Avis Rent A Car, Inc. Reports Annual And Fourth Quarter Operating Results For 1997
4 February 1998
Avis Rent A Car, Inc. Reports Annual And Fourth Quarter Operating Results For 1997
1997 Pro forma earnings per share up 350%
GARDEN CITY, N.Y., Feb. 4 -- Avis Rent A Car, Inc.
, the second largest general use car rental business in the world,
reported results for the fourth quarter and year ended December 31, 1997.
On a pro forma basis, for the year ended December 31, 1997, the Company
reported revenue of $2.2 billion, a 5.9 percent increase over 1996. Net
income and diluted earnings per share were $39.4 million and $1.26,
respectively, representing increases of 360 percent and 350 percent from net
income and diluted earnings per share of $8.6 million and 28 cents,
respectively, for 1996.
On a pro forma basis, for the fourth quarter of 1997, revenue was $520
million, representing a 5.7 percent increase over the same period in 1996.
Net income was $0.5 million and diluted earnings per share was 2 cents,
representing a $2.9 million increase from a net loss of $2.4 million and a 10
cents improvement in earnings per share from a diluted loss per share of 8
cents.
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 Cendant Corporation 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 the First Gray Line Corporation) from the AVI initial
public offering on September 24, 1997.
"Our record results reflect the continued positive impact of price
increases in the industry, the successful integration of the First Gray Line
Corporation into our existing operations, and our persistent focus on
improving operating margins," said chairman and chief executive officer, R.
Craig Hoenshell. Hoenshell concluded, "The ownership changes in the car
rental industry continues to focus participants on shareholder returns, not
expansion of market share."
On a historical basis, record revenue for the fourth quarter and the year
ended December 31, 1997 was $520 million and $2.0 billion, respectively, up
16.1 percent and 9.6 percent, respectively over the comparable periods in
1996. Net income for the fourth quarter of 1997 was $0.5 million or 2 cents
diluted earnings per share compared to $2.2 million or 7 cents diluted
earnings per share for the same period in 1996. For the years ended 1997 and
1996, net income was $27.5 million or 88 cents diluted earnings per share
compared to $39.8 million or $1.29 diluted earnings per share, respectively.
The operations of First Gray Line Corporation are included in the 1997 results
subsequent to its date of acquisition on August 20, 1997.
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 approximately 88% is derived from its operations in the
United States.
AVIS RENT A CAR, INC. FINANCIAL RESULTS
(In thousands, except share and per share amounts)
PRO FORMA PRESENTATION (A)
(UNAUDITED)
FOURTH QUARTER TWELVE MONTHS
ENDED DECEMBER 31, ENDED DECEMBER 31,
1997 1996 1997 1996
Revenue $520,458 $492,502 $2,175,897 $2,055,519
Costs and expenses:
Direct operating 222,294 224,052 920,283 905,534
Vehicle depreciation
and lease charges,
net 142,944 120,809 559,433 493,306
Selling, general and
administrative 102,089 103,364 422,053 439,674
Interest, net 49,506 48,785 192,598 183,115
Amortization of cost
in excess of net
assets acquired 2,615 2,323 9,743 9,295
519,448 499,333 2,104,110 2,030,924
Income (Loss) before
income taxes 1,010 (6,831) 71,787 24,595
Provision (Benefit) for
income taxes 455 (4,454) 32,355 16,028
Net income (loss) $555 $(2,377) $39,432 $8,567
Basic earnings (loss)
per share $0.02 $(0.08) $1.28 $0.28
Diluted earnings
(loss) per share $0.02 $(0.08) $1.26 $0.28
Weighted average number
of shares outstanding:
Basic 30,925,000 30,925,000 30,925,000 30,925,000
Diluted (c) 31,949,535 30,925,000 31,181,134 30,925,000
HISTORICAL PRESENTATION (B)
FOURTH QUARTER TWELVE MONTHS
ENDED DECEMBER 31, ENDED DECEMBER 31,
(UNAUDITED)
1997 1996 1997 1996
Revenue $520,458 $448,473 $2,046,154 $1,867,517
Costs and expenses:
Direct operating 222,294 202,368 863,839 818,432
Vehicle depreciation
and lease charges,
net 142,944 113,717 542,090 465,633
Selling, general and
administrative 102,089 87,063 415,728 351,395
Interest, net 49,506 40,024 167,314 155,189
Amortization of cost
in excess of net
assets acquired 2,615 1,233 6,860 4,808
519,448 444,405 1,995,831 1,795,457
Income before income
taxes 1,010 4,068 50,323 72,060
Provision for income
taxes 511 1,846 22,850 32,238
Net income $499 $2,222 $27,473 $39,822
Basic earnings per
share $0.02 $0.07 $0.89 $1.29
Diluted earnings per
share $0.02 $0.07 $0.88 $1.29
Weighted average number
of shares outstanding:
Basic 30,925,000 30,925,000 30,925,000 30,925,000
Diluted (C) 31,949,535 30,925,000 31,181,134 30,925,000
(A) 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 Cendant
Corporation 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 Corporation)
from the initial public offering.
(B) 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 Corporation) from the initial
public offering completed on September 24, 1997.
(C) Includes dilutive effect of the assumed excerise of stock options.
SOURCE Avis Rent A Car, Inc.