Avis Rent A Car, Inc. Reports Record Q3
15 October 1998
Avis Rent A Car, Inc. Reports Record Third Quarter 1998 Operating Results and Expands Stock Repurchase Program
Earnings Per Share Up 84.4%
GARDEN CITY, N.Y., Oct. 14 -- Avis Rent A Car, Inc.
today reported record results for the third quarter and nine
months ended September 30, 1998. Also, the Company announced that its Board
of Directors has authorized an increase in the existing stock repurchase
program from 1,500,000 to 5,000,000 shares of Avis common stock.
"Our third quarter results reflect continued margin expansion due to solid
price increases, higher fleet utilization and improved costs per transaction,"
said R. Craig Hoenshell, chairman and chief executive officer of Avis Rent A
Car, Inc. Hoenshell continued, "We are also substantially expanding our stock
repurchase program because Avis continues to be an outstanding value. This
program enhances shareholder value and demonstrates our confidence in the
future of Avis."
On a historical basis, revenue for the three months ended
September 30, 1998 was $652.4 million, up 12.5 percent over the comparable
period in 1997. Net income and diluted earnings per share were $30.1 million
and 83 cents, respectively, representing increases of 117.3 percent and
84.4 percent from net income and diluted earnings per share of $13.9 million
and 45 cents, respectively, for the comparable period in 1997.
On a historical basis, revenue for the nine months ended
September 30, 1998 was $1,739.1 million, up 14.0 percent over the comparable
period in 1997. Net income and diluted earnings per share were $59.9 million
and $1.70, respectively, representing increases of 122.1 percent and
95.4 percent from net income and diluted earnings per share of $27.0 million
and 87 cents, respectively, for the comparable period in 1997.
On a pro forma basis, revenue for the three months ended
September 30, 1998 was up 7.0 percent over the comparable period in 1997.
Net income and diluted earnings per share increased 65.9 percent and
40.7 percent, respectively, from net income and diluted earnings per share of
$18.2 million and 59 cents, respectively, for the comparable period in 1997.
On a pro forma basis, revenue for the nine months ended September 30, 1998
was up 5.1 percent over the comparable period in 1997. Net income and diluted
earnings per share increased 54.1 percent and 34.9 percent, respectively, from
net income and diluted earnings per share of $38.9 million and $1.26,
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.
On September 1, 1998, the Company announced a program to repurchase
1,500,000 shares. That repurchase has been completed. The Board of Directors
has authorized the repurchase of 3,500,000 additional shares. Currently,
there are 34,425,000 issued and outstanding shares of Avis Rent A Car, Inc.
common stock.
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, the
ability of the Company and its vendors to complete the necessary actions to
achieve a Year 2000 conversion for its computer systems and applications; 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 SEPTEMBER 30,
ACTUAL PRO FORMA
1998 1997 1997 (1)
Revenue $652,385 $580,049 $609,920
Costs and expenses:
Direct operating 266,863 242,997 255,437
Vehicle depreciation and
lease charges, net 166,788 148,068 155,595
Selling, general and
administrative 109,811 110,256 112,269
Interest, net 53,051 52,100 51,171
Amortization of cost
in excess of net assets acquired 3,166 1,675 2,383
599,679 555,096 576,855
Income before provision
for income taxes 52,706 24,953 33,065
Provision for income taxes 22,568 11,085 14,903
Net income $30,138 $13,868 $18,162
Earnings per share:
Basic $ 0.85 $0.45 $0.59
Diluted (2) $ 0.83 $0.45 $0.59
Weighted average number
of shares outstanding:
Basic 35,607,527 30,925,000 30,925,000
Diluted (2) 36,179,780 30,925,000 30,925,000
NINE MONTHS ENDED SEPTEMBER 30,
ACTUAL PRO FORMA
1998 1997 1997 (1)
Revenue $1,739,055 $1,525,696 $1,655,439
Costs and expenses:
Direct operating 706,290 641,545 697,989
Vehicle depreciation and
lease charges, net 444,182 382,199 416,489
Selling, general and
administrative 324,182 313,639 319,964
Interest, net 149,869 134,755 143,092
Amortization of cost in
excess of net assets required 8,687 4,245 7,128
1,633,210 1,476,383 1,584,662
Income before provision
for income taxes 105,845 49,313 70,777
Provision for income taxes 45,949 22,339 31,900
Net income $59,896 $26,974 $ 38,877
Earnings per share:
Basic $ 1.74 $0.87 $1.26
Diluted (2) $ 1.70 $0.87 $1.26
Weighted average number
of shares outstanding:
Basic 34,334,496 30,925,000 30,925,000
Diluted (2) 35,221,833 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 and the repayment of
debt with the net proceeds (after the purchase of The First Gray Line
Corporation) from the initial public offering on September 24, 1997
had taken place on January 1, 1997.
(2) Includes dilutive effect of the assumed exercise of stock options.