Cendant Corporation Reports Preliminary First Quarter 1998 Results.STAMFORD Stamford, town, England Stamford, town (1991 pop. 18,127), in the Parts of Kesteven, Lincolnshire, E central England, on the Welland River. It is a market town. Products include diesel engines, electrical equipment, bricks, and tiles. , CT, and PARSIPPANY, N.J.--(BUSINESS WIRE)--May 5, 1998 Earnings Per Share Reach $.26; Exceeds Street Consensus Estimate Travel and Real Estate Business Segments Performing at Record First Quarter Levels Cendant Cendant Corporation was a New York-based provider of business and consumer services, primarily within the real estate and travel industries. Although the company was based out of New York City, the majority of Cendant's headquarters employees were located in Parsippany-Troy Hills, Corporation (NYSE NYSE See: New York Stock Exchange :CD) today reported preliminary first quarter 1998 earnings per share of $.26 which exceeded Wall Street analysts' consensus estimate of $.25 per share. The Company's travel and real estate business segments performed at record first quarter levels in terms of revenue and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become . The results of the previously announced investigation by the Audit Committee of Cendant's Board of Directors into potential accounting irregularities in certain former CUC CUC Cuban Convertible Peso (ISO currency code) CUC Columbia Union College (Takoma Park, MD, USA) CUC Canadian Unitarian Council CUC Canadian Ultimate Championships business units may impact these preliminary first quarter 1998 results as well as require a restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of previously reported quarterly and annual results. Such restatement is expected to be completed during the summer of 1998. Additionally, following completion of the restatement and receipt of required shareholder and insurance regulatory approvals, Cendant expects to complete its previously announced tender offer and subsequent merger with American Bankers American Banker is a daily newspaper covering the financial services industry. Founded in 1835 and based in New York, American Banker's 70 reporters and editors in six cities monitor developments and breaking news affecting banks. Insurance Group, Inc. Net income and revenue for the first quarter of 1998 were $229.5 million and $1.44 billion, respectively. First quarter 1998 EBITDA and EBITDA margins were $470.4 million and 33%. Free cash flow per share Free Cash Flow per Share A measure of a company's financial flexibility. It is calculated as net income plus all non-cash expenses less dividends and capital expenditures. The total is then divided by the number of shares outstanding. was $.27. These results represent record levels for a first quarter, even when compared to the publicly filed quarterly results which may require restatement due to previously announced potential accounting irregularities. These results have been characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. as preliminary, and comparative results for 1997 for the entire Company have not been presented. More than eighty percent of the Company's net income for the first quarter of 1998 came from Cendant business units not impacted by the potential accounting irregularities. Net income for those businesses unaffected was $189.1 million for the first quarter of 1998 compared with $91.1 million for the same period in the prior year, an increase of 108%. Revenue for those same businesses was $699.6 million compared with $520.0 million for the same period in the prior year, an increase of 35%. A separate table is attached which summarizes those businesses. Cendant further announced that it has postponed its 1998 annual meeting of stockholders, previously scheduled to be held on May 19, 1998, pending completion of restated financial statements for 1997. The Company expects to reschedule re·sched·ule tr.v. re·sched·uled, re·sched·ul·ing, re·sched·ules To schedule again or anew: rescheduled the meeting for the following week; rescheduled the debts of many developing nations. the meeting for autumn 1998. Cendant (NYSE: CD) is the world's premier provider of consumer and business services. Cendant operates in three principal segments: Alliance Marketing, Travel and Real Estate Services. In Alliance Marketing, Cendant provides access to travel, shopping, auto, dining, and other services worldwide. In Travel Services, Cendant is the leading franchisor of hotels and rental car agencies worldwide, the premier provider of vacation exchange services, a leading fleet management company through PHH PHH Provinciale Handelsschool Hasselt (school) PHH Pasukan Anti Huru-Hara (Anti Riot Task Force) PHH Phillips Head (screw) PHH Planar Halogenated Hydrocarbon , and the U.K.'s largest private car park operator through NPC 1. (complexity) NPC - NP-complete. 2. (architecture) NPC - Next Program Counter. . In Real Estate Services, Cendant is the world's premier franchisor of residential real estate brokerage offices, a major provider of mortgage services to consumers and a global leader in corporate employee relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. . Headquartered in Stamford, CT and Parsippany, NJ, the company has nearly 40,000 employees, operates in over 100 countries and makes more than 100 million customer contacts annually. *Certain matters discussed in the news release are forward- looking statements, as defined in 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. Such 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. are subject to a number of known and unknown risks and uncertainties including, but not limited to, the outcome of the Audit Committee's investigation; uncertainty as to the Company's future profitability; the Company's ability to develop and implement operational and financial systems to manage rapidly growing operations; competition in the company's existing and potential future lines of business; the Company's ability to integrate and operate successfully acquired businesses and the risks associated with such businesses; the Company's ability to obtain financing on acceptable terms to finance the Company's growth strategy and for the Company to operate within the limitations imposed by financing arrangements; uncertainty as to the future profitability of acquired businesses; and other factors. Other factors and assumptions not identified above were also involved in the derivation derivation, in grammar: see inflection. of these forward-looking statements, and the failure of such other assumptions to be realized as well as other factors may also cause actual results to differ materially from those projected. The Company assumes no obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements. *As previously announced, Cendant expects to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its financial statements for 1997 and other periods as a result of potential accounting irregularities in certain former CUC business units. The Audit Committee of the Company's Board of Directors has retained Willkie, Farr & Gallagher as special legal counsel, and Willkie Farr has retained Arthur Anderson Arthur Anderson may refer to:
THE COMPANY'S FINANCIAL RESULTS (In millions, except per share
amounts)
First Quarter Financial Results (1)
3 Months
Ended 3/31/98
Revenues $ 1,436.6
Expenses 1,068.1
Income Before Income Taxes
and minority interest $ 368.5
Net income $ 229.5
EBITDA (2) $ 470.4
Earnings Per Share
Diluted $ 0.26
Basic $ 0.27
Adjusted Earnings Per Share (3) $ 0.27
Weighted Average Common and
Common Equivalent Shares
Outstanding
Diluted 908.5
Basic 838.7
Notes to Financial Information
1. The results of the previously announced investigation by the
Audit Committee of Cendant's Board of Directors into potential
accounting irregularities in certain former CUC business may impact
preliminary first quarter 1998 results as well as require a
restatement of previously reported quarterly and annual results. Such
restatement is expected to be completed during the summer of 1998.
2. Earnings before interest, taxes, depreciation and
amortization.
3. Adjusted earnings per share represents the cash earnings per
share of the Company and computed by adding the Company's depreciation
and amortization to net income available to common shareholders, less
capital expenditures. This numerator is then divided by weighted
average shares outstanding on a diluted basis.
CENDANT CORPORATION
BUSINESS UNIT LISTING
- Travel related business
- Lodging
- Timeshare
- Car Rental
- Fleet Management
- Tax Free Shopping
- Classified Advertising
- Real estate related business
- Real Estate Franchise
- Relocation
- Mortgage Services
- New Mover
- Membership related business
- Individual
- Entertainment
- Insurance
- Package - U.S.
- International
- Other segment
- Corporate including MIS-Wizcom
- Jackson Hewitt
- Software
- Essex (Mutual Funds)
- Credit Central, Inc.
Cendant Corporation
1st Quarter 1998 Segment Results Summary
($ in thousands)
Revenue EBITDA EBITDA Margin
Alliance Marketing $ 520,874 $ 98,140 19%
Travel 410,526 183,844 45%
Real Estate 279,094 124,048 44%
Other 226,113 64,332 28%
Total $ 1,436,607 $470,363 33%
CENDANT CORPORATION (Excludes former CUC business units)
1ST QUARTER 1998 RESULTS
($ in thousands)
Revenue EBITDA Net Income
1998 1997 % 1998 1997 % 1998 1997 %
Travel
Lodging $94,670 $89,843 5% $50,785 $43,092 18% $28,679 $21,219 35%
Timeshare 106,345 93,763 13% 42,050 28,345 48% 21,117 11,455 84%
Car rental 45,049 34,495 31% 30,752 20,376 51% 16,359 9,150 79%
Fleet
Management 82,745 80,795 2% 41,915 35,799 17% 24,151 18,915 28%
Total
Travel 328,809 298,896 10% 165,502 127,612 30% 90,306 60,739 49%
Real Estate
Real Estate 84,302 55,396 52% 58,421 28,934 102% 29,499 11,587 155%
Relocation 99,653 85,245 17% 27,249 15,924 71% 15,611 8,200 90%
Mortgage 77,996 33,632 132% 37,284 14,174 163% 22,818 7,523 203%
Total Real
Estate 261,951 174,273 50% 122,954 59,032 108% 67,928 27,310 149%
Other 108,839 46,813 132% 82,433 24,739 233% 30,854 3,054 910%
Total Excluding
Former --------------- ------------- --------------
CUC Business
Units $699,600 $519,983 35% $370,888 $211,383 75% $189,089 $91,102 108%
CENDANT CORPORATION (Excludes former CUC business units)
1st QUARTER COMPARATIVE RESULTS - EBITDA MARGIN
($ in thousands)
EBITDA Margin
1998 1997
Travel
Lodging 54% 48%
Timeshare 40% 30%
Car rental 68% 59%
Fleet Management 51% 44%
Total Travel 50% 43%
Real Estate
Real Estate 69% 52%
Relocation 27% 19%
Mortgage 48% 42%
Total Real Estate 47% 34%
Other 76% 53%
Total Excluding former
CUC Business Units 53% 41%
CONTACT: Investor Contact: or Media Contact: Laura P. Hamilton Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. Elliot Bloom bloom 1. the general appearance of the surface. In carcass meat it is the glistening, transparent effect and the gentle pink color that gives a good bloom to the carcass. It is the result of proper tissue hydration coupled with the correct proportions of fat, connective tissue and Sr. VP Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. VP Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most and Investor Relations Investor relations The process by which the corporation communicates with its investors. (973) 496-8414 (203) 965-5114 |
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