Avis Rent A Car, Inc. Reports Third Quarter Operating Results and Revenue
28 October 1997
Avis Rent A Car, Inc. Reports Third Quarter Operating Results and Record Revenue
Pro forma earnings per share for the quarter up 135% over prior year
GARDEN CITY, N.Y., Oct. 28 -- Avis Rent A Car, Inc.
, which successfully completed its initial public offering on
September 24, 1997, today reported results for the third quarter and
nine months of 1997.
For the three months ended September 30, 1997, on a pro forma basis, the
Company reported revenue of $610 million, representing a 4.9 percent increase
over the same period in 1996. Net income was $17.5 million with earnings per
share of $0.56, representing a 135 percent increase from net income and
earnings per share of $7.4 million and $0.24, respectively, for the third
quarter of 1996.
On a pro forma basis, for the nine months ended September 30, 1997,
revenue was $1.7 billion, a 5.9 percent increase over the same period in 1996.
Net income and earnings per share were $38.6 million and $1.25, respectively,
representing a 326 percent increase from net income and earnings per share of
$9.1 million and $0.29, respectively, for the same period in 1996.
The aforementioned results are presented on a pro forma basis to give
effect to the following transactions as if they had occurred on January 1,
1996: the acquisition of the Company by HFS Incorporated and the
establishment of a franchisor / franchisee relationship; the acquisition of
First Gray Line Corporation; and the repayment of debt with the net proceeds
(after the purchase of First Gray Line) from the AVI initial public offering.
The Company's Chairman and Chief Executive Officer, R. Craig Hoenshell,
stated, "The results reflect our focus on profitability rather than on share
of market, as well as the accretive benefits of our recent acquisition of
First Gray Line Corporation. We are very optimistic regarding future trends
in the rental car industry as rental car companies are becoming more profit
driven versus market share driven."
On a historical basis, record revenue for the third quarter and first
nine months of 1997 was $580 million and $1.5 billion, up 9.1 percent and
7.5 percent, respectively, over the comparable periods in 1996. Net income
for the third quarter of 1997 was $13.9 million or $0.45 per share compared to
$21.4 million or $0.69 per share for the same period last year. For the first
nine months of 1997 and 1996, net income was $27.0 million or $0.87 per share
compared to $37.6 million or $1.22 per share, respectively. Included in these
results, from August 20, 1997 are the operations of the recently acquired
First Gray Line Corporation, which was the second largest Avis franchisee in
North America, behind the Company.
Avis Rent A Car, Inc., operates the second largest general use car rental
business in the world, based on total revenue and volume of rental
transactions. The Company rents vehicles to business and leisure travelers
through over 600 locations in the United States, Canada, Puerto Rico, the U.S.
Virgin Islands, Argentina, Australia and New Zealand. Annually, the Company
completes approximately 15 million rental transactions with a fleet that
averages approximately 200,000 vehicles, generating over $2.0 billion in total
revenue, of which 87% is derived from its operations in the United States.
AVIS RENT A CAR, INC.
FINANCIAL RESULTS (Unaudited)
(In thousands, except share and per share amounts)
PRO FORMA PRESENTATION (1)
THIRD QUARTER NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1997 1996 1997 1996
Revenue $609,920 $581,388 $ 1,655,439 $1,563,017
Costs and expenses:
Direct operating 255,642 248,681 697,194 681,482
Vehicle depreciation and
lease charges, net 154,771 135,050 415,425 372,497
Selling, general and
administrative 113,112 122,335 319,394 336,310
Interest, net 51,981 49,154 145,521 136,626
Amortization, of cost
in excess of net assets
acquired 2,383 2,324 7,128 6,972
577,889 557,544 1,584,662 1,533,887
Income before income taxes 32,031 23,844 70,777 29,130
Provision for income taxes 14,574 16,429 32,203 20,071
Net income $17,457 $7,415 $ 38,574 $ 9,059
Earnings per share $.56 $.24 $1.25 $.29
Weighted average common shares
outstanding 30,925,000 30,925,000 30,925,000 30,925,000
AVIS RENT A CAR, INC.
HISTORICAL PRESENTATION (2)
THIRD QUARTER NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 3O,
1997 1996 (3) 1997 1996 (3)
Revenue $ 580,049 $ 531,478 $1,525,696 $ 1,419,044
Costs and expenses:
Direct operating 242,997 225,939 641,545 616,064
Vehicle depreciation and
lease charges, net 150,703 127,308 399,146 351,916
Selling, general and
administrative 110,256 96,290 313,639 264,332
Interest, net 49,465 42,012 117,808 115,165
Amortization of cost
in excess of net
assets acquired 1,675 1,193 4,245 3,575
555,096 492,742 1,476,383 1,351,052
Income before income taxes 24,953 38,736 49,313 67,992
Provision for income taxes 11,085 17,315 22,339 30,392
Net income $ 13,868 $ 21,421 $ 26,974 $ 37,600
Earnings per share $.45 $.69 $.87 $1.22
Weighted average common shares
outstanding 30,925,000 30,925,000 30,925,000 30,925,000
(1) Includes the effects of each of the following transactions as if they
had occurred on January 1, 1996: (a) the acquisition of the Company
by HFS and the establishment of a franchisor/franchisee relationship,
(b) the acquisition of First Gray Line Corporation and (c) the
repayment of debt with the net proceeds (after the purchase of First
Gray Line) from the initial public offering.
(2) Includes the effects of (a) the acquisition of First Gray Line
Corporation from August 20, 1997 and (b) the repayment of debt with
the net proceeds (after the purchase of First Gray Line) from the
initial public offering.
(3) Represents the operating results of the Company prior to the
acquisition by HFS.
SOURCE Avis Rent A Car, Inc.