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Press release from GlobeNewswire (a Nasdaq OMX company)

Zipcar Reports 2011 Second Quarter Results

Wednesday, August 03, 2011

Zipcar Reports 2011 Second Quarter Results13:05 EDT Wednesday, August 03, 2011CAMBRIDGE, Mass., Aug. 3, 2011 (GLOBE NEWSWIRE) -- Zipcar, Inc. (Nasdaq:ZIP), the world's leading car sharing network, today reported results for the second quarter ended June 30, 2011. Highlights for the Quarter Revenue increased 34% to $61.6 million compared to $46.0 million in the prior year period; revenue increased 28% year over year excluding the U.K. Streetcar operations acquired in April 2010 Total members grew 29% from the prior year period to approximately 605,000 Revenue from Established Markets increased 25% from the prior year period, with 37% growth in income before tax Usage revenue per vehicle per day increased to $65 from $59 in the prior year period Adjusted EBITDA of $2.3 million compared to $0.3 million in the prior year period; US GAAP net loss of $5.6 million compared to a loss of $5.2 million in the prior year period Completed initial public offering and significantly reduced outstanding debt Renewed asset backed financing facility on favorable terms Launched into Providence, Rhode Island and Sacramento, California "Our strong second quarter performance underscores the business momentum we have established based on solid execution and the benefits associated with our first mover advantage," said Scott Griffith, Chairman and CEO. "Our commitment to a superior member experience and continued innovation such as the launch of our new Android app during the quarter has helped to stimulate increased activity across the network. Once we complete the integration of Streetcar, which remains on track, we intend to build on our U.K. presence by expanding into new markets in continental Europe."Summary Results For the 2011 second quarter, revenue increased 34% to $61.6 million compared to $46.0 million in the prior year period. Excluding Streetcar, revenue increased 28% compared to the prior year period. Usage revenue represented $53.3 million in the second quarter of 2011, compared to $40.8 million in the prior year period with fee revenue representing the balance of total revenue. Revenue growth in the 2011 second quarter versus the prior year period resulted primarily from increased membership, and, to a lesser extent, the acquisition of Streetcar as well as relatively modest price increases implemented to offset higher fuel costs.  Total membership during the quarter increased 29% from the prior year period to approximately 605,000 at quarter end.  Revenue for Zipcar's Established Markets – Boston, New York, Washington, D.C. and San Francisco – grew 25% to $34.4 million compared to $27.6 million in the prior year period primarily due to new member additions. Income before tax for the Established Markets increased 37% to $7.5 million from $5.4 million last year. US GAAP net loss in the second quarter of 2011 was $5.6 million, or $(0.17) per basic and diluted share, compared to a loss of $5.2 million, or $(0.95) per basic and diluted share, in the prior year period during which the outstanding share count was substantially lower.Non-GAAP Results Adjusted EBITDA for the 2011 second quarter was $2.3 million compared to $0.3 million in the prior year period.  The improvement in Adjusted EBITDA relates to higher revenue and improved operating leverage. See the reconciliation between US GAAP net loss and Adjusted EBITDA provided below. Ed Goldfinger, Chief Financial Officer, commented, "Our results for the quarter show strong growth, solid progress in Adjusted EBITDA and improvements across our key operating metrics. Our financial condition has also improved significantly from a combination of the proceeds we received in the initial public offering, a reduction in high cost debt and the renewal of our asset backed financing facility on more favorable terms."Outlook Following Zipcar's strong second quarter performance, the Company is increasing its 2011 outlook. For the third quarter, Zipcar expects revenue in the range of $67 million to $69 million.  Adjusted EBITDA for the period is expected to range from $3.5 million to $4.5 million and US GAAP net loss is expected to range from $1.5 million to break-even. Full year 2011 revenue is now expected in the range of $240 million to $244 million. Full year 2011 Adjusted EBITDA is now expected to range from $8 million to $10 million and US GAAP net loss is expected to range from $11 million to $14 million. Average share counts are expected to be between 39 million and 40 million for the third and fourth quarters. Common stock equivalents of approximately 3.5 million to 4.5 million shares would be included in the average share count in any period during which the Company records positive US GAAP net income.Conference Call, Webcast, and Slide Presentation The Company will host a conference call today at 4:30 pm Eastern Daylight Time to discuss its 2011 second quarter results and financial outlook. To access the call, please dial 877-407-8029 (U.S.) or 201-689-8029 (international) approximately 10 minutes prior to the start of the call. The teleconference will be available via live webcast, along with an accompanying slide presentation, at Zipcar's investor relations website, http://ir.zipcar.com. If you are unable to listen to the live teleconference, a replay will be available through August 12, 2011, and can be accessed by dialing 877-660-6853 (U.S.) or 201-612-7415 (international). Callers will be prompted for replay account number 387# followed by conference ID number 376027#. An archived version of the webcast will also be available under the investor relations portion of Zipcar's website at http://ir.zipcar.com.About Zipcar Zipcar is the world's leading car sharing network with more than 605,000 members and over 9,000 vehicles in urban areas and college campuses throughout the United States, Canada and the United Kingdom. Zipcar offers more than 30 makes and models of self-service vehicles by the hour or day to residents and businesses looking for an alternative to the high costs and hassles of owning a car. Zipcar and the Zipcar logo are trademarks of Zipcar, Inc. Other company and product names may be trademarks of their respective owners.Non-GAAP Financial Measures This press release contains the non-GAAP financial measure of Adjusted EBITDA. The Company defines Adjusted EBITDA as earnings before non-vehicle depreciation, non-vehicle interest, interest income, amortization, preferred stock warrant liability adjustment, stock compensation expenses, acquisition and integration costs, taxes and other income related to Zero Emission Vehicle credits. The Company believes that this non-GAAP measure is an important measure of its operating performance because it allows management, investors and analysts to evaluate and assess the Company's core operating results from period to period after removing the impact of changes in the Company's capital structure, income tax status and method of vehicle financing, and other items of a non-operational nature that affect comparability. The Company includes vehicle-related depreciation and interest in its definition of Adjusted EBITDA because vehicles represent core operating assets used in the delivery of the Company's service that require periodic replacement. In addition, the exclusion of these costs would result in a lack of comparability in the treatment of vehicles that are owned or leased under capital leases and those leased under operating leases. The Company believes that various forms of the Adjusted EBITDA metric are often used by analysts, investors and other interested parties to evaluate companies such as Zipcar for the reasons discussed above. Adjusted EBITDA is also used for planning purposes and in presentations to the Company's board of directors as well as in the Company's annual incentive compensation program for senior management.  The Company does not consider the non-GAAP measure of Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes significant elements that are required by GAAP to be recorded in the Company's financial statements. In addition, it is subject to inherent limitations as it reflects the exercise of judgments by management in determining how it is formulated. In order to compensate for these limitations, management of the Company presents this non-GAAP financial measure in connection with its GAAP results. The Company urges investors to review the reconciliation of this non-GAAP financial measure to the comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate the Company's business. Reconciliation tables of the most comparable GAAP financial measure to the non-GAAP measure used in this press release are included in this release.Cautionary Language Concerning Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding completion of the Company's integration of its Streetcar operations, the Company's ability to expand into other markets in continental Europe and the Company's financial guidance for the third quarter of 2011 and for the full year 2011. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control. The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to the Company's ability to profitably attract new members and retain existing customers, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which the Company operates, the Company's ability to continue to promote and maintain its brand in a cost-effective manner, the Company's ability to manage growth, the Company's ability to successfully integrate the Streetcar operations, the Company's ability to successfully expand its business internationally, and other risks detailed in the Company's Quarterly Report on Form 10-Q filed on May 13, 2011, which are available on www.sec.gov. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent the Company's views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. The Company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release. ZIP-FZipcar, Inc.Condensed Consolidated Statements of Operations(Unaudited)            Three Months EndedSix Months Ended  June 30,June 30,  2011201020112010(in thousands, except per share data)                   Revenue $ 61,559 $ 45,962 $ 110,692 $ 79,206           Cost and expenses         Fleet operations 40,525 30,269 75,491 55,163 Member services and fulfillment (1) 5,067 3,875 9,138 6,545 Research and development (1) 1,010 799 1,972 1,470 Selling, general, and administrative (1) 14,723 13,008 27,410 22,445 Amortization of acquired intangible assets 994 905 2,067 1,102 Total operating expenses 62,319 48,856 116,078 86,725 Loss from operations (760) (2,894) (5,386) (7,519) Interest income 11 10 20 22 Interest expense (4,530) (2,415) (6,985) (3,220) Other income (expense), net (273) 128 714 254 Loss before income taxes (5,552) (5,171) (11,637) (10,463) Provision for income taxes 23 62 40 98 Net loss (5,575) (5,233) (11,677) (10,561) Less: Net loss attributable to redeemable noncontrolling interest 7 4 12 12 Net loss attributable to Zipcar, Inc.  $ (5,568)  $ (5,229)  $ (11,665)  $ (10,549)           Net loss attributable to common stockholders per share - basic and diluted  $ (0.17)  $ (0.95)  $ (0.60)  $ (2.72) Weighted average number of common shares outstanding used in          computing per share amounts - basic and diluted  32,422,508  5,481,265  19,500,504  3,872,821                               (1) Stock-based compensation is included in above line items                    Three Months EndedSix Months Ended  June 30,June 30,  2011201020112010                     Member services and fulfillment $ 24 $ 18 $ 49 $ 35 Research and development 39 47 81 87 Selling, general, and administrative 877 621 1,824 1,115   $ 940 $ 686 $ 1,954 $ 1,237Zipcar, Inc.Reconciliation of adjusted EBITDA(Unaudited)            For the Three Months EndedFor the Six Months Ended  June 30,June 30,  2011201020112010(in thousands)                  Reconciliation of adjusted EBITDA         Net loss attributable to Zipcar, Inc. $ (5,568) $ (5,229) $ (11,665) $ (10,549) Non-vehicle depreciation 605 476 1,166 894 Amortization 994 905 2,067 1,102 Non-vehicle interest expense 3,693 1,914 5,037 2,631 Interest income (11) (10) (20) (22) Preferred stock warrant liability adjustment 550  (41) 724  19 Stock compensation 940 686 1,954 1,237 Acquisition and integration cost 1,090 1,560 1,989 2,312 Taxes 23 62 40 98 Zero Emission Vehicle credits -- -- (861) -- Adjusted EBITDA  $ 2,316  $ 323  $ 431  $ (2,278)Zipcar, Inc.Condensed Consolidated Balance Sheets(Unaudited)        June 30,December 31,  20112010(in thousands, except share and per share data)          Assets     Current assets     Cash and cash equivalents $ 91,002 $ 43,005 Accounts receivable, net of allowance for doubtful accounts of $596 and $541 as of June 30, 2011 and December 31, 2010, respectively 4,910 4,223 Restricted cash 3,380 900 Prepaid expenses and other current assets 11,768 9,905 Total current assets 111,060 58,033 Property and equipment, net 98,817 70,917 Goodwill 101,808 99,750 Intangible assets 6,755 8,527 Restricted cash 6,969 3,503 Deposits and other noncurrent assets 7,865 8,198 Total assets $ 333,274 $ 248,928Liabilities, Redeemable Convertible Preferred Stock and     Stockholders' Equity (Deficit)     Current liabilities     Accounts payable $ 8,706 $ 6,247 Accrued expenses 18,054 16,594 Deferred revenue 16,275 14,261 Current portion of capital lease obligations and other debt 13,594 26,041 Total current liabilities 56,629 63,143 Capital lease obligations and other debt, net of current portion 55,748 68,022 Deferred revenue, net of current portion 3,895 3,651 Redeemable convertible preferred stock warrants -- 478 Other liabilities 2,371 1,975 Total liabilities 118,643 137,269       Commitments and contingencies           Non-controlling interest 481 277 Redeemable convertible preferred stock, par value $0.001 per share: -- 116,683 Stockholders' equity (deficit):     Common stock, $0.001 par value: 500,000,000 and 100,000,000 shares authorized at June 30, 2011 and December 31, 2010, respectively 39 6 Additional paid-in capital 288,804 59,647 Accumulated deficit (77,260) (65,380) Accumulated other comprehensive gain 2,567 426 Total stockholders' equity (deficit)  214,150 (5,301)       Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)  $ 333,274 $ 248,928Zipcar, Inc.Key financial and operating metrics (Unaudited)        For the Three Months Ended  June 30,  20112010      Key Financial and Operating Metrics:     Ending members  604,571  470,320 Ending vehicles  9,480  8,860 Usage revenue per vehicle per day  $ 65  $ 59 Total revenue per member per period  $ 103  $ 104 Cost per new account  $ 70  $ 66 Average monthly member retention 97.8% 97.9% Adjusted EBITDA (in thousands)  $ 2,316  $ 323      For the Three Months Ended  June 30,  20112010(in thousands)    Established Markets:      Revenue  $ 34,424  $ 27,639  Income before tax  $ 7,461  $ 5,433        For the Six Months Ended  June 30,  20112010(in thousands)    Established Markets:      Revenue  $ 61,518  $ 50,220  Income before tax  $ 12,020  $ 8,583CONTACT: Investor Relations: Jonathan Schaffer, The Blueshirt Group Phone: 212-871-3953 Email: ir@zipcar.com Media Relations: Greg Winter, Vice President of Corporate Communications, Zipcar Phone: 617-336-4323 Email: gwinter@zipcar.com