ESTERO, Fla., April 11, 2016 /PRNewswire/ -- Hertz Global
Holdings, Inc. (NYSE: HTZ) said today that, due to what the company
believes is excess industry capacity, it now expects its first
quarter and full year 2016 U.S. car rental (U.S. RAC) revenue and
consolidated first quarter adjusted earnings per share to be lower
than previously expected. Despite this reduction, the company
is affirming its full-year 2016 adjusted Corporate EBITDA* guidance
within a range of $1.6 to $1.7
billion.
For the first quarter 2016, Hertz Global Holdings expects U.S.
RAC revenue per available car day** (RACD) to decline between 2.5
to 3.5 percent versus the same period last year on low single-digit
growth in transaction days. For the full year 2016, Hertz
Global Holdings now expects U.S. RAC total revenue to be flat to
1.5 percent lower versus the company's previous guidance of 1.5 to
2.5 percent growth year over year. The company continues to
expect modest U.S. RAC transaction day growth in 2016, primarily
driven by its on-airport business. In addition to maintaining its
2016 adjusted Corporate EBITDA guidance, the company provided
corresponding full-year adjusted earnings per share guidance of
between $0.95 per share and
$1.10 per share, which is based on an
average of 424 million shares outstanding and a 37 percent
effective tax rate.
"We are disappointed that the pricing pressure experienced late
in 2015 further intensified in the first quarter of 2016.
However, we believe that industry capacity will likely moderate as
seasonal demand improves establishing the foundation for a relative
improvement in pricing as we head into the peak summer season,"
said President and Chief Executive Officer John Tague.
Hertz Global Holdings continues to expect to achieve
$350 million of incremental savings
in 2016. Similar to 2015, the company expects a lower rate of
savings realization during the first half of the year as targeted
initiatives ramp up throughout 2016.
ABOUT HERTZ GLOBAL HOLDINGS, INC.
Hertz Global
Holdings operates the Hertz, Dollar, Thrifty and Firefly car rental
brands in approximately 9,980 corporate and licensee locations
throughout approximately 150 countries in North America, Europe, Latin
America, Asia, Australia, Africa, the Middle
East and New Zealand. Hertz
Global Holdings is the largest worldwide airport general use car
rental company with approximately 1,635 airport locations in the
U.S. and more than 1,320 airport locations internationally. Product
and service initiatives such as Hertz Gold Plus Rewards,
NeverLost®, Carfirmations, Mobile Wi-Fi and unique vehicles offered
through the Adrenaline, Dream, Green and Prestige Collections set
Hertz Global Holdings apart from the competition. Additionally,
Hertz Global Holdings owns the vehicle leasing and fleet management
leader Donlen Corporation, operates the Hertz 24/7 hourly car
rental business in international markets and sells vehicles through
its Rent2Buy program. The Company also owns Hertz Equipment Rental
Corporation ("HERC"), one of the largest equipment rental
businesses with more than 280 locations worldwide offering a
diverse line of equipment and tools for rent and sale. HERC
primarily serves the construction, industrial, oil, gas,
entertainment and government sectors. For more information about
Hertz Global Holdings, visit: www.hertz.com.
* Gross EBITDA is defined as net income before net
interest expense, income taxes and depreciation (which includes
revenue earning equipment lease charges) and amortization.
Corporate EBITDA represents Gross EBITDA as adjusted for car rental
fleet interest, car rental fleet depreciation and car rental
debt-related charges. Adjusted Corporate EBITDA represents
Corporate EBITDA as adjusted for certain other items. Adjusted
earnings per share is calculated as adjusted net income, which is
income before income taxes plus certain non-cash acquisition
accounting charges, debt-related charges relating to the
amortization and write-off of debt financing costs and debt
discounts and certain one-time charges and non-operational items
less a provision for income taxes derived utilizing a combined
statutory rate of 37%, divided by the weighted average number of
diluted shares outstanding for the period. Because of the
forward-looking nature of the Company's adjusted Corporate EBITDA
and adjusted earnings per share forecasts, specific quantifications
of the amounts that would be required to reconcile pre-tax income
and earnings per share forecasts are not available. The Company
believes that there is a degree of volatility with respect to
certain of the Company's GAAP measures, primarily related to fair
value accounting for its financial assets (which includes the
Company's derivative financial instruments), its income tax
reporting and certain adjustments made to arrive at the relevant
non-GAAP measures, which preclude the Company from providing
accurate forecast of GAAP to non-GAAP reconciliations. Based on the
above, the Company believes that providing estimates of the amounts
that would be required to reconcile the range of the non-GAAP
adjusted Corporate EBITDA and adjusted earnings per share would
imply a degree of precision that would be confusing or misleading
to investors for the reasons identified above.
** Revenue per available car day is calculated
as total revenues less revenue from fleet subleases and ancillary
revenue associated with retail car sales divided by available car
days, with all periods adjusted to eliminate the effect of
fluctuations in foreign currency. Our management believes
eliminating the effect of fluctuations in foreign currency is
appropriate so as not to affect the comparability of underlying
trends. This metric is important to our management and investors as
it represents a measurement of the changes in underlying pricing in
the car rental business and encompasses the elements in car rental
pricing that management has the ability to control and provides a
measure of revenue production relative to overall capacity.
CAUTIONARY NOTE CONCERNING FORWARD LOOKING STATEMENTS
Certain statements contained in this release, and in related
comments by the Company's management, include "forward-looking
statements." Forward-looking statements include information
concerning the Company's liquidity and its possible or assumed
future results of operations, including descriptions of its
business strategies. These statements often include words such as
"believe," "expect," "project," "potential," "anticipate,"
"intend," "plan," "estimate," "seek," "will," "may," "would,"
"should," "could," "forecasts" or similar expressions. These
statements are based on certain assumptions that the Company has
made in light of its experience in the industry as well as its
perceptions of historical trends, current conditions, expected
future developments and other factors it believes are appropriate
in these circumstances. The Company believes these judgments are
reasonable, but you should understand that these statements are not
guarantees of performance or results, and the Company's actual
results could differ materially from those expressed in the
forward-looking statements due to a variety of important factors,
both positive and negative, that may be revised or supplemented in
subsequent reports on Forms 10-K, 10-Q and 8-K. Among other items,
such factors could include: any claims, investigations or
proceedings arising as a result of the restatement of our
previously issued financial results; our ability to remediate the
material weaknesses in our internal controls over financial
reporting; levels of travel demand, particularly with respect to
airline passenger traffic in the United
States and in global markets; the effect of our proposed
separation of our equipment rental business and ability to obtain
the expected benefits of any related transaction; significant
changes in the competitive environment, including as a result of
industry consolidation, and the effect of competition in our
markets on rental volume and pricing, including on our pricing
policies or use of incentives; occurrences that disrupt rental
activity during our peak periods; our ability to achieve and
maintain cost savings and efficiencies and realize opportunities to
increase productivity and profitability; an increase in our fleet
costs as a result of an increase in the cost of new vehicles and/or
a decrease in the price at which we dispose of used vehicles either
in the used vehicle market or under repurchase or guaranteed
depreciation programs; our ability to accurately estimate future
levels of rental activity and adjust the size and mix of our fleet
accordingly; our ability to maintain sufficient liquidity and the
availability to us of additional or continued sources of financing
for our revenue earning equipment and to refinance our existing
indebtedness; our ability to realize the operational efficiencies
of the acquisition of Dollar Thrifty; our ability to maintain
access to third-party distribution channels, including current or
favorable prices, commission structures and transaction volumes; an
increase in our fleet costs or disruption to our rental activity,
particularly during our peak periods, due to safety recalls by the
manufacturers of our vehicles and equipment; a major disruption in
our communication or centralized information networks; financial
instability of the manufacturers of our vehicles and equipment,
which could impact their ability to perform under agreements with
us and/or their willingness or ability to make cars available to us
or the car rental industry on commercially reasonable terms; any
impact on us from the actions of our franchisees, dealers and
independent contractors; our ability to maintain profitability
during adverse economic cycles and unfavorable external events
(including war, terrorist acts, natural disasters and epidemic
disease); shortages of fuel and increases or volatility in fuel
costs; our ability to successfully integrate acquisitions and
complete dispositions; our ability to maintain favorable brand
recognition; costs and risks associated with litigation and
investigations; risks related to our indebtedness, including our
substantial amount of debt, our ability to incur substantially more
debt and increases in interest rates or in our borrowing margins;
our ability to meet the financial and other covenants contained in
our Senior Credit Facilities, our outstanding unsecured Senior
Notes and certain asset-backed and asset-based arrangements;
changes in accounting principles, or their application or
interpretation, and our ability to make accurate estimates and the
assumptions underlying the estimates, which could have an effect on
earnings; changes in the existing, or the adoption of new laws,
regulations, policies or other activities of governments, agencies
and similar organizations where such actions may affect our
operations, the cost thereof or applicable tax rates; changes to
our senior management team; the effect of tangible and intangible
asset impairment charges; our exposure to uninsured claims in
excess of historical levels; fluctuations in interest rates and
commodity prices; and our exposure to fluctuations in foreign
exchange rates.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K.
You should not place undue reliance on forward-looking
statements. All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in
their entirety by the foregoing cautionary statements. All such
statements speak only as of the date made, and the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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SOURCE Hertz Global Holdings, Inc.