its future profitability, the discussion of the
Company's strategic relationships, discussions about Year 2000 compliance plans,
and the Company's operating and growth assumptions regarding certain matters,
including anticipated cost savings, in preparation of the unaudited pro forma
financial information. Investors are cautioned that forward-looking statements
involve risks and uncertainties. Although the Company believes that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate and, therefore, there can
be no assurance that the forward-looking statements included will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.
The Company provides parking services at multi-level parking facilities
and surface parking lots. It also provides parking consulting services, shuttle
services, valet services, parking meter enforcement services, and billing and
collection services. The Company distinguishes itself from its competitors by
combining a reputation for professional integrity and quality management with
operating strategies designed to increase the revenues of parking operations for
its clients. The Company's clients and landlords include some of the nation's
largest owners and developers of mixed-use projects, major office building
complexes, sports stadiums and hotels. Parking facilities operated by the
Company include, among others, certain terminals operated by BAA Heathrow
International Airport (London), the Prudential Center (Boston), Cinergy Field
(Cincinnati), Coors Field (Denver) and various parking facilities owned by the
Hyatt and Westin hotel chains, the Rouse Company, Faison Associates, May
Department stores, Equity Office Properties, and Crescent Real Estate.
The Company operates parking facilities under three types of arrangements:
- - Management contracts The Company's responsibilities under a management
contract as a facility manager include hiring, training, and staffing
parking personnel, and providing collections, accounting, record keeping,
insurance, and facility marketing services. In general, the Company is not
responsible for structural, mechanical, or electrical maintenance or
repairs, or providing security or guard services. The Company generally
receives a base monthly fee for managing these facilities plus fees for
ancillary services such as insurance, accounting, equipment leasing, and
consulting and often receives a percentage of facility revenues above a
base amount. Under the Company's typical management contract, the facility
owner pays a minimum management fee and operating expenses such as taxes,
license and permit fees, insurance, payroll and accounts receivable
processing, and wages of personnel assigned to the facility. In addition,
the facility owner also pays for maintenance, repair costs, and capital
improvements. The typical management contract is for a term of one to three
years and is renewable, typically for successive one-year terms.
- - Lease contracts In contrast to management contracts, lease arrangements
are typically for terms of three to ten years, with a renewal term, and
provide for a contractually established payment for the facility owner,
regardless of operating earnings of the parking facility. The Company's
rent is generally a flat annual amount, a percentage of gross revenues, or
a combination thereof. Under its leases, the Company is responsible for all
facets of the parking operations, including utilities and ordinary and
routine maintenance, but is generally not responsible for major
maintenance, repair, or property taxes. The leased facilities require a
longer commitment and a larger capital investment by the Company than
managed facilities, but provides a more stable source of revenue and a
greater opportunity for long term revenue growth.
- - Facility ownership Ownership of parking facilities, either independently
or through joint ventures, typically requires a larger capital investment
than managed or leased facilities, but provides maximum control over the
operation of the parking facility. All owned facility revenues flow
directly to the Company. Additionally, ownership provides the potential for
realizing capital gains from the appreciation of the value of underlying
real estate. The Company typically targets ownership opportunities in
cities in which it currently operates, focusing on unrelated sites that are
being used as parking facilities.
Page 11 of 19
<PAGE> 12
The Company also seeks joint venture partners who are established local
or regional developers pursuing financing alternatives for development projects.
Joint ventures typically involve a development where the parking facility is a
part of a larger multi-use project, allowing the Company's joint venture
partners to benefit from a capital infusion to the project. Joint ventures offer
the revenue growth potential of ownership with a partial reduction in capital
requirements.
Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997
Parking revenues for the third quarter of fiscal 1998 increased to
$96.5 million from $49.2 million in the third quarter of fiscal 1997, an
increase of $47.3 million, or 96.1%. Of the $47.3 million increase, $38.4
million, or 81.3% of the increase, resulted from the acquisitions of Diplomat,
Kinney, and Turner's 322 leased and owned locations. The remaining increase of
$8.9 million, or 18.7%, resulted from the net addition of 39 leased and owned
locations over the same quarter last year as well as a combination of rate
increases and higher utilization of parking spaces at existing facilities.
Revenues from foreign operations increased to $5.9 million from $5.3 million, an
increase of $600 thousand or 12.0%. The increase in foreign revenues was a
result of a combination of the addition of 53 leased locations as well as rate
increases and higher utilization of parking spaces at existing facilities.
Management contract revenues for the third quarter of fiscal 1998
increased to $15.7 million from $10.8 million in the third quarter of fiscal
1997, an increase of $4.9 million or 45.2%. Of the $4.9 million increase, $2.4
million, or 48.5% of the increase, resulted from the addition of 303 management
locations through the acquisitions of Diplomat, Kinney, and Turner. The
remaining increase of $2.5 million, or 51.5% of the total increase, is
attributed to the net addition of 102 management contracts and increased
management fees on existing locations.
Cost of parking in fiscal third quarter 1998 increased to $81.8 million
from $43.1 million in fiscal third quarter 1997, an increase of $38.7 million or
89.7%. Rent expense increased $25.5 million and payroll increased $6.4 million,
principally as a result of new locations from acquisitions and increases on
existing locations. Cost of parking as a percentage of parking revenues,
decreased to 84.8% in the third quarter of fiscal 1998 from 87.7% in fiscal
third quarter 1997. This decrease of 290 basis points was attributable
predominantly to the spreading of a number of fixed costs, over a larger revenue
base.
Cost of management contracts in fiscal third quarter 1998 increased to
$4.2 million from $3.5 million in the comparable period in 1997, an increase of
$700 thousand or 21.5%. The increase in cost reflects higher insurance claims
and employment taxes associated with the increase in the number of managed
facilities. Cost of management contracts as a percentage of management contract
revenue decreased to 26.8% for the third fiscal quarter 1998 from 32.0% for the
same period last year. The decrease as a percentage of management contract
revenue was attributable to the spreading of fixed costs over a larger revenue
base.
General and administrative expenses increased to $9.7 million for the
third quarter of fiscal 1998 from $5.4 million in fiscal third quarter 1997, an
increase of $4.3 million or 80.3%. The increase is primarily attributable to the
purchase of Kinney, Diplomat, and Turner and the increased administrative
activities associated with those acquisitions, as well as increased incentive
compensation resulting from increased profits and start-up costs associated with
the opening of new locations. General and administrative expenses, as a
percentage of revenues, were 8.7% for the third quarter of fiscal 1998 compared
to 9.0% for the third quarter of fiscal 1997, a decrease of 30 basis points. The
decrease was attributable to spreading fixed expenses over a broader base.
Goodwill and non-compete amortization for the third quarter of fiscal
1998 increased to $2.6 million from $332 thousand in fiscal third quarter 1997,
an increase of $2.2 million, as a result of the Diplomat, Kinney, and Turner
acquisitions.
Interest income increased to $785 thousand for the third quarter of
fiscal 1998, from $341 thousand in the third quarter of fiscal 1997, an increase
of $444 thousand. The increase in interest income is a result of higher
investment balances outstanding during the quarter and increased notes
receivable balances.
Interest expense decreased to $1.5 million for the third quarter of
fiscal 1998 from $1.6 million in the third quarter of fiscal 1997. The decrease
in interest expense was attributable to the decrease in indebtedness under the
Company's credit facilities. The weighted average balance outstanding under such
credit facilities was $53.4 million during the quarter ended June 30, 1998, at a
weighted average interest rate of 7.0%. The weighted average balance outstanding
was $82.0 million during the quarter ended June 30, 1997, at an average interest
rate of 7.2%. Additionally, the Company recorded dividends
Page 12 of 19
<PAGE> 13
on Company-obligated mandatorily redeemable convertible securities of a
subsidiary trust in the amount of $1.5 million during the quarter ended June 30,
1998.
Income taxes increased to $5.0 million for the third quarter of fiscal
1998 from $3.0 million in the third fiscal quarter in 1997, an increase of $2.0
million or 67.7%. The effective tax rate for the fiscal 1998 quarter was 38.5%
compared to 36.0% for the 1997 quarter. The increase in the effective tax rate
is attributable to a combination of decreasing interest income on tax-exempt
investments, an increase in non-tax deductible goodwill amortization and an
increase in effective state income tax rates.
Nine Months Ended June 30, 1998 Compared to Nine Months Ended June 30, 1997
Parking revenues for the nine months ending June 30, 1998 increased to
$232.0 million from $127.0 million in the nine months ending June 30, 1997, an
increase of $105.0 million, or 82.7%. Of the $105.0 million increase, $82.2
million, or 78.3% of the increase, resulted from the acquisition of Square
Industries, Inc. ("Square"), Car Park Corporation ("Car Park"), Diplomat,
Kinney, and Turner's 398 leased and owned locations. The remaining increase of
$22.8 million, or 21.7%, is a result of the net addition of 142 leased and owned
locations over the same period last year as well as a combination of rate
increases and higher utilization of parking spaces at existing facilities.
Revenues from foreign operations increased to $17.0 million from $13.4 million,
an increase of $3.6 million or 26.5%. The increase in foreign revenues was a
result of a combination of the addition of 53 leased locations as well as rate
increases and higher utilization of parking spaces at existing facilities.
Management contract revenues for the nine months ending June 30, 1998
increased to $42.6 million from $30.4 million in the nine months ending June 30,
1997, an increase of $12.2 million or 40.2%. Of the $12.2 million increase, $5.4
million, or 44.4%, resulted from the addition of 343 management locations
through the acquisitions of Square, Turner, Car Park, Diplomat and Kinney. The
remaining increase of $6.8 million, or 55.6%, is attributed to the net addition
of 142 management contracts and increased management fees on existing locations.
Cost of parking in the nine months ending June 30, 1998 increased to
$199.6 million from $111.6 million in the nine months ending June 30, 1997, an
increase of $88.0 million or 78.9%. Rent expense increased $55.7 million and
payroll increased $17.0 million, principally as a result of new locations from
acquisitions and increases on existing locations. Cost of parking as a
percentage of parking revenues, decreased to 86.1% in the nine months ending
June 30, 1998 from 87.9% in the nine months ending June 30, 1997. This decrease
of 180 basis points was attributable predominantly to greater economies of scale
resulting from synergies realized from recent acquisitions.
Cost of management contracts in the nine months ending June 30, 1998
increased to $11.3 million from $9.2 million in the comparable period in 1997,
an increase of $2.1 million or 23.6%. The increase in cost reflects higher
insurance claims and employment taxes associated with the increase in the number
of managed facilities.
General and administrative expenses increased to $24.3 million for the
nine months ending June 30, 1998 from $16.1 million in the nine months ending
June 30, 1997, an increase of $8.2 million or 51.1%. The increase is primarily
attributable to increased incentive compensation resulting from increased
profits and start-up costs associated with the opening of new locations and
joint ventures. General and administrative expenses, as a percentage of
revenues, were 8.9% for the nine months ending June 30, 1998 compared to 10.2%
for the nine months ending June 30, 1997, a decrease of 130 basis points. The
decrease was attributable to spreading fixed expenses over a broader base and
the implementation of bonus limits on certain key executives.
Goodwill and non-compete amortization for the nine months ended June
30, 1998 increased to $4.6 million from $568 thousand in the nine months ended
June 30, 1997, an increase of $4.0 million, as a result of the Square, Car Park,
Kinney, Turner, and Diplomat acquisitions.
Interest income increased to $1.9 million for the nine months ending
June 30, 1998, from $1.2 million in the nine months ending June 30, 1997, an
increase in the amount of $700 thousand or 57.1%. The increase in interest
income is a result of higher investment balances outstanding during the
nine-month period and increased notes receivable balances.
Interest expense increased to $6.2 million for the nine months ending
June 30, 1998 from $2.9 million in the nine months ending June 30, 1997. Of the
$3.3 million increase, $2.7 million or 80.4% of the increase, is attributable to
the indebtedness under the Company's credit facilities outstanding for nine
months in fiscal period 1998 compared to six months in fiscal period 1997, the
capitalization of interest on incremental debt related to the Civic acquisition
and bank fees associated with the credit facilities.
Page 13 of 19
<PAGE> 14
The remaining increase is attributable to the debt assumed in the Kinney
acquisition. The weighted average balance outstanding under the Company's
credit facilities was $94.3 million during the nine months ended June 30, 1998,
at a weighted average interest rate of 6.8%. For the fiscal period 1997, the
weighted average balance outstanding was $97.8 million for the period during
which the Company had debt outstanding, beginning December 31, 1996, at an
average interest rate of 7.1%. Additionally, the Company recorded dividends on
Company-obligated mandatorily redeemable convertible securities of a subsidiary
trust in the amount of $1.7 million during the nine months ended June 30, 1998.
Income taxes increased to $12.4 million for the nine months ending June
30, 1998 from $7.6 million in the nine months ending June 30, 1997, an increase
of $4.8 million or 62.5%. The effective tax rate for the first nine months of
the 1998 fiscal year was 38.4% compared to 36.0% for the same period in 1997.
The increase in the effective tax rate is attributable to a combination of
decreasing interest income on tax-exempt investments, an increase in non-tax
deductible goodwill amortization and an increase in effective state income tax
rates.
Liquidity and Capital Resources
During the nine months ended June 30, 1998 and 1997, the Company
generated cash flow from operating activities of $37.5 million and $5.1 million,
respectively, an increase of $32.4 million. The increase is primarily
attributable to increased net earnings of $6.3 million, increased goodwill and
non-compete amortization of $4.1 million, increased depreciation of $1.4
million, and increased changes in net operating assets and liabilities of $19.3
million.
The Company utilized cash of $210.4 million, net of cash acquired, in
the first nine months of fiscal 1998 for acquisitions (see Acquisitions)
compared to $50.6 million for the first nine months of fiscal 1997. The
acquisitions were funded from credit facilities described herein.
The Company purchased properties during the nine months ended June 30,
1998, and 1997 in the amounts of $21.4 million and $6.2 million, respectively.
During the first nine months of the 1997 fiscal year, Civic Parking, which
consists of four parking garages totaling approximately 7,500 parking spaces,
was acquired for $91.0 million. Of the $91.0 million, $46.0 million was held for
resale to a joint venture partner and $45.0 million was recorded as an
investment in joint ventures. The purchase was funded partially through
available cash and the drawing under a revolving credit facility in the amount
of $67.2 million. In April 1997, the Company sold 50% of its investment in Civic
Parking for $46.0 million.
During the nine months ended June 30, 1998, the Company received net
proceeds from an offering of 2,137,500 shares of common stock of $89.3 million.
Concurrent with the common stock offering, the Company received net proceeds
from a private placement of company-obligated mandatorily redeemable convertible
securities of $106.0 million.
At June 30, 1998, the Company had available $140.3 million under a new
credit facility. See New Credit Facility discussion below.
Acquisitions
Turner Parking
On April 1, 1998, the Company purchased substantially all of the assets
of Turner Parking Systems, Inc, ("Turner") a privately-held parking company
headquartered in Dallas, Texas, for $3.8 million, including $3.0 million in cash
and $800 thousand (16,842 shares) in common stock of the Company. The Company
financed the cash portion of the Turner purchase with borrowings under the New
Credit Facility described below. The transaction was accounted for using the
purchase method and, accordingly, the results of operations of Turner have been
included in the Company's consolidated financial statements from the date of
acquisition. The purchase price has been allocated to Turner's assets and
liabilities based on their estimated fair values at the date of acquisition. The
excess of the purchase price over fair value of the net assets acquired of $3.7
million is being amortized on a straight-line basis over 10 years. Turner
operates 34 parking facilities in Texas, Florida, California, Georgia and
Washington D.C.
Central Parking System of Louisiana, Inc.
The Company has historically owned 50% of Central Parking System of
Louisiana, Inc. ("CPS of LA") and on March 30, 1998 purchased the remaining 50%
from Property Service Corporation for $2.4 million in common stock (52,631
shares). CPS of LA manages and operates leased parking facilities, manages and
operates parking facilities owned or leased by other parties, and provides
financial and other advisory services. The Company's facilities are located in
Louisiana. The transaction was accounted for using the purchase method and,
accordingly, the purchase price has been
Page 14 of 19
<PAGE> 15
allocated to CPS of LA's assets and liabilities based on their estimated fair
market values at the date of acquisition. Since the date of acquisition, the
results of operations have been included in the company's consolidated financial
statements. Prior to the acquisition, results of operation have been accounted
for on the Company's books under the equity method. The excess of the purchase
price over fair value of the net assets acquired of $2.3 million is being
amortized on a straight-line basis over 5 years.
Kinney System Holding, Corp.
On February 12, 1998, the Company purchased Kinney System Holding Corp.
("Kinney"), a privately-held parking company headquartered in New York City, for
$208.8 million, including $171.8 million in cash and other consideration, and
$37.0 million (882,422 shares) in common stock of the Company. Kinney currently
operates 403 parking facilities, including facilities in New York, Boston,
Philadelphia, and Washington D.C. In connection with this transaction, the
Company assumed $8.1 million in capitalized leases, refinanced $24.2 million in
existing Kinney debt and assumed $4.6 million of Kinney debt. The purchase price
is subject to adjustment based on the outcome of an independent evaluation of
Kinney's February 12, 1998 balance sheet. The Company financed the Kinney
acquisition with borrowings under the New Credit Facility described below. The
transaction was accounted for using the purchase method and, accordingly, the
results of operations of Kinney have been included in the Company's consolidated
financial statements from the date of acquisition. The preliminary purchase
price has been allocated to Kinney's assets and liabilities based on their
estimated fair market values at the date of acquisition. The excess of the
preliminary purchase price over fair value of the net assets acquired of $186.3
million is being amortized on a straight-line basis over 30 years. Purchase
price adjustments for Kinney have not been finalized.
Diplomat Parking Corporation
On October 1, 1997, the Company purchased Diplomat Parking Corporation
("Diplomat") for $21.7 million, which was financed through a $12.3 million draw
on a revolving credit facility and an $8.2 million note to the sellers, that was
subsequently paid, at an interest rate of 5%. The note payment was financed
through a draw on the revolving credit facility. Diplomat operates 164 parking
facilities, located primarily in Washington, D.C. and Baltimore, Maryland. The
transaction was accounted for using the purchase method and, accordingly, the
results of operations of Diplomat have been included in the Company's
consolidated financial statements from the date of acquisition. The purchase
price has been allocated to Diplomat's assets and liabilities based on their
estimated fair values at the date of acquisition. The excess of the purchase
price over fair value of the net assets acquired of $20.1 million is being
amortized on a straight-line basis over 25 years.
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. 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 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 membership units retained by the Company
have been accounted for in the accompanying financial statements under the
equity method.
On March 17, 1998, Civic Parking obtained financing with a financial
institution for $60 million. The Company received net proceeds of $30.3 million
from this transaction which reduced the Company's investment in partnerships and
joint ventures. The proceeds from the refinancing were used to pay down the New
Credit Facility mentioned below. The Company does not expect such distributions
to occur in the future. The Company will continue to operate these garages
pursuant to a lease and operating agreement with Civic Parking.
Page 15 of 19
<PAGE> 16
New Credit Facility
On February 11, 1998, the Company established a new credit facility
providing for an aggregate availability of up to $300 million, consisting of a
five-year $200 million revolving credit facility, including a sub-limit of $25
million for standby letters of credit, and a $100 million term loan. The term
loan portion of the New Credit Facility was repaid with proceeds from the common
stock and Preferred Securities offerings described below. The New Credit
Facility bears interest until June 30, 1998 at a rate of LIBOR plus 1.25%. On
June 30, 1998 the interest rate on the New Credit Facility and the commitment
fee on the unused portion will revert to a grid pricing based upon the
achievement of various financial ratios. The New Credit Facility contains
certain covenants including those that require the Company to maintain certain
financial ratios, restrict further indebtedness, and limit the amount of
dividends payable. The amount outstanding under the Company's New Credit
Facility as of June 30, 1998 is $53.5 million, with an average interest rate of
6.9% for the period the New Credit Facility was outstanding. The Company used
borrowings under the New Credit Facility to replace the Company's prior
revolving credit facility and to finance the Kinney acquisition.
The prior credit facility, which was unsecured, was scheduled to expire
January 31, 2000. Credit available under the prior facility amounted to $120
million. The amount outstanding under the Company's prior credit facility was
$70.8 million, which is reflected as long term debt on the accompanying
condensed consolidated balance sheet as of September 30, 1997. Such debt had a
7.1% weighted average interest rate for the period from December 31, 1996 to
September 30, 1997, during which the Company had debt outstanding. At June 30,
1997, the Company had $78.3 million outstanding under its credit facilities at
an interest rate of 7.1%. The weighted average balance outstanding was $227.4
million during the nine months ended June 30, 1997 at an average interest rate
of 7.2%.
Convertible Trust Issued Preferred Securities and Equity Offerings
On March 18, 1998, the Company completed an offering of 2,137,500
shares of common stock. The Company received net proceeds from the offering of
$89.3 million. Concurrent with the common stock offering, the Company created
the Trust which completed a private placement of 4,400,000 shares at $25.00 per
share of 5.25% convertible trust issued preferred securities pursuant to an
exemption from registration under the Securities Act of 1933, as amended. The
Preferred Securities represent preferred undivided beneficial interests in the
assets of Central Parking Finance Trust, a statutory business trust formed under
the laws of the State of Delaware. The Company owns all of the common securities
of the Trust. The Trust exists for the sole purpose of issuing the Preferred
Securities and investing the proceeds thereof in an equivalent amount of 5.25%
Convertible Subordinated Debentures ("Convertible Debentures") of the Company
due 2028. The net proceeds to the Company from the Preferred Securities private
placement were $106.0 million. Each Preferred Security is entitled to receive
cumulative cash distributions at an annual rate of 5.25% (or $1.312 per share)
and will be convertible at the option of the holder thereof into shares of
Company common stock at a conversion rate of 0.4545 shares of Company common
stock for each Preferred Security (equivalent to $55.00 per share of Company
common stock), subject to adjustment in certain circumstances. The Preferred
Securities do not have a stated maturity date but are subject to mandatory
redemption upon the repayment of the Convertible Debentures at their stated
maturity (April 1, 2028) or upon acceleration or earlier repayment of the
Convertible Debentures. The proceeds of the equity and preferred security
offerings were used to repay indebtedness.
The Company's consolidated balance sheets reflect the Preferred
Securities of the Trust as company-obligated mandatorily redeemable convertible
securities of subsidiary whose sole assets are the convertible subordinated
debentures of the Company.
Subsequent Events
On July 1, 1998, the Company purchased substantially all of the assets
of Sterling Parking, Inc, ("Sterling") a privately-held parking company
headquartered in Dallas, Texas, for $4.48 million, including $2.24 million in
cash and $2.24 million (54,358 shares) in common stock of the Company. The
Company financed the cash portion of the Sterling purchase with borrowings under
the New Credit Facility described above. Sterling operates 34 parking facilities
in Georgia, Florida, Virginia, California, and Kentucky.
Page 16 of 19
<PAGE> 17
Year 2000
The Company has considered the impact of year 2000 issues on its
computer systems and applications and has developed a remediation plan. These
plans are part of the Company's ongoing business strategies to incorporate
advanced technologies in its information systems. The expenditures for system
upgrades will be accounted for as capital expenditures, and will not have a
significant impact on the Company's operations or liquidity.
Page 17 of 19
<PAGE> 18
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
There were no matters submitted to a vote of security-holders
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule (EDGAR Filing Only)
(b) Reports on Form 8-K.
In relation to the acquisition of Kinney System Holding Corp,
the Company filed an amended current report on form 8-KA on
May 15, 1998. This report included Item 2 and Item 7.
Financial statements presented under Item 7 included
pre-acquisition financial statements for Kinney System
Holding, Corp. and pro forma financial information for Central
Parking Corporation.
Page 18 of 19
<PAGE> 19
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 14, 1998 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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Stephen A. Tisdell Chief Financial Officer (Principal August 14, 1998
- ----------------------------------------- Financial and Accounting Officer)
Stephen A. Tisdell
</TABLE>
Page 19 of 19
<TABLE> <S> <C>
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SHARE AND PER SHARE AMOUNTS HAVE BEEN ADJUSTED TO REFLECT THE DECEMBER 12, 1997
THREE-FOR-TWO STOCK SPLIT
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<NAME> CENTRAL PARKING CORPORATION
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