UPDATE: Avis Budget Group (CAR) Prelim. FY17 Revenue Tops Views

(Updated - January 16, 2018 8:26 AM EST)

(Updated corrects to compare revenue to FY17 consensus. Prior compared to FY18 consensus)

Avis Budget Group, Inc. (NASDAQ: CAR) announced today that, based on preliminary data, it estimates that for the full-year ended December 31, 2017, revenues increased to approximately $8.85 billion, and it expects pretax income to be between $205 million and $215 million and Adjusted pretax income to be between $340 million and $350 million. The Company also expects Adjusted EBITDA to be within a range of $730 million to $740 million. A reconciliation from pretax income to both Adjusted pretax income and Adjusted EBITDA, together with other information regarding these non-GAAP financial measures, is included in “Non-GAAP Financial Measures” below.

(Street sees FY17 Revenue of $8.8 billion)

“Over the past two years we were confronted with nearly $300 million of unexpected pricing and fleet cost challenges. In the face of these extraordinary market pressures, we took decisive steps to reduce costs, including implementing voluntary retirement programs and other actions that produced more than $75 million of cost savings in 2017 alone,” said Larry De Shon, Avis Budget Group President and Chief Executive Officer. “In the fourth quarter of 2017, we generated our second consecutive quarter of positive year-over-year pricing in the Americas. For full-year 2017, we achieved significantly improved productivity from our manpower planning and shuttling initiatives and generated substantial benefits from our initiative to sell more of our used cars through low-cost alternative disposition channels. Additionally, we began the rollout of our sophisticated new revenue management system with algorithms that will assist us with dynamic pricing and setting fleet levels based on the available demand.”

Mr. De Shon continued: “We also continued to evolve and maintain our leadership position throughout 2017 as the mobility landscape changes. We commenced a partnership with Waymo to offer fleet support and maintenance services for its self-driving car program, and teamed up with RocketSpace, a leading technology accelerator for start-ups and corporate innovators, to identify market opportunities and fuel cross-industry innovation in areas such as autonomous and electronic vehicles. We also expanded Zipcar’s global presence, establishing its car sharing service in Taipei, Taiwan, opening licensee locations in Costa Rica and Iceland, launching Zipcar Flex in the U.K. and rolling out a new cost-effective mobility option for commuters who don’t want to bear the cost of car ownership. Additionally, we announced the launch of our first-ever "Mobility Lab," which serves as a pilot for fully-connected vehicles and operations in the greater Kansas City, Missouri area.” “Despite industry challenges, Avis Budget Group has continued to invest in our business and we believe there are considerable opportunities to leverage technology to further lower our cost structure and drive efficiencies throughout the organization while also pursuing growth initiatives such as our connected car and mobility solutions.” said Mr. De Shon.

Based on preliminary data, the Company estimates that its cash balance as of December 31, 2017 was more than $600 million and that its corporate debt balance was approximately $3.5 billion. The Company expects to continue to face certain ongoing headwinds in 2018, including the incremental impact of rising interest rates and other items, partially offset by the full-year benefit of the steps taken to reduce costs. The Company’s financial planning and budgeting process for fiscal 2018 is still underway. The Company will therefore provide further guidance on its 2018 outlook with its full-year earnings announcement in February, as usual.

Other Items

The Company also announced plans to report its fourth quarter and full-year 2017 results after the market close on Wednesday, February 21, 2018, and to host a conference call for investors to discuss these results and its outlook on Thursday, February 22, 2018 at 8:30 a.m. Eastern time.

Investors may access the call at ir.avisbudgetgroup.com, or by dialing (630) 395-0021 and providing the participant passcode 2995545. Investors are encouraged to dial in approximately 10 minutes prior to the call. A web replay will be available at ir.avisbudgetgroup.com following the call. A telephone replay will be available from 11:00 a.m. Eastern time on February 22, 2018 until 10:00 p.m. on March 8, 2018 at (203) 369-3463. About Avis Budget GroupAvis Budget Group, Inc. is a leading global provider of mobility solutions through its Avis and Budget brands, with more than 11,000 rental locations in approximately 180 countries around the world, and through its Zipcar brand, which is the world’s leading car sharing network. Avis Budget Group operates most of its car rental offices in North America, Europe and Australia directly, and operates primarily through licensees in other parts of the world. Avis Budget Group has approximately 30,000 employees and is headquartered in Parsippany, N.J. For more information, visit www.avisbudgetgroup.com.

In the table below, we provide an estimate of the items we exclude from our calculation of Adjusted pretax income and Adjusted EBITDA for 2017, which primarily include restructuring and other related charges, acquisition-related amortization expense, transaction-related costs, net, and charges for legal matters, net.

Reconciliation of pretax income to Adjusted EBITDA		In millions
Pretax income		$205-$215
Add:	Estimated certain items	$135
Adjusted pretax income		$340-$350
Add:	Non-vehicle related depreciation and amortization (excluding acquisition-related amortization expense)	$200
	Interest expense related to corporate debt, net (excluding early extinguishment of debt)	$190
Adjusted EBITDA		$730-$740

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Alphabet stock surges 11% to record high on Q1 earnings beat, first-ever dividend
• VinFast Auto (VFS) Appoints Tham Chee Soon to its Board, Ngan Wan Sing Winston Resigns
• Portland General Electric (POR) Tops Q1 EPS by 6c