Coach USA, Inc. Announces Record Third Quarter Results; Diluted EPS of $0.81 on a 48% Revenue Increase.

HOUSTON--(BUSINESS WIRE)--Nov. 3, 1998--Coach USA, Inc., (NYSE: CUI), the largest motorcoach company in the United States, today announced record results for the quarter ended September 30, 1998.

Revenues increased 48% to $232.9 million for the quarter ended September 30, 1998 from $157.1 million for 1997. Third quarter 1998 net income, before extraordinary items, increased 66% to $21.8 million compared to $13.1 million for the similar period in 1997. Diluted earnings per share, before extraordinary items, rose to $0.81 for the period ended September 30, 1998 compared to $0.60 for the corresponding 1997 period.

For the nine months ended September 30, 1998, the company reported revenues of $579.6 million compared with $392.4 million for the first nine months of 1997. Net income, before extraordinary items, for the first nine months of 1998 was $39.7 million, or $1.58 per diluted share, compared with $25.1 million, or $1.18 per diluted share, in the first nine months of 1997.

Increased revenues for the quarter resulted from both acquisitions and continued strong internal growth. Profitability increased as a result of implementation of the Company s operational and financial synergies.

Richard Kristinik, Chairman and CEO, stated, "We are very pleased with our strong results this quarter. The third quarter is traditionally our strongest seasonal quarter due to our tour and charter business. Same store revenue growth remains strong with continuing expansion opportunities throughout the company. We are proceeding with our initiatives to consolidate several facilities and we expect to see increased operating efficiencies in 1999."

Commenting on the acquisition program, Mr. Kristinik stated, "Our acquisition program remains very active. We are continuing our focus on strategic acquisitions and tuck-in opportunities and have a significant unused credit facility enabling us to continue these efforts at a strong pace."

Since its IPO in May 1996, Coach USA has completed over 70 acquisitions. Coach USA s current annualized revenue run rate is over $870.

Coach USA is the largest provider of motorcoach services in the United States.

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 the 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, risks of operations, and growth of the newly acquired businesses. -0-

                            COACH USA, INC.
                         Statements of Income
     For the three and nine months ended September 30, 1998 & 1997
               (Unaudited - In thousands except for EPS)


                         Three Months Ended       Nine Months Ended
                      9/30/98      9/30/97(1)   9/30/98     9/30/97(1)
Revenue             $ 232,916    $ 157,109    $ 579,552   $ 392,353

Operating Expenses    161,777      111,547      419,388     288,565
     Gross Profit      71,139       45,562      160,164     103,788
S, G & A Expenses      22,929       15,859       63,426      43,007
Amortization            2,513        1,037        5,586       2,380
Merger costs -
    poolings (2)            0          524            0         918
     Operating Income  45,697       28,142       91,152      57,483

Interest and Other
    Expenses            9,979        6,861       26,149      15,544

Income Before
    Income Taxes       35,718       21,281       65,003      41,939
Provision for
    Income Taxes       13,930        8,203       25,352      16,839

Income before
   extraordinary items 21,788       13,078       39,651      25,100

Extraordinary items
   (net of income taxes) (111)        (203)        (537)       (602)

Net Income          $  21,677    $  12,875     $ 39,114   $  24,498

Weighted Avg. Shares
   -Basic              25,288       21,555       23,684      21,312
Weighted Avg. Shares
   -Diluted            27,434       23,187       25,868      22,773

 EPS - Basic (3):
EPS                 $    0.86    $   0.60      $   1.65   $    1.15
EPS (before
extraordinary items)$    0.86    $   0.61      $   1.67   $    1.18
EPS(2)              $    0.86    $   0.63      $   1.67   $    1.22

 EPS - Diluted (3):
EPS                 $    0.81    $   0.57      $   1.56   $    1.11
EPS (before extraordinary
 items) (2)         $    0.81    $   0.58      $   1.58   $    1.14
EPS (2)             $    0.81    $   0.60      $   1.58   $    1.18

Depreciation           12,720       8,490        33,440      22,419
Amortization            2,513       1,037         5,586       2,380
EBITDA                 60,930      38,193       130,178      83,200

Note 1: Prior to the acquisitions, the pooled companies were managed

as independent private companies. In conjunction with the

acquisitions, certain stockholders of the pooled companies have

agreed to reductions in salaries and benefits and have entered

into employment agreements. Accordingly, the pro forma data for

the three and nine months ended September 30, 1997, includes an

adjustment to present compensation at the level the stockholders

agreed to receive subsequent to the acquisitions. 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 2: The above pro forma net income for the three and nine months

ended September 30, 1997 includes non-recurring acquisition costs

associated with certain poolings-of-interest transactions of $524

and $918, respectively. Excluding these costs, pro forma net

income before extraordinary items would have been $13,602 and

$26,018 for the three and nine months ended September 30, 1997,

respectively.

Note 3: All earnings per share data presented above have been

calculated in accordance with the new Statement of Financial

Accounting Standards No. 128. The diluted earnings per share data

presented above reflects the dilutive effect, if any, of stock

options, warrants and convertible subordinated notes which were

outstanding during the periods presented.