PARSIPPANY, N.J., May 01, 2023 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (NASDAQ: CAR) announced financial results for first quarter 2023 today.
We ended the quarter with revenues 5% above the first quarter 2022, at $2.6 billion, driven by strong demand and revenue per day in-line with prior year.
Net income was $312 million and our Adjusted EBITDA1 was $535 million. Utilization was up a point compared to first quarter 2022, at 68.4%, as our fleet continues to be well positioned to meet growing demand.
Our liquidity position at the end of the quarter was approximately $1.4 billion, with an additional $2.3 billion of fleet funding capacity. We have well-laddered corporate debt and no meaningful maturities until late 2024.
“Our first quarter demand was strong, with our international inbound and commercial customers continuing their improved growth. This culminated with the most rental transactions in our first quarter history,” said Joe Ferraro, Avis Budget Group Chief Executive Officer. “Despite this growth in activity, we managed to improve utilization and rigorously control costs to continue to deliver strong earnings. I want to thank our team, all around the world, for all their hard work. We look forward to continued success as we transition towards our seasonal peak.”
Q1 HIGHLIGHTS
INVESTOR CONFERENCE CALL
We will host a conference call to discuss our first quarter results on May 2, 2023, at 8:30 a.m. (ET). Investors may access the call on our investor relations website at ir.avisbudgetgroup.com or by dialing (877) 407-2991 and a replay of the call will be available on our website and at (877) 660-6853 using conference code 13737826.
1Adjusted EBITDA and certain other measures in this release are non-GAAP financial measures. See "Non-GAAP Financial Measures and Key Metrics" and the tables that accompany this release for the definitions and reconciliations of these non-GAAP measures to the most comparable GAAP measures.
ABOUT AVIS BUDGET GROUP
We are a leading global provider of mobility solutions, both through our Avis and Budget brands, which have more than 10,000 rental locations in approximately 180 countries around the world, and through our Zipcar brand, which is the world's leading car sharing network. We operate most of our car rental locations in North America, Europe and Australasia directly, and operate primarily through licensees in other parts of the world. We are headquartered in Parsippany, N.J. More information is available at avisbudgetgroup.com.
NON-GAAP FINANCIAL MEASURES AND KEY METRICS
This release includes financial measures such as Adjusted EBITDA and Adjusted Free Cash Flow, as well as other financial measures, that are not considered generally accepted accounting principle (“GAAP”) measures as defined under SEC rules. Important information regarding such non-GAAP measures is contained in the tables within this release and in Appendix I, including the definitions of these measures and reconciliations to the most comparable GAAP measures.
We measure performance principally using the following key metrics: (i) rental days, (ii) revenue per day, (iii) vehicle utilization, and (iv) per-unit fleet costs. Our rental days, revenue per day and vehicle utilization metrics are all calculated based on the actual rental of the vehicle during a 24-hour period. We believe that this methodology provides management with the most relevant metrics in order to effectively manage the performance of our business. Our calculations may not be comparable to the calculations of similarly-titled metrics by other companies. We present currency exchange rate effects on our key metrics to provide a method of assessing how our business performed excluding the effects of foreign currency rate fluctuations. Currency exchange rate effects are calculated by translating the current-period's results at the prior-period average exchange rates plus any related gains and losses on currency hedges.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained herein are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by any such forward-looking statements. Forward-looking statements include information concerning our future financial performance, business strategy, projected plans and objectives. These statements may be identified by the fact that they do not relate to historical or current facts and may use words such as “believes,” “expects,” “anticipates,” “will,” “should,” “could,” “may,” “would,” “intends,” “projects,” “estimates,” “plans,” “forecasts,” “guidance,” and similar words, expressions or phrases. The following important factors and assumptions could affect our future results and could cause actual results to differ materially from those expressed in such forward-looking statements. These factors include, but are not limited to:
We operate in a continuously changing business environment and new risk factors emerge from time to time. New risk factors, factors beyond our control, or changes in the impact of identified risk factors may cause actual results to differ materially from those set forth in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. Moreover, we do not assume responsibility if future results are materially different from those forecasted or anticipated. For additional information concerning forward-looking statements and other important factors, refer to our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (the "SEC").
Investor Relations Contact: | Media Relations Contact: |
David Calabria, IR@avisbudget.com | James Tomlinson, ABGPress@edelman.com |
*** Tables 1 - 6 and Appendix I attached *** |
Table 1
Avis Budget Group, Inc.
SUMMARY DATA SHEET (Unaudited)
(In millions, except per share data)
Three Months Ended March 31, | ||||||||||
2023 | 2022 | % Change | ||||||||
Income Statement and Other Items | ||||||||||
Revenues | $ | 2,557 | $ | 2,432 | 5% | |||||
Income before income taxes | 397 | 695 | (43)% | |||||||
Net income | 312 | 527 | (41)% | |||||||
Earnings per share - diluted | 7.72 | 9.71 | (20)% | |||||||
Adjusted EBITDA(A) | 535 | 810 | (34)% | |||||||
As of | ||||||||||
March 31, 2023 | December 31, 2022 | |||||||||
Balance Sheet Items | ||||||||||
Cash and Cash Equivalents | $ | 548 | $ | 570 | ||||||
Program cash and restricted cash | 81 | 72 | ||||||||
Vehicles, net | 17,434 | 15,961 | ||||||||
Debt under vehicle programs | 14,777 | 13,809 | ||||||||
Corporate debt | 4,696 | 4,671 | ||||||||
Stockholders' equity attributable to Avis Budget Group, Inc. | (444 | ) | (703 | ) | ||||||
Three Months Ended March 31, | ||||||||||
2023 | 2022 | % Change | ||||||||
Segment Results | ||||||||||
Revenues | ||||||||||
Americas | $ | 2,016 | $ | 2,000 | 1% | |||||
International | 541 | 432 | 25% | |||||||
Corporate and Other | — | — | n/m | |||||||
Total Company | $ | 2,557 | $ | 2,432 | 5% | |||||
Adjusted EBITDA(A) | ||||||||||
Americas | $ | 516 | $ | 810 | (36)% | |||||
International | 50 | 23 | 117% | |||||||
Corporate and Other | (31 | ) | (23 | ) | 35% | |||||
Total Company | $ | 535 | $ | 810 | (34)% | |||||
_______ | |
n/m | Not meaningful. |
(A) | Refer to Table 5 for the reconciliation of net income to Adjusted EBITDA and Appendix I for the related definition of the non-GAAP financial measure. |
Table 2
Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except per share data)
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 2,557 | $ | 2,432 | ||||
Expenses | ||||||||
Operating | 1,307 | 1,147 | ||||||
Vehicle depreciation and lease charges, net | 265 | 111 | ||||||
Selling, general and administrative | 324 | 283 | ||||||
Vehicle interest, net | 133 | 77 | ||||||
Non-vehicle related depreciation and amortization | 56 | 58 | ||||||
Interest expense related to corporate debt, net: | ||||||||
Interest expense | 73 | 53 | ||||||
Restructuring and other related charges | 4 | 8 | ||||||
Other (income) expense, net | (2 | ) | — | |||||
Total expenses | 2,160 | 1,737 | ||||||
Income before income taxes | 397 | 695 | ||||||
Provision for income taxes | 85 | 168 | ||||||
Net income | 312 | 527 | ||||||
Less: net income (loss) attributable to non-controlling interests | — | (2 | ) | |||||
Net income attributable to Avis Budget Group, Inc | $ | 312 | $ | 529 | ||||
Earnings per share | ||||||||
Basic | $ | 7.88 | $ | 9.96 | ||||
Diluted | $ | 7.72 | $ | 9.71 | ||||
Weighted average shares outstanding | ||||||||
Basic | 39.6 | 53.1 | ||||||
Diluted | 40.4 | 54.5 |
Table 3
Avis Budget Group, Inc.
KEY METRICS SUMMARY (Unaudited)
Three Months Ended March 31, | |||||||||||
2023 | 2022 | % Change | |||||||||
Americas | |||||||||||
Rental Days (000’s) | 28,274 | 27,482 | 3% | ||||||||
Revenue per Day | $ | 71.30 | $ | 72.76 | (2)% | ||||||
Revenue per Day, excluding exchange rate effects | $ | 71.49 | $ | 72.76 | (2)% | ||||||
Average Rental Fleet | 452,535 | 443,356 | 2% | ||||||||
Vehicle Utilization | 69.4 | % | 68.9 | % | 0.5 pps | ||||||
Per-Unit Fleet Costs per Month | $ | 128 | $ | 20 | n/m | ||||||
Per-Unit Fleet Costs per Month, excluding exchange rate effects | $ | 128 | $ | 20 | n/m | ||||||
International | |||||||||||
Rental Days (000’s) | 9,962 | 8,581 | 16% | ||||||||
Revenue per Day | $ | 54.28 | $ | 50.42 | 8% | ||||||
Revenue per Day, excluding exchange rate effects | $ | 57.50 | $ | 50.42 | 14% | ||||||
Average Rental Fleet | 168,298 | 150,788 | 12% | ||||||||
Vehicle Utilization | 65.8 | % | 63.2 | % | 2.6 pps | ||||||
Per-Unit Fleet Costs per Month | $ | 179 | $ | 186 | (4)% | ||||||
Per-Unit Fleet Costs per Month, excluding exchange rate effects | $ | 189 | $ | 186 | 2% | ||||||
Total | |||||||||||
Rental Days (000’s) | 38,236 | 36,063 | 6% | ||||||||
Revenue per Day | $ | 66.87 | $ | 67.44 | (1)% | ||||||
Revenue per Day, excluding exchange rate effects | $ | 67.84 | $ | 67.44 | 1% | ||||||
Average Rental Fleet | 620,833 | 594,144 | 4% | ||||||||
Vehicle Utilization | 68.4 | % | 67.4 | % | 1.0 pps | ||||||
Per-Unit Fleet Costs per Month | $ | 142 | $ | 62 | n/m | ||||||
Per-Unit Fleet Costs per Month, excluding exchange rate effects | $ | 145 | $ | 62 | n/m | ||||||
_______ | |||||||||||
n/m Not meaningful. | |||||||||||
Refer to Table 6 for key metrics calculations and Appendix I for key metrics definitions. |
Table 4
Avis Budget Group, Inc.
CONSOLIDATED CONDENSED SCHEDULE OF CASH FLOW AND ADJUSTED FREE CASH FLOW (Unaudited)
(In millions)
CONSOLIDATED CONDENSED SCHEDULE OF CASH FLOW | Three Months Ended March 31, 2023 | ||
Operating Activities | |||
Net cash provided by operating activities | $ | 819 | |
Investing Activities | |||
Net cash used in investing activities exclusive of vehicle programs | (47 | ) | |
Net cash used in investing activities of vehicle programs | (1,631 | ) | |
Net cash used in investing activities | (1,678 | ) | |
Financing Activities | |||
Net cash used in financing activities exclusive of vehicle programs | (58 | ) | |
Net cash provided by financing activities of vehicle programs | 899 | ||
Net cash provided by financing activities | 841 | ||
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | 5 | ||
Net change in cash and cash equivalents, program and restricted cash | (13 | ) | |
Cash and cash equivalents, program and restricted cash, beginning of period | 642 | ||
Cash and cash equivalents, program and restricted cash, end of period | $ | 629 |
ADJUSTED FREE CASH FLOW(A) | |||
Adjusted EBITDA(B) | $ | 535 | |
Interest expense related to corporate debt, net (excluding early extinguishment of debt) | (73 | ) | |
Working capital and other | 145 | ||
Capital expenditures(C) | (56 | ) | |
Tax payments, net of refunds | (19 | ) | |
Vehicle programs and related(D) | (502 | ) | |
Adjusted Free Cash Flow(B) | $ | 30 | |
Acquisition and related payments, net of acquired cash | (3 | ) | |
Borrowings, net of debt repayments | (5 | ) | |
Repurchases of common stock | (51 | ) | |
Change in program and restricted cash | 9 | ||
Other receipts (payments), net | 4 | ||
Foreign exchange effects, financing costs and other | 3 | ||
Net change in cash and cash equivalents, program and restricted cash (per above) | $ | (13 | ) |
_______ | |
Refer to Appendix I for the definitions of non-GAAP financial measures Adjusted EBITDA and Adjusted Free Cash Flow. | |
(A) | This presentation demonstrates the relationship between Adjusted EBITDA and Adjusted Free Cash Flow. We believe it is useful to understand this relationship because it demonstrates how cash generated by our operations is used. This presentation is not intended to be a reconciliation of these non-GAAP measures, which can be found in Table 5. |
(B) | Refer to Table 5 for the reconciliations of net income to Adjusted EBITDA and net cash provided by operating activities to Adjusted Free Cash |
(C) | Includes $12 million of cloud computing implementation costs. |
(D) | Includes vehicle-backed borrowings (repayments) that are incremental to amounts required to fund vehicle and vehicle-related assets. |
Table 5
Avis Budget Group, Inc.
RECONCILIATION OF NON-GAAP MEASURES (Unaudited)
(In millions)
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Reconciliation of Net income to Adjusted EBITDA: | ||||||||
Net income | $ | 312 | $ | 527 | ||||
Provision for income taxes | 85 | 168 | ||||||
Income before income taxes | 397 | 695 | ||||||
Non-vehicle related depreciation and amortization | 56 | 58 | ||||||
Interest expense related to corporate debt, net | 73 | 53 | ||||||
Restructuring and other related charges | 4 | 8 | ||||||
Other (income) expense, net | (2 | ) | — | |||||
Reported within operating expenses: | ||||||||
Cloud computing costs | 7 | 2 | ||||||
COVID-19 charges, net | — | (7 | ) | |||||
Unprecedented personal-injury and other legal matters, net | — | 1 | ||||||
Adjusted EBITDA | $ | 535 | $ | 810 |
Reconciliation of Net cash provided by operating activities to Adjusted Free Cash Flow: | |||||||
Net cash provided by operating activities | $ | 819 | |||||
Net cash used in investing activities of vehicle programs | (1,631 | ) | |||||
Net cash provided by financing activities of vehicle programs | 899 | ||||||
Capital expenditures | (44 | ) | |||||
Change in program and restricted cash | (9 | ) | |||||
Other receipts (payments), net | (4 | ) | |||||
Adjusted Free Cash Flow | $ | 30 |
_______ |
Refer to Appendix I for the definition of Adjusted EBITDA and Adjusted Free Cash Flow, non-GAAP financial measures. Adjusted EBITDA includes stock-based compensation expense and vehicle related deferred financing fee amortization in the aggregate totaling $15 million and $12 million in the three months ended March 31, 2023 and 2022, respectively. |
Table 6
Avis Budget Group, Inc.
KEY METRICS CALCULATIONS (Unaudited)
($ in millions, except as noted)
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||||||||||||||||||
Americas | International | Total | Americas | International | Total | |||||||||||||||||||
Revenue per Day (RPD) | ||||||||||||||||||||||||
Revenue | $ | 2,016 | $ | 541 | $ | 2,557 | $ | 2,000 | $ | 432 | $ | 2,432 | ||||||||||||
Currency exchange rate effects | 5 | 32 | 37 | — | — | — | ||||||||||||||||||
Revenue excluding exchange rate effects | $ | 2,021 | $ | 573 | $ | 2,594 | $ | 2,000 | $ | 432 | $ | 2,432 | ||||||||||||
Rental days (000's) | 28,274 | 9,962 | 38,236 | 27,482 | 8,581 | 36,063 | ||||||||||||||||||
RPD excluding exchange rate effects (in $'s) | $ | 71.49 | $ | 57.50 | $ | 67.84 | $ | 72.76 | $ | 50.42 | $ | 67.44 | ||||||||||||
Vehicle Utilization | ||||||||||||||||||||||||
Rental days (000's) | 28,274 | 9,962 | 38,236 | 27,482 | 8,581 | 36,063 | ||||||||||||||||||
Average rental fleet | 452,535 | 168,298 | 620,833 | 443,356 | 150,788 | 594,144 | ||||||||||||||||||
Number of days in period | 90 | 90 | 90 | 90 | 90 | 90 | ||||||||||||||||||
Available rental days (000's) | 40,728 | 15,147 | 55,875 | 39,902 | 13,571 | 53,473 | ||||||||||||||||||
Vehicle utilization | 69.4 | % | 65.8 | % | 68.4 | % | 68.9 | % | 63.2 | % | 67.4 | % | ||||||||||||
Per-Unit Fleet Costs | ||||||||||||||||||||||||
Vehicle depreciation and lease charges, net | $ | 174 | $ | 90 | $ | 264 | $ | 26 | $ | 85 | $ | 111 | ||||||||||||
Currency exchange rate effects | — | 5 | 5 | — | — | — | ||||||||||||||||||
$ | 174 | $ | 95 | $ | 269 | $ | 26 | $ | 85 | $ | 111 | |||||||||||||
Average rental fleet | 452,535 | 168,298 | 620,833 | 443,356 | 150,788 | 594,144 | ||||||||||||||||||
Per-unit fleet costs (in $'s) | $ | 386 | $ | 566 | $ | 434 | $ | 59 | $ | 558 | $ | 186 | ||||||||||||
Number of months in period | 3 | 3 | 3 | 3 | 3 | 3 | ||||||||||||||||||
Per-unit fleet costs per month excluding exchange rate effects (in $'s) | $ | 128 | $ | 189 | $ | 145 | $ | 20 | $ | 186 | $ | 62 |
_______ | |||
Our calculation of rental days and revenue per day may not be comparable to the calculation of similarly-titled metrics by other companies. Currency exchange rate effects are calculated by translating the current-period's results at the prior-period average exchange rates plus any related gains and losses on currency hedges. |
Appendix I
Avis Budget Group, Inc.
DEFINITIONS OF NON-GAAP MEASURES AND KEY METRICS
Adjusted EBITDA
The accompanying press release presents Adjusted EBITDA, which is a non-GAAP measure most directly comparable to net income (loss). Adjusted EBITDA is defined as income (loss) from continuing operations before non-vehicle related depreciation and amortization; any impairment charges; restructuring and other related charges; early extinguishment of debt costs; non-vehicle related interest; transaction-related costs, net; charges for unprecedented personal-injury and other legal matters, net, which includes amounts recorded in excess of $5 million related to class action lawsuits; non-operational charges related to shareholder activist activity, which includes third party advisory, legal and other professional fees; COVID-19 charges, net; cloud computing costs; other (income) expense, net; and income taxes.
We believe Adjusted EBITDA is useful to investors as a supplemental measure in evaluating the performance of our operating businesses and in comparing our results from period to period. We also believe that Adjusted EBITDA is useful to investors because it allows them to assess our results of operations and financial condition on the same basis that management uses internally. Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP. Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. A reconciliation of Adjusted EBITDA from net income (loss) recognized under GAAP is provided on Table 5.
Adjusted Free Cash Flow
Represents net cash provided by operating activities adjusted to reflect the cash inflows and outflows relating to capital expenditures, the investing and financing activities of our vehicle programs, asset sales, if any, and to exclude debt extinguishment costs, transaction-related costs, restructuring and other related charges, charges for unprecedented personal-injury and other legal matters, COVID-19 charges, other (income) expense, and non-operational charges related to shareholder activist activity. We believe that Adjusted Free Cash Flow is useful to management and investors in measuring the cash generated that is available to be used to repay debt obligations, repurchase stock, pay dividends and invest in future growth through new business development activities or acquisitions. Adjusted Free Cash Flow should not be construed as a substitute in measuring operating results or liquidity, and our presentation of Adjusted Free Cash Flow may not be comparable to similarly-titled measures used by other companies. A reconciliation of Adjusted Free Cash Flow from net cash provided by operating activities recognized under GAAP is provided on Table 5.
Adjusted EBITDA Margin
Represents Adjusted EBITDA as a percentage of revenues.
Available Rental Days
Defined as Average Rental Fleet times the numbers of days in a given period.
Average Rental Fleet
Represents the average number of vehicles in our fleet during a given period of time.
Currency Exchange Rate Effects
Represents the difference between current-period results as reported and current-period results translated at the prior-period average exchange rates plus any related currency hedges.
Net Corporate Debt
Represents corporate debt minus cash and cash equivalents.
Net Corporate Leverage
Represents Net Corporate Debt divided by Adjusted EBITDA for the twelve months prior to the date of calculation.
Per-Unit Fleet Costs
Represents vehicle depreciation, lease charges and gain or loss on vehicles sales, divided by Average Rental Fleet.
Rental Days
Represents the total number of days (or portion thereof) a vehicle was rented during a 24-hour period.
Revenue per Day
Represents revenues divided by Rental Days.
Vehicle Utilization
Represents Rental Days divided by Available Rental Days.