Avis Rent A Car, Inc. Announces Record Earning
26 January 1999
Avis Rent A Car, Inc. Announces Record Earning; Fourth Quarter E.P.S. Up 450%; Full Year Up 107%
GARDEN CITY, N.Y., Jan. 25 -- Avis Rent A Car, Inc.
today announced record operating results for the 1998 fourth
quarter and full year; and anticipates continued growth.
On a historical basis, the Company reported a $3.1 million increase in net
income for the quarter ended December 31, 1998, while diluted earnings per
share increased to 11 cents as compared to 2 cents for the comparable period
in 1997. Revenue for the fourth quarter was up 7.3% compared to the same
period in 1997.
For the year ended December 31, 1998, on a pro forma basis, net income
increased 61% over calendar year 1997 and diluted earnings per share rose
44% to $1.82 from $1.26 in 1997, while revenue increased 5.6%. On a
historical basis, net income increased 131% and diluted earnings per share
increased 107% to $1.82 from 88 cents compared to the same period in 1997,
while revenue increased 12.3%.
"We had a great year" said Kevin Sheehan, Executive Vice President and
CFO. "In addition to our continued strong financial performance, Avis Rent A
Car, Inc. continues to build momentum with its preferred customer base. We
believe that strategically we are on the right course as evidenced in the
fourth quarter by our strong earnings per share growth which was achieved
through targeted marketing initiatives, higher utilization and improved
processes."
"Avis took major steps to accelerate growth and reduce costs in 1998. We
executed on our strategy of acquiring key independent franchisees, we
implemented a suburban expansion strategy to better utilize our fleet, and
because our stock is modestly priced, we created value by repurchasing our
stock in the marketplace. Looking ahead, based on our reservation builds, as
well as our revenue drivers, we anticipate solid growth in 1999."
The aforementioned pro forma results are presented 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.
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 205,000 vehicles, generating over $2.2 billion in revenue.
This press release contains statements related to future results, which
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 involves 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 are 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
judgements as of the date of this release.
For additional quotes and news, please log onto the Avis Galaxy Web Site
(http://www.avis.com) or call Company News on Call (800-758-5804, access code
#078975).
AVIS RENT A CAR, INC.
FINANCIAL RESULTS
(In thousands, except share and per share amounts)
THREE MONTHS ENDED DECEMBER 31,
(UNAUDITED)
ACTUAL
1998 1997
Revenue $558,527 $520,458
Costs and expenses:
Direct operating 233,696 222,294
Vehicle depreciation
and lease charges, net 148,883 142,944
Selling general and
administrative 114,542 102,089
Interest, net 51,856 49,506
Amortization of cost in
excess of net assets
required 3,167 2,615
552,144 519,448
Income before provision
for income taxes 6,383 1,010
Provision for income taxes 2,758 511
Net income $3,625 $499
Earnings per share:
Basic $0.11 $0.02
Diluted(2) $0.11 $0.02
Weighted average number
of shares outstanding:
Basic 33,690,798 30,925,000
Diluted(2) 34,068,603 31,949,535
TWELVE MONTHS ENDED DECEMBER 31,
(UNAUDITED)
ACTUAL PRO FORMA
1998 1997 1997(1)
Revenue $2,297,582 $2,046,154 $2,175,897
Costs and expenses:
Direct operating 939,986 863,839 920,283
Vehicle depreciation
and lease charges, net 593,064 525,143 559,433
Selling, general and
administrative 438,724 415,728 422,053
Interest, net 201,726 184,261 192,598
Amortization of cost
in excess of net 11,854 6,860 9,743
2,185,354 1,995,831 2,104,110
Income before provision
for income taxes 112,228 50,323 71,787
Provision for income taxes 48,707 22,850 32,355
Net income $63,521 $27,473 $ 39,432
Earnings per share:
Basic $1.86 $0.89 $1.28
Diluted(2) $1.82 $0.88 $1.26
Weighted average number
of shares outstanding:
Basic 34,172,249 30,925,000 30,925,000
Diluted(2) 34,952,557 31,181,134 31,181,134
(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.