Central Parking Corp. (CPC) shares rose another 11.5% to a new 52-week high Friday morning, a day after releasing improved financial results. In Thursday's conference call, highlights of which are published below, company executives gave further explanation for the gains.
The Nashville-based company, which owns 202 facilities, manages 1,695 and leases another 1,757, said it earned $9.7 million, or 27 cents a share, in the first quarter, nearly double from the same period last year when the company showed earnings of $5.2 million, or 14 cents a share.
Central Parking shares were up $2.05, or 11.5%, in Friday morning trading. Earlier the shares made a new 52-week high of $20.06. Their 52-week low is $8.13. As a result, the company has raised its EPS guidance for fiscal 2004 to 55-65 cents from 45-55. The increased earnings were due to lower expenses, significantly reduced debt and an increase in the comparable sales in the New York market, said Monroe Carell, the company’s Chairman and CEO, in yesterday's conference call yesterday.
In the recent quarter, the company reduced its long-term debt by more $38 million, largely through approximately $24 million in property sales. CPC also received $19.8 million, or $17.1 million net of value-added taxes, from the restructuring of a lease contract to a management agreement with the United Kingdom’s Connex rail. The rest of the debt-reduction was due to increased cash flow from operations and reduced capital expenditures. Overall the net debt-to-capital ratio was reduced from 42.9% at the end of 2003 to 38.8%.
The company was also able to stabilize its payroll, reducing overtime pay by 22% since the second quarter last year. Consequently, Carell said he expects the company to continue on the positive trend throughout the year and is expecting another $20 million to $25 million in asset sales to continue reducing debt.
Company officials were asked and declined extensive comment in the conference call about Canada’s largest parking operator Imperial Parking Corp., which has 1,680 parking lots in Canada and the U.S. and announced last week that it has signed a $46.8 million deal to be acquired by an affiliate of Cleveland’s private equity firm Gates Group LLC Central parking. According to the questioner, Imperial will be bought for eight times trailing EBITDA.
Other highlights from the call:
* Same-store sales rose 2.9% in the recent quarter. The New York market saw a 7% gain, while the rest of the country gained less than 1%. Central Parking said those same sales trends in New York are persisting in the current quarter, though a major storm impacted December sales.
* A 22% reduction in overtime accounted for some of the reduction in expenses.
* Capital expenditures in fiscal 2004 should be $17 million to $20 million
* Pricing of parking services is becoming firmer, the company said. New Orleans, Los Angeles, Denver, midtown New York and Washington, D.C. are markets where parking prices are edging upward. The rest of the country remains flat in its pricing.
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