Standard Parking Corporation Announces Third Quarter 2013 Results
Third Quarter Operating Results
Gross profit in the third quarter of 2013 was $40.1 million, compared to second quarter 2013 gross profit of $46.0 million, a decrease of 13%. The decrease in sequential quarter gross profit was primarily attributable to the timing of a health insurance dividend that was recorded in the second quarter of 2013, an unfavorable swing in insurance reserve estimates related to prior years, volatility at some of the Company's leased locations and an unfavorable sequential quarter fluctuation in deficiency payments at Bradley Airport as a result of a large repayment to the Company in the second quarter and a large payment by the Company in the third quarter. The $18.7 million year-over-year increase in gross profit was primarily attributable to the addition of Central Parking operations.
Third quarter 2013 general and administrative (G&A) expenses were $20.5 million, including $1.9 million of merger and integration related costs, as compared to $26.9 million in the second quarter of 2013, which included $3.1 million of merger and integration related costs. The sequential quarter decrease of $5.2 million in adjusted G&A, excluding merger and integration related costs, was due primarily to decreases in compensation related costs. Adjusted G&A as a percentage of gross profit improved to 46.4% in the 2013 third quarter as compared to 51.6% in the 2013 second quarter.
Income before income taxes for the third quarter of 2013 was $6.9 million. On a year-over-year basis, excluding the impact of the amortization of merger-related intangible assets of $3.8 million for the third quarter of 2013, adjusted income before income taxes would have increased 62% over the same period of 2012.The Company generated negative free cash flow of $1.0 million during the third quarter of 2013 and negative $4.0 million for the first nine months of 2013. Free cash flow has been impacted by higher than normal receivables outstanding from some of our large airport clients, and though the Company fully expects to collect on all outstanding balances, the timing of those collections is expected to result in lower than expected free cash flow for 2013. In addition, the Company has paid out approximately $5 million more than expected for merger and integration related costs and capital investments.
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