Hertz Announces Q2 Earnings
15 July 1997
Hertz Earns Record $53.9 Million for Second Quarter; Names New CFO and New Equipment Rental President; Elects Two New Board Members
PARK RIDGE, N.J., July 15 -- The Hertz Corporation, the
world's largest car rental company and the largest domestic industrial and
construction equipment rental business, reported record earnings of
$53.9 million for the second quarter of 1997 or $0.50 per share, up
36.3 percent from the $39.5 million or $0.36 per share earned in the same
period last year. The increase for the second quarter of 1997 reflected
continued strong performance in the domestic car rental market.
Net income for the first half of 1997 was $73.6 million, up 52 percent
from the $48.3 million earned in the first half of 1996.
Hertz Chairman and Chief Executive Officer Frank A. Olson said, "We
continue to be encouraged by the ownership changes in the domestic car rental
industry that have focused attention on the fundamentals of the business and
created an atmosphere conducive to profitable growth."
Hertz, which underwent an initial public offering of just under 20 percent
of the company's common stock on April 25, 1997, achieved record revenues of
$976.3 million in the second quarter of 1997, up $64.9 million from the same
period last year. Before accounting for the effect of foreign exchange, the
revenue increase was $81 million or 9 percent.
Revenues from worldwide car rental operations were $864.5 million in the
second quarter of 1997, up $49.1 million from the second quarter of 1996, or
before foreign exchange impact, $881.9 million, up $64.8 million.
Contributing to this performance were increased domestic car rental
transaction volume and continued upward movement in domestic car rental
pricing.
Revenues from industrial and construction equipment rental of
$105.0 million in the second quarter of 1997 increased $12.7 million over the
second quarter last year, primarily as a result of increased volume
attributable to the opening of 13 new domestic equipment rental locations
during the first half of 1997 and increased penetration of the industrial
equipment rental market.
New Officers Announced
At the same time, it was announced that Hertz Executive Vice President and
Chief Financial Officer William Sider will retire in 1998 and that Paul J.
Siracusa, Vice President, Finance and Chief Financial Officer, Hertz
International, Ltd., has been elected Executive Vice President and named Chief
Financial Officer for the Corporation, effective August 1, 1997. Mr. Siracusa
has been with Hertz since 1969.
Gerald A. Plescia, Division Vice President, Field Operations for Hertz
Equipment Rental Corporation, has been named President of the equipment rental
unit. With HERC since 1991, Mr. Plescia was previously with Hertz' Rent A Car
operations for 11 years.
Daniel I. Kaplan, President of HERC, will continue as an Executive Vice
President of The Hertz Corporation, reporting to the Chairman and Chief Execut
iv
Off
"These management changes capitalize on the depth of our management
strength and position us well for the future," said Mr. Olson.
Two New Directors Elected
Hertz also announced the election of two new members to its Board of
Directors. Louis C. Burnett, Co-founder and Managing Partner of
Secura/Burnett Partners, an executive search consulting firm, and Joseph A.
Walker, Managing Director and Co-head of the Advisory/Mergers and Acquisitions
Department at J.P. Morgan & Co. Incorporated were elected Directors of The
Hertz Corporation.
The Hertz Corporation, headquartered in Park Ridge, N.J., operates from
approximately 5,500 locations throughout the U.S. and in approximately 140
foreign countries with a global fleet of 500,000 cars.
THE HERTZ CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in Thousands of Dollars)
Unaudited
Three Months As % of
Ended June 30, Total Revenue
1997 1996 1997 1996
Revenue $976,316 $911,401 100.0% 100.0%
Expenses:
Direct Operating 452,759 437,214 46.4% 48.0%
Depreciation of revenue
earning equipment 245,292 221,539 25.1% 24.3%
Selling, General and
Administrative 106,876 108,388 10.9% 11.9%
Interest - net 78,284 74,976 8.0% 8.2%
Total expenses 883,211 842,117 90.5% 92.4%
Income before
income taxes 93,105 69,284 9.5% 7.6%
Income taxes 39,204 29,739 4.0% 3.3%
Net income $53,901 $39,545 5.5% 4.3%
Net income per
share $0.50 $0.36 -- --
SOURCE The Hertz Corporation