Budget Group Reports Second Quarter Results
30 July 1998
Budget Group Reports Second Quarter Results In Line With Expectations
DAYTONA BEACH, Fla., July 29 -- Budget Group, Inc.
released its second quarter operating results today, reporting earnings per
share up 65 percent to 33 cents before non-recurring and extraordinary items
related to the recapitalization of the balance sheet in conjunction with
Budget Group's acquisition of Ryder TRS. On June 19, 1998, Budget Group
purchased Ryder TRS, the second largest consumer truck rental company in the
U.S. Net income before non-recurring and extraordinary items for the second
quarter increased to $10.4 million from $4.6 million in the prior year.
Revenues increased to $614.4 million from $332.1 million. Operating income
increased to $60.9 million from $33.8 million in the prior year. Non-
recurring and extraordinary items related to the extinguishment of debt in the
recapitalization of the balance sheet were $51.0 million after-tax.
The operating results for second quarter 1998 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 and one month for
Ryder TRS. The 1997 second quarter results 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, as
well as two months of Budget Rent a Car Corporation unless otherwise noted.
Second quarter revenue from Budget Rent a Car (BRAC) North American
corporate car rental operations reached $297.9 million. Excluding recent
licensee acquisitions, revenue was up 9.4% and rental days (volume) were up
7.0% over prior year second quarter. Daily dollar average was up 2.2% over
the prior year, reaching $41.22.
Continuing its strategy to acquire franchise locations in key markets,
BRAC closed on purchases of rental operations in Cleveland, Ohio; the San
Francisco Bay area; Central Indiana; and Arkansas. In addition, the company
continues to grow its local market presence and has opened 27 new corporate-
owned rental locations and 40 additional one-way truck dealer locations since
the first of the year.
The truck rental division, which now includes Ryder TRS, Budget Truck
Rental and Cruise America, generated revenue of $121.4 million and
$27.5 million in operating income during the second quarter. (Comparisons to
the prior year period are not meaningful given the magnitude of the Ryder TRS
acquisition.) At the close of the quarter, the truck rental division had a
fleet of 50,712 vehicles, with Ryder TRS operating 33,660 trucks, Budget Truck
Rental operating 13,377 and Cruise America operating 3,675 recreational
vehicles. Ryder TRS revenue in the month of June was $55.1 million. As
reported in previous quarters, Budget Truck Rental continues to experience
strong growth in revenue and volume. Budget Truck Rental revenue increased
31% to $41.8 million.
Revenue from Budget Car Sales reached $132.9 million for the quarter, up
from $57.2 million in the prior year. Revenue from Budget Car Sales includes
proceeds from the sale of units at retail and wholesale. During the quarter
the company opened three Budget Car Sales facilities in new markets and closed
one under-performing store which was part of the BRAC acquisition. In
addition, the company purchased three new car dealerships in Florida and
Indiana. With a total of 32 stores open at the end of the quarter, units sold
retail increased to 6,577 compared to 3,944 units the prior year.
Budget Group Chairman and CEO Sandy Miller commented, "We've made a lot of
progress since acquiring Budget Rent a Car Corporation one year ago. We're
growing our vehicle rental and sales businesses through expansion and
acquisitions, innovative marketing initiatives like Budget's successful
Perfect Drive customer loyalty program and cross promotion among the Budget
Group companies. In addition, we've been pleased with our acquisitions of
Premier Car Rental, Cruise America and Ryder TRS. We continue to work to
streamline the common functions of the companies, leverage our increased
buying power and identify further costs savings through the integration of the
subsidiary companies."
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 Ryder TRS, the second
largest consumer truck rental company in the U.S. The company also 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.
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 June 30
(In Thousands)
2nd Quarter Year to Date
1998 1997 1998 1997
OPERATING REVENUE:
Vehicle rental $450,141 $251,678 $790,096 $313,700
Retail vehicle sales 140,746 67,292 238,037 121,027
Royalty fees and other 23,465 13,174 42,204 13,755
Total operating revenue 614,352 332,144 1,070,337 448,482
OPERATING EXPENSES:
Direct vehicle and operating 75,626 32,489 122,500 43,138
Depreciation - vehicles 114,746 71,331 208,842 90,683
Depreciation - non vehicle 5,444 4,914 9,873 5,805
Cost of vehicle sales 125,053 57,667 211,195 103,270
Advertising, promotion and
selling 62,511 29,176 98,135 36,345
Occupancy 33,568 24,699 65,815 30,913
Personnel 107,133 59,900 201,923 77,248
General and administrative 24,376 15,702 46,947 20,265
Merger expenses - pooling 0 0 1,595 0
Amortization 5,045 2,429 8,483 2,975
Total operating expenses 553,502 298,307 975,308 410,642
OPERATING INCOME 60,850 33,837 95,029 37,840
OTHER (INCOME) EXPENSE:
Vehicle interest 38,837 22,867 73,258 31,302
Non vehicle interest 6,545 4,571 14,993 5,378
Interest income -
restricted cash (1,220) (1,089) (4,210) (1,812)
Debt extinguishment cost 9,454 0 9,454 0
Total other (income) expense 53,616 26,349 93,495 34,868
INCOME BEFORE INCOME TAXES 7,234 7,488 1,534 2,972
Provision (benefit) for
income taxes 1,833 2,925 (447) 1,710
Minority interest 651 0 651 0
INCOME BEFORE EXTRAORDINARY ITEM 4,750 4,563 1,330 1,262
Loss on extinguishment of
debt (net of income tax
of $26,602) (45,296) 0 (45,296) 0
NET INCOME (LOSS) ($40,546) $4,563 ($43,966) $1,262
Weighted average number
of shares outstanding 29,499,00018,765,000 28,134,000 15,836,000
Basic EPS - Income before
extraordinary item 0.16 0.24 0.05 0.08
Basic EPS - Extraordinary Item (1.54) 0.00 (1.61) 0.00
Basic EPS - Net Income (1.37) 0.24 (1.56) 0.08
Weighted average
number of shares outstanding
- Diluted 30,243,00022,596,000 28,963,000 17,931,000
Diluted EPS - Income before
extraordinary item 0.16 0.20 0.05 0.07
Diluted EPS - Extraordinary Item(1.50) 0.00 (1.57) 0.00
Diluted EPS - Net Income (1.34) 0.20 (1.52) 0.07
BUDGET RENT A CAR CORPORATION
2nd QUARTER 1998 OPERATING STATISTICS
U.S. Vehicle Rental
1998 CHANGE FROM PRIOR
2nd QUARTER 2nd QUARTER *
U.S. CARS
Average Fleet 97,666 8.2%
Utilization 79.6% -86 bps
Rental Days 7,074,137 7.0%
Daily Dollar Average $41.22 2.2%
Rental Revenue $291,563,909 9.4%
Total Revenue $297,926,000 9.4%
Transactions 1,863,533 6.2%
Revenue Per Unit $995 1.1%
* Based on same-market comparison representing BRAC and Team Rental
operations combined in April 1997; excluding recent licensee acquisitions.