Avis Budget Group Reports Boost in Quarterly Revenue, EBITA
By Mimi Kmet
August 02, 2012 10:51 PM
Avis Budget Group, Inc. reported revenue of $1.9 billion for its second quarter ended June 30, 2012, a 32 percent increase over the same quarter in 2011. This increase was primarily due to a 34 percent increase in rental days, a 3 percent decrease in average daily rate and a 43 percent increase in ancillary revenues, according to the company. Excluding certain items, adjusted EBITDA increased 39 percent to $266 million. The company reported net income of $112 million and diluted earnings per share of 94 cents, excluding certain items. GAAP net income of $79 million was impacted by debt extinguishment costs and acquisition-related charges.
As previously announced, the company completed its acquisition of Avis Europe plc on Oct. 3, 2011. For the quarter ended June 30, 2012, the acquisition of Avis Europe contributed revenue of $417 million and adjusted EBITDA of $46 million, excluding certain items. Excluding Avis Europe, the company's revenue grew 3 percent in the second quarter, and adjusted EBITDA increased 15 percent, excluding certain items.
The company expects its full-year 2012 revenue to be approximately $7.2 billion to $7.5 billion, a 22 percent to 27 percent increase compared to 2011. The decline in the company's revenue estimate compared to its previous estimate of $7.3 billion to $7.6 billion is due to movement in currency exchange rates, according to the company. Avis Budget Group expects its 2012 adjusted EBITDA to be approximately $825 million to $875 million, excluding certain items, an increase of 35 percent to 43 percent compared to the prior year.
Fleet costs in North America are expected to decline 3 percent to 8 percent on a per-unit basis compared to 2011, consistent with the company's prior estimate. Interest expense related to corporate debt is expected to be approximately $260 million to $265 million in 2012, which represents a modest increase versus the company's prior estimate due to year-to-date hedging costs. The company also expects that its 2012 non-vehicle depreciation and amortization expense (excluding the amortization of intangible assets related to the acquisition of Avis Europe) will be approximately $110 million and that its pretax income will be approximately $450 million to $505 million, excluding certain items.
The company expects that its effective tax rate in 2012 will be approximately 34 percent to 38 percent, excluding items, and that its diluted share count will be approximately 122 million. Based on these expectations, the company estimates that its 2012 diluted earnings per share, excluding certain items, will be approximately $2.35 to $2.65.
The company expects to reach a run-rate of more than $35 million of annual synergies from the acquisition of Avis Europe by the fourth quarter. It also is continuing its efforts to reduce costs and enhance productivity and expects that such initiatives will provide incremental benefits of more than $45 million in 2012.