Avis Rent A Car, Inc. Reports Record Second Quarter
16 July 1998
Avis Rent A Car, Inc. Reports Record Second Quarter 1998 Operating Results Earnings Per Share Up 110.3%
GARDEN CITY, N.Y., July 15 -- Avis Rent A Car, Inc.
reported record results for the second quarter and six months
ended June 30, 1998.
On a historical basis, revenue for the three months ended June 30, 1998
was $575.3 million, up 17.5 percent over the comparable period in 1997. Net
income and diluted earnings per share were $22.4 million and 61 cents,
respectively, representing increases of 151.1 percent and 110.3 percent from
net income and diluted earnings per share of $8.9 million and 29 cents,
respectively, for the comparable period in 1997.
On a historical basis, revenue for the six months ended June 30, 1998 was
$1,086.7 million, up 14.9 percent over the comparable period in 1997. Net
income and diluted earnings per share were $29.8 million and 86 cents,
respectively, representing increases of 127.1 percent and 104.8 percent from
net income and diluted earnings per share of $13.1 million and 42 cents,
respectively, for the comparable period in 1997.
On a pro forma basis, revenue for the three months ended June 30, 1998 was
up 6.7 percent over the comparable period in 1997. Net income and diluted
earnings per share increased 48.7 percent and 24.5 percent, respectively, from
net income and diluted earnings per share of $15 million and 49 cents,
respectively, for the comparable period in 1997.
On a pro forma basis, revenue for the six months ended June 30, 1998 was
up 3.9 percent over the comparable period in 1997. Net income and diluted
earnings per share increased 43.7 percent and 28.4 percent, respectively, from
net income and diluted earnings per share of $20.7 million and 67 cents,
respectively, for the comparable period in 1997.
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,
1997: the acquisition of The 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.
Commenting on second quarter results, R. Craig Hoenshell, chairman and
chief executive officer of Avis Rent A Car, Inc. stated, "Our second quarter
results reflect a healthy margin expansion due to higher pricing, improved
fleet utilization and lower costs per rental transaction." Looking ahead,
Hoenshell concluded, "We are experiencing positive pricing movement and
strong rental volumes for the critical summer season and we anticipate this to
continue through 1998."
Avis Rent A Car, Inc., with locations in the United States, Canada,
Australia, New Zealand, Argentina, Puerto Rico and the U.S. Virgin Islands, is
one of the leading car rental companies in the world. Annually, the Company
completes approximately 15 million rental transactions with a fleet averaging
approximately 200,000 vehicles, generating over $2.3 billion in total revenue.
Certain matters discussed in the news release that are not historical
facts are forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Forward-
looking statements involve risks and uncertainties including the impact of
competitive products and pricing, changing market conditions, and other risks
which were detailed from time to time in the Company's publicly-filed
documents, including its Annual Report on Form 10-K for the period ended
December 31, 1997. Actual results may differ materially from those projected.
These forward-looking statements represent the Company's judgement as of the
date of this release.
For more information and recent news releases, please log onto the Avis
Galaxy Web site at http://www.avis.com or call Company News on Call at
800-758-5804, access code #078975.
AVIS RENT A CAR, INC.
FINANCIAL RESULTS
(In thousands, except share and per share amounts)
(Unaudited)
THREE MONTHS ENDED JUNE 30,
ACTUAL PRO FORMA
1998 1997 1997 (1)
Revenue $ 575,280 $ 489,633 $ 539,102
Costs and expenses:
Direct operating 229,612 200,262 222,053
Vehicle depreciation
and lease charges, net 144,032 119,568 132,854
Selling, general and
administrative 109,607 108,470 107,207
Interest, net 49,150 42,362 46,937
Amortization of cost
in excess of net
assets acquired 2,969 1,594 2,681
535,370 472,256 511,732
Income before income taxes 39,910 17,377 27,370
Provision for income taxes 17,560 8,476 12,336
Net income $ 22,350 $8,901 $ 15,034
Earnings per share:
Basic $ 0.62 $ 0.29 $ 0.49
Diluted (2) $ 0.61 $ 0.29 $ 0.49
Weighted average number
of shares outstanding:
Basic 35,925,000 30,925,000 30,925,000
Diluted (2) 36,730,233 30,925,000 30,925,000
SIX MONTHS ENDED JUNE 30,
ACTUAL PRO FORMA
1998 1997 1997 (1)
Revenue $ 1,086,670 $ 945,647 $ 1,045,519
Costs and expenses:
Direct operating 439,427 398,548 442,552
Vehicle depreciation
and lease charges, net 277,394 234,131 260,894
Selling, general
and administrative 214,371 203,383 207,695
Interest, net 96,818 82,655 91,921
Amortization of cost in
excess of net assets
acquired 5,521 2,570 4,745
1,033,531 921,287 1,007,807
Income before income taxes 53,139 24,360 37,712
Provision for income taxes 23,381 11,254 16,997
Net income $ 29,758 $ 13,106 $ 20,715
Earnings per share:
Basic $ 0.88 $ 0.42 $ 0.67
Diluted (2) $ 0.86 $ 0.42 $ 0.67
Weighted average number of
shares outstanding:
Basic 33,687,431 30,925,000 30,925,000
Diluted (2) 34,680,670 30,925,000 30,925,000
(1) Presents the results of operations of the Company as if the
acquisition of The First Gray Line Corporation) from the initial
public offering had taken place on January 1, 1997.
(2) Includes dilutive effect of the assumed exercise of stock options.