Avis Rent A Car Announces Record Earnings Fourth Quarter E.P.S. Up 82%
27 January 2000
Avis Rent A Car, Inc. Announces Record Earnings Fourth Quarter E.P.S. Up 82%; Full Year Up 43%
GARDEN CITY, N.Y., Jan. 26 -- Avis Rent A Car, Inc.
today reported record results for the fourth quarter and full year
1999.
A. Barry Rand, Avis' Chairman and Chief Executive Officer, said: "Our
solid fourth quarter results cap a year of significant progress for Avis. We
continued to exploit New Avis growth opportunities by strategically leveraging
the integration of our vehicle management services operations ('VMS') with the
rental car group, including VMS' internet-based e-business systems platform.
Our combined business shows great promise for 2000 and we are excited about
the vast array of opportunities that will not only foster further growth but
unlock unrealized shareholder value."
On a historical basis, net income and diluted earnings per share for the
three months ended December 31, 1999 were $10.7 million and 20 cents,
respectively, compared to $3.6 million and 11 cents per share, respectively,
for the same period in 1998. The 1999 period includes the results of
operations of VMS subsequent to its date of acquisition on June 30, 1999.
On a historical basis, net income and diluted earnings per share for the
twelve months ended December 31, 1999 were $92.6 million and
$2.61, respectively, compared to $63.5 million and $1.82, respectively, for
the same period in 1998. Our 1999 results include a previously reported first
quarter non-recurring $7.5 million pre-tax gain representing 13 cents diluted
earnings per share, resulting from the curtailment of the Company's defined
benefit plans.
"Once again, our brand leadership, innovation and commitment to enhance
shareholder value helped generate results above expectations, driving the
company to its 10th consecutive quarter of exceeding earnings per share
consensus. Looking ahead, our earnings outlook is solid. We anticipate
strong performance from both the rental car and VMS businesses. Projects that
were initiated in 1999 will further contribute to our strong GAAP and cash
earnings per share estimates for 2000," said Kevin M. Sheehan, President of
Corporate and Business Affairs.
On a pro forma basis, revenue for the fourth quarter increased 4.5 percent
to $1.0 billion in 1999 from $962 million in 1998. Net income for the fourth
quarter of 1999 was $10.7 million, an increase of $16 million over the same
period in 1998. Diluted earnings per share was 20 cents, an increase of
49 cents over the same period in 1998.
On a pro forma basis, revenue for the twelve months ended December 31,
1999 increased 6.1 percent to $4.1 billion from $3.9 billion in 1998. Net
income and diluted earnings per share for the twelve months ended December 31,
1999 were $73.2 million and $1.72, respectively, including the aforementioned
non-recurring gain, compared to $26.9 million and 25 cents, respectively, for
the comparable period in 1998.
The pro forma operating results give effect to the acquisition of PHH
North America, PHH Europe and Wright Express ("Vehicle Management Services or
VMS") as if they had occurred on January 1, 1998.
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; 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 DECEMBER 31,
ACTUAL PRO FORMA (1)
1999 1998 1998
Revenue:
Vehicle Rental $586,817 $558,527 $558,527
Vehicle Management Services:
Vehicle Leasing 346,871 -- 342,647
Other Fee Based Revenue 71,847 -- 60,705
1,005,535 558,527 961,879
Costs and Expenses:
Direct Operating, net 232,428 230,523 230,523
Vehicle Depreciation
and Lease Charges, net 413,578 148,882 401,632
Interest 106,504 48,299 99,725
Selling, general and
administrative 173,756 113,951 174,325
926,266 541,655 906,205
EBITDA 79,269 16,872 55,674
Interest - Acquisition Debt 36,416 -- 35,078
Amortization of cost in
excess of net assets acquired 11,854 3,167 11,792
Non-Vehicle depreciation &
amortization 11,230 7,322 12,975
Income before Provision
for Income Taxes 19,769 6,383 (4,171)
Provision for Income Taxes 9,027 2,758 1,133
Net Income 10,742 3,625 (5,304)
Preferred Stock Dividends 4,555 -- 4,555
Earnings applicable to
Common Stockholders $6,187 $3,625 $(9,859)
Earnings Per Share:
Basic $0.20 $0.11 $(0.29)
Diluted (2) $0.20 $0.11 $(0.29)
Cash earnings per share (3) $0.56 $0.19 $0.05
Weighted Average
Shares Outstanding:
Basic 31,130,973 33,690,798 33,690,798
Diluted (2) 31,426,681 34,068,603 34,068,603
TWELVE MONTHS ENDED DECEMBER 31,
ACTUAL PRO FORMA (1)
1999 1998 1999 1998
Revenue:
Vehicle Rental $2,500,746 $2,297,582 $2,500,746 $2,297,582
Vehicle Management
Services:
Vehicle Leasing 692,935 1,380,866 1,375,187
Other Fee Based
Revenue 139,046 263,058 234,270
3,332,727 2,297,582 4,144,670 3,907,039
Costs and Expenses:
Direct Operating, net 957,270 927,930 957,272 927,930
Vehicle Depreciation
and Lease
Charges, net 1,174,509 593,064 1,689,343 1,612,968
Interest 316,232 192,080 411,682 398,254
Selling, general
and administrative 582,056 436,275 710,576 667,717
3,030,067 2,149,349 3,768,873 3,606,869
EBITDA 302,660 148,233 375,797 300,170
Interest - Acquisition
Debt 71,961 -- 140,719 143,574
Amortization of cost
in excess of
net assets acquired 30,182 11,854 47,409 46,405
Non-Vehicle depreciation
& amortization 34,600 24,151 46,267 44,595
Income before
Provision for
Income Taxes 165,917 112,228 141,402 65,596
Provision for
Income Taxes 73,332 48,707 68,231 38,680
Net Income 92,585 63,521 73,171 26,916
Preferred Stock
Dividends 9,110 -- 18,220 18,220
Earnings applicable
to Common
Stockholders $83,475 $63,521 $54,951 $8,696
Earnings Per Share:
Basic $2.66 $1.86 $1.75 $0.25
Diluted (2) $2.61 $1.82 $1.72 $0.25
Cash earnings
per share (3) $3.51 $2.13 $3.15 $1.55
Weighted Average
Shares Outstanding:
Basic 31,330,536 34,172,249 31,330,536 34,172,249
Diluted (2) 31,985,569 34,952,557 31,985,569 34,952,557
(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.