Avis Budget Group Reports Strong First Quarter 2018 Results

PARSIPPANY, N.J., May 02, 2018 (GLOBE NEWSWIRE) — Avis Budget Group, Inc. (NASDAQ:CAR) today reported results for its first quarter ended March 31, 2018.

Revenue grew 7% to a record $2.0 billion in the first quarter

Net loss improved by $20 million

Adjusted EBITDA improved by $29 million

Company reaffirms its projected full-year 2018 results
“The first quarter has our year starting on a very positive note with strong demand, higher underlying pricing in the Americas, improved utilization and lower per-unit fleet costs,” said Larry De Shon, Avis Budget Group President and Chief Executive Officer. “With both pricing and fleet costs in the Americas having stabilized, the benefits of our strategic initiatives were clearly evident this quarter with year-over-year profitability improving significantly.”

$ millions * 2018 2017 % change
Revenues 1,968 1,839 7 %
Net loss (87 ) (107 ) 19 %
Adjusted EBITDA 2 (27 ) n/m
Per-unit fleet costs excluding exchange rate effects (in $’s) 286 297 (4 %)

  • Excluding per-unit fleet costs

Revenue growth in the quarter was driven by a 5% increase in total rental days, strong pricing in the Americas under our historical T&M per day metric and a 3% benefit from currency exchange. This strong revenue performance and a 4% reduction in local currency per-unit fleet costs led to Adjusted EBITDA improving by $29 million year-over-year. Net loss was $87 million, or $1.08 per diluted share and Adjusted net loss improved to $60 million, or $0.74 per share.

Business Segment Discussion


$ millions * 2018 2017 % change
Revenues 1,348 1,314 3 %
Adjusted EBITDA 15 (20 ) n/m
Per-unit fleet costs excluding exchange rate effects (in $’s) 322 335 (4 %)

  • Excluding per-unit fleet costs

Revenue growth in the quarter was driven by a 3% increase in volume. Revenue per day was unchanged and increased 2% under our historical T&M per day metric. This revenue performance together with 4% lower per-unit fleet costs and a 120 basis point improvement in utilization resulted in Adjusted EBITDA increasing significantly to $15 million.


$ millions * 2018 2017 % change
Revenues 620 525 18 %
Adjusted EBITDA 3 7 (57 %)
Per-unit fleet costs excluding exchange rate effects (in $’s) 208 209 0 %

  • Excluding per-unit fleet costs

Revenue growth in the quarter was driven by 9% higher volume and a $61 million (12%) benefit from foreign currency, partially offset by 2% lower local currency revenue per day (up 1% under our historical T&M metric). The strong volume growth and a $4 million benefit from currency were offset by lower pricing, higher marketing investment and increased airport concession fees, resulting in Adjusted EBITDA of $3 million for the quarter.

Balance Sheet

The Company’s corporate debt was approximately $3.6 billion at the end of the first quarter of 2018 and cash and cash equivalents totaled $544 million, compared to $3.6 billion of corporate debt and cash and cash equivalents of $611 million for the year ended December 31, 2017.

Other Items

Annual Stockholders Meeting – We have scheduled our 2018 Annual Meeting of Stockholders for May 23, 2018 in New York, NY. Stockholders of record as of the close of business on March 26, 2018 will be entitled to vote at the annual meeting.

Our full-year 2018 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 metrics 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 reconciling items could be significant to the Company’s future quarterly or annual results.

The Company today reaffirmed its estimated full-year 2018 results as follows:

$ millions * 2018 Estimates
Revenues $9,200 – $9,450
Adjusted EBITDA $740 – $820
Adjusted pretax income $330 – $410
Adjusted net income $240 – $310
Adjusted diluted earnings per share $2.90 – $3.75
Adjusted free cash flow $325 – $375

  • Excluding Adjusted diluted earnings per share.

Additional Guidance Details:


% change vs prior year
Rental days 1.0% – 3.0%
Total revenue per day 0.0% – 2.0%
Per-unit fleet costs (1.0%) – 1.0%
Total revenue per day and per-unit fleet costs exclude the effect of changes in currency exchange rates. Total revenue per day also reflects the effect of the newly adopted revenue recognition standard pertaining to customer loyalty programs.


% change vs prior year
Rental days 5.0% – 7.0%
Total revenue per day (2.0%) – 0.0%
Per-unit fleet costs 0.0% – 2.0%
Total revenue per day and per-unit fleet costs exclude the effect of changes in currency exchange rates.

Investor Conference Call

Avis Budget Group will host a conference call to discuss first quarter results and its outlook on May 3, 2018, at 8:30 a.m. (ET). Investors may access the call and supporting presentation materials at ir.avisbudgetgroup.com or by dialing (630) 395-0021 and providing the participant passcode 2995545. Investors are encouraged to dial in approximately 10 minutes prior to the call. A web replay will be available at ir.avisbudgetgroup.com following the call. A telephone replay will be available from 11:00 a.m. (ET) on May 3 until 10:00 p.m. (ET) on May 17 at (203) 369-0194.

About Avis Budget Group
Avis Budget Group, Inc. is a leading global provider of mobility solutions, both through its Avis and Budget brands, which have more than 11,000 rental locations in approximately 180 countries around the world, and through its Zipcar brand, which is the world’s leading car sharing network, with more than one million members. Avis Budget Group operates most of its car rental offices in North America, Europe and Australasia directly, and operates primarily through licensees in other parts of the world. Avis Budget Group has approximately 31,000 employees and is headquartered in Parsippany, N.J. More information is available at www.avisbudgetgroup.com.

Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “forecast” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are based upon then current assumptions and expectations and are generally forward-looking in nature and not historical facts. Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results, including all statements related to our outlook, future results, future fleet costs, acquisition synergies, cost-saving initiatives and future share repurchases are also forward-looking statements.

Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this press release include, but are not limited to, the Company’s ability to promptly and effectively integrate acquired businesses, any change in economic conditions generally, particularly during our peak season or in key market segments, the high level of competition in the vehicle rental industry, a change in our fleet costs as a result of a change in the cost of new vehicles, manufacturer recalls and/or the value of used vehicles, disruption in the supply of new vehicles, disposition of vehicles not covered by manufacturer repurchase programs, the financial condition of the manufacturers that supply our rental vehicles, which could effect their ability to perform their obligations under our repurchase and/or guaranteed depreciation arrangements, any change in travel demand, including changes in airline passenger traffic, any occurrence or threat of terrorism, a significant increase in interest rates or borrowing costs, our ability to obtain financing for our global operations, including the funding of our vehicle fleet via the asset-backed securities market, any changes to the cost or supply of fuel, any fluctuations related to the mark-to-market of derivatives which hedge our exposure to exchange rates, interest rates and fuel costs, our ability to meet the financial and other covenants contained in the agreements governing our indebtedness, risks associated with litigation, governmental or regulatory inquiries or investigations involving the Company, changes in tax or other regulations, changes to our share repurchase plans, risks related to acquisitions, and our ability to accurately estimate our future results and implement our strategy for cost savings and growth. Other unknown or unpredictable factors could also have material adverse effects on the Company’s performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in Avis Budget Group’s Annual Report on Form 10-K for the year ended December 31, 2017 included under headings such as “Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in other filings and furnishings made by the Company with the SEC from time to time. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

Non-GAAP Financial Measures
This release includes financial measures such as Adjusted EBITDA and Adjusted free cash flow, as well as metrics that exclude certain items that are not considered generally accepted accounting principles (“GAAP”) measures as defined under SEC rules. Important information regarding such measures is contained on Table 1, Table 4,Table 5 and Appendix I of this release. The Company and its management believe that these non-GAAP measures are useful to investors in measuring the comparable results of the Company period-over-period. The GAAP measures most directly comparable to Adjusted EBITDA, Adjusted free cash flow, Adjusted pretax income (loss), Adjusted net income (loss) and Adjusted diluted earnings (loss) per share are net income (loss), net cash provided by operating activities, income(loss) before income taxes, net income (loss) and diluted earnings (loss) per share, respectively. Foreign currency translation effects on the Company’s results are quantified by translating the current period’s non-U.S.-dollar-denominated results using the currency exchange rates of the prior period of comparison plus any related gains and losses on currency hedges. Per-unit fleet costs, which represent vehicle depreciation, lease charges and gain or loss on vehicle sales, divided by average rental fleet, is calculated on a per-month basis.