SP Plus Corporation
Nov 4, 2015
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SP Plus Corporation Announces Third Quarter and Year-to-Date 2015 Results

Year-to-date performance continues to significantly outpace 2014;
Full-year adjusted EPS toward higher end of guidance range

CHICAGO, Nov. 4, 2015 (GLOBE NEWSWIRE) -- SP Plus Corporation (Nasdaq:SP), a leading national provider of parking, ground transportation and related products and services to commercial, institutional and municipal clients throughout North America, today announced its results for the third quarter and first nine months of 2015.

G Marc Baumann, President and Chief Executive Officer, stated, "We remain very pleased with our financial performance this year. Year-to-date adjusted gross profit growth of 6%, coupled with results we're achieving from our cost reduction initiatives, is generating double-digit growth in year-to-date adjusted EBITDA and our third quarter results continued to show solid growth in year-over-year adjusted gross profit. Our robust new business pipeline continues to significantly contribute to this growth.

"With nine-months behind us, we're very pleased with our progress on the key initiatives we laid out for the year to drive EBITDA growth. Looking forward to 2016 and beyond, we're confident that the initiatives and strategies we're implementing across SP+, as well as our ability to identify and execute on new opportunities, bode well for our goal of driving growth and creating value for our clients, customers and shareholders."

Financial Summary
         
In millions except per share Three Months Ended  Three Months Ended
  September 30, 2015 September 30, 2014
  Reported Adjusted (3) Reported Adjusted (3)
Gross profit (1) $42.8 $45.2 $43.6 $43.4
General and administrative expenses (1) $23.8 $22.2 $24.1 $20.7
EBITDA (1),(3) $18.3 $22.2 $18.7 $22.0
Net income attributable to SP Plus (1) $3.7 $5.9 $4.3 $6.3
Earnings per share (EPS) (1) $0.16 $0.26 $0.19 $0.28
Free cash flow (2),(3) $5.9 $11.3 $9.3 $10.0
         
In millions except per share Nine Months Ended  Nine Months Ended
  September 30, 2015 September 30, 2014
  Reported Adjusted (3) Reported Adjusted (3)
Gross profit (1) $130.5 $134.5 $126.8 $126.7
General and administrative expenses (1) $74.2 $70.7 $75.2 $68.9
EBITDA (1),(3) $54.3 $61.7 $49.5 $55.7
Net income attributable to SP Plus (1) $14.8 $15.4 $13.9 $11.5
Earnings per share (EPS) (1) $0.66 $0.69 $0.62 $0.52
Free cash flow (2),(3) $7.9 $16.8 $22.1 $24.3
         
(1) Adjusted to eliminate non-routine items including, but not limited to, restructuring, merger and integration costs, non-routine asset sales or dispositions, non-routine tax adjustments, and ongoing costs related to non-routine structural and other repairs at legacy Central Parking lease locations. Results have also been adjusted for the impact of the completed Parkmobile investment transaction, the sale of a large portion of the security business, and other contemplated transaction costs. Please refer to the accompanying financial tables for a reconciliation of these adjusted items.
         
 (2) Adjusted free cash flow excludes cash used for non-routine structural and other repairs at legacy Central Parking lease locations.
         
(3) Refer to accompanying financial tables for a reconciliation of non-GAAP financial measures.

Third Quarter Operating Results

Reported gross profit in the third quarter of 2015 was $42.8 million, compared to $43.6 million in the third quarter of 2014, a decrease of $0.8 million or 2%.  On an adjusted basis, which excludes non-routine structural and other repair costs in both years as well as the impact of last year's Parkmobile transaction and this year's security transaction, third quarter 2015 adjusted gross profit increased $1.7 million or 4% as compared to last year. Strong new business activity and continued favorable changes in casualty loss reserve estimates for prior years were offset by wind-down expenses at a recently terminated airport contract.

Third quarter 2015 reported general and administrative (G&A) expenses were $23.8 million, which included $1.6 million of restructuring, merger and integration related costs, as compared to reported G&A of $24.1 million in the third quarter of 2014, which included $3.0 million of restructuring, merger and integration related costs as well as $0.4 million for costs related to Click and Park operations, the Parkmobile transaction and other contemplated transactions. On an adjusted basis, third quarter 2015 G&A expenses were $22.2 million, up $1.5 million from the third quarter of 2014, also on an adjusted basis. On a sequential quarter basis, third quarter adjusted G&A decreased $2.1 million or 9% from the second quarter of 2015.

Resulting adjusted EBITDA was $22.2 million for the third quarter of 2015, as compared with $22.0 million on the same basis for the third quarter of 2014.

Reported earnings per share for the third quarter of 2015 was $0.16, as compared to reported earnings per share of $0.19 for the third quarter of 2014. Adjusted earnings per share, which excludes restructuring, merger and integration related costs, the impact of asset sales and dispositions, non-routine structural repairs, and non-routine tax adjustments, was $0.26 for the third quarter of 2015, as compared with adjusted earnings per share of $0.28 for the third quarter of 2014. While the Company realized lower interest expense in the third quarter of 2015 as compared with the third quarter of 2014 due to its amended senior credit agreement, it was more than offset by higher income taxes and depreciation and amortization expense. The Company incurred higher income taxes in the third quarter of 2015 as compared to the third quarter of 2014 due to favorable tax adjustments recognized last year as well as a higher overall state tax rate in the current year.

Recent Developments

Recent contract awards and new business activity include the following:

Year-to-Date Operating Results

Reported gross profit for the first nine months of 2015 was $130.5 million, compared to $126.8 million for the same period of 2014, an increase of $3.7 million or 3%. On an adjusted basis, which excludes non-routine structural and other repair costs as well as the impact from asset sales or dispositions from both years, adjusted gross profit for the first nine months of 2015 was up $7.8 million or 6% over the same period last year. Strong new business activity, as well as continued favorable changes in casualty loss reserve estimates for prior years and a substantial reduction in health benefit costs, contributed to the gross profit growth.

Reported G&A expenses for the first nine months of 2015 were $74.2 million, which included $3.5 million of restructuring, merger and integration related costs as compared to reported G&A of $75.2 million in the first nine months of 2014 that included $5.0 million of restructuring, merger and integration related costs and $1.3 million for costs related to Click and Park operations, the Parkmobile transaction and other contemplated transactions. On an adjusted basis, G&A for the first nine months of 2015 was up $1.9 million over the same period of 2014. A $2.7 million increase in costs related to the Company's performance-based compensation and long-term incentive plans contributed to the year-over-year increase.

Resulting adjusted EBITDA was $61.7 million for the first nine months of 2015, as compared with $55.7 million on the same basis for the first nine months of 2014, an increase of 11%.

Reported earnings per share for the first nine months of 2015 was $0.66, which included a $0.20 per share benefit from the reversal of valuation allowances for deferred tax assets, as compared to reported earnings per share of $0.62 for the first nine months of 2014, which included a $0.28 per share benefit from the reversal of valuation allowances for deferred tax assets. Adjusted earnings per share, which excludes restructuring, merger and integration related costs, the impact of asset sales and dispositions, non-routine structural repairs and non-routine tax adjustments, was $0.69 for the first nine months of 2015. Despite expected increases in depreciation and amortization expenses and income taxes that more than offset the year-to-date reduction in interest expense, 2015 adjusted earnings per share increased $0.17 per share over adjusted earnings per share of $0.52 for the first nine months of 2014.

The Company generated adjusted free cash flow of $16.8 million during the first nine months of 2015, in line with Company expectations but lower than the $24.3 million generated during the first nine months of 2014, primarily due to $15.9 million higher cash taxes paid in 2015. Based on the current outlook for the remainder of 2015, the Company continues to expect to generate full-year free cash flow in line with its previous guidance.

Outlook

Based on results of the first nine months of 2015, the Company continues to expect its full-year adjusted EPS and adjusted EBITDA to be toward the higher end of the guidance range of $0.93 to $1.03 for adjusted EPS and $83 million to $87 million for adjusted EBITDA. Adjusted EBITDA and Adjusted EPS will continue to exclude non-routine items, including but not limited to restructuring, merger and integration costs, asset sales, non-routine tax adjustments, and ongoing costs related to non-routine structural and other repairs. Free cash flow, adjusted for non-routine structural and other repairs, is still expected to be in the range of $30 million to $36 million.

Conference Call

The Company's quarterly earnings conference call will be held at 10:00 a.m. (Central Time) on November 5, 2015, and will be available live and in replay to all analysts and investors through a webcast service. To listen to the live call, individuals are directed to the Company's Investor Relations page at http://ir.spplus.com at least 15 minutes early to register and download and install any necessary audio software. For those who cannot listen to the live broadcast, replays will be available shortly after the call on the SP Plus website and can be accessed for 30 days after the call.

About SP+

SP+ provides professional parking, ground transportation, facility maintenance, security and event logistics services to property owners and managers in all markets of the real estate industry. The Company has more than 22,000 employees. SP+ Parking operates approximately 3,900 parking facilities with 2.1 million parking spaces in hundreds of cities across North America, including parking-related and shuttle bus operations serving approximately 75 airports. USA Parking System, a wholly owned subsidiary, is one of the premier valet operators in the nation with more four and five diamond luxury properties, including hotels and resorts, than any other valet competitor. The Company's ground transportation division transports over 41 million passengers each year; its facility maintenance division operates in dozens of U.S. cities; and it provides security services in several states. The Company also provides a wide range of event logistics services. For more information, visit www.spplus.com.

You should not construe the information on that website to be a part of this release. SP Plus Corporation's annual reports filed on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K are available on the Internet at www.sec.gov and can also be accessed through the Investor Relations section of the Company's website.

Cautionary Note Regarding Forward-Looking Statements

This release and the attached tables contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including the statements under the caption "Outlook," and other statements regarding expectations, beliefs, plans, intentions and strategies of the Company. The Company has tried to identify these statements by using words such as "expect," "anticipate," "believe," "could," "should," "estimate," "intend," "may," "plan," "guidance," "will," "are to be" and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. These forward-looking statements are made based on management's expectations and beliefs concerning future events affecting the Company and are subject to uncertainties and factors relating to operations and the business environment, all of which are difficult to predict and many of which are beyond management's control. Actual results, performance and achievements could differ materially from those expressed in, or implied by, these forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, the following: costs of non-routine structural and other repairs incurred by the Company under leases acquired in the Central Merger; adverse litigation judgments or settlements, including a dispute with Central's former stockholders; intense competition; risks associated with management contracts and leases; information technology disruption, cyber attacks, cyber terrorism and security breaches; breach of credit facility terms, which may restrict borrowing, require penalty payments or accelerate payment of the Company's substantial indebtedness; the impact of public and private regulations; deterioration of general economic and business conditions or changes in demographic trends; financial difficulties or bankruptcy of major clients; insurance losses that are worse than expected or adverse events not covered by insurance; labor disputes; negative or unexpected tax events; risks associated with joint ventures; extraordinary events affecting parking at facilities that the Company manages, including emergency safety measures, military or terrorist attacks, and natural disasters; adverse weather conditions that reduce gross profit; the risk that state and municipal government clients sell or enter into long-term leases of parking-related assets to competitors or clients of our competitors; availability, terms and deployment of capital; the Company's ability to obtain performance bonds on acceptable terms; and the impact of Federal health care reform.

For a detailed discussion of factors that could affect the Company's future operating results, please see the Company's filings with the Securities and Exchange Commission, including the disclosures under "Risk Factors" in those filings. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason.

Use of Non-GAAP Financial Measures

To supplement its consolidated financial statements presented in accordance with GAAP, the Company considers certain financial measures that are not prepared in accordance with GAAP, including gross profit plus costs incurred related to non-routine structural and other repairs at legacy Central Parking leases and less gross profit impact related to asset sales or dispositions (also referred to as adjusted gross profit); general and administrative expenses less restructuring, merger and integration related costs, costs related to asset sales or dispositions, and costs incurred related to the Parkmobile and other contemplated transactions (also referred to as adjusted G&A); net income and net income per share attributable to SP Plus plus costs incurred related to non-routine structural and other repairs at legacy Central Parking leases, restructuring, merger and integration related costs, net income impact related to asset sales or dispositions, costs incurred related to the Parkmobile and other contemplated transactions, and costs incurred in connection with the amendment to the senior credit agreement and eliminating non-routine tax adjustments (also referred to as adjusted net income attributable to SP Plus and adjusted EPS); EBITDA and EBITDA plus costs incurred related to non-routine structural and other repairs at legacy Central Parking leases, restructuring, merger and integration related costs, and costs incurred related to the Parkmobile and other contemplated transactions less EBITDA impact related to asset sales or dispositions (also referred to as adjusted EBITDA); and free cash flow and free cash flow plus cash used for non-routine structural and other repairs at legacy Central Parking leases (also referred to as adjusted free cash flow). 

The Company uses these non-GAAP financial measures, in addition to GAAP financial measures, to evaluate its operating and financial performance and to compare such performance to that of prior periods and to the performance of its competitors. Additionally, the Company uses these non-GAAP financial measures in making operational and financial decisions and in the Company's budgeting and planning process.The Company believes that providing these non-GAAP financial measures to investors helps investors evaluate the Company's operating performance, profitability and business trends in a way that is consistent with how management evaluates such performance and consistent with guidance previously provided by the Company. Adjusted gross profit, adjusted G&A, adjusted net income attributable to SP Plus, adjusted EPS, EBITDA and adjusted EBITDA, and free cash flow and adjusted free cash flow should not be considered as alternatives to, or more meaningful indicators of the Company's operating performance or liquidity than, gross profit, G&A, net income, EPS or net cash provided by operating activities, as determined in accordance with GAAP. In addition, the Company's calculation of such non-GAAP measures may not be comparable to similarly titled measures of another company.

EBITDA is a non-GAAP financial measure that represents GAAP net income attributable to the Company before (i) interest expense net of interest income, (ii) provision for income taxes, (iii) depreciation and amortization, (iv) gain on sale of a business or contribution of a business to an unconsolidated entity, and (v) equity in the gains or losses from investment in an unconsolidated entity. Adjusted EBITDA further adjusts EBITDA by adding costs incurred related to non-routine structural and other repairs at legacy Central Parking leases, restructuring, merger and integration related costs and costs incurred related to the Parkmobile and other contemplated transactions and subtracting gross profit and G&A impacts related to asset sales or dispositions.

The Company defines free cash flow as net cash from operating activities, less cash used for investing activities (exclusive of acquisitions and net proceeds from the sale of businesses), less distribution to noncontrolling interest, plus the effect of exchange rate changes on cash and cash equivalents. Adjusted free cash flow also excludes the cash used for non-routine structural and other repairs at legacy Central Parking leases. The Company believes that the presentation of free cash flow and adjusted free cash flow provides useful information regarding its recurring cash provided by operating activities after certain expenditures. It also demonstrates the Company's ability to execute its financial strategy. The Company's presentations of free cash flow and adjusted free cash flow have material limitations. The Company's free cash flow and adjusted free cash flow do not represent its cash flow available for discretionary expenditures because it excludes certain expenditures that are required or to which the Company has committed, such as debt service requirements. The Company's definition of free cash flow and adjusted free cash flow may not be comparable to similarly titled measures presented by other companies.

For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the accompanying tables to this release.

 
SP Plus Corporation
Condensed Consolidated Balance Sheets
 September 30,  December 31,
(in thousands, except for share and per share data)2015  2014
 (unaudited)    
Assets      
Cash and cash equivalents  $ 18,992    $ 18,196
Notes and accounts receivable, net  107,078    109,287
Prepaid expenses and other  16,729    17,776
Deferred taxes  10,977    10,992
Total current assets  153,776    156,251
Leasehold improvements, equipment, land and construction in progress, net  38,001    42,784
Other assets      
Advances and deposits  5,885    6,693
Intangible assets, net  79,671    91,028
Favorable acquired lease contracts, net  41,003    48,268
Equity investments in unconsolidated entities  19,553    20,660
Other assets, net  19,758    16,697
Cost of contracts, net  11,647    10,481
Goodwill  431,457    432,888
Total other assets  608,974    626,715
Total assets  $ 800,751    $ 825,750
Liabilities and stockholders' equity      
Accounts payable  $ 91,233    $ 106,519
Accrued and other current liabilities  93,281    103,844
Current portion of obligations under senior credit facility and other long-term borrowings  15,974    15,567
Total current liabilities  200,488    225,930
Deferred taxes  —     5,814
Long-term obligations under senior credit facility and other long-term borrowings  231,018    237,833
Unfavorable acquired lease contracts, net  52,967    61,350
Other long-term liabilities  69,508    65,011
Total noncurrent liabilities  353,493    370,008
Stockholders' equity      
Preferred Stock, par value $0.01 per share; 5,000,000 shares authorized as of September 30, 2015 and December 31, 2014; no shares issued  —     — 
Common stock, par value $0.001 per share; 50,000,000 shares authorized as of September 30, 2015 and December 31, 2014; 22,222,947 and 22,127,725 shares issued and outstanding as of September 30, 2015 and December 31, 2014  22    22
Additional paid-in capital  247,119    243,867
Accumulated other comprehensive loss  (1,312)    (205)
Retained earnings (accumulated deficit)  226    (14,581)
Total SP Plus Corporation stockholders' equity  246,055    229,103
Noncontrolling interest  715    709
Total shareholders' equity  246,770    229,812
Total liabilities and stockholders' equity  $ 800,751    $ 825,750
 
SP Plus Corporation
Condensed Consolidated Statements of Income
 Three Months EndedNine Months Ended
(in thousands, except for share and per share data, unaudited)September 30,September 30,September 30,September 30,
 2015201420152014
         
Parking services revenue        
Lease contracts   $ 146,618  $ 129,004  $ 428,887  $ 370,597
Management contracts   85,813  77,878  268,176  252,764
Reimbursed management contract revenue   168,332  173,405  513,469  507,122
Total revenue   400,763  380,287  1,210,532  1,130,483
Cost of parking services        
Lease contracts   135,966  116,520  399,133  340,583
Management contracts   53,629  46,741  167,469  155,971
Reimbursed management contract expense   168,332  173,405  513,469  507,122
Total cost of parking services   357,927  336,666  1,080,071  1,003,676
Gross profit        
Lease contracts   10,652  12,484  29,754  30,014
Management contracts   32,184  31,137  100,707  96,793
Total gross profit   42,836  43,621  130,461  126,807
General and administrative expenses   23,752  24,123  74,164  75,185
Depreciation and amortization   8,275  7,630  24,374  22,523
Operating income   10,809  11,868  31,923  29,099
Other expenses (income)        
Interest expense   2,954  4,162  10,059  13,782
Interest income   (46)  (144)  (146)  (336)
Gain on sale of a business  (508)  —   (508)  — 
Equity in losses from investment in unconsolidated entity  408  —   1,232  — 
Total other expenses (income)  2,808  4,018  10,637  13,446
Income before income taxes   8,001  7,850  21,286  15,653
Income tax provision (benefit)   3,516  2,763  4,466  (421)
Net income   4,485  5,087  16,820  16,074
Less: Net income attributable to noncontrolling interest   778  785  2,014  2,162
Net income attributable to SP Plus Corporation   $ 3,707  $ 4,302  $ 14,806  $ 13,912
Common stock data        
Net income per share        
Basic   $ 0.17  $ 0.20  $ 0.67  $ 0.63
Diluted   $ 0.16  $ 0.19  $ 0.66  $ 0.62
Weighted average shares outstanding        
Basic  22,205,707 21,997,394 22,159,701 21,989,131
Diluted  22,548,166 22,426,787 22,519,818 22,392,572
 
SP Plus Corporation
Condensed Consolidated Statements of Cash Flows
 Nine Months Ended
(in thousands, unaudited)September 30,September 30,
 20152014
     
Operating activities    
Net income  $ 16,820  $ 16,074
Adjustments to reconcile net income to net cash provided by operations    
Depreciation and amortization  24,678  22,493
Net accretion of acquired lease contracts  (1,118)  (849)
Net loss on sale and abandonment of assets  94  105
Net gain on sale of business  (508)  — 
Amortization of debt issuance costs  704  999
Amortization of original discount on borrowings  487  983
Write-off of debt issuance costs and original discount on borrowings  634  — 
Non-cash stock-based compensation  3,100  2,806
Provisions for losses on accounts receivable  365  901
Excess tax benefit related to vesting of restricted stock units  (183)  79
Deferred income taxes  (7,718)  (7,148)
Net change in operating assets and liabilities  (18,224)  (652)
Net cash provided by operating activities  19,131  35,791
Investing activities    
Purchase of leasehold improvements and equipment  (6,558)  (10,409)
Acquisitions  —   (40)
Cost of contracts purchased  (2,686)  (1,375)
Proceeds from sale of assets  391  366
Proceeds from sale of business, net  960  — 
Capitalized interest  —   (17)
Contingent payments for businesses acquired  —   (6)
Net cash (used in) investing activities  (7,893)  (11,481)
Financing activities    
Tax benefit from vesting of restricted stock units  183  (79)
Contingent payments for businesses acquired  (57)  (441)
Proceeds from Senior Credit Facility and Restated Credit Facility revolver, net  (5,700)  (1,850)
Proceeds (payments) from Senior Credit Facility and Restated Credit Facility term loan, net  (1,295)  (24,815)
Payments of debt issuance costs for Restated Credit Facility  (906)  — 
Distribution to noncontrolling interest  (1,742)  (2,211)
Redemption of convertible debentures  (68)  (13)
Borrowings (payments) on other long-term debt obligations  (235)  153
Net cash (used in) financing activities  (9,820)  (29,256)
Effect of exchange rate changes on cash and cash equivalents  (622)  (47)
Increase in cash and cash equivalents  796  (4,993)
Cash and cash equivalents at beginning of period  18,196  23,158
Cash and cash equivalents at end of period  $ 18,992  $ 18,165
     
Supplemental disclosures    
Cash paid (received) during the period for    
Interest  $ 8,379  $ 10,665
Income taxes, net  $ 14,301  $ (1,637)
 
SP Plus Corporation
Supplemental Financial Information - Reconciliation of Adjusted Gross Profit, Adjusted G&A, Adjusted Net Income, and Adjusted Net Income Per Share
(in thousands, except for share and per share data, unaudited)
 Three months endedNine months ended
 September
30, 2015
September
30, 2014
September
30, 2015
September
30, 2014
Gross profit        
Gross profit, as reported $42,836 $43,621 $130,461 $126,807
Add: Non-routine structural and other repairs  2,138  242  4,215  1,184
Subtract: Gross profit related to asset sales or dispositions  178  (414)  (196)  (1,308)
Adjusted gross profit$45,152 $43,449 $134,480 $126,683
         
         
General and administrative expenses        
General and administrative expenses, as reported $23,752 $24,123 $74,164 $75,185
Subtract: Restructuring, merger and integration costs  (1,613)  (2,989)  (3,484)  (5,031)
Subtract: G&A related to asset sales or dispositions  129  (226)  129  (691)
Subtract: Parkmobile and other contemplated transaction costs  (48)  (205)  (84)  (612)
Adjusted G&A$22,220 $20,703 $70,725 $68,851
         
         
Net income attributable to SP Plus        
Net income attributable to SP Plus, as reported $3,707 $4,302 $14,806 $13,912
Add: Non-routine structural and other repairs, after tax  1,240  140  2,445  687
Add: Restructuring, merger and integration costs, after tax  936  1,734  2,021  2,918
Add: Net income related to asset sales or dispositions  (30)  39  231  23
Add: Costs incurred related to Parkmobile and other contemplated transaction  28  119  49  355
Add: Writeoff of debt issuance costs and original discount on borrowings, after tax  --   --   368  -- 
Subtract: Reversal of valuation allowances for deferred tax assets  --   --   (4,473)  (6,359)
Adjusted net income attributable to SP Plus$5,881 $6,334 $15,446 $11,535
         
Net income per share, as reported        
Basic $0.17 $0.20 $0.67 $0.63
Diluted $0.16 $0.19 $0.66 $0.62
         
Adjusted net income per share        
Basic$0.26 $0.29 $0.70 $0.52
Diluted$0.26 $0.28 $0.69 $0.52
         
Weighted average shares outstanding        
Basic  22,205,707  21,997,394  22,159,701  21,989,131
Diluted  22,548,166  22,426,787  22,519,818  22,392,572
 
SP Plus Corporation
Supplemental Financial Information - Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(in thousands, unaudited)
         
 Three months endedNine months ended
 September 30,
2015
September 30,
2014
September 30,
2015
September 30,
2014
Net income attributable to SP Plus, as reported $3,707 $4,302 $14,806 $13,912
Add (subtract):        
Income tax provision (benefit)  3,516  2,763  4,466  (421)
Interest expense, net  2,908  4,018  9,913  13,446
Gain on sale of a business  (508)  --   (508)  -- 
Equity in losses from investment in unconsolidated entity  408  --   1,232  -- 
Depreciation and amortization expense  8,275  7,630  24,374  22,523
Earnings before interest, taxes, depreciation and amortization (EBITDA)$18,306 $18,713 $54,283 $49,460
         
Add: Non-routine structural and other repairs  2,138  242  4,215  1,184
Add: Restructuring, merger and integration costs  1,613  2,989  3,484  5,031
Subtract: EBITDA related to asset sales or dispositions  49  (188)  (325)  (617)
Add: Parkmobile and other contemplated transaction costs  48  205  84  612
Adjusted EBITDA$22,154 $21,961 $61,741 $55,670
 
SP Plus Corporation
Free Cash Flow
(in thousands, unaudited)
         
  Three Months Ended Nine months ended
  September
30, 2015
September
30, 2014
September
30, 2015
September
30, 2014
Operating income $10,809 $11,868 $31,923 $29,099
Depreciation and amortization  8,275  7,630  24,374  22,523
Net accretion of acquired lease contracts  (403)  (48)  (1,118)  (849)
Non-cash stock-based compensation  967  865  3,100  2,806
Income tax (paid) received, net  (5,089)  (1,502)  (14,301)  1,637
Income attributable to noncontrolling interest  (778)  (785)  (2,014)  (2,162)
Change in operating assets and liabilities  (2,918)  (2,517)  (16,427)  (8,490)
Purchase of leaseholds, equipment and cost of contracts and contingent purchase payments  (2,361)  (2,719)  (9,244)  (11,807)
Operating cash flow $8,502 $12,792 $16,293 $32,757
Cash interest paid  (2,591)  (3,497)  (8,379)  (10,665)
Free cash flow (1) $5,911 $9,295 $7,914 $22,092
plus: Cash used for non-routine structural and other repairs  5,433  728  8,924  2,200
Adjusted free cash flow $11,344 $10,023 $16,838 $24,292
         
         
(1) Reconciliation of Free Cash Flow to Consolidated Statements of Cash Flow
  Three Months Ended Nine months ended
  September
30, 2015
September
30, 2014
September
30, 2015
September
30, 2014
Net cash provided by operating activities $8,957 $12,737 $19,131 $35,791
Net cash used in investing activities  (1,226)  (2,539)  (7,893)  (11,481)
Acquisitions and sale of business, net  (960)  40  (960)  40
Distribution to noncontrolling interest  (533)  (839)  (1,742)  (2,211)
Effect of exchange rate changes on cash and cash equivalents  (327)  (104)  (622)  (47)
Free cash flow $5,911 $9,295 $7,914 $22,092
 
SP Plus Corporation
Location Count
       
  September
30, 2015
December
31, 2014
September
30, 2014
Leased facilities  739  774  789
Managed facilities (1)  3,161  3,348  3,415
Total facilities  3,900  4,122  4,204
       
(1) Adjusted to exclude 61 managed facilities related to the security business, primarily operating in the
Southern California market, for December 31, 2014 and September 30, 2014
CONTACT: Vance Johnston

         (312) 521-8409

         vjohnston@spplus.com