Budget Group Reports First Quarter Results Ahead of Expectations.DAYTONA BEACH Daytona Beach (dātō`nə), city (1990 pop. 61,921), Volusia co., NE Fla., on the Atlantic coast and Halifax River (a lagoon); inc. 1876. Center of a rapidly urbanizing area, in a region settled by Spanish Franciscans in the 17th cent. , Fla.--(BUSINESS WIRE)--April 27, 1998--Budget Group, Inc. (NYSE NYSE See: New York Stock Exchange :BD) released its first quarter operating results today, reporting a loss per share of 9 cents, excluding one-time charges related to the merger between Budget Group and Cruise America Cruise America is a privately held recreational vehicle rental and sales company based in Mesa, Arizona. The company was founded in 1972 and was publicly traded in the American Stock Exchange under the ticker “RVR” until 1997. [1]. . These results were one cent better than consensus estimates. When giving effect to the one-time merger charges, which totaled $1.6 million pre-tax, the Company reported a loss of 12 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for the first quarter ended March 31, 1998. The merger between Budget Group and Cruise America was completed on January 28, 1998, and was accounted for as a pooling-of-interests. Budget Group revenues for the quarter increased to $456 million from $116 million in the prior year first quarter. Excluding one-time charges related to the Cruise America merger, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased to $35.8 million from $4 million and the net loss was $2.5 million. Also in the quarter, Budget Group announced an agreement to acquire Ryder TRS See traffic engineering methods. TRS - term rewriting system . The Ryder TRS acquisition cleared the FTC FTC See Federal Trade Commission (FTC). last week. The operating results herein represent three full months of combined operations For the department of the British War Office during World War II, see . In the military, combined operations are operations conducted by forces of two or more allied nations acting together for the accomplishment of a single mission. See also
First quarter rental revenue from Budget Rent a Car U.S. corporate operations increased 12.5% to $259.6 million, versus pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma prior year first quarter revenues of $230.7 million. Rental days (volume) were up 11.1% on a pro forma basis. Daily dollar average for Budget's U.S. car operations was up 1.3%, or 50 cents per rental day, over the prior year quarter pro forma, reaching $39.66. Daily dollar average was up 3.0%, taking into account fleet mix issues such as more low-cost VIP Pickups and fewer luxury cars such as Lincoln Town Cars The Lincoln Town Car is a rear wheel drive full-size luxury sedan and serves as the flagship of Ford's Lincoln luxury car division. Often referred to as a traditional American luxury sedan, the Town Car features a V8 engine, rear wheel drive, very generous exterior and interior . Gross rental margin (revenue per unit less holding costs per unit) was 57.4%, down 80 basis points below prior year pro forma due primarily to early disposal of vehicles as the company down-fleeted in response to poor weather conditions in Florida and California. Budget Group Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Sandy Miller Sandy Lee Miller (nee Percival) is a journalist and news anchor from Missouri. Miller currently co-anchors weekdays for FOX 2 News at 6 p.m. She joined FOX 2 in October 2002. Before joining the FOX team, Sandy co-anchored the 9 p.m. news at KPLR-TV for 4 years. noted, "We're continuing to see pricing strengthen in the industry, and we are taking advantage of these opportunities to yield up. The diminution Taking away; reduction; lessening; incompleteness. The term diminution is used in law to signify that a record submitted by an inferior court to a superior court for review is not complete or not fully certified. of gross rental margin reflects Budget's discipline in maintaining yield, rather than simply cutting rates to maintain volume in softer markets. We are maintaining our strategy of pursuing higher margin business. Dollar average continues to trend up over prior year. In addition to the increases in DDA DDA Disability Discrimination Act (1995, UK) DDA Downtown Development Authority DDA Doha Development Agenda DDA Delhi Development Authority DDA Department for Disarmament Affairs DDA Demand Deposit Account DDA Domain Defined Attribute throughout last year and in the first quarter of 1998, we're seeing a 2.1% increase in DDA for the month of April." On April 1, Budget Rent a Car launched its new frequent renter program, Perfect Drive, to continue to build loyalty among business and leisure travelers. "We've offered customers a frequent renter awards program since 1992. Our new Perfect Drive program has a number of enhancements and members will soon be able to link directly to our new paperless, automated express service, FastBreak, which kicks off this summer," said Miller. "Perfect Drive was designed to keep current loyal renters and to attract new customers. With Perfect Drive and Fastbreak, customers will try Budget and stay, not only for the awards, but for the quality service and good value Budget provides," Miller added. Continuing its strategy to acquire franchise locations in key markets, Budget closed on purchases of rental operations in Quebec (including Montreal); Austria; Spain; San Juan, Puerto Rico San Juan (IPA: [saŋ hwaŋ]) (from the Spanish San Juan Bautista, "Saint John the Baptist") is the capital and largest municipality on Puerto Rico. ; California (north coast area); Garden City, NY; and Christchurch, New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . For the third consecutive quarter, Budget Truck Rental Budget Truck Rental, LLC is the second largest truck rental company in the continental United States of America with around 2,800 businesses and 32,000 trucks across the country. experienced record operating results. Rental revenue of $31.3 million was up 30% over prior year quarter pro forma. Budget Group's pending acquisition of Ryder TRS has cleared the FTC, and the Company expects to close on the deal late in the second quarter. Revenues from Budget Car Sales increased to $92.0 million for the quarter up from $43.3 million for first quarter 1997 pro forma. With 29 stores open at the end of the quarter, units sold retail increased to 4,859. During the first quarter, which is typically the off-season for recreational vehicle rentals, Cruise America reported revenue of $11.2 million. Reservation builds for its peak summer season are strong. Budget Group is already realizing synergies from this acquisition as Cruise America now rents local and One-Way Budget trucks from a number of its locations, and recreational vehicles are now available for rent in several Budget operations. To reduce Budget Truck Rental fleet costs, Cruise America has already delivered 20 modular body trucks to the Budget One-Way fleet. Cruise America engineers have also built a prototype airport shuttle An airport shuttle is a shuttle bus that transports airline passengers to and from a commercial airport. Passengers wait at the shuttle stop for the bus to arrive, and at appointed areas where shuttle pick-up and drop-off are allowed at the airport. bus conversion, demonstrating the potential to reduce the costs of these types of vehicles as well. Regarding other Budget Group companies, Premier Car Rental revenue reached $12.8 million. Premier opened locations in two new markets, Albany, NY and Charlotte, NC and additional locations in Indianapolis and Albuquerque. The company now receives reservations through a direct electronic link from the claims offices of major insurance carriers to its rental locations. Premier is also beta testing (programming) beta testing - Testing a pre-release (potentially unreliable) version of a piece of software by making it available to selected users. This term derives from early 1960s terminology for product cycle checkpoints, first used at IBM but later standard throughout the a new state-of-the-art integrated front- and back-office automated system. Van Pool Services revenue grew to $9.5 million, up 15% over prior year quarter pro forma due primarily to increased contract revenue from its existing markets and expansion of its vehicle leasing Vehicle leasing refers to leasing the use of a motor vehicle for a fixed or indefinite period of time. It is commonly offered by dealers as an alternative to vehicle purchase. business. Budget Group, Inc., through subsidiary companies and their franchisees, operates Budget Car and Truck Rental, the third largest worldwide car and truck rental system. In addition, the Company owns Premier Car Rental, which serves the insurance replacement market. Budget Car Sales is one of the largest independent retailers of late model vehicles in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Cruise America is the largest recreational vehicle rental and sales company in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Budget Group also operates airport parking facilities and through Van Pool Services leases vans for van pooling. This press release does not constitute "proxy solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual material" within the meaning of Regulation 14A and Schedule 14A of the Securities Exchange Act of 1934, as amended. -0- Certain items in this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Budget to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements speak only as of the date of this press release. Budget expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Budget's expectations with regard thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or any change in events, conditions or circumstances on which any statement is based. -0-
BUDGET GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Period Ending March 31
(In Thousands, Except Share Data)
1st Quarter
1998 1997
OPERATING REVENUE
Vehicle rental $339,955 $62,022
Sales of vehicles 97,291 53,735
Royalty fees and other 18,739 581
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Total operating revenues 455,985 116,338
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OPERATING COSTS AND EXPENSES
Direct vehicle and operating 46,874 10,649
Depreciation - vehicles 94,096 19,352
Depreciation - non-vehicles 4,429 891
Cost of vehicle sales 86,142 45,603
Advertising, promotion and selling 35,623 7,169
Occupancy 32,246 6,214
Personnel 94,790 17,348
General and administrative 22,572 4,563
Merger expenses - pooling 1,595 -
Amortization expense 3,439 546
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Total operating costs and
expenses 421,806 112,335
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OPERATING INCOME 34,179 4,003
OTHER (INCOME) EXPENSE
Interest - vehicle 34,421 8,435
Interest - other 8,450 807
Interest - restricted cash (2,991) (723)
Interest - related party 0 0
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Total other (income) expense 39,880 8,519
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LOSS BEFORE INCOME TAXES (5,701) (4,516)
Provision for income taxes 2,280 1,215
---------------------------
NET LOSS $(3,421) $(3,301)
===========================
Shares outstanding 27,445,000 12,875,000
Basic EPS (0.12) (0.26)
===========================
BUDGET RENT A CAR CORPORATION
FIRST QUARTER OPERATING STATISTICS
U.S. VEHICLE RENTAL
1998 CHANGE FROM
1st QUARTER PRIOR 1st QUARTER
------------ -----------
(PROFORMA)
U.S. CARS
Average Fleet 89,964 14.8%
Utilization 80.9% (260) bps
Rental Days 6,546,444 11.1%
Daily Dollar Average $39.66 1.3%
Rental Revenue $259,645,432 12.5%
Transactions 1,620,241 11.6%
Revenue Per Unit $962 (1.9)%
U.S. TRUCKS
Average Fleet 11,733 29.3%
Utilization 53.1% 150 bps
Rental Days 561,252 33.2%
Daily Dollar Average $55.74 (2.0)%
Rental Revenue $31,282,648 30.5%
Transactions 129,375 26.1%
Revenue Per Unit $889 0.9%
CONTACT: Scott White Executive Vice President, Corporate Development and Investor Relations Investor relations The process by which the corporation communicates with its investors. Budget Group, Inc. 630/955-7600 |
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