Central Parking Announces New Strategic Plan and Management Reorganization
September, 2005Central Parking Corp. announced in August a new strategic plan designed to improve profitability. The company also announced changes in senior management and plans to conduct a "Dutch Auction" tender offer.
Emanuel Eads, who has served as President and Chief Operating Officer since May 2003, has been named President and Chief Executive Officer.
Monroe Carell Jr., Chairman and Chief Executive Officer, will become Executive Chairman of the Board of Directors. In his new role, Carell will continue to be involved in all strategic aspects of the business and will lead Central Parking's efforts to re-emphasize the importance of client relationships.
Two of the company's senior vice presidents, Alan Kahn and Gregory Stormberg, have been promoted to the newly created position of Executive Vice President, reporting to Eads. In addition to their current responsibilities, Kahn will oversee international operations and Stormberg will have direct responsibility for New York City. Under the new management structure, the position of Chief Operating Officer has been eliminated.
Central Parking's new strategic plan is designed to streamline operations and focus on core competencies and key markets with the greatest potential for growing profits. The plan includes the following components:
* Exit marginal and low-growth markets. The operations that the company plans to divest represent less than 4% of revenues. In addition to reducing costs at the local level, these divestitures will enable the company to reduce general and administrative costs by more than 10% at the regional and corporate levels.
* Reduce the number of marginal or unprofitable operating agreements.
* Target national accounts and other markets with high-growth potential.
* Re-emphasize the importance of client relationships.
* Expand the Operational Excellence Initiative companywide.
* Increase investment in technology to reduce costs and improve operations efficiency. The company plans to invest up to $10 million over the next two years to deploy additional technology at the lot level, including automated pay stations and other revenue collection technology.
* Continue to pursue opportunistic sales of real estate.
'Dutch Auction' Tender Offer
The company intends to commence a modified "Dutch Auction" tender offer to purchase up to approximately 12% of its common stock. The final number of shares, timing, price range and other details will be determined on the date the tender offer is commenced. The company expects to finance the purchase of the shares from cash proceeds from property sales and from its credit facility.