--Record 2023 Gross Profit Performance--
--
--Increased Penetration of Technology Solutions Driving Accelerated Growth--
--SP+ Stockholders Approved Merger with
Management Commentary
“Both our Commercial and Aviation segments experienced double-digit gross profit growth in 2023, as strong demand across the majority of our verticals led to a continued increase in our addressable market through new business wins. Commercial segment reported gross profit increased 14% and adjusted gross profit increased 11% for the year, reflecting robust location growth and increased activity and services at existing locations. We ended 2023 with 3,384 commercial locations, representing year-on-year growth of 8% and 11 consecutive quarters of net location growth, while maintaining a high location retention rate of 94%. Also contributing to our record 2023 results was the continuing success of our Sphere technology offerings which gained further traction with existing clients and enabled us to add 120 new standalone deployments at locations not currently utilizing any SP+ services. Aviation segment reported gross profit increased 19% and adjusted gross profit increased 17% year-on-year, as results continued to benefit from recent airport contract wins, high travel volumes and recent strategic technology acquisitions.
Financial Summary
In millions except per share | Three Months Ended | Three Months Ended | |||||||||||
GAAP | Adjusted/ Non-GAAP(1) | GAAP | Adjusted/ Non-GAAP(1) | ||||||||||
Total services revenue (before reimbursed management type contract revenue) | NA | NA | |||||||||||
Gross profit(2),(3) | |||||||||||||
General and administrative expenses(3) | |||||||||||||
Operating income(3) | |||||||||||||
Net income attributable to | |||||||||||||
Net income per share (EPS)(3) | |||||||||||||
EBITDA(1),(3) | NA | NA | |||||||||||
Net cash provided by operating activities | NA | NA | |||||||||||
Free cash flow(1) | NA | ( | NA |
In millions except per share | Fiscal Year Ended | Fiscal Year Ended | |||||||||||
GAAP | Adjusted/ Non-GAAP(1) | GAAP | Adjusted/ Non-GAAP(1) | ||||||||||
Total services revenue (before reimbursed management type contract revenue) | NA | NA | |||||||||||
Gross profit(2),(3) | |||||||||||||
General and administrative expenses(3) | |||||||||||||
Operating income(3) | |||||||||||||
Net income attributable to | |||||||||||||
Net income per share (EPS)(3) | |||||||||||||
EBITDA(1),(3) | NA | NA | |||||||||||
Net cash provided by operating activities | NA | NA | |||||||||||
Free cash flow(1) | NA | NA |
(1) Refer to the disclosure regarding use of non-GAAP financial measures and the accompanying financial tables for a reconciliation of all non-GAAP financial measures to
(2) GAAP gross profit includes depreciation and amortization expense. Please refer to the table accompanying this release for a reconciliation of GAAP gross profit.
(3) Adjusted gross profit, adjusted general and administrative expenses, adjusted operating income, adjusted net income attributable to
Fourth Quarter Operating Results
Reported gross profit in the fourth quarter of 2023 increased 20% year-over-year to
Fourth quarter 2023 reported general and administrative (“G&A”) expenses were $40.4 million, compared to $30.7 million in the year ago quarter. Adjusted G&A expenses for the fourth quarter of 2023, which exclude acquisition-related, restructuring and other costs, were $30.2 million, compared to
Fourth quarter 2023 reported net income attributable to SP Plus was $1.2 million, or
Full Year Operating Results
Full-year 2023 reported gross profit was
Full year reported G&A expenses were
2023 full year reported net income attributable to
Full-year 2023 cash flow from operations totaled
Recent Events
On
In light of the pending acquisition by
About SP+
SP+ (www.spplus.com) develops and integrates industry-leading technology with best-in-class operations management and support to deliver mobility solutions that enable the efficient and time-sensitive movement of people, vehicles, and personal travel belongings. With over 20,000 team members located throughout
You should not construe the information on those websites 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
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. Expectations regarding gross profits, G&A, revenue volatility, actions to limit discretionary spending, 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”, “confident”, “could”, “should”, “estimate”, “intend”, “may”, “plan”, “guidance”, “pathway”, “will”, 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. 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: the Company's ability to successfully effect its strategic growth plan; intense competition; changing consumer preferences and legislation; ability to preserve client relationships; difficulty obtaining insurance coverage or obtaining insurance coverage at a reasonable cost; volatility associated with high deductible and high retention insurance programs; risk that insurance reserves are inadequate; losses not covered by insurance; risks relating to the Company's acquisition strategy and ability to successfully integrate such acquisitions; information technology disruption, cyber-attacks, cyber-terrorism and security breaches; risk management and safety programs do not have the intended effect; risks associated with management type contracts and lease type contracts; deterioration in general economic and business conditions, including inflation or rising interest rates, or changes in demographic trends; labor disputes; catastrophic events such as natural disasters, pandemic outbreaks and military or terrorist attacks could disrupt business; risks associated with operations outside of
Important risk factors relating to the pending acquisition by
For a detailed discussion of factors that could affect the Company's future operating results, please see the Company's filings with the
Use of Non-GAAP Financial Measures
To supplement its consolidated financial statements presented in accordance with
The Company defines Adjusted EBITDA, a non-GAAP financial measure, as
The Company defines free cash flow as net cash provided by (used in) operating activities, less cash used for investing activities (exclusive of cash used for acquisitions or the purchase of intangible assets and net after-tax cash proceeds from the sale of businesses or joint venture related assets), less distributions to non-controlling interests, plus the effect of exchange rate changes on cash and cash equivalents. The Company believes that the presentation of free cash flow provides useful information regarding its ability to generate cash flow from business operations after funding capital expenditures, that can be used to, among other things, repay debt, fund strategic acquisitions, and return value to shareholders. The Company's definition of free cash flow may not be comparable to similarly titled measures presented by other companies.
The Company uses these non-GAAP financial measures, in addition to
For reconciliations of these non-GAAP financial measures to the most directly comparable
The summary condensed consolidated financial statements presented below reflect a combination of certain line items from our consolidated financial statements and should be read in conjunction with the financial statements and notes set forth in our Annual Report on Form 10-K and quarterly filings with the
Summary Condensed Consolidated Statements of Income | |||||||||||||
(millions, except for share and per share data) (unaudited) | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
Total services revenue | |||||||||||||
Total cost of services (exclusive of depreciation and amortization) | 391.9 | 365.0 | 1,528.3 | 1,331.8 | |||||||||
General and administrative expenses | 40.4 | 30.7 | 140.4 | 109.1 | |||||||||
Depreciation and amortization | 9.9 | 9.2 | 36.1 | 29.7 | |||||||||
Operating income | 11.9 | 13.4 | 77.5 | 82.9 | |||||||||
Interest expense, net of interest income | 7.5 | 5.5 | 28.8 | 17.3 | |||||||||
Earnings before income taxes | 4.4 | 7.9 | 48.7 | 65.6 | |||||||||
Income tax expense | 2.4 | 2.5 | 14.0 | 17.5 | |||||||||
Net income | 2.0 | 5.4 | 34.7 | 48.1 | |||||||||
Less: Net income attributable to noncontrolling interest | 0.8 | 0.6 | 3.6 | 2.9 | |||||||||
Net income attributable to | |||||||||||||
Common stock data | |||||||||||||
Net income per common share | |||||||||||||
Basic | |||||||||||||
Diluted | |||||||||||||
Weighted average shares outstanding | |||||||||||||
Basic | 19,700,554 | 20,083,147 | 19,670,918 | 20,809,363 | |||||||||
Diluted | 19,873,605 | 20,364,402 | 19,781,388 | 21,007,068 |
Revenue and Gross Profit, before depreciation and amortization expense - by Contract type | ||||||||||||||||
(millions) (unaudited) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
Management type contracts | ||||||||||||||||
Service revenue | ||||||||||||||||
Subtract: Cost of services (exclusive of depreciation and amortization) | (92.8 | ) | (90.5 | ) | (388.6 | ) | (343.2 | ) | ||||||||
Management type gross profit, before depreciation and amortization expense | ||||||||||||||||
Lease type contracts | ||||||||||||||||
Service revenue | ||||||||||||||||
Subtract: Cost of services (exclusive of depreciation and amortization) | (62.2 | ) | (58.9 | ) | (240.6 | ) | (225.8 | ) | ||||||||
Lease type gross profit, before depreciation and amortization expense | ||||||||||||||||
Other revenue and cost of services | ||||||||||||||||
Reimbursed management type contract revenue | ||||||||||||||||
Subtract: Reimbursed management type contract expense | (236.9 | ) | (211.9 | ) | (899.1 | ) | (759.1 | ) | ||||||||
Subtract: Lease impairment | - | (3.7 | ) | - | (3.7 | ) | ||||||||||
Other gross profit, before depreciation and amortization expense | ( | ) | ( | ) |
Reconciliation of Non-GAAP Measures | |||||||||||||||||
(millions, except for share and per share data) (unaudited) | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
Gross profit | |||||||||||||||||
Total services revenue | |||||||||||||||||
Subtract: Total cost of services (exclusive of depreciation and amortization) | (391.9 | ) | (365.0 | ) | (1,528.3 | ) | (1,331.8 | ) | |||||||||
Subtract: Depreciation and amortization | (4.1 | ) | (4.7 | ) | (14.4 | ) | (13.7 | ) | |||||||||
Gross profit, GAAP (1) | 58.1 | 48.6 | 239.6 | 208.0 | |||||||||||||
Add: Depreciation and amortization | 4.1 | 4.7 | 14.4 | 13.7 | |||||||||||||
Add: Acquisition-related, restructuring and other costs | 0.3 | - | 0.6 | 0.1 | |||||||||||||
Add: Non-cash impairment charges | - | 3.7 | - | 3.7 | |||||||||||||
Other, rounding | 0.1 | - | 0.1 | - | |||||||||||||
Adjusted gross profit | |||||||||||||||||
(1) GAAP gross profit includes depreciation and amortization expense | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
General and administrative expenses | |||||||||||||||||
General and administrative expenses, GAAP | |||||||||||||||||
Subtract: Acquisition-related, restructuring and other costs | (10.2 | ) | (1.9 | ) | (18.3 | ) | (3.7 | ) | |||||||||
Other, rounding | - | (0.1 | ) | - | - | ||||||||||||
Adjusted G&A | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
Operating income | |||||||||||||||||
Operating income, GAAP | |||||||||||||||||
Add: Acquisition-related, restructuring and other costs | 10.5 | 1.9 | 18.9 | 3.8 | |||||||||||||
Add: Non-cash impairment charges | - | 3.7 | - | 3.7 | |||||||||||||
Add: Amortization of acquired intangibles | 3.0 | 2.9 | 12.0 | 9.9 | |||||||||||||
Other, rounding | 0.1 | 0.1 | 0.1 | - | |||||||||||||
Adjusted operating income | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
Net income attributable to | |||||||||||||||||
Net income attributable to | |||||||||||||||||
Add: Acquisition-related, restructuring and other costs (1) | 10.7 | 1.9 | 19.1 | 3.8 | |||||||||||||
Add: Non-cash impairment charges | - | 3.7 | - | 3.7 | |||||||||||||
Add: Amortization of acquired intangibles | 3.0 | 2.9 | 12.0 | 9.9 | |||||||||||||
Net tax effect of adjustments | (3.7 | ) | (2.3 | ) | (8.4 | ) | (4.7 | ) | |||||||||
Non-routine tax | 0.7 | 0.4 | 0.7 | 0.4 | |||||||||||||
Other, rounding | - | 0.1 | 0.1 | 0.1 | |||||||||||||
Adjusted net income attributable to | |||||||||||||||||
Adjusted net income per share | |||||||||||||||||
Basic | |||||||||||||||||
Diluted | |||||||||||||||||
(1) Includes interest expense related to carrying cost of acquisition related expenses | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
Adjusted EBITDA | |||||||||||||||||
Net income attributable to | |||||||||||||||||
Add (subtract): | |||||||||||||||||
Income tax expense | 2.4 | 2.5 | 14.0 | 17.5 | |||||||||||||
Interest expense, net | 7.5 | 5.5 | 28.8 | 17.3 | |||||||||||||
Total depreciation and amortization expense | 9.9 | 9.2 | 36.1 | 29.7 | |||||||||||||
Acquisition-related, restructuring and other costs | 10.5 | 1.9 | 18.9 | 3.8 | |||||||||||||
Non-cash impairment charges | - | 3.7 | - | 3.7 | |||||||||||||
Other, rounding | - | - | 0.1 | - | |||||||||||||
Adjusted EBITDA | |||||||||||||||||
Selected Segment Data(millions, unaudited) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
Commercial Segment | ||||||||||||||||
Gross Profit, GAAP (1) | ||||||||||||||||
Add: Depreciation and amortization | 2.2 | 2.4 | 8.3 | 7.9 | ||||||||||||
Add: Non-cash impairment charges | - | 3.7 | - | 3.7 | ||||||||||||
Add: Acquisition-related, restructuring and other costs | 0.3 | - | 0.6 | 0.1 | ||||||||||||
Other, rounding | 0.1 | (0.1 | ) | 0.1 | - | |||||||||||
Adjusted Gross Profit | ||||||||||||||||
General and administrative expenses, GAAP | ||||||||||||||||
Subtract: Acquisition-related, restructuring and other costs | (1.7 | ) | (0.1 | ) | (3.7 | ) | (0.8 | ) | ||||||||
Adjusted G&A | ||||||||||||||||
Operating income, GAAP | ||||||||||||||||
Add: Amortization of acquired intangibles | 1.6 | 1.4 | 6.2 | 4.6 | ||||||||||||
Add: Non-cash impairment charges | - | 3.7 | - | 3.7 | ||||||||||||
Add: Acquisition-related, restructuring and other costs | 2.0 | 0.1 | 4.3 | 0.9 | ||||||||||||
Other, rounding | - | - | 0.1 | - | ||||||||||||
Adjusted Operating Income | ||||||||||||||||
(1) GAAP gross profit updated to include depreciation and amortization expense | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
Aviation Segment | ||||||||||||||||
Gross Profit, GAAP (1) | ||||||||||||||||
Add: Depreciation and amortization | 1.9 | 2.3 | 6.1 | 5.8 | ||||||||||||
Add: Restructuring, acquisition, integration, and other costs | - | - | - | - | ||||||||||||
Other, rounding | - | 0.1 | - | - | ||||||||||||
Adjusted Gross Profit | ||||||||||||||||
General and administrative expenses, GAAP | ||||||||||||||||
Add (Subtract): Acquisition-related, restructuring and other costs | (0.8 | ) | - | (2.0 | ) | 0.4 | ||||||||||
Other, rounding | - | (0.1 | ) | - | - | |||||||||||
Adjusted G&A | ||||||||||||||||
Operating income, GAAP | ||||||||||||||||
Add: Amortization of acquired intangibles | 1.4 | 1.5 | 5.8 | 5.3 | ||||||||||||
Add: Non-cash impairment charges | - | - | - | - | ||||||||||||
Add (Subtract): Acquisition-related, restructuring and other costs | 0.8 | - | 2.0 | (0.4 | ) | |||||||||||
Other, rounding | - | 0.1 | - | 0.1 | ||||||||||||
Adjusted Operating Income | ||||||||||||||||
(1) GAAP gross profit updated to include depreciation and amortization expense | ||||||||||||||||
Summary Condensed Consolidated Balance Sheets | ||||||||
(millions, except for share and per share data) | ||||||||
Assets | (unaudited) | |||||||
Cash and cash equivalents | ||||||||
Accounts receivable, net | 180.5 | 167.7 | ||||||
Prepaid expenses and other current assets | 12.6 | 16.7 | ||||||
Total current assets | 212.2 | 196.8 | ||||||
Property and equipment, net | 68.3 | 60.2 | ||||||
Right-of-use assets | 179.4 | 166.9 | ||||||
544.6 | 543.2 | |||||||
Other intangible assets, net | 59.7 | 68.9 | ||||||
Other assets, net | 87.7 | 85.4 | ||||||
Total noncurrent assets | 939.7 | 924.6 | ||||||
Total assets | ||||||||
Liabilities and stockholders' equity | ||||||||
Accounts payable | ||||||||
Accrued and other current liabilities | 128.1 | 137.6 | ||||||
Short-term lease liabilities | 56.2 | 60.2 | ||||||
Current portion of long-term borrowings | 16.5 | 12.4 | ||||||
Total current liabilities | 337.4 | 343.6 | ||||||
Long-term borrowings, excluding current portion | 335.6 | 331.8 | ||||||
Long-term lease liabilities | 158.0 | 158.5 | ||||||
Other noncurrent liabilities | 70.2 | 61.8 | ||||||
Total noncurrent liabilities | 563.8 | 552.1 | ||||||
Total liabilities | 901.2 | 895.7 | ||||||
250.8 | 226.0 | |||||||
Noncontrolling interest | (0.1 | ) | (0.3 | ) | ||||
Total stockholders' equity | 250.7 | 225.7 | ||||||
Total liabilities and stockholders' equity | ||||||||
Summary Condensed Consolidated Statements of Cash Flows | |||||||
(millions) (unaudited) | |||||||
Twelve Months Ended | |||||||
Net cash provided by operating activities | |||||||
Net cash used in investing activities | (26.6 | ) | (54.0 | ) | |||
Net cash used in financing activities | (22.3 | ) | (42.4 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (0.2 | ) | (0.2 | ) | |||
Increase (decrease) in cash and cash equivalents | 6.7 | (3.3 | ) | ||||
Cash and cash equivalents at beginning of year | 12.4 | 15.7 | |||||
Cash and cash equivalents at end of period | |||||||
Supplemental disclosures | |||||||
Cash paid (received) during the period for | |||||||
Interest | |||||||
Income taxes, net | ( | ) | |||||
Free Cash Flow | |||||||||||||||
(millions) (unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
Net cash provided by operating activities | |||||||||||||||
Net cash used in investing activities | (4.2 | ) | (35.9 | ) | (26.6 | ) | (54.0 | ) | |||||||
plus: Acquisition of business, net of cash acquired | - | 30.5 | 3.1 | 30.5 | |||||||||||
plus: Acquisition of other intangible assets | - | - | - | 1.8 | |||||||||||
plus: Noncontrolling interest buyout | 0.1 | - | 2.4 | - | |||||||||||
Distributions to noncontrolling interests | (0.9 | ) | (0.8 | ) | (3.4 | ) | (2.8 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 0.3 | 0.5 | (0.2 | ) | (0.2 | ) | |||||||||
Other, rounding | 0.1 | - | 0.1 | - | |||||||||||
Free cash flow | ( | ) | |||||||||||||
Commercial Segment Facilities | ||||
Managed facilities | 2,979 | 2,709 | ||
Leased facilities | 405 | 421 | ||
Total Commercial Segment facilities (1) | 3,384 | 3,130 | ||
Aviation Segment - Airports served | ||||
101 | 100 | |||
58 | 58 | |||
Total Airports | 159 | 158 | ||
(1) The increase as of | ||||
Contact:
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