Coach Announces Third Quarter Results.

HOUSTON--(BUSINESS WIRE)--Oct. 31, 1996--Coach USA, Inc. (Nasdaq - TOUR), headquartered in Houston, Texas, reported financial results for the third quarter ended Sept. 30, 1996. "Our third quarter is our strongest quarter of the year. Our results reflect continued growth at all of our key locations and early effects of our greater purchasing power on lowering certain costs," said Richard Kristinik, Chief Executive Officer of the Company.

"We are pleased with the operating results of our founding companies as well as the results of our recent acquisitions which closed in August 1996. These acquisitions almost double the size of the company and put us in several additional key markets in the country. On a pro forma basis, our 1995 revenues and net income of all companies, including those accounted for as purchases, are $197 million and $10.8 million compared to 1995 revenues and net income of the founding companies of $113 million and $6 million."

Set forth below are the reported results, which have been restated in prior periods for the August 1996 acquisitions accounted for as poolings of interests.

Comparing the third quarter 1996 with the third quarter 1995:

-- Pro forma revenue increased to $52.3 million from $46.4 million, an increase of 13 percent.

-- Pro forma net earnings before extraordinary income increased to $4.6 million from $4.0 million, an increase of 15 percent.

-- Pro forma earnings per share decreased to $0.32 from $0.34. Excluding pooling acquisitions costs, earnings per share for the third quarter 1996 would be $0.34. Weighted average shares outstanding increased to 14.4 million from 11.6 million.

Comparing the nine months ended Sept. 30, 1996 with the same period last year:

-- Pro forma revenue increased to $139.1 million from $121.4 million, an increase of 15 percent.

-- Pro forma net earnings before extraordinary item increased to $8.4 million from $7.0 million, an increase of 20 percent.

-- Pro forma earnings per share increased to $0.64 from $0.60. Excluding non-recurring acquisitions costs, earnings per share for 1996 would be $0.66. Weighted average shares outstanding increased to 13.1 million from 11.6 million.

Revenues for the quarter expanded in all areas of operations. Profitability increased in spite of continued higher fuels costs in the quarter. These costs, along with the costs of establishing corporate headquarters group in Houston, Texas were offset by growth of the company's operations and by certain purchasing economies of scale, resulting in lower insurance and financing costs.

Coach USA is the largest provider of motorcoach tour and charter services and one of the largest providers of motorcoach commuter and transit services in the United States.

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Note: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current plans and expectations of Coach USA, Inc. and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements.

Important factors that could cause actual results to differ include, among others, risks associated with acquisitions, fluctuations in operating results because of acquisitions and variations in stock prices, changes in government regulations, competition, and risks of operations and growth of the newly acquired businesses. -0-

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    Coach USA, Inc.
    Pro forma Combined Statements of Income
    For the three months and nine months ended Sept. 30, 1996 & 1995
    (Unaudited - In thousands except for EPS)


                                      Three Months Ended
                                      ------------------
                            9/30/96        %     9/30/95        %
                           --------   ------    --------   ------
    Revenue                $ 52,278   100.0%    $ 46,444   100.0%
    Operating Expense        36,711    70.2%      33,615    72.4%
                           --------   ------    --------   ------
       Gross Profit          15,567    29.8%      12,829    27.6%

    S,G & A Expenses          5,691    11.7%       4,568     9.8%
                           --------   ------    --------   ------
       Operating Income       9,876    18.1%       8,261    17.8%

    Interest and Other
     Expense                  1,897     2.9%       1,378     3.0%

    Income Before Income
     Taxes                    7,979    15.3%       6,883    14.8%
    Provision for Income
     Taxes                    3,341     6.4%       2,873     6.2%
                           --------   ------    --------   ------

    Income before
     extraordinary item       4,638     8.9%       4,010     8.6%

    Extraordinary item
     (net of income tax)      4,205                   --
                           --------             --------

    Net Income                8,843                4,010
                           ========             ========

    Weighted Avg. Shares     14,424               11,643

    EPS                       $0.61                $0.34
                           ========             ========
    EPS (before
     extraordinary item)      $0.32                $0.34
                           ========             ========


                                      Nine Months Ended
                                      -----------------
                            9/30/96        %     9/30/95        %
                           --------   ------    --------   ------
    Revenue                $139,085   100.0%    $121,385   100.0%
    Operating Expense       103,457    74.4%      91,694    75.5%
                           --------   ------    --------   ------
       Gross Profit          35,628    25.6%      29,691    24.5%
    S,G & A Expenses         15,820    11.4%      13,595    11.2%
                           --------   ------    --------   ------
       Operating Income      19,808    14.2%      16,096    13.3%

    Interest and Other
     Expense                  5,089     3.7%       3,887     3.2%

    Income Before Income
     Taxes                   14,719    10.6%      12,209    10.1%
    Provision for Income
     Taxes                    6,289     4.5%       5,239     4.3%
                           --------   ------    --------   ------

    Income before
     extraordinary item       8,430     6.1%       6,970     5.7%

    Extraordinary item
     (net of income tax)      4,205                   --
                           --------             --------

    Net Income               12,635                6,970
                           ========             ========

    Weighted Avg. Shares     13,083               11,643

    EPS                       $0.97                $0.60
                           ========             ========
    EPS (before
     extraordinary item)      $0.64                $0.60
                           ========             ========

Note 1: The above pro forma net income for the 1996 periods includes

acquisition costs of $340 related to the August acquisitions.

Excluding these costs, pro forma net income before

extraordinary item would have been $4,842 and $8,635 and pro

forma EPS would have been $0.34 and $0.66 for the three

months and nine months ended Sept. 30, 1996.

Note 2: On May 17, 1996, Coach USA acquired six motorcoach businesses

(the "Founding Companies"), simultaneously with the closing

of its initial public offering. Additionally the Company

completed the mergers of the pooled and purchased companies

in August 1996. The above pro forma data reflects the

results of the Founding Companies and pooled companies

combined as of Jan. 1, 1995, and the purchased companies from

their date of acquisition. The actual consolidated reported

results of the Company for the three months and nine months

ended Sept. 30, 1996 reflect revenues of $52,278 and $94,147,

net income of $3,911 and $6,786 and net income per common

share of $0.27 and $0.47.

Note 3: Prior to the Mergers, the Founding and pooled companies had

been managed as independent private companies. In

conjunction with the mergers, certain stockholders have

agreed to reductions in salaries and benefits and have

entered into employment agreements. The pro forma data

presents compensation at the level the stockholders agreed to

receive subsequent to the Mergers. In addition, the pro

forma data presents the incremental provision for income

taxes as if all entities had been subject to federal and

state income taxes throughout the periods.

Note 4: The extraordinary item in the quarter is the result of debt

forgiveness at one of the pooled companies.

CONTACT: Coach USA, Inc.

Dick Kristinik or Larry King, 888/COACH-US