-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JUYZEmHmnEHeJYwS2TEuW6trplQ6XKkzgD6Bxoyq2hKzrE7CiK+TwdFa3QVFzkRi +a+mycyHt3KZXy93qU2+kg== 0000950131-01-501331.txt : 20010511 0000950131-01-501331.hdr.sgml : 20010511 ACCESSION NUMBER: 0000950131-01-501331 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APCOA INC CENTRAL INDEX KEY: 0001059262 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AUTO RENTAL & LEASING (NO DRIVERS) [7510] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-50437 FILM NUMBER: 1629063 BUSINESS ADDRESS: STREET 1: 900 N. MICHIGAN AVENUE CITY: CHICAGO STATE: IL ZIP: 60611-1542 BUSINESS PHONE: 2185220700 10-Q 1 d10q.txt FORM 10-Q ================================================================================ 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 March 31, 2001 Commission file number: 333-50437 _________________ APCOA/STANDARD PARKING, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 16-1171179 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 900 N. Michigan Avenue, Chicago, Illinois 60611-1542 (Address of Principal Executive Offices, Including Zip Code) (312) 274-2000 (Registrant's Telephone Number, Including Area Code) Former name, address and fiscal year, if changed since last report: 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 X NO ================================================================================ APCOA/STANDARD PARKING, INC. FORM 10-Q INDEX
Part I. Financial Information Item 1. Financial Statements (Unaudited): Condensed Consolidated Balance Sheets as of March 31, 2001 and December 31, 2000....................................................................... 3 Condensed Consolidated Statements of Operations for the three months ended March 31, 2001 and March 31, 2000.............................................. 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2001 and March 31, 2000.............................................. 5 Notes to Condensed Consolidated Financial Statements........................................ 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....... 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................. 12 Part II. Other Information Item 1. Legal Proceedings........................................................................... 12 Item 2. Changes in Securities and Use of Proceeds................................................... 13 Item 3. Defaults upon Senior Securities............................................................. 13 Item 4. Submission of Matters to a Vote of Security Holders......................................... 13 Item 5. Other Information........................................................................... 13 Item 6. Exhibits and Reports on Form 8-K............................................................ 13 Signatures.................................................................................................. 14 Index to Exhibits........................................................................................... 15
2 PART I FINANCIAL INFORMATION Item 1. Financial Statements APCOA/STANDARD PARKING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except for share data)
March 31, 2001 December 31, 2000 -------------- ----------------- ASSETS (Unaudited) (see Note) ------ Current assets: Cash and cash equivalents.......................................... $ 9,662 $ 3,539 Notes and accounts receivable, net................................. 45,307 46,826 Prepaid expenses and supplies...................................... 1,445 1,775 ------------ ------------ Total current assets............................................... 56,414 52,140 ------------ ------------ Leaseholds and equipment, net......................................... 27,184 28,492 Advances and deposits................................................. 2,274 2,075 Cost in excess of net assets acquired................................. 112,416 113,293 Intangible and other assets........................................... 11,779 12,341 ------------ ------------ Total assets....................................................... $ 210,067 $ 208,341 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIT ------------------------------------- Current liabilities: Accounts payable................................................... $ 38,681 $ 35,079 Accrued and other current liabilities.............................. 24,932 27,596 Current portion of long-term borrowings............................ 1,421 1,406 ------------ ------------ Total current liabilities........................................... 65,034 64,081 Long-term borrowings, excluding current portion....................... 177,092 173,590 Other long-term liabilities........................................... 9,159 10,121 Redeemable preferred stock............................................ 56,500 54,976 Common stock subject to put/call rights; 5.01 shares issued and outstanding................................. 8,708 6,304 Common stockholders' deficit: Common stock, par value $1.00 per share; 1,000 shares authorized; 26.3 shares issued and outstanding................................. 1 1 Additional paid-in capital.......................................... 11,422 11,422 Advances to and deposits with affiliates............................ (12,247) (11,979) Accumulated other comprehensive income.............................. (59) (374) Accumulated deficit................................................. (105,543) (99,801) ------------ ------------ Total common stockholders' deficit.................................. (106,426) (100,731) ------------ ------------ Total liabilities and stockholders' deficit......................... $ 210,067 $ 208,341 ============ ============
See Notes to Condensed Consolidated Financial Statements. Note: The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. 3 APCOA/STANDARD PARKING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, unaudited)
Three Months Ended ----------------------------------------- March 31, 2001 March 31, 2000 -------------- -------------- Gross customer collections.......................................... $ 395,477 $ 366,100 ============ ============ Parking services revenue: Lease contracts................................................... $ 41,273 $ 47,431 Management contracts.............................................. 20,407 15,660 ------------ ------------ 61,680 63,091 Cost of parking services: Lease contracts................................................ 37,190 42,640 Management contracts........................................... 10,451 6,288 ------------ ------------ 47,641 48,928 ------------ ------------ Gross profit ....................................................... 14,039 14,163 General and administrative expenses................................. 8,531 9,110 Other special charges............................................... - 119 Depreciation and amortization....................................... 2,729 2,541 ------------ ------------ Operating income.................................................... 2,779 2,393 Interest expense (income): Interest expense............................................... 4,662 4,421 Interest income................................................ (218) (207) ------------ ------------ 4,444 4,214 ------------ ------------ Loss before minority interest and income taxes...................................................... (1,665) (1,821) Minority interest................................................... 49 73 Income tax expense.................................................. 100 17 ------------ ------------ Net loss............................................................ (1,814) (1,911) Preferred stock dividends........................................... 1,524 1,366 Increase in fair value of common stock subject to put/call rights................................................... 2,404 - ------------ ------------ Net loss attributable to stockholders.................................................... $ (5,742) $ (3,277) ============ ============
See Notes to Condensed Consolidated Financial Statements. 4 APCOA/STANDARD PARKING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited)
Three Months Ended ------------------------------------------- March 31, 2001 March 31, 2000 -------------- -------------- Operating activities: Net loss................................................................................ $ (1,814) $ (1,911) Adjustments to reconcile net loss to net cash provided by (used in) operations: Depreciation and amortization........................................................ 2,729 2,541 Change in operating assets and liabilities, net of acquisitions......................................................................... 1,831 (1,244) --------- ---------- Net cash provided by (used in) operating activities.................................. 2,746 (614) Investing activities: Purchase of leaseholds and equipment.................................................... (455) (1,393) --------- ---------- Net cash used in investing activities................................................... (455) (1,393) Financing activities: Proceeds from long-term borrowings...................................................... 3,800 3,800 Payments on long-term borrowings........................................................ (74) (107) Payments on joint venture borrowings.................................................... (209) (187) --------- ---------- Net cash provided by financing activities............................................... 3,517 3,506 Effect of exchange rate on cash and cash equivalents.................................... 315 (634) --------- ---------- Increase in cash and cash equivalents................................................... 6,123 865 Cash and cash equivalents at beginning of period........................................ 3,539 5,215 --------- ---------- Cash and cash equivalents at end of period.............................................. $ 9,662 $ 6,080 ========= ========== Supplemental disclosures: Cash paid during the period for: Interest............................................................................. $ 7,404 $ 7,277 Taxes................................................................................ 256 456
See Notes to Condensed Consolidated Financial Statements. 5 APCOA/STANDARD PARKING, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 (in thousands, unaudited) 1. Interim Financial Data The accompanying unaudited condensed consolidated financial statements of APCOA/Standard Parking, Inc., ("APCOA/Standard" or "the Company") have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation of the financial position and results of operations have been included. Operating results for the three-month period ended March 31, 2001 are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2001. The financial statements presented in this Report should be read in conjunction with the consolidated financial statements and footnotes thereto included in APCOA/Standard's 2000 Form 10-K filed April 2, 2001. Certain reclassifications have been made to the 2000 financial information to conform to the 2001 presentation. 2. Other Special Charges Included in "Other special charges" in the accompanying condensed consolidated statements of operations are the following:
Three Months Ended ----------------------------------- March 31, 2001 March 31, 2000 -------------- -------------- Incremental integration costs and other.................. $ - $ 119 ============== ==============
The integration costs relate primarily to actions to facilitate the accounting system consolidation and activities to realign, centralize and reorganize administrative and other support functions. 3. Borrowing Arrangements APCOA/Standard's $140,000 9 1/4% Senior Subordinated Notes were issued in September of 1998 and are due in March of 2008. The Notes are registered with the Securities and Exchange Commission. The Notes were exchanged for unregistered notes with substantially identical terms, which had been issued earlier in 1998 to finance acquisitions, retire certain existing indebtedness, and for general working capital purposes. In March of 1998, the Company entered into a $40,000 revolving Senior Credit Facility (the "Facility") with a group of banks. Rates of interest on borrowings against the Facility are indexed to certain key variable rates. At March 31, 2001, borrowings under the Facility aggregated $30,750 and there were letters of credit outstanding against this Facility of $250. The Notes and Senior Credit Facility contain covenants that limit APCOA/Standard from incurring additional indebtedness and issuing preferred stock, restrict dividend payments, limit transactions with affiliates and restrict certain other transactions. Substantially all of APCOA/Standard's net assets are restricted under these provisions and covenants (See Note 4). 6 4. Subsidiary Guarantors Substantially all of the Company's direct or indirect wholly owned domestic subsidiaries, other than inactive subsidiaries, fully, unconditionally, jointly and severally guarantee the Senior Subordinated Notes. Financial statements of the guarantor subsidiaries are not separately presented because, in the opinion of management, such financial statements are not material to investors. The non-guarantor subsidiaries include joint ventures, wholly owned subsidiaries of the Company organized under the laws of foreign jurisdictions, inactive subsidiaries, and bankruptcy remote subsidiaries formed in connection with Joint Ventures, all of which are included in the consolidated financial statements. The following is summarized combined financial information for the Company, the guarantor subsidiaries of the Company and the non-guarantor subsidiaries of the Company:
Guarantor Non-Guarantor APCOA/Standard Subsidiaries Subsidiaries Eliminations Total -------------- ------------ ------------ ------------ ----- Balance Sheet Data: - ------------------ March 31, 2001 Cash and cash equivalents............................. $ 6,928 $ 127 $ 2,607 $ - $ 9,662 Notes and accounts receivable......................... 53,806 (13,655) 5,156 - 45,307 Current assets........................................ 61,953 (13,424) 7,885 - 56,414 Leaseholds and equipment, net......................... 15,206 6,852 5,126 - 27,184 Cost in excess of net assets acquired, net............ 18,940 90,126 3,350 - 112,416 Investment in subsidiaries............................ 103,579 - - (103,579) - Total assets.......................................... 208,110 88,499 17,037 (103,579) 210,067 Accounts payable...................................... 23,010 11,510 4,161 - 38,681 Current liabilities................................... 46,934 9,372 8,728 - 65,034 Long-term borrowings, excluding current portion....... 173,060 174 3,858 - 177,092 Redeemable preferred stock............................ 56,500 - - - 56,500 Common stock subject to put/call rights............... 8,708 - - - 8,708 Total stockholders' equity (deficit).................. (83,640) 76,787 4,006 (103,579) (106,426) Total liabilities and stockholders' equity (deficit).. 208,110 88,499 17,037 (103,579) 210,067 December 31, 2000 Cash and cash equivalents............................. $ (593) $ 76 $ 4,056 $ - $ 3,539 Notes and accounts receivable......................... 50,972 (7,529) 3,383 - 46,826 Current assets........................................ 50,792 (6,264) 7,612 - 52,140 Leaseholds and equipment, net......................... 15,693 7,395 5,404 - 28,492 Cost in excess of net assets acquired, net............ 19,062 90,673 3,558 - 113,293 Investment in subsidiaries............................ 93,211 - - (93,211) - Total assets.......................................... 187,446 96,818 17,288 (93,211) 208,341 Accounts payable...................................... 21,744 10,172 3,163 - 35,079 Current liabilities................................... 46,328 8,938 8,815 - 64,081 Long-term borrowings, excluding current portion....... 169,305 175 4,110 - 173,590 Redeemable preferred stock............................ 54,976 - - - 54,976 Common stock subject to put/call rights............... 6,304 - - - 6,304 Total stockholders' equity (deficit).................. (94,942) 83,504 3,918 (93,211) (100,731) Total liabilities and stockholders' equity (deficit).. 187,446 96,818 17,288 (93,211) 208,341 Income Statement Data: - ---------------------- Three Months Ended March 31, 2001 Parking Revenue....................................... $ 33,610 $ 22,393 $ 5,677 $ - $ 61,680 Gross profit.......................................... 8,645 4,246 1,148 - 14,039 Other special charges................................. - - - - - Depreciation and amortization......................... 1,195 1,247 287 - 2,729 Operating income...................................... 6,226 (4,234) 787 - 2,779 Interest expense, net................................. 4,330 (11) 125 - 4,444 Equity in earnings of subsidiaries.................... (3,760) - - 3,760 - Net (loss) income..................................... (1,814) (4,222) 462 3,760 (1,814) Three Months Ended March 31, 2000 Parking Revenue....................................... $ 29,073 $ 23,158 $ 10,860 $ - $ 63,091 Gross profit.......................................... 7,775 4,472 1,916 - 14,163 other special charges................................. 119 - - - 119 Depreciation and amortization......................... 948 1,252 341 - 2,541 Operating income...................................... 5,517 (4,547) 1423 - 2,393 Interest expense, net................................. 4,062 (7) 159 - 4,214 Equity in earnings of subsidiaries.................... (3,362) - - 3,362 - Net (loss) income..................................... (1,911) (4,529) 1,167 3,362 (1,911)
7 APCOA/STANDARD PARKING, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Statement of Cash Flow Data: - ---------------------------- Three Months Ended March 31, 2001 Net cash provided by (used in) operating activities......... $ 3,787 $ 408 $ (1,449) $ - $ 2,746 Investing activities: - Purchase of leaseholds and equipment...................... (47) (408) - - (455) -------- --------- ---------- ------- ---------- Net cash used in investing activities....................... (47) (408) - - (455) Financing activities: Proceeds from long-term borrowings........................ 3,800 - - - 3,800 Payments on long-term borrowings.......................... (74) - - - (74) Payments on Joint Venture borrowings...................... (209) - - - (209) -------- --------- ---------- ------- ---------- Net cash provided by financing activities................... 3,517 - - - 3,517 Effect of exchange rate changes............................. 315 - - - 315 Three Months Ended March 31, 2000 Net cash (used in) provided by operating activities........... $ (748) $ (1,386) $ 1,520 $ - $ (614) Investing activities: Purchase of leaseholds and equipment...................... (1,393) - - - (1,393) -------- --------- ---------- ------- ---------- Net cash used in investing activities.......................... (1,393) (1,393) Financing activities: Proceeds from long-term borrowings........................ 3,800 - - - 3,800 Payments on long-term borrowings.......................... (107) - - - (107) Payments on Joint Venture borrowings...................... (187) - - - (187) -------- --------- ---------- ------- ---------- Net cash provided by financing activities...................... 3,506 - - - 3,506 Effect of exchange rate changes................................ (634) - - - (634)
8 PART I FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General APCOA/Standard Parking, Inc. ("APCOA/Standard" or "the Company") operates in a single reportable segment operating parking facilities under two types of arrangements: management contracts and leases. Under a management contract, APCOA/Standard typically receives a base monthly fee for managing the property, and may also receive an incentive fee based on the achievement of facility revenues above a base amount. In some instances, APCOA/Standard also receives certain fees for ancillary services. Typically, all of the underlying revenues, expenses and capital expenditures under a management contract flow through to the property owner, not to APCOA/Standard. Under lease arrangements, APCOA/Standard generally pays to the property owner either a fixed annual rental, a percentage of gross customer collections or a combination thereof. APCOA/Standard collects all revenues under lease arrangements and is responsible for most operating expenses, but it is typically not responsible for major maintenance or capital expenditures. As of March 31, 2001, APCOA/Standard operated approximately 81% of its 1,959 parking facilities under management contracts and approximately 19% under leases. Parking services revenue--lease contracts. Lease parking services revenues consist of all gross customer collections received at a leased facility. Parking services revenue--management contracts. Management contract revenues consist of management fees, including both fixed and revenue-based, and fees for ancillary services such as accounting, equipment leasing, consulting, and other value-added services with respect to managed locations, but exclude gross customer collections at such locations. Management contracts generally provide APCOA/Standard a management fee regardless of the operating performance of the underlying facility. Cost of parking services--lease contracts. Cost of parking services under lease arrangements consist of (i) contractual rental fees paid to the facility owner and (ii) all operating expenses incurred in connection with operating the leased facility. Contractual fees paid to the facility owner are based on either a fixed contractual amount or a percentage of gross revenue, or a combination thereof. Generally under a lease arrangement, APCOA/Standard is not responsible for major capital expenditures or property taxes. Cost of parking services--management contracts. Cost of parking services under management contracts is generally passed through to the facility owner, therefore these costs are not included in the results of operations of the Company. Several APCOA/Standard contracts, however, require APCOA/Standard to pay for certain costs that are offset by larger management fees. These contracts tend to be large airport properties with high cost structures. General and administrative expenses. General and administrative expenses include primarily salaries, wages, travel and office related expenses for the headquarters and field office and supervisory employees. Summary of Operating Facilities The following table reflects the Company's facilities at the end of the periods indicated:
March 31, 2001 December 31, 2000 March 31, 2000 -------------- ----------------- -------------- Managed facilities............... 1,593 1,575 1,429 Leased facilities................ 366 368 393 ------ ------- ------- Total facilities............... 1,959 1,943 1,822 ====== ======= =======
The Company's strategy is to add locations in core cities where a concentration of locations improves customer service levels and operating margins. In general, contracts added as set forth in the table above followed this strategy. 9 Results of Operations Gross customer collections consist of gross receipts collected at all leased and managed properties, including unconsolidated affiliates. Gross customer collections increased $29.4 million, or 8%, to $395.5 million in the first quarter of 2001 compared to $366.1 million in the first quarter of 2000. This increase is attributable to the addition of 137 locations during the period. In analyzing gross margins of APCOA/Standard, it should be noted that the cost of parking services incurred in connection with the provision of management services is generally paid by the clients. Margins for lease arrangements are significantly impacted by variables other than operating performance, such as variability in parking rates in different cities and widely varying space utilization by parking facility type. The following should be read in conjunction with the Condensed Consolidated Financial Statements. Three Months ended March 31, 2001 Compared to Three Months ended March 31, 2000 Parking services revenue--lease contracts. Lease revenue decreased $6.1 million, or 13.0 %, to $41.3 million in the first quarter of 2001 as compared to $47.4 in the first quarter of 2000. This resulted from the net reduction of 27 leases through contract expirations, conversions to management contracts and the conversion of one large airport property from a lease contract to a management contract. Parking services revenue--management contracts. Management contract revenue increased $4.7 million, or 30.3%, to $20.4 million in the first quarter of 2001 as compared to $15.7 million in the first quarter of 2000. This resulted from the net increase of 164 contracts through internal growth and conversions from lease contracts. Cost of parking services--lease contracts. Cost of parking services for leases decreased $5.4 million, or 12.8%, to $37.2 million for the first quarter of 2001 from $42.6 million in the first quarter of 2000. This decrease resulted from the reduction of 27 leases through terminations and conversions to management contracts. Gross margin for lease contracts declined slightly to 9.9% for the first quarter of 2001 compared to 10.1% for the first quarter of 2000. This decrease was primarily due to the increases in costs related to snow removal. Cost of parking services--management contracts. Cost of parking for management contracts increased $4.2 million, or 66.2%, to $10.5 million for the first quarter of 2001 from $6.3 million in the first quarter of 2000. This increase resulted from the addition of a net total of 164 new contracts through internal growth and conversions from lease contracts. Gross margin for management contracts declined to 48.8% in the first quarter of 2001 compared to 59.8% for the first quarter of 2000. Most management contracts have no cost of parking services related to them, as all costs are reimbursable to the Company. However, several contracts (primarily large airport properties and several urban locations) require the Company to pay for certain costs, which are offset by larger management fees. The increase in cost of parking management contracts was related to the addition of several contracts of this type. General and administrative expenses. General and administrative expenses decreased $0.6 million, or 6.4%, to $8.5 million for the first quarter of 2001 as compared to $9.1 million, for the first quarter of 2000. This decrease resulted from cost savings and staff reductions implemented in the fourth quarter of 2000. Other special charges. The Company did not record other special charges in the first quarter of 2001, as compared to $0.1 million in the first quarter of 2000. The 2000 special charges relate to actions to facilitate the accounting system consolidation and other support functions. Liquidity and Capital Resources As a result of day-to-day activity at the parking locations, APCOA/Standard collects significant amount of cash. Under lease contracts, this revenue is deposited into local APCOA/Standard bank accounts, with a portion remitted to the clients in the form of rental payments according to the terms of the leases. Under management contracts, some clients require APCOA/Standard to deposit the daily receipts into a local APCOA/Standard bank account. Others require the deposit into a client account, and some have a segregated account for the receipts and disbursements of the location. 10 Locations with revenues deposited into APCOA/Standard bank accounts enable the Company to operate with a negative working capital. This negative working capital arises from the liability that is created for the amount of revenue that will be remitted to the clients in the form of rents or net profit distributions subsequent to month end, after the books are closed and reconciled. Since the Company operates with a revolving Senior Credit Facility, all funds held for future remittance to the clients are used to reduce the credit line until the payments are made to the clients. Locations with revenue deposited into client accounts or segregated accounts can, depending upon timing of rent or net profit distributions, result in significant amounts of cash being temporarily inaccessible to the Company for use for operating needs. Additionally, the ability to utilize cash deposited into local APCOA/Standard accounts is dependent upon the movement of that cash into the Company's corporate account. For these reasons, the Company from time to time carries significant cash balances, while utilizing its Senior Credit Facility. The Company had cash and cash equivalents of $9.7 million at March 31, 2001 compared to $3.5 million at December 31, 2000. Three Months ended March 31, 2001 Compared to Three Months ended March 31, 2000 Net cash provided by operating activities totaled $2.7 million for the first quarter of 2001 compared to cash used of $0.6 million for the first quarter of 2000. Cash provided during 2001 included a $1.5 million reduction in accounts receivable, a $0.5 million reduction in prepaid and other assets, a $3.6 million increase in accounts payable, which was offset by a $3.9 million decrease in other liabilities due primarily to the $6.5 million interest payment on the Senior Subordinated Notes. Cash used during 2000 included a $1.2 million increase in accounts receivable, offset by increases in accounts payable and other liabilities of $5.0 million and a decrease in other assets of $1.3 million. Cash used during 2000 included a $6.5 million interest payment on the Senior Subordinated Notes. Cash used in investing activities totaled $0.5 million for the first quarter of 2001 compared to $1.4 million for the first quarter of 2000. Cash used in investing activities in the first quarter of 2001 and the first quarter of 2000 resulted from capital purchases to secure and/or extend leased facilities and investments in management information system enhancements. Cash generated from financing activities totaled $3.5 million in the first quarter of 2001. The 2001 activity included $3.8 million in borrowings from the Senior Credit Facility, offset by repayments on long-term and joint venture borrowings of $0.3 million. The 2000 activity included $3.8 million in borrowings from the Senior Credit Facility, offset by repayments on long-term and joint venture borrowings of $0.3 million. Other Liquidity and Capital Resources Information The Company's Senior Credit Facility (the "Facility") provides cash borrowings up to $40.0 million with sublimits for Letters of Credit up to $10.0 million, at variable rates based, at the Company's option, either on LIBOR, the overnight federal funds rate, or the bank's base rate. The Company utilizes the Facility to provide readily-accessible cash for working capital purposes. The Facility includes covenants that limit the Company from incurring additional indebtedness, issuing preferred stock or paying dividends, and contains certain other restrictions. At March 31, 2001, the Company had $0.3 million of letters of credit outstanding under the Facility and borrowings against the Facility aggregated $30.8 million. The Facility was amended on March 30, 2000, with the principal changes to the agreement providing for revisions to interest rates charged on borrowings and certain financial covenants. The Facility was amended on May 12, 2000, with the principal change to the agreement relating to the definition of a change in control. The Facility was amended on November 14, 2000, with the principal changes to the agreement providing for revisions to interest rates charged on borrowings and certain financial covenants. The Facility was amended on March 30, 2001, with the principal changes to the agreement providing for revisions to interest rates charged on borrowings, certain financial covenants, a change to restore the original borrowing limits, and a change in the expiration date from March 30, 2004 to July 1, 2002. As of March 31, 2001, the Company was in compliance with the covenants contained in the Facility or has obtained the necessary waivers on or before March 31, 2001. The Company's ability to meet its anticipated future requirements for working capital, capital expenditures, scheduled payments of interest and principal on its indebtedness depends on the Company's future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors beyonds its 11 control. Based upon the current level of operations and anticipated growth, the Company believes that, together with available borrowings under its Facility, its cash flow and available liquidity will be adequate to meet the Company's anticipated requirements up to the expiration date of the Facility. However, there can be no assurance that the Company's business will generate sufficient cash or that future borrowings will be available in an amount sufficient to enable the Company to meet its future requirements, or that any refinancing of existing indebtedness (including the Facility) would be available on commercially reasonable terms, or at all. If the Company identifies investment opportunities requiring cash in excess of the Company's cash flows and existing cash, the Company may borrow under the Senior Credit Facility. Special Cautionary Notice Regarding Forward-Looking Statements In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as in this Quarterly Report generally. You should carefully review the risks described in this Quarterly Report as well as the risks described in other documents filed by the Company and from time to time with the Securities and Exchange Commission. In addition, when used in this Quarterly Report, the words "anticipates," "plans," "believes," "estimates," and "expects" and similar expressions are generally intended to identify forward- looking statements. Such statements are subject to a number of risks and uncertainties. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by the Company or these forward looking statements. The Company undertakes no obligation to revise these forward-looking statements to reflect any future events or circumstances. Cautionary Statements The Company continues to be subject to certain factors that could cause the Company's results to differ materially from expected and historical results (see the "Risk Factors" set forth in the Company's Registration Statement on Form S-4 (No. 333-50437) filed on April 17, 1998, as amended on June 9, 1998, July 15, 1998, August 11, 1998 and August 14, 1998 (the "Registration Statement") and the Company's 2000 10-K filed on April 2, 2001. Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company's primary market risk exposure consists of risk related to changes in interest rates. Historically, the Company has not used derivative financial instruments for speculative or trading purposes. The Company entered into a $40.0 million revolving variable rate Senior Credit Facility (see Note 3 of the Notes to the Condensed Consolidated Financial Statements). Interest expense on such borrowing is sensitive to changes in the market rate of interest. If the Company were to borrow the entire $40.0 million available under the Facility, a 1% increase in the average market rate would result in an increase in the Company's annual interest expense of $0.4 million. This amount is determined by considering the impact of the hypothetical interest rates on the Company's borrowing cost, but does not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Due to the uncertainty of the specific changes and their possible effects, the foregoing sensitivity analysis assumes no changes in the Company's financial structure. PART II OTHER INFORMATION Item 1. Legal Proceedings In the normal course of business, the Company is involved in disputes, generally regarding the terms of lease agreements. In the opinion of management, the outcome of these disputes and litigation will not have a material adverse effect on the consolidated financial position or operating results of the Company. 12 Item 2. Changes in Securities and Use of Proceeds None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number Description ------ ----------- 2.1 Combination Agreement, dated as of January 15, 1998, by and between APCOA, Inc. and the Standard Owners (incorporated by reference to Exhibit 2.1 to the Registration Statement) 3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 (No. 333-50437) filed on April 17, 1998, as amended on June 9, 1998, July 15, 1998, August 11, 1998 and August 14, 1998 (the "Registration Statement")). 3.2 Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement). 3.3 Amended and Restated By-Laws of the Company dated as of December 29, 2000. (incorporated by reference to Exhibit 3.3 to the Registration Statement). 4.1 Indenture, dated as of March 30, 1998, amended as of July 6, 1998, September 21, 1998 and January 12, 1999 by and among the Company, the Subsidiary Guarantors and State Street Bank and Trust Company (incorporated by reference to Exhibit 4.1 to the Registration Statement). 4.2 Form of New Note (included as Exhibit A to Exhibit 4.1). 4.3 Form of New Note Guarantee (included as Exhibit D to Exhibit 4.1). 4.11 Fifth Amendment to the Senior Credit Facility dated March 30, 2001 by and among the Company, the Lenders and Bank One, N.A., as agent for the Lenders. (incorporated by reference to Exhibit 4.11 to the Company's Annual Report on Form 10-K field for December 31, 2000). b) Reports on Form 8-K On March 8, 2001, the Company filed a Current Report on Form 8-K. This report disclosed that on March 5, 2001, Holberg restructured certain of its debt and eliminated the defaults thereunder, thereby eliminating the possibility of a change of control of APCOA/Standard under the APCOA/Standard debt instruments as a result of such defaults. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. APCOA/Standard Parking, Inc. (Registrant) May 10, 2001 By:______________________________________________ Myron C. Warshauer Director and Chief Executive Officer May 10, 2001 By:______________________________________________ G. Marc Baumann Executive Vice President, Chief Financial Officer, and Treasurer 14 INDEX TO EXHIBITS Exhibit Number Description ------ ----------- 2.1 Combination Agreement, dated as of January 15, 1998, by and between APCOA, Inc. and the Standard Owners (incorporated by reference to Exhibit 2.1 to the Registration Statement) 3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 (No. 333-50437) filed on April 17, 1998, as amended on June 9, 1998, July 15, 1998, August 11, 1998 and August 14, 1998 (the "Registration Statement")). 3.2 Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement). 3.3 Amended and Restated By-Laws of the Company dated as of December 29, 2000. (incorporated by reference to Exhibit 3.3 to the Registration Statement). 4.1 Indenture, dated as of March 30, 1998, amended as of July 6, 1998, September 21, 1998 and January 12, 1999 by and among the Company, the Subsidiary Guarantors and State Street Bank and Trust Company (incorporated by reference to Exhibit 4.1 to the Registration Statement). 4.2 Form of New Note (included as Exhibit A to Exhibit 4.1). 4.3 Form of New Note Guarantee (included as Exhibit D to Exhibit 4.1). 4.11 Fifth Amendment to the Senior Credit Facility dated March 30, 2001 by and among the Company, the Lenders and Bank One, N.A., as agent for the Lenders. (incorporated by reference to Exhibit 4.11 to the Company's Annual Report on Form 10-K filed for December 31, 2000). 15 -----END PRIVACY-ENHANCED MESSAGE-----