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Avis Budget Group Reports First Quarter 2019 Results

May 6, 2019 Financial No Comments Email Email

Avis Budget Group, Inc. (NASDAQ: CAR) today reported results for its first quarter ended March 31, 2019.http://www.stevecafeandcuisine.com/

First Quarter Highlights:

  • Revenues were $1.9 billion, down 2% due to the impact of currency exchange rate movements
  • Net loss was $91 million or a diluted loss of $1.20 per share
  • Adjusted EBITDA loss was $1 million
  • Adjusted diluted loss of $0.78 per share
  • We reaffirm our projected full-year 2019 guidance

“We had a strong first quarter to begin 2019, despite the impacts from a government shutdown, uncertainty around Brexit and the shift of Easter to the second quarter,” said Larry De Shon, Avis Budget Group President and Chief Executive Officer. “Including these impacts, our results were comparable to prior year, leaving us on track for our full-year guidance. Americas leisure pricing increased for the seventh consecutive quarter. At the same time we continue to improve our per-unit fleet costs, which were 5% lower globally.”

“Looking forward, we will continue to execute on our strategic initiatives to accelerate our position as a global leader in mobility solutions, as evidenced by partnerships with Lyft, Via, and Waymo, while we enhance the customer experience and improve profitability.”

Total Company

Three Months Ended March 31,
$ millions 2019 2018 % change 
Revenues 1,920 1,968 (2 %)
Net loss (91 ) (87 ) (5 %)
Adjusted EBITDA (1 ) 2 n/m
Adjusted Net loss (59 ) (60 ) 2 %

n/m    not meaningful

  • Revenues were 2% lower in the quarter, with a 2% decrease in Revenue per Day and a $56 million or 3% effect from currency exchange movements being partially offset by a 2% increase in Rental Days
  • Overall Per-Unit Fleet Costs improved 5% year-over-year
  • For the quarter, net loss was $91 million. Adjusted EBITDA loss was $1 million and Adjusted net loss was $59 million, or $0.78 per diluted share

Americas

Three Months Ended March 31,
$ millions 2019 2018 % change 
Revenues 1,327 1,348 (2 %)
Adjusted EBITDA 35 15 n/m
  • Revenues in the quarter were 2% lower compared to the prior year due to a 1% decrease in Rental Days
  • Per-Unit Fleet Costs decreased by 8% and have improved year-over-year for five quarters. We continue to utilize alternative disposition channels and take advantage of strong residual values
  • Adjusted EBITDA increased to $35 million and margin expanded by 150 basis points

“Our pricing in the quarter was flat while per-unit fleet costs were 8% lower compared to last year,” said Joe Ferraro, President Americas.

International

Three Months Ended March 31,
$ millions 2019 2018 % change 
Revenues 593 620 (4 %)
Adjusted EBITDA (21 ) 3 n/m
  • Revenues in the quarter were 4% lower driven by an 8%, or $50 million, impact from currency exchange movements. Rental Days increased 8%, partially offset by a 4% decrease in Revenue per Day
  • Per-Unit Fleet Costs increased by 3% in the quarter, while utilization improved 80 basis points
  • Adjusted EBITDA loss was $21 million for the quarter, with lower Revenue per Day and higher Per-Unit Fleet Costs partially offset by higher volume and improved utilization

“Rental days grew by 8% driven by higher utilization and the successful integration of Morini and Turiscar,” said Mark Servodidio, President International.

Finance and Liquidity

In February 2019, our Avis Budget Rental Car Funding subsidiary issued $600 million of asset-backed notes with an expected final payment date of March 2022 incurring interest at a weighted average rate of 3.56%.

In April 2019, our Avis Budget Rental Car Funding subsidiary also issued $650 million of asset-backed notes with an expected final payment date of September 2024 incurring interest at a weighted average rate of 3.44%.

Our corporate debt was approximately $3,524 million at the end of the first quarter and cash and cash equivalents totaled $540 million.

Capital Allocation

Weighted average diluted shares outstanding (as used to calculate Adjusted diluted earnings per share) were 75.8 million in the quarter compared to 81.0 million in the prior year, a 6% year-over-year reduction.

Outlook
The Company’s full-year 2019 outlook includes non-GAAP financial measures and excludes the effect of future changes in currency exchange rates.  The Company believes that it is impracticable to provide a reconciliation to the most comparable GAAP measures due to the forward-looking nature of these forecasted Adjusted earnings measures and the degree of uncertainty associated with forecasting the reconciling items and amounts.  The Company further believes that providing estimates of the amounts that would be required to reconcile the forecasted adjusted measures to forecasted GAAP measures would imply a degree of precision that would be confusing or misleading to investors.  The after-tax effect of such reconciling items could be significant to the Company’s future quarterly or annual results.

The Company today provides its 2019 guidance:

$ millions * 2019 Estimates
Revenues $9,200 – $9,500
Adjusted EBITDA $750 – $850
Non-vehicle related depreciation and amortization $215
Interest expense related to corporate debt, net $185
Adjusted pretax income $350 – $450
Adjusted net income $260 – $320
Adjusted diluted earnings per share $3.35 – $4.20
Capital expenditures $235
Cash taxes, vehicle programs and other $80 – $130
Adjusted free cash flow $250 – $300

Excluding Adjusted diluted earnings per share.
Non-vehicle related depreciation and amortization excludes acquisition-related amortization expense.
Interest expense related to corporate debt, net excludes early extinguishment of debt.

$ change millions (better)/worse vs prior year
Vehicle interest expense $25 – $35
Adjusted EBITDA net currency translation $15 – $25

Additional guidance details:

Americas

% change vs prior year
Rental days 0.0% – 2.0%
Revenue per Day 0.5% – 2.5%
Per-Unit Fleet Costs per Month 1.0% – 3.0%

Revenue per Day and Per-Unit Fleet Costs per Month exclude exchange rate effects.

International

% change vs prior year
Rental days 3.0% – 6.0%
Revenue per Day (1.0%) – (4.0%)
Per-Unit Fleet Costs per Month 0.0% – 2.0%

Revenue per Day and Per-Unit Fleet Costs per Month exclude exchange rate effects.

Investor Conference Call
Avis Budget Group will host a conference call to discuss first quarter results and its outlook on May 2, 2019, at 8:30 a.m. (ET).  Investors may access the call at ir.avisbudgetgroup.com or by dialing (773) 756-0108 and providing the participant passcode 9806274.  The supporting presentation will also be available at ir.avisbudgetgroup.com.  Investors are encouraged to dial in approximately 10 minutes prior to the call.  A replay will be available at ir.avisbudgetgroup.com following the call.  A telephone replay will also be available from 11:00 a.m. (ET) on May 2, 2019 until 10:00 p.m. (ET) on June 2, 2019 at (203) 369-3335.

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