Budget Group Reports Q1 Results

28 April 1998

    DAYTONA BEACH, Fla., April 27 -- Budget Group, Inc.
released its first quarter operating results today, reporting a
loss per share of 9 cents, excluding one-time charges related to the merger
between Budget Group and Cruise America.  These results were one cent better
than consensus estimates.  When giving effect to the one-time merger charges,
which totaled $1.6 million pre-tax, the Company reported a loss of 12 cents
per share for the first quarter ended March 31, 1998.  The merger between
Budget Group and Cruise America was completed on January 28, 1998, and was
accounted for as a pooling-of-interests.
    Budget Group revenues for the quarter increased to $456 million from
$116 million in the prior year first quarter.  Excluding one-time charges
related to the Cruise America merger, operating income increased to
$35.8 million from $4 million and the net loss was $2.5 million.  Also in the
quarter, Budget Group announced an agreement to acquire Ryder TRS.  The Ryder
TRS acquisition cleared the FTC last week.
    The operating results herein represent three full months of combined
operations for Budget Rent a Car Corporation, Budget Car Sales, Van Pool
Services, Premier Car Rental and Cruise America.  Results for 1997 discussed
herein relate only to the operations of the former Team Rental Group (renamed
Budget Group in April 1997 concurrent with the acquisition of Budget Rent a
Car Corporation) and Cruise America unless otherwise noted.
    First quarter rental revenue from Budget Rent a Car U.S. corporate
operations increased 12.5% to $259.6 million, versus pro forma prior year
first quarter revenues of $230.7 million.  Rental days (volume) were up 11.1%
on a pro forma basis.  Daily dollar average for Budget's U.S. car operations
was up 1.3%, or 50 cents per rental day, over the prior year quarter pro
forma, reaching $39.66.  Daily dollar average was up 3.0%, taking into account
fleet mix issues such as more low-cost VIP Pickups and fewer luxury cars such
as Lincoln Town Cars.  Gross rental margin (revenue per unit less holding
costs per unit) was 57.4%, down 80 basis points below prior year pro forma due
primarily to early disposal of vehicles as the company down-fleeted in
response to poor weather conditions in Florida and California.  Budget Group
Chairman and CEO Sandy Miller noted, "We're continuing to see pricing
strengthen in the industry, and we are taking advantage of these opportunities
to yield up.  The diminution of gross rental margin reflects Budget's
discipline in maintaining yield, rather than simply cutting rates to maintain
volume in softer markets.  We are maintaining our strategy of pursuing higher
margin business.  Dollar average continues to trend up over prior year.  In
addition to the increases in DDA throughout last year and in the first quarter
of 1998, we're seeing a 2.1% increase in DDA for the month of April."
    On April 1, Budget Rent a Car launched its new frequent renter program,
Perfect Drive, to continue to build loyalty among business and leisure
travelers.  "We've offered customers a frequent renter awards program since
1992.  Our new Perfect Drive program has a number of enhancements and members
will soon be able to link directly to our new paperless, automated express
service, Fastbreak, which kicks off this summer," said Miller.  "Perfect Drive
was designed to keep current loyal renters and to attract new customers.  With
Perfect Drive and Fastbreak, customers will try Budget and stay, not only for
the awards, but for the quality service and good value Budget provides,"
Miller added.
    Continuing its strategy to acquire franchise locations in key markets,
Budget closed on purchases of rental operations in Quebec (including
Montreal); Austria; Spain; San Juan, Puerto Rico; California (north coast
area); Garden City, N.Y.; and Christchurch, New Zealand.
    For the third consecutive quarter, Budget Truck Rental experienced record
operating results.  Rental revenue of $31.3 million was up 30% over prior year
quarter pro forma.  Budget Group's pending acquisition of Ryder TRS has
cleared the FTC, and the Company expects to close on the deal late in the
second quarter.
    Revenues from Budget Car Sales increased to $92.0 million for the quarter
up from $43.3 million for first quarter 1997 pro forma.  With 29 stores open
at the end of the quarter, units sold retail increased to 4,859.
    During the first quarter, which is typically the off-season for
recreational vehicle rentals, Cruise America reported revenue of
$11.2 million.  Reservation builds for its peak summer season are strong.
Budget Group is already realizing synergies from this acquisition as Cruise
America now rents local and One-Way Budget trucks from a number of its
locations, and recreational vehicles are now available for rent in several
Budget operations.  To reduce Budget Truck Rental fleet costs, Cruise America
has already delivered 20 modular body trucks to the Budget One-Way fleet.
Cruise America engineers have also built a prototype airport shuttle bus
conversion, demonstrating the potential to reduce the costs of these types of
vehicles as well.
    Regarding other Budget Group companies, Premier Car Rental revenue reached
$12.8 million. Premier opened locations in two new markets, Albany, N.Y., and
Charlotte, N.C., and additional locations in Indianapolis and Albuquerque.
The company now receives reservations through a direct electronic link from
the claims offices of major insurance carriers to its rental locations.
Premier is also beta testing a new state-of-the-art integrated front- and
back-office automated system.  Van Pool Services revenue grew to $9.5 million,
up 15% over prior year quarter pro forma due primarily to increased contract
revenue from its existing markets and expansion of its vehicle leasing
business.
    Budget Group, Inc., through subsidiary companies and their franchisees,
operates Budget Car and Truck Rental, the third largest worldwide car and
truck rental system.  In addition, the Company owns Premier Car Rental, which
serves the insurance replacement market.  Budget Car Sales is one of the
largest independent retailers of late model vehicles in the United States.
Cruise America is the largest recreational vehicle rental and sales company in
North America.  Budget Group also operates airport parking facilities and
through Van Pool Services leases vans for van pooling.
    This press release does not constitute "proxy solicitation material"
within the meaning of Regulation 14A and Schedule 14A of the Securities
Exchange Act of 1934, as amended.
    Certain items in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 and as such may involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of Budget to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.  Such
forward-looking statements speak only as of the date of this press release.
Budget expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained herein to
reflect any change in Budget's expectations with regard thereto or any change
in events, conditions or circumstances on which any statement is based.


                              BUDGET GROUP, INC.
                      CONSOLIDATED STATEMENTS OF INCOME
                            Period Ending March 31
                      (In Thousands, Except Share Data)

                                                  1st Quarter
                                            1998               1997

    OPERATING REVENUE
     Vehicle rental                       $339,955          $62,022
     Sales of vehicles                      97,291           53,735
     Royalty fees and other                 18,739              581
       Total operating revenues            455,985          116,338

    OPERATING COSTS AND EXPENSES
     Direct vehicle and operating           46,874           10,649
     Depreciation - vehicles                94,096           19,352
     Depreciation - non-vehicles             4,429              891
     Cost of vehicle sales                  86,142           45,603
     Advertising, promotion and selling     35,623            7,169
     Occupancy                              32,246            6,214
     Personnel                              94,790           17,348
     General and administrative             22,572            4,563
     Merger expenses - pooling               1,595               --
     Amortization expense                    3,439              546
       Total operating costs and
         expenses                          421,806          112,335

    OPERATING INCOME                        34,179            4,003

    OTHER (INCOME) EXPENSE
     Interest - vehicle                     34,421            8,435
     Interest - other                        8,450              807
     Interest - restricted cash             (2,991)            (723)
     Interest - related party                    0                0
       Total other (income) expense         39,880            8,519

    LOSS BEFORE INCOME TAXES                (5,701)          (4,516)
     Provision for income taxes              2,280            1,215

    NET LOSS                               $(3,421)         $(3,301)

    Shares outstanding                  27,445,000       12,875,000

    Basic EPS                                (0.12)           (0.26)


                        BUDGET RENT A CAR CORPORATION
                      FIRST QUARTER OPERATING STATISTICS
                             U.S. VEHICLE RENTAL


                                            1998           CHANGE FROM
                                         1st QUARTER    PRIOR 1st QUARTER
                                                            (PROFORMA)

    U.S. CARS
     Average Fleet                          89,964            14.8%
     Utilization                             80.9%        (260) bps
     Rental Days                         6,546,444            11.1%
     Daily Dollar Average                   $39.66             1.3%
     Rental Revenue                   $259,645,432            12.5%
     Transactions                        1,620,241            11.6%
     Revenue Per Unit                         $962           (1.9)%


    U.S. TRUCKS
     Average Fleet                          11,733            29.3%
     Utilization                             53.1%          150 bps
     Rental Days                           561,252            33.2%
     Daily Dollar Average                   $55.74           (2.0)%
     Rental Revenue                    $31,282,648            30.5%
     Transactions                          129,375            26.1%
     Revenue Per Unit                         $889             0.9%

SOURCE  Budget Group, Inc.