SP Plus (SP) Misses Q2 EPS by 85c, Revenues Beat

SP Plus (NASDAQ: SP) reported Q2 EPS of ($0.86), $0.85 worse than the analyst estimate of ($0.01). Revenue for the quarter came in at $203.4 million versus the consensus estimate of $143.31 million.

“We saw a progressive pick-up in activity throughout the quarter as businesses re-opened in line with the easing of pandemic-related restrictions. Clients required our expertise to accommodate changes in consumer behaviors and preferences while also addressing safety and social distancing mandates. While we continue to closely monitor the recent pauses to re-openings in certain parts of the country, our improving trend is indicative of the importance of our services to our clients.

“At the pandemic’s onset, we implemented substantial cost reductions that enabled us to reduce our second quarter adjusted G&A by 30%. These actions, together with contract re-negotiations and concessions from our clients, enabled us to achieve positive second quarter free cash flow of $13 million despite the dramatic fall-off in gross profit. Although not all of the cost savings will continue beyond this year, they emphasize the flexibility of our business model and provide a framework through which to re-imagine the leaner organization that SP+ will become once business conditions normalize.

“Technology remains at the center of how we differentiate ourselves from competitors and we’ve increased our efforts and made excellent progress on this front over the last several months. I am excited about the recent launch of Sphere, Technology by SP+™, our new technology brand comprised of a suite of industry-leading mobility-focused technology solutions that leverage decades of SP+ intelligence, innovation and operating excellence to deliver products that increase clarity and visibility for our clients while providing a user-friendly, seamless and contactless experience for our end consumers. During the second quarter, we also enhanced our Parking.com™ platform to improve the user experience and also launched on-demand payment capabilities that support payments by mobile app, web, text message and QR code. We are also leveraging the latest in Bluetooth and license plate recognition technology to create a frictionless and touchless solution for consumers. We believe these technology enabled capabilities are critical for delivering low-touch, low-friction interactions and experiences to the public, which is important to our clients now and will remain so in the post-COVID environment.”

For earnings history and earnings-related data on SP Plus (SP) click here.

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