PARSIPPANY, N.J., Aug. 05, 2019 (GLOBE NEWSWIRE) — Avis Budget Group, Inc. (NASDAQ: CAR) today reported results for its second quarter ended June 30, 2019.
Second Quarter Highlights:
- Record second quarter revenues of $2.3 billion, including the negative impact of $46 million, or 2%, from currency exchange rate movements
- Net income increased to $62 million, a $36 million increase from prior year, for diluted earnings of $0.81 per share
- Adjusted EBITDA increased to $175 million, up 9% from prior year
- Adjusted diluted earnings of $0.79 per share increased by 39%
- Reaffirm projected full-year 2019 guidance
- Increased share repurchase authorization by $100 million to a total of $250 million, or 9% of shares outstanding
Total Company
We set record second quarter revenues with a 2% increase in Rental Days, partially offset by currency exchange movements. Overall Per-Unit Fleet Costs improved 8% year-over-year, while utilization also improved 70 basis points. For the quarter, net income was $62 million, or $0.81 per diluted share. Adjusted EBITDA was $175 million and Adjusted net income was $61 million, or $0.79 per diluted share.
“In the second quarter, we achieved record revenues and improved our Adjusted EBITDA margin by 90 basis points in constant currency. We also achieved record Net Promoter Scores in both the Americas and International regions,” said Larry De Shon, Avis Budget Group President and Chief Executive Officer. “Our earnings were driven by a continued focus on more profitable rentals as evidenced by our eighth consecutive quarter of increased leisure pricing in the Americas, and our ability to capitalize on a strong residual fleet environment.”
“We are executing on our strategic initiatives and are seeing meaningful benefits from our partnerships with Lyft, Via, Fetch, Waymo, and Otonomo. We are also pleased to announce our new partnership with Uber to expand our ride-hail fleet initiative. These initiatives continue to provide opportunities within the mobility industry for our customers while improving profitability and maintaining our position as a global leader in mobility solution.
Americas
Revenues in the quarter were up 2% compared to the prior year due to a 2% increase in Rental Days and a 1% increase in Revenue per Day. Per-Unit Fleet Costs decreased by 10% as we continue to utilize alternative disposition channels to take advantage of strong residual values. Adjusted EBITDA increased to $152 million and margin expanded to 9.3%.
Joe Ferraro, President, Americas commented, “Our record revenues along with our growing alternative channel dispositions expanded our Adjusted EBITDA margins over 250 basis points from the prior year.”
International
Revenues in the quarter were 4% lower driven by a 6% impact from currency exchange movements. Rental Days increased 3%, partially offset by a 1% decrease in Revenue per Day, excluding exchange rate effects. Per-Unit Fleet Costs were flat in the quarter, excluding exchange rate effects, while utilization improved 60 basis points. This resulted in Adjusted EBITDA of $39 million for the quarter.
“Our customer approval rating hit record highs, increasing by 650 basis points over the prior year,” said Keith Rankin, President, International.
Capital Allocation and Liquidity
In July, we completed an offering of $400 million of 5.75% Senior Notes due July 2027. We subsequently redeemed a portion of our outstanding 5.50% Senior Notes due April 2023.
As of June 30, 2019, our corporate debt was approximately $3,535 million and cash and cash equivalents totaled $534 million, bringing net corporate debt to $3,001 million, and our net corporate leverage ratio to 3.8x. We also announced that our share repurchase authorization has been increased by an additional $100 million, which authorizes a total of $250 million in repurchases.
Weighted average diluted shares outstanding were 76.4 million in the quarter compared to 81.5 million in the prior year, a 6% year-over-year reduction.
Investor Conference Call
We will host a conference call to discuss second quarter results and its outlook on August 6, 2019, at 8:30 a.m. (ET). Investors may access the call at ir.avisbudgetgroup.com or by dialing (877)-407-2991 and a replay will be available on our website and at (877)-660-6853 using conference code 13692335.
Outlook
Our full-year 2019 outlook includes non-GAAP financial measures and excludes the effect of future changes in currency exchange rates. We believe 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 measures and the degree of uncertainty associated with forecasting the reconciling items and amounts. We further believe 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 such reconciling items could be significant to our future quarterly or annual results.
2019 guidance: