Avis Rent A Car, Inc. Reports Record Q3 1999 Operating Results
19 October 1999
Avis Rent A Car, Inc. Reports Record Third Quarter 1999 Operating Results; Earnings Per Share up 33%
GARDEN CITY, N.Y., Oct. 19 -- Avis Rent A Car, Inc.
today reported record results for the quarter ended September 30,
1999.
On a historical basis, net income and diluted earnings per share for the
three months ended September 30, 1999 were $39.4 million and $1.10 per share,
respectively, representing increases of 31 percent and 33 percent,
respectively, over the comparable period in 1998. EBITDA was $130.3 million,
representing an increase of 111 percent over the comparable period in 1998.
Revenue was $1,120.6 million, up 72 percent over the comparable period in
1998. The 1999 period includes the results of operations of PHH North
America, PHH Europe and Wright Express ("Vehicle Management Services or VMS")
which were acquired on June 30, 1999.
On a historical basis, net income and diluted earnings per share for the
nine months ended September 30, 1999 were $81.8 million and $2.40 per share,
respectively, representing increases of 37 percent and 41 percent,
respectively, over the comparable period in 1998. The year to date results
include a previously reported first quarter non-recurring $7.5 million pre-tax
gain representing 13 cents per share on a diluted earnings per share basis,
resulting from the curtailment of the Company's defined benefit plans. Net
income and diluted earnings per share increased 30 percent and 34 percent,
respectively, excluding the non-recurring gain. EBITDA was $223.4 million,
representing an increase of 70 percent over the comparable period in 1998.
Revenue was $2,325.0 million, an increase of 34 percent over the comparable
period in 1998.
On a pro forma basis, revenue for the third quarter increased 6 percent
and net income and diluted earnings per share increased 84 percent and 134
percent, respectively, over the comparable period in 1998. EBITDA increased
31 percent over the comparable period in 1998.
On a pro forma basis, revenue for the nine months ended September 30, 1999
increased 7 percent and net income and diluted earnings per share increased 75
percent and 103 percent, respectively, over the comparable period in 1998
excluding the aforementioned non-recurring gain. EBITDA increased 20 percent
over the comparable period in 1998.
The operating results are presented on a pro forma basis to give effect to
the acquisition of VMS as if it had occurred on January 1, 1998.
"Our third quarter results reflect the significant strength of the New
Avis," said Kevin Sheehan, President of Corporate and Business Affairs. "The
combination of VMS with Avis provides us with a steady base of predictable
earnings. For the third quarter, we are pleased to have achieved a 33%
increase in diluted earnings per share".
"We are excited about the progress made to date in exploiting the many
growth opportunities amongst our businesses and will continue to push hard to
optimize results for our shareholders for the remainder of 1999 and 2000".
Avis is one of the world's leading providers of comprehensive automotive
transportation and vehicle management solutions, with strengths in car rental,
vehicle leasing, and vehicle management services. Avis operates the second
largest general-use car rental business in the world, with locations in the
United States, Canada, Australia, New Zealand and the Latin American Caribbean
region. Avis operates the vehicle management and fuel card businesses through
three separate units: PHH North America, PHH Europe and Wright Express. The
services of these units consist of vehicle leasing and a broad range of
vehicle related fee based services. The Company manages a fleet of
approximately 1 million vehicles and has over 4 million fuel and maintenance
cards outstanding. Annually, the Company generates over $4 billion in total
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 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 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, 1998. 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 information and news, please log onto the Avis Web Site
(http://www.avis.com) or call Company News on Call (1-800-758-5804, 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 (1)
1999 1998 1998
Revenue:
Vehicle Rental $709,555 $652,385 $652,385
Vehicle Management Services:
Vehicle Leasing 345,696 342,438
Other Fee Based Revenue 65,378 63,353
1,120,629 652,385 1,058,176
Costs and Expenses:
Direct Operating,net 288,761 263,017 281,455
Vehicle Depreciation and
Lease Charges, net 436,535 166,788 430,885
Interest 109,803 51,149 97,884
Selling, general and
administrative 155,215 109,811 148,442
990,314 590,765 958,666
EBITDA 130,315 61,620 99,510
Interest - Acquisition Debt 35,545 -- 35,545
Amortization of cost in
excess of net assets acquired 11,977 3,166 11,808
Non-Vehicle depreciation
& amortization 11,019 5,748 10,874
Income before Provision
for Income Taxes 71,774 52,706 41,283
Provision for Income Taxes 32,399 22,568 19,871
Net Income 39,375 30,138 21,412
Preferred Stock Dividends 4,555 -- 4,555
Earnings applicable to
Common Stockholders $34,820 $30,138 $16,857
Earnings Per Share:
Basic $1.12 $0.85 $0.47
Diluted (2) $1.10 $0.83 $0.47
Cash earnings per share (3) $1.45 $0.91 $0.77
Weighted Average Shares Outstanding:
Basic 31,129,164 35,607,527 35,607,527
Diluted (2) 31,760,213 36,179,780 36,179,780
NINE MONTHS ENDED SEPTEMBER 30,
ACTUAL PRO FORMA (1)
1999 1998 1999 1998
Revenue:
Vehicle Rental $1,913,929 $1,739,055 $1,913,929 $1,739,055
Vehicle Management Services:
Vehicle Leasing 345,696 1,034,019 1,015,442
Other Fee Based
Revenue 65,378 188,146 175,797
2,325,003 1,739,055 3,136,094 2,930,294
Costs and Expenses:
Direct Operating,net 757,785 695,549 805,395 760,040
Vehicle Depreciation
and Lease Charges,
net 747,702 444,182 1,262,539 1,213,922
Interest 209,728 143,781 304,326 282,070
Selling, general
and administrative 386,397 324,182 467,305 427,159
2,101,612 1,607,694 2,839,565 2,683,191
EBITDA 223,391 131,361 296,529 247,103
Interest -
Acquisition Debt 35,545 -- 106,635 106,635
Amortization of
cost in excess
of net assets
acquired 18,328 8,687 35,612 34,613
Non-Vehicle
depreciation &
amortization 23,370 16,829 34,980 31,620
Income before
Provision for
Income Taxes 146,148 105,845 119,302 74,235
Provision for
Income Taxes 64,305 45,949 58,294 39,289
Net Income 81,843 59,896 61,008 34,946
Preferred Stock
Dividends 4,555 -- 4,555 4,555
Earnings applicable
to Common
Stockholders $77,288 $59,896 $56,453 $30,391
Earnings Per Share:
Basic $2.46 $1.74 $1.80 $0.89
Diluted (2) $2.40 $1.70 $1.75 $0.86
Cash earnings per share (3) $2.93 $1.93 $2.79 $1.78
Weighted Average Shares Outstanding:
Basic 31,394,335 34,334,496 31,394,335 34,334,496
Diluted (2) 32,172,196 35,221,833 32,172,196 35,221,833
(1) Presents the results of operations of the Company as if the
acquisition of PHH North America, PHH Europe and Wright Express had
occurred on January 1, 1998.
(2) Includes dilutive effect of the assumed exercise of stock options.
(3) Cash earnings per share equals Earnings applicable to Common
Stockholders plus amortization of cost in excess of net assets
acquired (net of income tax benefit) divided by the weighted average
diluted shares outstanding.