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10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-50796

SP Plus Corporation

(Exact Name of Registrant as Specified in Its Charter)


Delaware		16-1171179
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)

200 E. Randolph Street, Suite 7700

Chicago, Illinois 60601-7702

(Address of Principal Executive Offices, Including Zip Code)

(312) 274-2000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	SP	The Nasdaq Stock Market LLC

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


Class	Outstanding at November 2, 2022
Common Stock, $0.001 par value per share	20,167,187	Shares

Table of Contents

SP PLUS CORPORATION

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Income	3
Condensed Consolidated Statements of Comprehensive Income	4
Condensed Consolidated Statements of Stockholders' Equity	5
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures about Market Risk	35
Item 4. Controls and Procedures	36

PART II. OTHER INFORMATION	37
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39

Signatures	40

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SP Plus Corporation

Condensed Consolidated Balance Sheets


(millions, except for share and per share data)	September 30, 2022			December 31, 2021
	(unaudited)
Assets
Cash and cash equivalents	$	18.4		$	15.7
Accounts and notes receivable, net		153.2			139.6
Prepaid expenses and other current assets		14.4			32.2
Total current assets		186.0			187.5
Property and equipment, net		54.7			48.9
Right-of-use assets		175.4			201.2
Goodwill		526.3			526.6
Other intangible assets, net		49.2			54.4
Deferred taxes		45.7			50.6
Other noncurrent assets, net		42.6			47.0
Total noncurrent assets		893.9			928.7
Total assets	$	1,079.9		$	1,116.2
Liabilities and stockholders’ equity
Accounts payable	$	128.7		$	118.5
Accrued and other current liabilities		116.6			123.3
Short-term lease liabilities		61.4			65.4
Current portion of long-term borrowings		11.8			25.6
Total current liabilities		318.5			332.8
Long-term borrowings, excluding current portion		293.4			298.4
Long-term lease liabilities		165.6			200.3
Other noncurrent liabilities		60.8			62.6
Total noncurrent liabilities		519.8			561.3
Total liabilities	$	838.3		$	894.1
Stockholders’ equity
Preferred stock, par value $0.01 per share; 5,000,000 shares authorized as of September 30, 2022 and December 31, 2021, respectively; no shares issued or outstanding	$	—		$	—
Common stock, par value $0.001 per share; 50,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 23,276,329 and 20,397,787 shares issued and outstanding as of September 30, 2022, respectively, and 23,224,459 and 21,189,717 shares issued and outstanding as of December 31, 2021, respectively		—			—
Treasury stock, at cost; 2,878,542 and 2,034,742 shares as of September 30, 2022 and December 31, 2021, respectively		(98.2	)		(70.6	)
Additional paid-in capital		274.1			267.5
Accumulated other comprehensive loss		(3.0	)		(2.8	)
Retained earnings		68.8			28.4
Total SP Plus Corporation stockholders’ equity		241.7			222.5
Noncontrolling interest		(0.1	)		(0.4	)
Total stockholders’ equity		241.6			222.1
Total liabilities and stockholders’ equity	$	1,079.9		$	1,116.2

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SP Plus Corporation

Condensed Consolidated Statements of Income


	Three Months Ended						Nine Months Ended
(millions, except for share and per share data) (unaudited)	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Services revenue
Lease type contracts	$	72.2		$	59.7		$	205.4		$	153.3
Management type contracts		134.9			101.9			382.6			278.2
		207.1			161.6			588.0			431.5
Reimbursed management type contract revenue		197.3			150.0			547.2			402.5
Total services revenue		404.4			311.6			1,135.2			834.0
Cost of services (exclusive of depreciation and amortization)
Lease type contracts		59.0			48.0			166.9			122.8
Management type contracts		89.9			64.1			252.7			174.3
Lease impairment		—			3.5			—			3.6
		148.9			115.6			419.6			300.7
Reimbursed management type contract expense		197.3			150.0			547.2			402.5
Total cost of services (exclusive of depreciation and amortization)		346.2			265.6			966.8			703.2
General and administrative expenses		27.2			21.1			78.4			64.1
Depreciation and amortization		7.2			6.0			20.5			18.5
Operating income		23.8			18.9			69.5			48.2
Other expense (income)
Interest expense		3.9			5.2			12.2			16.1
Interest income		(0.1	)		(0.1	)		(0.4	)		(0.3	)
Total other expenses		3.8			5.1			11.8			15.8
Earnings before income taxes		20.0			13.8			57.7			32.4
Income tax expense		4.9			1.6			15.0			6.5
Net income		15.1			12.2			42.7			25.9
Less: Net income attributable to noncontrolling interest		0.8			0.7			2.3			3.1
Net income attributable to SP Plus Corporation	$	14.3		$	11.5		$	40.4		$	22.8
Common stock data
Net income per common share
Basic	$	0.69		$	0.54		$	1.92		$	1.08
Diluted	$	0.68		$	0.54		$	1.90		$	1.07
Weighted average shares outstanding
Basic		20,744,813			21,184,583			21,054,095			21,158,667
Diluted		20,977,667			21,400,386			21,223,982			21,365,282

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SP Plus Corporation

Condensed Consolidated Statements of Comprehensive Income


	Three Months Ended						Nine Months Ended
(millions) (unaudited)	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Net income	$	15.1		$	12.2		$	42.7		$	25.9
Reclassification of de-designated interest rate collars		—			0.4			0.5			1.2
Foreign currency translation loss		(0.6	)		(0.1	)		(0.7	)		—
Comprehensive income		14.5			12.5			42.5			27.1
Less: Comprehensive income attributable to noncontrolling interest		0.8			0.7			2.3			3.1
Comprehensive income attributable to SP Plus Corporation	$	13.7		$	11.8		$	40.2		$	24.0

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SP Plus Corporation

Condensed Consolidated Statements of Stockholders' Equity


	Common Stock
(millions, except share data) (unaudited)	Number of Shares Issued		Par Value		Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Retained Earnings		Treasury Stock			Noncontrolling Interest			Total
Balance at January 1, 2022		23,224,459	$	—	$	267.5	$	(2.8	)	$	28.4	$	(70.6	)	$	(0.4	)	$	222.1
Net income		—		—		—		—			10.7		—			0.6			11.3
Foreign currency translation		—		—		—		0.1			—		—			—			0.1
Reclassification of de-designated interest rate collars		—		—		—		0.4			—		—			—			0.4
Issuance of restricted stock units		37,235		—		—		—			—		—			—			—
Non-cash stock-based compensation		—		—		1.8		—			—		—			—			1.8
Distributions to noncontrolling interest		—		—		—		—			—		—			(0.5	)		(0.5	)
Balance at March 31, 2022		23,261,694	$	—	$	269.3	$	(2.3	)	$	39.1	$	(70.6	)	$	(0.3	)	$	235.2
Net income		—		—		—		—			15.4		—			0.9			16.3
Foreign currency translation		—		—		—		(0.2	)		—		—			—			(0.2	)
Reclassification of de-designated interest rate collars		—		—		—		0.1			—		—			—			0.1
Issuance of stock grants		14,635		—		0.4		—			—		—			—			0.4
Non-cash stock-based compensation		—		—		2.2		—			—		—			—			2.2
Repurchases of common stock		—		—		—		—			—		(5.6	)		—			(5.6	)
Distributions to noncontrolling interest		—		—		—		—			—		—			(0.7	)		(0.7	)
Balance at June 30, 2022		23,276,329	$	—	$	271.9	$	(2.4	)	$	54.5	$	(76.2	)	$	(0.1	)	$	247.7
Net income		—		—		—		—			14.3		—			0.8			15.1
Foreign currency translation		—		—		—		(0.6	)		—		—			—			(0.6	)
Non-cash stock-based compensation		—		—		2.2		—			—		—			—			2.2
Repurchases of common stock		—		—		—		—			—		(22.0	)		—			(22.0	)
Distributions to noncontrolling interest		—		—		—