PARSIPPANY, N.J. -

Mirroring impressive gains made by an industry competitor, Avis Budget Group highlighted jumps in revenue, adjusted EBITDA and more during the second quarter.

Avis determined its revenue came in at $1.4 billion, an increase of 9 percent compared with the same period a year ago. This increase is primarily due to an 8-percent rise in rental day volume.

The company also mentioned ancillary revenues, excluding gas and customer recoveries, grew 4 percent on a per-rental-day basis during the second quarter.

Excluding certain items, officials said their adjusted EBITDA spiked 95 percent to $191 million, and adjusted EBITDA margin expanded by 600 basis points compared to the prior-year second quarter.

Avis explained the increase in margin was primarily due to a 30-percent decline in per-unit fleet costs, including gains on vehicle dispositions amid a particularly strong used market, lower vehicle financing costs and incremental savings from productivity initiatives. But this was partially offset by higher direct operating costs, including increased maintenance and damage expense, foreign-exchange effects and increased marketing costs.

The company also highlighted its second-quarter net income shot $79 million higher and diluted earnings per share increased to 63 cents, excluding certain items. Avis added that reported net income and diluted earnings per share, which include those items, were $52 million and 42 cents, respectively.

In assessing the company’s second-quarter performance, Avis Budget Group chairman and chief executive officer Ronald Nelson offered, “We reported strong revenue and earnings growth in the second quarter with both corporate and leisure volumes benefiting from our ongoing investments in driving brand awareness.

“Fleet costs also decreased substantially as a result of the ongoing strength of the used-car market,” Nelson continued.

“The strategic growth initiatives that we have implemented, including our increased emphasis on inbound-international and small-business rentals, are driving incremental revenue and enhancing the vehicle-rental experience we offer,” he went on to say.

“In addition, our plans for integrating Avis Europe plc are progressing well, and we look forward to realizing significant value from re-uniting our brands globally under one corporate umbrella,” Nelson added.

As reported by Auto Remarketing, Hertz Global Holdings posted a second quarter with profitability levels chairman and CEO Mark Frissora said hadn’t “been seen before.” Details on Hertz’s numbers can be found here.

More Details of Avis’ Operating Segments

After revealing the broad figures, Avis went into more detail about each of its operating segments.

For its domestic car rental interests, second-quarter revenue climbed 8 percent year-over-year from $981 million to $1.055 billion. Adjusted EBIDTA climbed a whopping 177 percent from $52 million to $144 million.

Pushing that 177-percent adjusted EBITDA increase was a 39-percent decrease in per-unit fleet costs, 5-percent growth in ancillary revenues on a per-rental-day basis and the company’s productivity initiatives. The company noted adjusted EBITDA also includes $2 million of restructuring costs from second quarter of last year.

On the international car rental front, Avis calculated that revenue climbed 20 percent year-over-year from $212 million to $254 million. The company determined the rise stemmed from a 6-percent increase in rental days and a 13-percent uptick in pricing.

While revenue climbed, Avis noted adjusted EBITDA from its international car rental operations remained flat year-over-year, coming in at $32 million in the second quarter.

And in regard to its truck rental performance, Avis discovered revenue ticked 3 percent higher year-over-year from $100 to $103 million thanks to a 10-percent rise in rental days and a 5-percent decline in pricing.

“The growth in volume and the decline in pricing was a result of the substantial growth we achieved in commercial rentals, which have a longer length of rental but lower pricing,” Avis officials explained.

With those points in mind, Avis said its truck rental business posted a 13-percent year-over-year gain in adjusted EBITDA, moving from $16 million to $18 million.

Discussion about European Acquisition, Ongoing Dollar Thrifty Negotiations

In another element of this week’s financial report, Avis recapped that back on June 14  it had agreed to acquire Avis Europe plc, the independently-owned operator of the Avis and Budget brands in Europe, the Middle East, Africa and parts of Asia. The deal came for an aggregate equity purchase price of approximately $1.0 billion.

Officials explained the company incurred $32 million of expenses in connection with the transaction in the second quarter, including $23 million of mark-to-market foreign-currency losses related to the purchase price.

They went on to state Avis Europe shareholders approved the transaction on Monday.

Avis said the acquisition is scheduled to close in early October, subject to applicable court and regulatory approvals.

Meanwhile, company executives emphasized they continue to monitor developments with respect to the potential acquisition of Dollar Thrifty Automotive Group.

“We incurred $9 million of expenses related to this potential transaction in the second quarter, including $7 million of acquisition-related interest expense,” they shared.

Future Outlook

Avis declared that it is well positioned for the ongoing rebound in travel volume and that the strategic initiatives it has implemented have accelerated its revenue and profit growth.

The company estimated its domestic vehicle depreciation costs will decline 18 to 20 percent on a per-unit basis this year compared with last year. That projection includes an estimated 8 to 11 percent decline in the second half as vehicle residual values have been significantly stronger than initially expected. Avis indicated that it plans to keep its rental fleet in line with rental demand, which should result in year-over-year utilization remaining fairly steady during the second half of this year.

Furthermore, officials think their initiatives to reduce costs and enhance productivity will provide $55 to $65 million of incremental savings this year compared to a year ago, bringing the annual savings from their actions since 2008 to $565 to $575 million.

Finally, Avis expects its effective tax rate in 2011 will be approximately 38 to 40 percent, excluding certain items.