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Executives

G. Marc Baumann - Chief Financial Officer, Treasurer and President of Urban Operations

James A. Wilhelm - Chief Executive Officer, President and Director

Analysts

Daniel Moore - CJS Securities, Inc.

Nathan Brochmann - William Blair & Company L.L.C., Research Division

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Standard Parking (STAN) Q1 2013 Earnings Call May 9, 2013 11:00 AM ET

Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2013 Standard Parking Earnings Conference Call. My name is Mary, and I'll be your operator for today. [Operator Instructions] And I would now like to turn the conference over to your host for today, Mr. Marc Baumann, Executive Vice President and Chief Financial Officer of Standard Parking. Please proceed.

G. Marc Baumann

Thank you, Mary and good morning, everybody. As Mary just said, I'm Marc Baumann. I'm the Chief Financial Officer of Standard Parking. Welcome to the conference call for the first quarter of 2013. I hope all of you had a chance to review our earnings announcement, which was released last evening. We'll begin our call today with a brief overview by Jim Wilhelm, our President and Chief Executive Officer, and then I'll discuss some of the financials in more detail. After that, we'll open up the call for a Q&A session. During the call, we'll make some remarks that would be considered forward-looking statements, including statements as to our 2013 financial guidance, statements regarding financial expectations relating to the company's merger with Central Parking and other statements regarding the company's strategies, plans, intentions, future operations and expected financial performance.

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 or other factors, including those described in our earnings release issued yesterday, which are incorporated by reference for purposes of this call.

I would also like to refer you to the Risk Factors disclosures made in the company's filings with the Securities and Exchange Commission. Finally, before we get started, I want to mention that this call is being broadcast live over the Internet and that a replay of the call will be available for 30 days from now.

With that, I'll turn the call over to Jim.

James A. Wilhelm

Thanks, Marc. Good morning, everybody. Thanks for taking the time to come on our call today. I'm pleased to report that 2013, as we discussed last night, is off to a real solid start as our first quarter's results exceeded our own internal expectations.

Same location gross profit at legacy Standard locations increased 3% for the quarter as compared to the same period of last year when you exclude the impact of the large contract re-trades that took effect during 2012 and that I have spoken to before on previous calls.

Since the merger closed on October 2 of last year, the location retention rate of Central Parking's legacy portfolio was 81% on an annualized basis, including the impact of the locations we had to divest in connection with the merger. The location retention rate for Standard's legacy portfolio was 89% for the 12 months ended March 31, 2013, again, including the impact of the merger-related location divestitures from that side. When you exclude the divestitures, location retention rates increased to 87% for legacy Central locations and 91% for legacy Standard. I want to take just a couple of minutes to talk about that.

When we spoke last call, after we announced the merger and again when we talked about the year end results, I talked about the near-term importance and the near-term strategy and tactics of putting the company together. So in the near term for 2013, the priorities for the organization were to make sure that we were foresighted enough to get out with every one of our 4,500 clients, talk to them about expectations for the merger for products that we'd be able to deliver in the future, to enhance their products even or enhance their locations even further, and just a solid effort towards reaching out in an effort to retain our existing clients. That effort would be matched by our internal support offices' importance for the integration -- the ultimate integration of our back-office systems. And I'm sure we can talk about more on the Q&A part of that call. The reason I mentioned the effort that was put forward on the retention side is I am extremely happy with those retention rates that we just talked about. That retention rate for the Central Parking locations far exceeds Central's most recent historical legacy retention rates and brings -- with our retention rate at 90% or 91%, matches our historic legacy targets for retention. So I couldn't be more prouder of the field organization who's primarily responsible for relationships on the client side to have executed and performed exactly as we directed in the midterm towards getting those retention rates where we -- protecting our retention rates and even exceeding my expectations for where I thought we'd be, given the noise around the business in the near term.

At the same time, our new business activity remains strong. As we announced, we took over management of the New York City Housing Authority spaces, about 22,000-plus spaces at 600 lots in New York City where we're taking on initial responsibility for permits, permit parking regulation and penalizing scofflaws and things like that.

For Standard Parking of Canada, we added Place Du Portage, Canada's most -- largest government plaza, which is 5 facilities, 2,600 parking spaces to a multiyear contract. In addition, we took over the Public Works Building in Gatineau, Québec, 780 spaces also on a multiyear contract, significant adds as we've tried to refocus our efforts up in Canada.

We added 2 more beach lots at the Balboa Pier and Corona Del Mar to the portfolio we're already managing for the City of Newport Beach. We now manage almost 4,000 spaces in that city for the SP Plus municipal banner. And USA Parking, our hospitality specialists, added the Ritz-Carlton Residences and Milea Hotel in Atlanta, as well as the Ritz-Carlton Denver, which is right in our sweet spot for a 5-star hotel hospitality services.

We also have been very busy on the airport side of this business. We either have announced or will be announcing some additional wins in that area. And more importantly, the retention of some significant airports as we are bringing those sort of legacy large deals that we've been speaking about through 2011 and 2012 to a close. So I couldn't be more proud of the folks that are working in our airport division.

And as I mentioned earlier and on the integration front, as you know, the integration of the field organization is essentially complete, as I've spoken. And the field organization has been working rather seamlessly to grow the business organically, as I've talked about, as well as exceeding my expectations on the new business front, at least through the first quarter in terms of deals that we either announced or we consider in the bag by virtue of contract signing.

I can tell you that I've been out in the field, I think, 9 of the last 10 weeks, meeting with each of the newly assembled field organizations by region. And the talent that we've been able to assemble by, what we think, picking the best field organization from both organizations and then having the synergies that as a result of those moving forward with us versus who's not, has been striking for me. There's been no substitute than to get out and meet some of the new people that are working for us and to meet them in the team concept, Standard and Central people together, and pulling in the same direction under, obviously, these very trying circumstances.

On the flip side of the business, the process to integrate our back-office systems and processes is moving ahead on schedule. We expect to convert the first group of locations on to the combined platform during the early part of the third quarter. Upon the successful migration of those locations, we expect to continue the conversion on a carefully planned geographic basis with the goal of completing the entire conversion process by the end of 2014.

On the branding front, we expect to announce our new corporate brand strategy by the end of second quarter, by the end of this quarter. And I know we'll be asked more about that later. So with that, I'll turn the call back over to Marc to lead you through a more detailed discussion of our financial performance for the first quarter.

G. Marc Baumann

Thanks, Jim, and hello again, everybody. As usual, our first quarter results were laid out in quite a bit of detail in the earnings release we issued last night. In addition to comparing our results to the same quarter last year, we're making a sequential comparison to help identify trends in key captions for the merged company. While there are some seasonality in the sequential quarter results, we believe this is a helpful presentation and certainly better than just giving you the comparison to the first quarter of last year, which just reflected Standard's premerger results on a stand-alone basis.

Getting to the results for the first quarter, gross profit was $40.7 million, a decrease of $1 million from the fourth quarter of 2012. Several factors contributed to this result. First, we experienced the $1.7 million unfavorable change in prior-year insurance loss reserve estimates in the first quarter of 2013, which we did not have in the fourth quarter. Those of you who have followed us for a while know that we can see large swings in loss reserve estimates from time to time, but swings of this magnitude are the exception and not the norm. And we don't expect them to continue as we look forward for the rest of the year. Offsetting this unfavorable change in loss reserve estimate was a $2.1 million net benefit from the sale of a long-term contract right. These sales are not unusual and occur from time to time in the normal course of business, although they generally are not of this magnitude. In addition, the first quarter has generally been our weakest quarter from a seasonality point of view, as travel subsides after the holidays and unpredictable weather can impact both revenues and expenses.

On a year-over-year basis, gross profit increased $19.1 million from $21.6 million in the first quarter of '12, which was obviously driven primarily by including Central Parking's results in the 2013 numbers. G&A expenses, excluding merger and integration-related costs, decreased by $1.9 million or 7% from the fourth quarter of 2012. The company has now realized synergy-driven cost savings of $4 million, including the incremental $2 million in savings realized in this year's first quarter.

We're pleased with this continuing progress toward our goal of $26 million in cost savings by 2015 and I should say that's a good start for us in terms of getting the savings that we have been talking about. On a year-over-year basis, G&A increased $12.8 million, as compared with the first quarter of 2012, due primarily to the addition of Central Parking's operations and slightly higher merger and integrations costs in Q1 of 2013 as compared with the same period last year.

EBITDA for the first quarter of 2013 was $12.3 million, almost twice as much as the $6.5 million of EBITDA the company earned in the first quarter of '12. When adjusted for merger and integration related cost, in both years, first quarter 2013 EBITDA grew by 70% as compared to the first quarter of 2012. On a sequential basis, adjusted EBITDA for the first quarter increased 7% from adjusted EBITDA for the 2012 fourth quarter.

Free cash flow for the quarter was negative $13.4 million for the first quarter of 2013, due primarily to $8.4 million of merger and integration related payments. This leaves an adjusted negative $5 million of free cash flow for the quarter. The majority of those payments were for previously accrued severance, legal settlements, required divestitures and other merger-related costs. And I think we mentioned that we're going to expect that and we actually expect the total for the year to be about $17 million that we'll be paying out of accrued costs from 2012.

Free cash flow for the first quarter of 2012 was a negative $10 million, including a couple of million dollars of merger and integration costs for an adjusted negative free cash flow for the first quarter of 2012 of a negative $8 million versus the adjusted negative free cash flow of $5 million in the current quarter. So we're seeing some improvement in free cash flow on a year-on-year basis.

Also bear in mind that the first quarter tends to be our weakest, as I said a few minutes ago, both in terms of level of business activity and free cash flow as our company's annual performance-based compensation is also paid out in the quarter. Our full year expectation for free cash flow of at least $30 million did contemplate the negative free cash flow for the first quarter, so our outlook for the full year remains unchanged.

Based on the first quarter results, we're affirming our full year expectations of earnings per share between $0.75 and $0.85, excluding all merger and integration costs. The effective tax rate for the first quarter was skewed by discrete tax items, but we expect the full year tax rate to be approximately 39% as we told you a few weeks ago. As I just mentioned, we continue to expect to generate at least $30 million free cash flow during the year after the payment of $17 million for liabilities accrued at the end of 2012.

That's it for the formal comments. I'll turn the call back over to Mary to begin our Q&A.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Daniel Moore from CJS Securities.

Daniel Moore - CJS Securities, Inc.

Including the impact of the re-trades, what would organic gross profit growth have been in the quarter?

G. Marc Baumann

Including the impact of the re-trades, I think it was essentially flat.

Daniel Moore - CJS Securities, Inc.

Perfect. And looking at -- given the contract with the New York City Housing Authority and several of the other contracts wins that you've announced today, as well as earlier in the year, what type of organic growth and gross profit should we be contemplating for the back half of the year as well as 2014? Longer term, you have sort of a 5% organic gross profit growth goal in more normal economic times. Where do we stand as we look out over the next several quarters?

G. Marc Baumann

Yes. I think what I'll be glad to do, Dan, is give you some guidance on some of the items below gross profit. You have our earnings guidance and if I give you some indications on the rest of those, I think you'll be able to make an estimate for gross profit for the year. We haven't worked through, yet, what the actual growth rate is going to be organically for '13 and '14. As we said in the last call, our goal was to get it back to 5%. We're clearly not growing at that rate at the moment. But one thing about this quarter is that if you look at G&A, it's a fairly good proxy for our run rate G&A for the year. If you take the first quarter and annualize it, excluding merger costs, D&A, subject to finalization of purchase accounting, which won't be done until later in the year, is a decent proxy for our estimates for the year. And interest expense is lower than in Q4. It is high as a proxy for the year because we do have amortization of the term loan going on during the year. So I think if you take what I've just said there, our EPS guidance, you ought to be able work back to a fairly decent gross profit estimate for the rest of the year.

Daniel Moore - CJS Securities, Inc.

That's helpful. And any upfront costs for the New York City contract that might impact Q2 results?

James A. Wilhelm

No.

Operator

[Operator Instructions] Our next question comes from Nate Brochmann from William Blair & Company.

Nathan Brochmann - William Blair & Company L.L.C., Research Division

I wanted to talk a little bit -- obviously, it sounds like that integration is going well already, starting to see some synergies and congratulations on kind of moving pretty quickly with all that. On the new win front, what are you seeing in terms of as you're leveraging the kind of sales force and everybody's kind of energetic to go out there? I mean, do you feel that -- like you're already starting to see some additional wins here in the first quarter just from leveraging the sales force a little bit more, the combined entity or some of the cross-selling efforts? Just wanted to get a little bit of a feel on kind of the top line in terms of what you're seeing in terms of the benefits so far.

James A. Wilhelm

Yes, that's a great question. And there are really 2 answers. One, it relates to what I talked about early in the call. And remember, I have focused the organization for -- from the time we've come together last October through the end of the year on retention. It's much easier for us to retain our business and continue to grow that organically, than depend on a significant amount of new business to replace that. So getting the retention rate to where it was is exciting because it's exceeding where we thought we would be as a result of putting the 2 companies together. That being said, the energy in the field to go out and sell new has been terrific. So the management or the discipline that has to be put in place is not to do that on a shotgun approach because you have everybody out there from both sides saying, "I want to go out and sell Standard's transportation and I want to go out and sell maintenance and I want to sell security and expand Click and Park. And what about universities, what about the stadiums?" That becomes -- if it's not managed in an orderly fashion with some discipline from us in terms of internal controls, it becomes relatively ineffective. So we had a pace kind of established for how we would go to market in the first quarter and second quarter based on the lead opportunities that we have built into our CRM. You identified our sales force as our sales force, but it's also the foundation for our CRM as a product. The exciting part of that is we have seen, at least through the first quarter, and the company is in the process of finishing its first re-forecast for this year that we are exceeding our expectations on the new side in terms of new business being sold, as I've said, in advance or more than we had expected. And even that schedule that we've set for 2013 was rather ambitious. So I guess the best way to explain that is in looking at the re-forecast for this year's new, Nate, we're exceeding the expectation. Now that is on the backs of some airport wins that we'll be talking about yet unannounced. The municipal side, as I've talked about for the last several years, is extremely busy. The hotel area led by USA has had some terrific wins and is expecting more based on wrapping up contract negotiations of hopefully some deals that we'll be able to announce before the second quarter is over. And it is in those areas where we've seen much more success early on than we thought relative to, again, the distraction of putting the companies together, focusing on retention, focusing on integration. So far, so good from the sales side.

Nathan Brochmann - William Blair & Company L.L.C., Research Division

That's great to hear. And then I just have 2 kind of semi- housekeeping things, but just as a proxy for how the underlying environments doing a little bit particularly on the lease side. And you guys might have mentioned this and I might have missed it, but do you have like what the paid exit rates were for the quarter?

G. Marc Baumann

No, we don't. And I mean, part of the problem, we have now, Nate, is that Central is not tracking its data in a way that we did at Standard. And we get into this, do we have paid exits and leases? And Standard only had 200 leases and Central has 800 leases in the legacy portfolio. So we don't think that Standard stand-alone paid exit is a good measure for the whole company. We're trying to gather that data for the entire portfolio of leases so that we can talk about it in the future quarters.

Nathan Brochmann - William Blair & Company L.L.C., Research Division

Okay. That's fair. Do you have any kind of commentary, kind of just regarding that, though, in terms of at least what the feel is for how that business is going?

James A. Wilhelm

Yes. As I said, that we're in the middle of a re-forecast now. And some of the numbers for, particularly on the hospitality side of the business and the airport side of the business, have been encouraging relative to increased revenues via paid exits. And I can't go much further, Nate, for the reasons that Marc said, just in terms of being accurate. I think and I don't want to lose sight of the fact -- I know we didn't skim through. We mentioned it last night. We mentioned it this morning. We're affirming -- reaffirming guidance, earnings per share for the year even though the insurance hit that we took in the first quarter was unexpected, and that's $0.07 or $0.08. So the rest of the businesses picked that up. And again, I assume that you can sense from my tone, not only this morning but in the release last night, that we are further encouraged by what's going on , on the topline of the statement relative to retention, relative to new business wins and then we become subjected to the economy. And you know me well enough to know that I don't go out very far in terms of where we think the economy's going to take us relative to paid exits. We also did not discuss a whole lot, the hurricane implications in New York that we had last year and some of the ongoing issues there. So again, without going too far on this, I couldn't be more pleased with how the organization has come together in terms of working as a group, and that's one thing. But I think it's beginning to show up in our numbers and will continue to do so.

Nathan Brochmann - William Blair & Company L.L.C., Research Division

Okay, that's fair. And then just one last quick one. On the gain on the sale of that contract, are you guys -- is that, I mean, embedded obviously in your numbers and you're not pulling that out? Is that included in your guidance still for the year?

G. Marc Baumann

It is and we actually expected this transaction, so this has been a situation where a client came to us and they wanted to gain control of this property for future redevelopment some years down the road, we expect, and so we engaged in a transaction with them. We are still going to operate the facility for them for the foreseeable future. But we've been in discussions with them for several months. And so, when we formulated our guidance for 2013, we knew about the transaction. We included it in our expectations.

James A. Wilhelm

And I think, Nate, that to that end, the resultant new company -- merging the company together and looking at Central's business model in the past versus what you were more accustomed to in terms of our business model, we have allowed for some of that because tactically we're going through the organization now saying, "Well, which cities do we really want to be in? And to what to degree do we want to be in those cities in terms of kind of our strategy around risks? And what opportunities do leases in certain markets bring us that might not fit with the long-term aspirations of the growth opportunity on the service end of the business?" So as opposed to what you were used to with us on the Standard side, those sort of opportunities, as well as some of the opportunities I alluded to in our press release last night relative to using our scale to leverage opportunities, we'll be more part of the regular business model on a move forward basis than it was in the past.

Nathan Brochmann - William Blair & Company L.L.C., Research Division

So while it might not be to this magnitude, it does sound like this could be kind of a recurring-type blind item, again, probably pretty lumpy and hard to predict. But there's really no reason to take it out if we're going to see some of these here and there?

James A. Wilhelm

Well, yes, that was Marc's point. And like always, we will highlight those so you can separate them from the rest of the business. I think just the message is that we see an opportunity over the next couple of years to approach deal structures and development opportunities tactically.

Operator

Our next question comes from Daniel Moore from CJS Securities.

Daniel Moore - CJS Securities, Inc.

You mentioned you anticipate new contract wins in the airport vertical, as well as some renewals. Any risk that those renewals might require lower initial price point similar to the re-trades that have impacted the last few quarters?

James A. Wilhelm

Yes, that's a great question. I would say that for those that I know about that we're only exposed to that in one instance. And I hate to be so vague about this, but until we sign, get the deals done and we can secure the approval of the municipalities to make the public announcements, I can tell you that in reference to those that we're getting through now and our -- I couldn't -- as I said I was proud of our airport guys and ladies because they're going 5 for 5 on this. That the -- only one requires us to take a step backwards and it is not significant given the long-term opportunity and the length of the extension. Certainly, they don't have the impact of those airports that we re-traded last year. We had announced our re-trading of O'Hare and Midway and Cleveland Hopkins and several other large ones. These are not of that magnitude in terms of moving us either way in a big way other than to grant us significant years of more term.

Operator

Our next question comes from Kevin Steinke from Barrington Research.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

I wanted to just first follow up on -- Marc, I believe you said that G&A in the first quarter is a good run rate for the year. Is that correct?

G. Marc Baumann

Yes.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Okay. Just in terms of the synergies that you expect to realize for the rest of the year on the cost side, how does that factor in the G&A expenses? I guess because you saw a sequential decline from fourth quarter to first quarter based on synergies, but now you're expecting to be flattish. So I'm just kind of wondering how synergies play in versus other expense factors as we go throughout the year?

G. Marc Baumann

Yes. Well, I think, Kevin, that you will see some continued sequential decline, but bear in mind that when we had the last call, we said we had identified $2 million of synergies in Q4 that annualizes to $8 million for 2013. But obviously, it's only $6 million incremental in 2013, so we have the same $2 million plus another $6 million. And then we also identified additional synergies for the year of about $10 million. So in those numbers are those synergies. Now bearing in mind that we've made a lot of the changes already that are going to happen and so we're seeing the benefits of those now. There will be some modest sequential declines as we go through the year, but I'm just trying to give you a rough rule of thumb and say, take Q1 and multiply by 4 and it's not a bad number for the year in aggregate.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Okay.

James A. Wilhelm

And, Kevin, to maybe add just a little bit color to that, what is happening and what has happened and will continue to happen around the business, if you think about it, is as we talked about last fall, putting the operating groups together and realizing the synergies from Central Parking senior management, executive management team, who are gone, as well as getting the field organizations in place and then deciding on those teams we'd like to move forward with and deal with severance and relocation costs and all that go around getting the field organization formed and settled down has happened. And where we had office rent, offices in 2 cities and where some of the support departments could get the benefit of synergies early on, now that the organization has kind of settled in -- and that's exactly what Marc is alluding to in terms of numbers, right? Then the next segment of synergies to get to the sort of the grand total is around the reorganization of the basic process and support platforms of the business. And that puts us on the time frame towards 2000 -- this year, '13, '14, and into '15. By the time we get all of the 4,500 to 5,000 locations onto the merged platform. And that will happen, as Marc said, on a sequential basis as geographies are brought onto the new platform.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Okay, great. And Jim, you had talked about retention being up meaningfully for Central. And you also talked about retention rate you believe is a result of the combination of the 2 companies, retention going up at Central. I'm just wondering exactly if you could pinpoint why bringing the 2 organizations together was able to improve retention? I mean, was it a team effort going out there in the field that you think helped that?

James A. Wilhelm

Yes. It was focused, Kevin. Central's legacy retention

[Audio Gap]

quarter is ours too but not

[Audio Gap]

It's really what I talked about in the first segment of the call today. And that was from the very first moment of bringing the companies together where we could energize tactics and strategy following the Department of Justice review. The theme that we hit upon was don't worry about selling, don't worry about what's going on around you with accounting business, or those things that we can work on later. Make sure that you're able to sit with your clients and reassure them that the products that they are experiencing now, we will continue to bring and that we have a long list of ideas bringing the company together that will only enhance that product in terms of the cost side and the technology deployment; or the marketing side on the top line for web-enabled strategic approaches to the marketing and selling parking in the future, and you've heard me talk about some of those technologies, and the team got it. I mean, we were able to align around the approach. And I think that those people in the field that are responsible day-to-day for client relationships are those to be sort of singled out for the success that we've seen in getting the retention rate to this level. Now you can't rest on that, right? You need to continue to move forward. And now we need to be able to demonstrate that yes, indeed, after we have the integration of the basic platforms completed and we've developed additional products for technology or maintenance or remote monitoring of automated parking facilities that will bring those solutions to our clients and make sure we keep our word on only making the situation better for them in the future. Sorry for the speech, but it's all kind of linked together. It's nice to have the credibility with them upfront and that is based on years of working together, but there is also the expectation that we need to continue to deliver to them to keep the rates where they are today.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Sure, that's very helpful. And I guess, you did tee it up earlier in the call on your prepared comments about the brand strategy and also you mention it in the press release. So do you have any additional comments on how that's coming together?

James A. Wilhelm

Only we talked early in the release about the fact that we will be announcing our brands before the end of the quarter. We've obviously met -- I've met with my colleagues on the Board of Directors and we've briefed them on the approach. And we're excited from 2 perspectives. One, it's certainly a new day in the parking business in terms of what we're expecting to roll out on the technology side and the marketing side, transactional opportunities and reservation opportunities, validation opportunities. And that kind of speaks to moving the brand forward with a fresher look, but along the lines of what we've been working on in terms of not only our parking product. We are not just a parking operator anymore. So as to add some clarity to our brand on a move-forward basis, externally the brand change is important. Internally, and I think I spoke about this last quarter, getting us all under one flag is important. An important lesson learned from our merger with APCOA in the late 90s and this Central/Allright merger in the sort of -- the same sort of time frame, was that the cultures of each of the disparate companies sort of remained as long as the names and flags were allowed to move forward. And when you are trying to radically change the way that outsourced services are being brought to the commercial and institutional and municipal real estate fields, having us under a unified flag with a unified mission and a set of marketing tools and products that can be dispatched under that flag is important, which is why I've rushed those people, right? That we have within the organization from marketing and branding to begin the effort to get us under that flag. Now the reality of branding 5,000 -- ultimately 5,000 parking locations and 25,000 uniforms and websites and letterhead and the minutia of business cards and all of that stuff, will take some time for all of that to roll out, right? But by making the -- initiating the brand move now, it gets us closer sooner to making sure that all of our 25,000 folks are swimming in the same direction.

Kevin M. Steinke - Barrington Research Associates, Inc., Research Division

Great. I look forward to hearing more about that as it progresses. And if I could just ask one more kind of housekeeping-related question. You didn't call anything out in the press release or your prepared comments about whether -- but was there anything meaningful enough to call out that did have an impact on the first quarter? Or was it just pretty much typical seasonality?

James A. Wilhelm

Well, in terms of the 2012 results, we are nearing completion of our view of our insurance claim relative to the hurricanes on the East Coast. And that will inure some sort of benefit to us in the future. I don't know -- there were some significant storms on the East Coast but I wouldn't say that the results of the first quarter were significantly affected by weather in going through the results with the senior leadership. It didn't come out as a significant issue. Remember, Kevin, that we've sort of mitigated around some of that where we can. SP Plus Maintenance has the ability to deliver snow removal services in those cities where we might see significant snow and we have sufficient mass. So Chicago and New York and Boston and some we've kind of mitigated that. So to the degree that weather impacts us negatively on the location side, SP Plus Maintenance should have some sort of a pickup to mitigate this by plowing snow and spreading salt. Where there -- we didn't anticipate regularity of the winter storm, then SP Plus Maintenance will suffer, but the locations don't have the expense out. So you've heard me talk about that a couple of times. We moved directionally 7 years ago to try to make us less vulnerable to weather, particularly snow. Hurricanes, we can't do much about. I got to figure out a company for SP Plus hurricane remediation.

Operator

Thank you. As there are no more questions at this time, I would like to turn the presentation back to Mr. Jim Wilhelm for closing remarks.

James A. Wilhelm

Thanks, Mary, and thanks, everyone, for taking the time out of their busy day to listen to this quarter's story. Enjoy the spring, everyone.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes our presentation. You may now disconnect. Thank you, and have a great day.

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