<PAGE> 1
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 March 31, 1997
--------------
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
BUDGET 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
4225 Naperville Road, Lisle, IL 60532-3662
(Address of principal executive offices)
(904) 238-7035
--------------
Registrant's telephone number, including area code
TEAM RENTAL GROUP, INC.
-----------------------
Basin Street, Suite 210, Daytona Beach, FL 32114
(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 []
19,899,683 shares of common stock were outstanding as of May 13, 1997,
comprised of 17,963,083 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.
1
<PAGE> 2
INDEX
<TABLE>
<S> <C>
PART I. Financial Information
- ------------------------------
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1997 (unaudited)
and December 31, 1996 3
Consolidated Statements of Operations for the Three-Month
Periods Ended March 31, 1997 and 1996 (unaudited) 4
Consolidated Statement of Changes in Stockholders' Equity
for the Three-Month Period Ended March 31, 1997 (unaudited) 5
Consolidated Statements of Cash Flows for the Three-Month
Periods Ended March 31, 1997 and 1996 (unaudited) 6
Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
PART II. Other Information
- --------------------------
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Default Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signature Page 15
</TABLE>
2
<PAGE> 3
BUDGET GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Dollar amounts in thousands) (UNAUDITED)
MARCH 31, DECEMBER 31,
1997 1996
--------------- ----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $35,275 $50,490
Restricted cash 49,335 66,336
Trade and vehicle receivables, net of
allowance for doubtful accounts 31,818 31,302
Accounts receivable, related parties 58 58
Vehicle Inventory 22,292 16,413
Revenue earning vehicles, net 368,968 319,257
Property and equipment, net 18,624 18,502
Franchise rights, net
of accumulated amortization 68,088 68,469
Deferred financing fees, net 3,780 3,950
Other assets 11,880 10,022
Other intangible assets 2,403 2,424
----------- -----------
Total assets $612,521 $587,223
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Notes payable $477,241 $454,109
Capital lease obligations 531 580
Accounts payable 7,865 14,601
Accrued and other liabilities 24,873 16,526
Deferred income taxes 7,162 7,406
----------- -----------
Total liabilities 517,672 493,222
----------- -----------
COMMON STOCK WARRANT 2,000 2,000
STOCKHOLDERS' EQUITY
Common stock 112 112
Additional paid-in-capital 89,856 89,856
Retained Earnings 3,211 2,363
Treasury stock (330) (330)
----------- -----------
Total stockholders' equity 92,849 92,001
----------- -----------
Total liabilities and stockholders' equity $612,521 $587,223
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE> 4
BUDGET GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
(Dollar amounts in thousands except per share data) FOR THE 3-MONTH PERIOD ENDED MARCH 31,
1997 1996
-------------- ---------------
<S> <C> <C>
OPERATING REVENUE:
Rental revenue $58,697 $44,697
Sales revenue 43,751 21,097
-------------- -----------
Total operating revenue 102,448 65,794
OPERATING EXPENSES:
Direct vehicle and operating 8,860 4,209
Depreciation - vehicles 17,403 11,804
Depreciation - nonvehicle 671 536
Cost of car sales 36,575 17,840
Advertising, promotion and selling 6,523 4,600
Facilities 5,935 4,328
Personnel 14,800 10,689
General and administrative 2,975 4,020
Amortization 546 514
------------- -----------
Total operating expenses 94,288 58,540
------------- -----------
OPERATING INCOME 8,160 7,254
------------- -----------
OTHER (INCOME) EXPENSE:
Interest expense - vehicles 6,724 5,027
Interest expense - other 746 254
Interest income - restricted cash (723) (155)
------------- -----------
Total other (income) expense 6,747 5,126
------------- -----------
INCOME BEFORE PROVISION FOR INCOME TAXES 1,413 2,128
Provision (credit) for income taxes 565 851
------------- -----------
NET INCOME $848 $1,277
============= ===========
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE $0.08 $0.18
============= ===========
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING 11,256,983 7,255,950
============= ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE> 5
BUDGET GROUP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Additional Total
Common Paid-In Retained Treasury Stockholders'
Stock Capital Earnings Stock Equity
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(Dollars amounts in thousands)
Balance at December 31, 1996 $112 $89,856 $2,363 ($330) $92,001
Net income 848 $ 848
--------------------------------------------------------------------------------------------
Balance at March 31, 1997 $112 $89,856 $3,211 ($330) $92,849
============================================================================================
</TABLE>
5
<PAGE> 6
BUDGET GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(Dollar amounts in thousands) FOR THE 3-MONTH PERIOD ENDED MARCH 31,
1997 1996
------------------ ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 848 $ 1,277
Adjustments to reconcile net income to net
cash provided by operating activities :
Depreciation 18,074 12,340
Amortization 546 514
Deferred income tax benefit (244) (142)
Changes in operating assets and liabilities:
Accounts receivable (516) (8,389)
Vehicle inventory (5,879) (4,894)
Other assets (1,858) (3,529)
Accounts payable (6,736) (2,828)
Other liabilities 8,347 9,369
------------- -----------
Total adjustments 11,734 2,441
------------- -----------
Net cash provided by operating activities 12,582 3,718
------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash 17,001 43,534
Proceeds from sale of
revenue-earning vehicles 84,912 43,878
Purchases of revenue-earning vehicles (152,000) (106,812)
Purchase of rental vehicle franchise rights (11,497)
Purchases of equipment and improvements (793) (6,921)
------------- -----------
------------- -----------
Net cash used in investing activities (50,880) (37,818)
------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from vehicle financing 40,223 63,278
Repayment of vehicle financing (7,644) (49,738)
Proceeds from notes payable
Principal payments : 24,922
Notes payable (9,447)
Capital leases (49) (45)
------------- -----------
Net cash provided by financing activities 23,083 38,417
------------- -----------
Net increase (decrease) in cash and cash equivalents (15,215) 4,317
Cash and cash equivalents, beginning of period 50,490 357
------------- -----------
Cash and cash equivalents, end of period $ 35,275 $ 4,674
============= ===========
</TABLE>
6
<PAGE> 7
BUDGET GROUP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Budget Group,
Inc., previously named Team Rental Group, Inc. (the "Company") 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-month period ended March 31, 1997
are not necessarily indicative of the results that may be expected for the
entire year ending December 31, 1997.
The consolidated financial statements for the three-month period ended March
31, 1996 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, from the date of acquisition through the end of
the period presented.
2. ACQUISITIONS
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, and operated a rental fleet of approximately
3,300 vans as of the acquisition date.
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
the Company.
If the acquisitions had occurred at the beginning of 1996, 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.
THREE-MONTH PERIOD ENDED MARCH 31,
<TABLE>
<CAPTION>
1996
----
<S> <C>
(Dollars in thousands)
Operating revenue $ 85,521
Income before provision for income taxes (2,448)
Net income (1,469)
Earnings per common share $ (0.20)
</TABLE>
3. SUBSEQUENT EVENTS
On April 17, 1997, the Company's Class A Common Stock began trading on the New
York Stock Exchange under the ticker symbol "BD". Prior to that time, the
Company's Class A Common Stock had been traded on Nasdaq.
7
<PAGE> 8
On April 29, 1997, the entity formerly known as Team Rental Group, Inc.
completed its acquisition of Budget Rent a Car Corporation ("BRACC") and
changed its name to Budget Group, Inc. After the consummation of the BRACC
acquisition, Budget Group and its franchisees (collectively referred to as the
"Budget System") operate the third largest worldwide general use car and truck
rental system, with approximately 3,200 locations and a peak fleet size during
1996 of 266,000 cars and 18,000 trucks. The Budget System includes locations in
both the airport and local (downtown and suburban) markets in all major
metropolitan areas in the United States, in many other small and mid-size U.S.
markets and in more than 110 countries worldwide. Pro forma for the BRACC
Acquisition, the Budget System included approximately 455 company-owned
locations in the United States at December 31, 1996, accounting for
approximately 76% of 1996 U.S. system-wide revenues. In addition, Budget
franchisees operated approximately 500 royalty-paying franchise locations in
the United States at December 31, 1996. Budget is one of only three vehicle
rental systems that offer rental vehicles throughout the world under a single
brand name, with locations in Europe, Canada, Latin America, the Middle East,
Asia/Pacific and Africa. The Budget System currently maintains more local
market rental locations throughout the world than most of its major
competitors. The Budget System is also unique among major car rental systems in
that it rents trucks in most major markets worldwide. The Budget System's
consumer truck rental fleet is the fourth largest in the United States. Budget
Group is also one of the largest independent retailers of late model vehicles
in the United States, operating 22 retail car sales facilities under the name
"Budget Car Sales" with pro forma revenues of $246.9 million for 1996.
In conjunction with and concurrent to the acquisition of BRACC on April 29,
1997, the Company sold 8,625,000 shares of Class A common stock at a price of
$21.625 in a public offering raising proceeds, net of underwriting commissions,
of $177.2 million. The Company also issued 4,500 shares of Series A
convertible, non-voting preferred stock, each share of which is convertible
into 1,000 shares of the Company's Class A common stock, to Ford Motor
Corporation. The common shares underlying the preferred stock had a value of
approximately $97.3 million at the time of issuance. The Company also entered
into the following debt financing transactions concurrently with the
acquisition of BRACC: (i) $165.0 million of guaranteed senior notes at a rate
of 9.57% maturing in 2007; (ii) $45.0 million of convertible subordinated notes
at a rate of 6.85%, convertible into 1,609,442 shares of Class A common stock
at a conversion price of $27.96 per share and maturing in 2007; (iii) a
variable-rate commercial paper vehicle financing facility in the amount of $900
million; (iv) a $500 million asset-backed note vehicle financing facility
maturing in 2001 and 2002, composed of a senior note in the amount of $472.5
million bearing interest at a rate of 7.35% and a subordinated note in the
amount of $27.5 million bearing interest at a rate of 7.80%; and (v) a $300
million five-year secured working capital facility bearing interest at an
initial rate of 1.75% over LIBOR, guaranteed by Budget Group and secured
primarily by accounts receivable, cash and unencumbered vehicles.
For further information regarding the BRACC Acquisition, see the Company's
Current Report on Form 8-K filed on May 13, 1997.
8
<PAGE> 9
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.
In April 1997, the Company acquired Budget Rent a Car Corporation and changed
its name to Budget Group, Inc. For a further discussion of this transaction,
see Note 3 to the Company's financial statements herein.
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 March 31, 1997 has interest rates ranging from 6.3% to
8.5%. The Company intends to fund its operations through asset-backed notes
and 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 March 31, 1997, the Company had $321.7 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
March 31, 1997 range from 6.3% to 7.1%.
The Company's other vehicle obligations consist of outstanding lines of credit
to purchase rental fleet and retail car sales inventory. Collateralized
available lines of credit at March 31, 1997 consist of $208 million for rental
vehicles and $26 million for retail car sales inventory with maturity dates
ranging from April 1997 to May 1998. 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 6.9% to 8.5% at March 31, 1997. 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.
9
<PAGE> 10
Monthly payments of interest only for retail car sales inventory obligations
are required at an annual interest rate of 8.5% at March 31, 1997. 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.
Working Capital Facilities. At March 31, 1997, the Company had an unutilized
working capital facility of $10.0 million, which requires monthly interest
payments on the outstanding balance at LIBOR plus 2.50% (8.125% at December 31,
1996). This facility, which expired in April 1997, was collateralized by
accounts receivable, vehicle inventory, equipment, certain intangibles,
investments and all other personal property of the Company and guarantees of
certain of the Company's subsidiaries. This agreement was subject to certain
covenants, the most restrictive of which requires the Company to maintain
certain financial ratios and minimum tangible net worth and prohibits the
payment of cash dividends.
Convertible Subordinated Notes. At March 31, 1997, the Company had $80.0
million aggregate principal amount of Series A Convertible Notes outstanding.
At a conversion price of $20.07, the Series A Convertible Notes are convertible
into 3,986,049 shares of Class A Common Stock. The notes bear interest at a
rate of 7.0% and mature in 2007.
CHANGE IN FINANCIAL CONDITION
Total assets increased $25.3 million, or 4.3%, from $587.2 million at December
31, 1996 to $612.5 million at March 31, 1997. This increase resulted primarily
from increases in revenue-earning vehicles of $49.7 million, or 15.6%, and
retail car sales inventory of $5.9 million, or 35.8% due to the increased size
of the rental fleet and to the increased number of retail car sales facilities
at March 31, 1997. These increases were somewhat offset by a decrease in cash
and cash equivalents and restricted cash of $32.2 million resulting from the
use of cash to finance vehicle purchases in the first three months of 1997.
Total liabilities increased $25.4 million, or 5.1%, from $493.2 million at
December 31, 1996 to $518.6 million at March 31, 1997 due primarily to an
additional $23.1 million of net borrowings for financing vehicle acquisitions
and increases in accounts payable and other accrued liabilities of $1.6 million
relating to the increased size of the Company at March 31, 1997. The increase
in stockholders' equity of approximately $0.8 million was due to earnings in
the first quarter of 1997.
RESULTS OF OPERATIONS
General Operating Results. Net income for the first three months of 1997
decreased $0.10 per share from $0.18 for the first three months of 1996 to
$0.08 for the first three months of 1997. Pre-tax income for the first quarter
of 1996 included $1.9 million of automobile incentives received in 1995 that
reduced vehicle depreciation in the first quarter of 1996 for which there were
no corresponding amounts recognized in 1997. Excluding the incentive payments
recognized in the first quarter of 1996, net income increased from $0.02 in the
first quarter of 1996 to $0.08 in the first quarter of 1997. Operating revenues
increased $36.7 million, or 55.7%, in the first quarter of 1997 as compared to
the comparable period of 1996. Operating expenses over the same period
increased $35.7 million from $58.5 million in the first quarter of 1996 to
$94.3 million in 1997. Operating income increased approximately 12.5% to $8.2
million in the first quarter of 1997 as compared to $7.3 million operating
income earned in the comparable period of 1996. The increase in operating
income of $0.9 million in the first quarter was offset by an increase in net
interest expense of $1.6 million, or 31.6%, due primarily to an increase in the
vehicle fleet due to the acquisitions of VPSI and the Budget franchise in
Arizona.
Operating Revenues. Vehicle rental revenues increased $14.0 million, or 31.3%,
in the first quarter of 1997 as compared to the comparable period of 1996. The
increase in rental revenues is due primarily to an increase in the volume of
the Company's business in its existing franchise territories and to the fact
that 1997 results include three full months of VPSI and the Arizona Budget
franchise, whereas 1996 included only two months and one month of operations,
respectively. This increased size resulted in an increase in the number of
rental revenue days from 954,000 in the first quarter of 1996 to 1,218,000 days
in 1997.
10
<PAGE> 11
The average rental term increased from 4.0 days in the first quarter of 1996 to
4.2 days in the comparable period of 1997. Revenues from the Company's retail
car sales operations increased 107.4% from $21.1 million in the first quarter
of 1996 to $43.8 million in the comparable period of 1997, due to the expansion
of the Company's car sales facilities from seven locations at March 31, 1996 to
twelve locations at March 31, 1997.
Operating Expenses. Operating expenses increased approximately $35.7 million,
or 61.1%, to $94.3 million for the three-month period ended March 31, 1997 as
compared to $58.5 million for the same period in 1996. The Company's cost of
retail vehicle sales increased $18.7 million, or 105% due to the increase in
the number of retail vehicle sales facilities operated by the Company in 1997
and due to the increase in volume of business at all of the Company's car sales
facilities. Vehicle depreciation increased approximately $5.6 million, or
47.4%, and direct vehicle and operating costs increased $4.7 million, or
110.5%, due to an increase in fleet of 3,600 vehicles in the Budget vehicle
rental fleet. Personnel costs increased approximately 38.5% in the first three
months of 1997 as compared to the comparable period of 1996 due to an increase
of approximately 200 employees since March 31, 1996, and due to the fact that
1997 includes a full three months of personnel expense for VPSI and the Phoenix
Budget franchise. Advertising expenses increased from $4.6 million to $6.5
million for the first three months of 1997 primarily to the growth of the
retail car sales operations from seven locations at March 31, 1996 to twelve
locations at March 31, 1997. The retail car sales business typically incurs
greater advertising expense than the car rental business. Other operating
expense fluctuations of approximately $0.7 million were due to the increased
volume of business the Company experienced in the first quarter of 1997.
Other (Income) Expense, net. Interest expense, net of interest income,
increased from $5.1 million for the first three months of 1996 to $6.7 million
for the first three months of 1997, an increase of 31.6%. Vehicle interest
expense increased approximately $1.7 million in the first quarter of 1997 due
to the increase in the size of the Company's average rental fleet from
approximately 12,600 vehicles in the first quarter of 1996 to approximately
16,200 vehicles at March 31, 1997. Nonvehicle interest and other expense, net
of interest income, decreased approximately $0.1 million in the first quarter
of 1997 due to a $0.5 million increase in other interest expense, which was
offset by a $0.6 million increase in interest income the Company received on
restricted cash from proceeds from the Company's asset-backed vehicle financing
facilities that were not invested in vehicle fleet.
Provision for income taxes. The provision for income taxes decreased $0.3
million from $0.9 million for the first three months of 1996 to $0.6 million
for the comparable period of 1997. The tax provision is calculated at a rate of
40%. The decrease in the tax provision is due to a $750,000 reduction in taxes
from the lack of any automobile incentives in 1997 comparable to those that
generated income in the first quarter of 1996, which was offset by
approximately $0.5 million of additional tax due to the enhanced profitability
of the Company in 1997.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
There are no material pending legal proceedings to which Budget 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 January 13, 1997, pursuant to the terms of a Consent Agreement dated as
of January 13, 1997 among Ford Motor Company and Messrs. Miller, Kennedy and
Congdon (the three holders of all of the outstanding Class B Common Stock,
representing, in the aggregate, over 67% of the outstanding voting power of the
Common Stock), Messrs. Miller, Congdon and Kennedy executed a written consent
approving the issuance of the shares of Class A Common Stock issuable upon
conversion of the Series A convertible preferred stock that was issued to Ford
Motor Company in the acquisition of Budget Rent a Car Corporation.
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 27 Financial Data Schedule
(b) Reports on Form 8-K
None.
12
<PAGE> 13
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.
BUDGET GROUP, INC.
------------------
(Registrant)
Dated: May 13, 1997 By: /s/ Sanford Miller
--------------
Sanford Miller
Chairman of the Board and
Chief Executive Officer
Dated: May 13, 1997 By: /s/ Jeffrey D. Congdon
------------------
Jeffrey D. Congdon
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 84,610
<SECURITIES> 0
<RECEIVABLES> 31,876
<ALLOWANCES> 0<F1>
<INVENTORY> 391,260
<CURRENT-ASSETS> 507,746
<PP&E> 18,624
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 612,521
<CURRENT-LIABILITIES> 40,431
<BONDS> 477,241
0
0
<COMMON> 112
<OTHER-SE> 92,737
<TOTAL-LIABILITY-AND-EQUITY> 612,521
<SALES> 102,448
<TOTAL-REVENUES> 102,448
<CGS> 36,575
<TOTAL-COSTS> 57,713
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,747
<INCOME-PRETAX> 1,413
<INCOME-TAX> 565
<INCOME-CONTINUING> 848
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 848
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
<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>
