SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ________ to ________
Commission File No.: 0-23962
TEAM RENTAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 59-3227576
-------- ----------
State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
125 Basin Street, Suite 210, Daytona Beach, FL 32114
(Address of principal executive offices)
(904) 238-7035
Registrant's telephone number, including area code
Not applicable
(Former name, former address, and former fiscal year, if
changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
11,250,783 shares were outstanding as of November 12, 1996, comprised of
9,314,183 shares of the registrant's Class A common stock, par value $0.01, and
1,936,600 shares of the registrant's Class B common stock, par value $0.01.
The Exhibit Index, filed as a part of this report, appears on page 13.
- --------------------------------------------------------------------------------
<PAGE>
INDEX
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30,
1996 (unaudited) and December 31, 1995 3
Consolidated Statements of Operations for the
Three- and Nine-Month Periods Ended September
30, 1996 and 1995 (unaudited) 4
Consolidated Statement of Changes in Stockholders'
Equity for the Nine-Month Period Ended September
30, 1996 (unaudited) 5
Consolidated Statements of Cash Flows for the
Nine-Month Periods Ended September 30, 1996 and
1995 (unaudited) 6
Notes to Unaudited Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. Other Information
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signature Page 13
<PAGE>
Team Rental Group, Inc.
Consolidated Balance Sheets
Team CorporateTeam Operations
(Dollar amounts in thousands) (Unaudited)
September 30, December 31,
ASSETS 1996 1995
---- ----
Cash and cash equivalents $ 16,249 $357
Restricted cash 8,407 67,731
Trade and vehicle receivables, net 38,082 20,928
Accounts receivable, related parties 61 61
Vehicle inventory 22,417 8,938
Revenue earning vehicles, net 327,542 219,927
Property and equipment, net 22,098 12,503
Franchise rights, net 63,028 46,670
Deferred financing fees, net 1,653 2,266
Other assets 9,676 6,942
--------- ---------
Total assets $ 509,213 $ 386,323
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Notes payable $ 372,300 $ 318,233
Capital lease obligations 668 784
Accounts payable 12,548 14,698
Deferred income taxes 1,701 1,701
Accrued and other liabilities 24,388 9,315
--------- ---------
Total liabilities 411,605 344,731
Common stock warrant 2,000 2,000
STOCKHOLDERS' EQUITY
Common stock 112 72
Additional paid-in-capital 89,797 41,984
Retained earnings (accumulated deficit) 6,029 (2,134)
Treasury stock (330) (330)
--------- ---------
Total stockholders' equity 95,608 39,592
--------- ---------
Total liabilities and stockholders' equity $ 509,213 $ 386,323
========= =========
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
Team Rental Group, Inc.
Consolidated Statements of Operations
(Unaudited)
(Dollar amounts in thousands except per share data)
For the three-month periods For the nine-month periods
ended September 30, ended September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenue:
Rental revenue $ 62,689 $ 29,677 $ 166,531 $ 70,819
Sales revenue 38,803 10,419 94,489 23,234
Other revenue 0 2,287 0 2,922
---------- --------- --------- ---------
Total operating revenue 101,492 42,383 261,020 96,975
Operating expenses:
Direct vehicle and operating 9,900 3,822 24,392 9,120
Depreciation - vehicles 15,960 8,255 43,983 19,824
Depreciation - nonvehicle 705 287 1,915 872
Cost of car sales 30,432 9,205 77,727 20,655
Advertising, promotion and selling 6,492 1,964 17,101 6,493
Facilities 5,507 2,851 14,924 7,397
Personnel 14,234 5,941 38,239 15,798
General and administrative 2,628 1,397 8,013 3,398
Amortization 472 259 1,468 610
---------- --------- --------- ---------
Total operating expenses 86,330 33,981 227,762 84,167
---------- --------- --------- ---------
Operating income 15,162 8,402 33,258 12,808
---------- --------- --------- ---------
Other (income) expense:
Vehicle interest 6,579 3,387 18,542 8,803
Other interest, net 355 293 1,286 525
Interest income - restricted cash 266 (66) (521) (638)
Non-recurring bank fees 1,275(2) 0 1,275 0
Related party interest 0 0 118 0
---------- --------- --------- ---------
Total other (income) expense 8,475 3,614 20,700 8,690
Income before provision
for income taxes 6,687 4,788 12,558 4,118
Provision for income taxes 2,047 807 4,395 540
---------- --------- --------- ---------
Net income $ 4,640 $ 3,981 $ 8,163 $ 3,578
========== ========= ========= =========
Net income per common share:
Primary $ 0.42 $ 0.65 $ 0.94 $ 0.59
========== ========= ========= =========
Fully diluted $ 0.41 $ 0.65 $ 0.93 $ 0.59
========== ========= ========= =========
Weighted average shares outstanding:
Primary 11,175,000 6,129,000 8,675,000 6,104,000
========== ========= ========= =========
Fully diluted 11,196,000 6,129,000 8,820,000 6,104,000
========== ========= ========= =========
See accompanying notes to unaudited consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Team Rental Group, Inc.
Consolidated Statement of Changes in Stockholders' Equity
For the nine-month period ended September 30, 1996
(Unaudited)
Retained
Additional Earnings Total
Common Paid-In (Accumulated Treasury Stockholders'
(Dollar amounts in thousands) Stock Capital Deficit) Stock Equity
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ 72 $ 41,984 $ (2,134) ($ 330) $ 39,592
Shares issued in conjunction with acquisition
of Arizona Rent A Car Systems, Inc. 2 2,725 2,727
Warrants issued in conjunction with financing 686 686
Proceeds from stock offering 38 44,402 44,440
Net income 8,163 8,163
-------- -------- -------- -------- --------
Balance at September 30, 1996 $ 112 $ 89,797 $ 6,029 $ (330) $ 95,608
======== ======== ======== ======== ========
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Team Rental Group, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(Dollar amounts in thousands) For the nine-month periods
ended September 30,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,163 $ 3,578
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 45,898 20,696
Amortization 2,767 1,059
Deferred income tax provision 0 (83)
Changes in operating assets and liabilities:
Accounts receivable (17,154) (10,196)
Other assets (2,734) (577)
Vehicle inventory (13,479)
Accounts payable (2,150) 8,460
Other liabilities 15,073 290
-------- --------
Total adjustments 28,221 19,649
-------- --------
Net cash provided by operating activities 36,384 23,227
Cash flows from investing activities:
Change in restricted cash 59,324 15,593
Proceeds from sale of
revenue-earning vehicles 189,646 111,860
Purchases of revenue-earning vehicles (341,244) (200,628)
Purchase of rental vehicle franchise rights (15,099) (7,490)
Purchases of equipment and improvements (11,510) (3,510)
-------- --------
Net cash used in investing activities (118,883) (84,175)
Cash flows from financing activities:
Proceeds from vehicle financing 152,901 82,564
Repayment of vehicle financing (90,295) (30,616)
Proceeds from borrowings under notes payable 26,074 10,734
Proceeds from stock issuance 44,440
Acquisition of Treasury Stock (330)
Principal payments :
Capital leases (116) (142)
Notes payable (34,613) (2,000)
-------- --------
Net cash provided by financing activities 98,391 60,210
-------- --------
Net increase in cash and cash equivalents 15,892 (738)
Cash and cash equivalents, beginning of period 357 878
-------- --------
Cash and cash equivalents, end of period $ 16,249 $ 140
========= =========
See accompanying notes to unaudited consolidated financial statements
</TABLE>
<PAGE>
Team Rental Group, Inc.
Notes to Unaudited Consolidated Financial Statements
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of Team Rental
Group, Inc. (the "Company") for the three- and nine-month periods ended
September 30, 1996 and 1995 reflect all adjustments (consisting of normal
recurring adjustments) which, in the opinion of management, are necessary to
present fairly the Company's consolidated financial condition, results of
operations and cash flows for the periods presented. Operating results for the
three- and nine-month periods ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the entire year ending
December 31, 1996.
The consolidated financial statements for the three- and nine-month periods
ended September 30, 1995 give effect to the Company's acquisition of all of the
outstanding stock of the Budget franchises in Dayton, Ohio, Charlotte, North
Carolina, and Hartford, Connecticut. The accompanying statement of operations
and statement of cash flows only give effect to these operations for the period
from their respective dates of acquisition through September 30, 1995. The
consolidated financial statements as of September 30, 1996 and for the three-
and nine-month periods then ended give effect to the Company's acquisition of
all of the outstanding stock of the Budget franchise in Phoenix, Arizona and
VPSI, Inc., both of which were acquired in February 1996, and to the Company's
acquisition of all of the outstanding stock of ValCar Rental Car Sales, Inc.,
which was acquired in August 1996. The accompanying statement of operations and
statement of cash flows only give effect to these operations for the period from
their respective dates of acquisition through the end of the period presented.
2. Non-Recurring Bank Fees
On July 9, 1996, the Company utilized proceeds from its secondary stock offering
to repay a $10 million bridge financing facility it had obtained from a bank in
the second quarter of 1996. In conjunction with this financing, the Company had
issued warrants valued at $0.7 million, and had paid additional fees
approximating $1.0 million. As a result of this repayment, the Company has
written off all unamortized fees related to this financing, totaling $1.3
million, in the third quarter.
3. Acquisitions
Dayton Franchise - In January 1995, the Company purchased all of the outstanding
stock of Don Kremer, Inc. located in Dayton, Ohio for $1.3 million. The
acquisition funding consisted of $650,000 cash and two notes totaling $650,000.
Charlotte Franchise - In January 1995, the Company purchased all of the
outstanding stock of MacKay Car & Truck Rentals, Inc. located in Charlotte,
North Carolina for approximately $8.4 million consisting of cash of $8.3 million
and 13,483 shares of Class A common stock.
Hartford Franchise - In March 1995, the Company purchased all of the outstanding
stock of Rental Car Resources, Inc. located in Hartford, Connecticut for
approximately $1.5 million by issuing 157,333 shares of Class A common stock.
OPCO Franchise - In October 1995, the Company purchased all of the outstanding
stock of BRAC-OPCO, Inc., which operates Budget franchises in the greater Los
Angeles area, excluding the vehicle rental operations at Los Angeles
International Airport, for approximately $11.2 million by issuing 1,050,000
shares of Class A common stock.
Acquisition of Van Pool Operations - In February 1996, the Company purchased for
a nominal amount all of the outstanding stock of VPSI, Inc. ("VPSI") located in
Detroit, Michigan. VPSI provides commuter van pooling services to business
commuters in 22 states, operating a rental fleet of approximately 3,300 vans as
of March 31, 1996.
Acquisition of Phoenix Franchise - In February 1996, the Company purchased all
of the outstanding stock of Arizona Rent-A-Car Systems, Inc. located in Phoenix,
Arizona for approximately $18 million consisting of cash of approximately $5.0
million, a promissory note of $10.0 million and 272,727 shares of Class A common
stock.
Acquisition of ValCar Rental Car Sales, Inc. On August 1, 1996, the Company
acquired all of the outstanding stock of ValCar Rental Car Sales, Inc. for
$400,000 cash. ValCar owns and operates four retail vehicle sales facilities in
Indianapolis, Indiana, and was formerly owned by a director and officer of Team
Rental Group.
If the acquisitions had occurred at the beginning of 1995, the Company's
results of operations would be as shown in the following table. These unaudited
pro forma results are not necessarily indicative of the actual results of
operations that would have occurred had the acquisitions actually been made at
the beginning of the respective periods.
Nine-month period ended September 30, 1996 1995
---- ----
(Dollars in thousands)
Operating revenue $293,370 $256,151
Incomebefore provision for income taxes 7,424 3,874
Net income 4,790 2,518
Earnings per common share $ 0.55 $ 0.34
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The Company's original operation, acquired in April 1987, was the Budget
franchise for the San Diego metropolitan area, exclusive of the airport
location, which it acquired in 1988. The Company acquired the Albany and
Rochester, New York franchises and the Richmond, Virginia franchise in 1991.
Concurrent with the Company's initial public offering on August 25, 1994, the
Company purchased the Budget operations in Philadelphia and Pittsburgh,
Pennsylvania and Cincinnati, Ohio. In November 1994, the Company acquired the
Fort Wayne, Indiana Budget franchise and opened its first retail car sales
facility in San Diego, California. The Company acquired the Dayton, Ohio and
Charlotte, North Carolina Budget franchises in January 1995, the Hartford,
Connecticut Budget franchise in March 1995 and the Los Angeles Budget franchise
in October 1995. During 1995, the Company opened four retail car sales
facilities, including locations in Philadelphia, Pennsylvania; Richmond,
Virginia; Charlotte, North Carolina; and a second location in San Diego,
California; and acquired retail car sales facilities in Dayton, Ohio and
Ontario, California. In February 1996, the Company acquired the Phoenix, Arizona
Budget franchise territory and VPSI, Inc., a commuter van pooling service with
operations in many regions throughout the United States. In April 1996, the
Company opened two retail car sales facilities, including its first facility in
Cincinnati, Ohio and its second facility in Dayton, Ohio. In August 1996, the
Company acquired ValCar Rental Car Sales, Inc., the operator of four retail
vehicle sales facilities in Indianapolis, Indiana.
Liquidity and Capital Resources
Historically, the Company's operations have been funded by cash provided from
operating activities and by financing provided by banks, automobile
manufacturers' captive finance companies and leasing companies. The Company's
existing indebtedness at September 30, 1996 has interest rates ranging from 6.1%
to 10.3%. The Company intends to fund its operations through asset-backed notes,
revolving credit facilities with financial institutions for fleet financing and
working capital, as well as through other similar facilities and through
placements or offerings of additional debt and/or equity securities.
At September 30, 1996, the Company has $145.7 million borrowed under
asset-backed notes which are utilized to finance vehicles eligible for certain
manufacturers' guaranteed repurchase programs. Proceeds from the notes that are
temporarily unutilized for vehicle financing are maintained in restricted cash
accounts with the trustee. The notes are collateralized by the secured vehicles
and the restricted cash accounts. Rates on asset-backed notes at September 30,
1996 range from 6.1% to 6.8%.
The Company's other vehicle obligations consist of outstanding lines of credit
to purchase rental fleet and retail car sales inventory. Revolving credit
facilities are in place with various financial institutions with rates ranging
from 7.0% to 10.3% at September 30, 1996. Collateralized lines of credit at
September 30, 1996 consist of $244 million for rental vehicles and $26 million
for retail car sales inventory with maturity dates ranging from October 1996 to
October 1997. Vehicle obligations are collateralized by revenue earning vehicles
financed under these credit facilities and proceeds from the sale, lease or
rental of rental vehicles and retail car sales inventory. Interest payments for
rental fleet facilities are due monthly at annual interest rates ranging from
7.0% to 10.3% at September 30, 1996. Management expects vehicle obligations will
generally be repaid within one year from the balance sheet date with proceeds
received from either the repurchase of the vehicles by the manufacturers in
accordance with the terms of the manufacturers' rental fleet programs or from
the sale of the vehicles.
Monthly payments of interest only for retail car sales inventory obligations are
required at an annual interest rate of 8.5% at September 30, 1996. Retail car
sales inventory obligations are paid when the inventory is sold but in no event
later than 120 days after the date of purchase.
The Company has a facility in the amount of $13 million for working capital and
the purchase of retail car sales inventory, which bears interest payable monthly
at a rate of 7.4% at September 30, 1996. This facility, which expires in
December 1996, is collateralized by accounts receivable, inventory, equipment,
general intangibles, investments and all other personal property of the Company
and guarantees of the Company's subsidiaries. Under the terms of this agreement,
the Company is required to pay commitment fees quarterly equal to 0.125% per
annum on the maximum amount of credit available under the credit facility and an
annual agent fee of $50,000 as long as the facility has an outstanding balance.
This agreement is subject to certain covenants which require the Company to
maintain certain financial ratios and minimum tangible net worth and prohibit
the payment of cash dividends. At September 30, 1996, there were no amounts
outstanding under this working capital facility.
Change in Financial Condition
Total assets increased $122.9 million, or 31.8%, from $386.3 million at December
31, 1995 to $509.2 million at September 30, 1996. This increase resulted
primarily from increases in revenue-earning vehicles of $107.6 million, accounts
receivable of $17.2 million and franchise rights of $16.4 million and other
assets of $25.1 million that were primarily the result of the acquisition
activity discussed above, which was somewhat offset by a decrease in cash and
cash equivalents and restricted cash of $43.4 million resulting from the use of
cash to finance vehicle purchases in the first nine months of 1996. Total
liabilities increased $66.9 million, or 19.4%, from $344.7 million at December
31, 1995 to $411.6 million at September 30, 1996 due primarily to an additional
$62.6 million of net borrowings for financing vehicle acquisitions and increases
in accounts payable and other accrued liabilities of $12.8 million relating to
the increased size of the Company at September 30, 1996, which was offset in
part by $8.5 million of non-vehicle debt principal repayments. The increase in
stockholders' equity of approximately $56.0 million resulted from additional
shares issued in a stock offering in July 1996 in the amount of $44.4 million,
additional shares issued in conjunction with the Arizona Rent a Car Systems,
Inc. acquisition totaling $2.7 million, additional paid-in capital from the
issuance of stock warrants in the amount of $0.7 million and net income of $8.2
million earned in the first nine months of 1996.
Results of Operations
General Operating Results. Net income for the first nine months of 1996
increased $.35 per share, or 59%, from $.59 for the first nine months of 1995 to
$.94 for the first nine months of 1996. Net income for the third quarter of 1996
of $0.42 per share included $1.3 million, or $.08 per share net of tax, of
non-recurring bank fees incurred for bridge financing prior to the Company's
secondary stock offering in July 1996. Income before provision for income taxes
increased over three times from $4.1 million in first nine months of 1995 to
$12.6 million for the comparable period of 1996. This increase was due to the
Company's acquisition activity and the growth of the Company's car sales
operations from five locations at September 30, 1995 to thirteen locations at
September 30, 1996. Operating income increased over 80% to $15.2 million in the
third quarter of 1996 as compared to $8.4 million operating income earned in the
comparable period of 1995. Operating income for the nine-month period ended
September 30, 1996 increased $20.5 million, or 160%, to $33.3 million. The
increase in operating income in the third quarter was somewhat offset by an
increase in net interest expense of $4.9 million, or 135%, due primarily to an
increase in the vehicle fleet due to the acquisitions of the Budget franchises
in Arizona and Southern California and VPSI, and due to an increase in the
provision for income taxes of $1.2 million due to the enhanced profitability of
the Company in 1996.
Operating Revenues. Vehicle rental revenues increased $33.0 million, or 111%, in
the third quarter of 1996 as compared to the comparable period of 1995. Such
revenues for the nine-month period ended September 30, 1996 increased $95.7
million from $70.8 million in 1995 to $166.5 million in the current year. The
increase in rental revenues is due primarily to the increase in the size of the
Company from operating 99 rental locations in eleven franchise areas at
September 30, 1995 to operating 155 locations in thirteen franchise territories
at September 30, 1996 and to the acquisition of VPSI, Inc. in February 1996.
This increased size resulted in an increase in the number of rental revenue days
from 711,000 in the third quarter of 1995 to 1,369,000 days in 1996. The average
rental term increased from 4.0 days in the third quarter of 1995 to 4.2 days in
the comparable period of 1996. Vehicle rental revenues also increased in the
third quarter of 1996 due to the inclusion of $8.1 million of revenues earned by
VPSI for which there were no corresponding revenues in 1995. Revenues from the
Company's retail car sales operations increased $26.1 million from $12.7 million
in the third quarter of 1995 to $38.8 million in the comparable period of 1996,
due to the expansion of the Company's car sales facilities from four locations
at September 30, 1995 to thirteen locations at September 30, 1996.
Operating Expenses. Operating expenses increased approximately $143.6 million,
or 171%, to $227.8 million for the nine-month period ended September 30, 1996 as
compared to $84.2 million for the same period in 1995. The growth of the
Company's vehicle rental operations through the acquisitions discussed above was
the principal cause of all of the increases to the Company's operating expenses.
Vehicle depreciation increased approximately $24.2 million, or 122%, due to an
increase in fleet of 7,800 vehicles. Personnel costs increased approximately
142% in the first nine months of 1996 as compared to the comparable period of
1995 due to an increase of approximately 1,300 employees since September 30,
1995. Advertising expenses increased from $6.5 million to $17.1 million for the
first nine months of 1996 due to the increase in the size of the rental
operations and due to the growth of the retail car sales operations from five
markets at September 30, 1995 to thirteen markets at September 30, 1996. The
retail car sales business typically incurs greater advertising expense than the
car rental business. Facilities expense increased $7.5 million, or 102%, due to
the addition of 56 locations since September 30, 1995. Other operating expense
increases were due to the increased volume of rental business resulting from the
1995 and 1996 acquisitions.
Other (Income) Expense, net. Interest expense, net of interest income, increased
from $8.7 million for the first nine months of 1995 to $20.7 million for the
first nine months of 1996. Vehicle interest expense increased approximately $3.2
million in the third quarter of 1996 due to the increase in the size of the
Company's rental fleet from approximately 7,800 vehicles at September 30, 1995
to approximately 15,600 vehicles at September 30, 1996. The Company's cost of
funds decreased approximately 0.4% per annum in the third quarter of 1996 as
compared to the third quarter of 1995, due primarily to the decrease in the
LIBOR rate, upon which most of the Company's debt is based. Nonvehicle interest
and other expense, net of interest income, increased approximately $1.7 million
in the third quarter of 1996, from approximately $0.2 million in 1995 to $1.9
million in 1996. This increase was primarily due to approximately $1.3 million
in nonrecurring bank fees in the form of cash and stock warrants paid to a bank
for a bridge financing that was repaid in July 1996 with proceeds from the
Company's issuance of common stock.
Provision for income taxes. The provision for income taxes increased $3.9
million from $0.5 million for the first nine months of 1995 to $4.4 million for
the comparable period of 1996. The tax provision is calculated at a rate of 35%.
The increase in provision is due to the enhanced profitability in the first nine
months of 1996 as compared to 1995.
<PAGE>
Part II - Other Information
Item 1 Legal Proceedings
There are no material pending legal proceedings to which Team Rental Group,
Inc. nor any of its subsidiaries is a party or to which any of their
properties are subject.
Item 2 Changes in Securities
On July 9, 1996, the Company sold 3,821,007 shares of Class A common stock
at $13.00 per share to investors in a public offering yielding proceeds, net
of underwriters' commissions, of $46.9 million to the Company.
Item 3 Defaults upon Senior Securities
Not applicable.
Item 4 Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5 Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit 11.1 Earnings Per Share Computations
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
In a Form 8-K dated August 1, 1996, the Company reported under Item 2 the
acquisition of ValCar Rental Car Sales, Inc. The required financial statements
and pro forma financial information were subsequently filed on a Form 8-K/A by
the Company under Item 7 on November 12, 1996.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TEAM RENTAL GROUP, INC.
-----------------------
(Registrant)
Dated: November 13, 1996 By: /s/ Sanford Miller
--------------
Sanford Miller
Chairman of the Board and
Chief Executive Officer
Dated: November 13, 1996 By: /s/ Jeffrey D. Congdon
------------------
Jeffrey D. Congdon
Chief Financial Officer
<TABLE>
<CAPTION>
EXHIBIT 11.1
EARNINGS PER SHARE COMPUTATIONS
Nine-Month Period Ended
Sept. 30, Sept. 30,
1996 1995
---- ----
PRIMARY EARNINGS PER SHARE: (Dollar and share amounts in 000's)
<S> <C> <C>
Net Income $ 8,163 $ 3,578
------- -------
Shares:
Weighted average common shares outstanding 8,543 6,104
Effect of shares issuable under stock option
plans and from stock purchase warrants,
based on the treasury stock method 132
------- -------
Adjusted common shares and equivalents 8,675 6,104
------- -------
Earnings per share - primary $0.94 $0.59
------- -------
FULLY DILUTED EARNINGS PER SHARE:
Net Income $ 8,163 $ 3,578
------- -------
Shares:
Weighted average common shares outstanding 8,543 6,104
Effect of shares issuable under stock option
plans and from stock purchase warrants,
based on the treasury stock method 277
------- -------
Adjusted common shares and equivalents 8,820 6,104
------- -------
Earnings per share - fully diluted $0.93 $0.59
------- -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11.1
EARNINGS PER SHARE COMPUTATIONS
Three-Month Period Ended
Sept. 30, Sept. 30,
1996 1995
---- ----
PRIMARY EARNINGS PER SHARE: (Dollar and share amounts in 000's)
<S> <C> <C>
Net Income $ 4,640 $ 3,981
------- -------
Shares:
Weighted average common shares outstanding 10,919 6,129
Effect of shares issuable under stock option
plans and from stock purchase warrants,
based on the treasury stock method 256
------- -------
Adjusted common shares and equivalents 11,175 6,129
------- -------
Earnings per share - primary $0.42 $0.65
------- -------
FULLY DILUTED EARNINGS PER SHARE:
Net Income $ 4,640 $ 3,981
Shares:
Weighted average common shares outstanding 10,919 6,129
Effect of shares issuable under stock option
plans and from stock purchase warrants,
based on the treasury stock method 277
------- -------
Adjusted common shares and equivalents 11,196 6,129
------- -------
Earnings per share - fully diluted $0.41 $0.65
------- -------
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-3-1996
<CASH> 24,656
<SECURITIES> 0
<RECEIVABLES> 38,143
<ALLOWANCES> 0<F1>
<INVENTORY> 349,959
<CURRENT-ASSETS> 412,758
<PP&E> 22,098
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 509,213
<CURRENT-LIABILITIES> 37,604
<BONDS> 372,300
2,000
0
<COMMON> 112
<OTHER-SE> 95,496
<TOTAL-LIABILITY-AND-EQUITY> 509,213
<SALES> 261,020
<TOTAL-REVENUES> 261,020
<CGS> 77,727
<TOTAL-COSTS> 150,035
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,700
<INCOME-PRETAX> 12,558
<INCOME-TAX> 4,395
<INCOME-CONTINUING> 8,163
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,163
<EPS-PRIMARY> 0.94
<EPS-DILUTED> 0.93
<FN>
<F1>Receivables are reported net of allowances for doubtful accounts on the Balance
Sheet.
<F2>Property, plant & equipment is reported net of accumulated depreciation on the
Balance Sheet.
</FN>
</TABLE>
