Full-Year 2012 Operating Results
Gross profit in 2012 was $109.8 million, compared to $88.6 million in 2011. The increase in gross profit was attributable to $21.2 million of gross profit from Central Parking's operations. The Company's gross profit for 2012, excluding gross profit attributable to Central Parking's operations, was flat as compared to 2011, primarily due to the full-year impact of several large contract retrades in 2011 and an unfavorable swing of $1.5 million in insurance reserve estimates for 2012 compared to 2011. On a same location basis, excluding Central Parking's operations and the impact of the large contract retrades, gross profit was up 2% from 2011.
G&A expenses for 2012 and 2011 were $86.7 million and $48.3 million, respectively. Excluding $28.0 million of merger and integration related costs in 2012, G&A expenses were $58.6 million, including $14.5 million from Central Parking's operations. Excluding Central Parking's operations and all merger and integration related costs, 2012 G&A expenses were $44.1 million, a 2% decrease, compared to 2011 G&A expenses of $45.2 million excluding $3.1 million of merger and acquisition related costs.
Net income attributable to the Company for 2012 was $3.9 million, or $0.22 per share, compared to $17.9 million or $1.12 per share for 2011. Merger adjusted net income attributable to the Company would have been $20.1 million, or $1.27 per share, compared to 2011 net income of $19.8 million, or $1.23 per share, excluding merger and acquisition related expenses. Merger-adjusted net income attributable to the Company for 2012 assumes a 38.1% tax rate for 2012, the same as the effective tax rate for 2011.The Company generated $4.0 million of free cash flow, compared to $28.9 million in 2011, as costs incurred in 2012 for merger and integration significantly impacted free cash flow. Recent Developments Recent noteworthy new business activity includes the following:
- SP Plus® Office Services was awarded the management of the parking operations at nine office buildings across the country for Piedmont Real Estate Investment Trust. The Company has commenced its management responsibilities at all of those properties.
- The City of Scranton awarded SP Plus® Municipal Services a new on-street meter collection and enforcement contract effective Jan. 1, 2013.
- SP Plus® Municipal Services is the parking operator on the "Harrisburg First" team that includes Guggenheim Partners and AEW North America-AEW Capital Management, LLP, which was selected by the City of Harrisburg to operate and manage all of the City's on-street and off-street parking assets. SP Plus® Municipal Services expects to commence operations under the agreement in the third quarter of 2013.
- SP Plus® Municipal Services also was selected by the City of Oxford, Miss. to provide on-street meter enforcement and citations for parking violations in the downtown area, beginning Oct. 1, 2012.
- Standard Parking expanded its services at the Horseshoe Casino, Cleveland with 24/7 shuttle service. The Company, which also provides valet and parking services to the property, began commuter shuttles between the Casino's Prospect Avenue entrance and the Collection Auto Center Garage on Oct. 15, 2012.
- SP Plus® Security Services was selected to become a single-source provider for Solair ST Collections, a mixed-use retail and residential project in the heart of Los Angeles' Koreatown.
- Central Parking was selected by Gates, Hudson & Associates, the largest asset manager in the Ballston area of Arlington, Va., to manage the parking operations at five of its Arlington locations, including the Westin Hotel, and began providing such services on Jan. 1, 2013.
- Central Parking, with assistance from its USA Parking System subsidiary, obtained contracts to begin providing valet parking services at several hotels in New York City, including The Manhattan at Times Square Hotel, the Hampton Inn on East 43 rd Street, the Refinery Hotel New York and The Quin.