Press release
AVIS BUDGET GROUP PROVIDES UPDATE RELATED TO CORONAVIRUS
PARSIPPANY, N.J., March 23, 2020 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (NASDAQ: CAR) today provided the following business update related to the
About this update from Avis Budget Group, Inc.
[{"type":"text","content":"PARSIPPANY, N.J., March 23, 2020 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (NASDAQ: CAR) today provided the following business update related to the coronavirus.\n Joe Ferraro, Interim President and Chief Executive Officer, said, “Consistent with other integral components of the global travel industry, we are seeing significant impacts in our business around the world as a result of the coronavirus. Our team is united in facing the current unprecedented health crisis, and we are committed to taking the necessary steps to protect the health and safety of our customers, our employees, and to navigate through this disruptive global event.” Business Update The positive momentum from fourth quarter 2019 continued into January and February, and results for these two months significantly exceeded both prior year and our expectations. Revenue was up 9% as rental days increased by 8% and revenue per day grew 1%, resulting in ~$60 million higher Adjusted EBITDA over the prior year in this timeframe. However, in March reservations and revenue began to be negatively affected as travel restrictions were broadly implemented. The outlook for April and beyond is challenged with reservations down approximately 60% and with the potential for further declines. As a result of these developments, we are withdrawing the financial outlook we provided earlier this year. Responsive Actions We are taking numerous steps to proactively manage declining reservations and revenue. We are reviewing our overall fleet plan and aggressively reducing vehicles, matching staffing levels to current demand, and reducing operational costs and pausing capital spending among other actions. We are also evaluating compensation expense and intend to make reductions, including to base compensation for senior employees including the executive leadership team. Overall, we are targeting more than $400 million in annualized cost reduction and mitigation. These savings will serve us well even after the emergency passes. We will be reporting on our progress toward this target in future communications. Balance Sheet and Liquidity We have consistently maintained a strong balance sheet with no meaningful corporate debt maturities until 2023. Earlier this year, we extended our Term Loan B to 2027, added a year of maturity to our AESOP variable funding facilities to 2022, and accesse...