Zipcar Reports Fourth Quarter and Full Year 2012 Results

Zipcar Reports Fourth Quarter and Full Year 2012 Results

CAMBRIDGE, Mass., Feb. 15, 2013 (GLOBE NEWSWIRE) -- Zipcar, Inc. (Nasdaq:ZIP)
("Zipcar" or the "Company") , the world's leading car sharing network, today
reported results for the fourth quarter and year ended December 31, 2012. On
December 31, 2012, Zipcar and Avis Budget Group, Inc., a Delaware corporation
("Avis Budget"), and Millennium Acquisition Sub, Inc., a Delaware corporation
and a wholly-owned subsidiary of Avis Budget ("Merger Sub"), entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which, on
the terms and subject to the conditions set forth in the Merger Agreement,
Avis Budget has agreed to acquire all of the outstanding shares of Zipcar for
$12.25 per share in cash, without interest, and pursuant to which Merger Sub
will be merged with and into Zipcar with Zipcar continuing as the surviving
corporation and a wholly-owned subsidiary of Avis Budget (the "Merger"). The
Merger Agreement was approved by the board of directors of both companies. As
previously announced, the waiting period related to the Merger under the U.S.
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on
February 11, 2013. The closing of the transaction remains subject to other
customary conditions, including approval by Zipcar shareholders and review by
UK competition authorities, and is expected to close in March or April, 2013.
Prior to the closing of the Merger, Avis Budget and Zipcar will continue to
operate as separate companies.

Financial Highlights

  *Fourth quarter revenue increased 12% to $70.7 million compared to $62.9
    million in the prior year period, despite the loss of potential revenue
    due to Hurricane Sandy of just over $1 million; full year revenue
    increased 15% to $278.9 million from $241.6 million in 2011
  *Total members grew 16% from the prior year period to over 777,000 at year
    end
  *Fourth quarter Adjusted EBITDA of $7.3 million compared to $5.9 million
    last year; full year Adjusted EBITDA of $17.2 million compared to $10.9
    million in 2011
  *Fourth quarter US GAAP net income of $13.8 million, or $0.34 per diluted
    share, compared to $3.9 million, or $0.09 per diluted share in the prior
    year period; full year 2012 US GAAP net income of $14.7 million, or $0.35
    per diluted share, versus a loss of $7.2 million, or ($0.24) per share, in
    2011. Fourth quarter and full year 2012 net income include a non-cash net
    tax benefit of $10.9 million, or $0.27 per diluted share for the fourth
    quarter and $0.26 per diluted share for the full year 2012, primarily
    related to the release of valuation allowance against U.S. net deferred
    tax assets. Also included in the 2012 periods are costs related to the
    Merger Agreement of $0.8 million and costs associated with Hurricane Sandy
    of $1.0 million, partially offset by the positive impact from the sale of
    Zero Emission Vehicle (ZEV) Credits of $1.3 million for the fourth
    quarter, which had not been previously anticipated, and $3.0 million for
    the full year 2012.

Summary Results

For the 2012 fourth quarter, revenue increased 12% to $70.7 million compared
to $62.9 million in the prior year period despite the previously anticipated
negative impact from Hurricane Sandy, which reduced revenue by just over $1
million. Usage revenue represented $58.6 million in the fourth quarter of 2012
compared to $53.3 million in the prior year period with fee revenue
representing substantially all of the remaining revenue in both periods. Fee
revenue represented 17% of total revenue in the 2012 fourth quarter compared
to 15% in the prior year period. For the full year 2012, revenue grew 15% to
$278.9 million compared to 2011 revenue of $241.6 million with usage revenue
representing $235.1 million in 2012 compared to $207.2 million in 2011.Fee
revenue represented substantially all of the remaining revenue in both years
at 16% of total revenue in 2012 and 14% of total revenue in 2011.

Fourth quarter US GAAP net income increased to $13.8 million, or $0.34 per
diluted share, versus net income of $3.9 million, or $0.09 per diluted share,
in the prior year period.Net income in the 2012 fourth quarter includes a
non-cash net tax benefit of $10.9 million or $0.27 per diluted share primarily
related to the release of valuation allowance against U.S. net deferred tax
assets as well as $1.3 million from the unanticipated sale of ZEV
Credits,which were partially offset by approximately $1.0 million in
previously anticipated costs associated with Hurricane Sandy, including
vehicle damages and increased operating costs, and $0.8 million in costs
associated with the Merger Agreement.The release of the valuation allowance
is based on the projected ability of Zipcar to utilize the deferred tax assets
to offset future taxable income in the U.S. Net income in the fourth quarter
of 2011 included a gain on the sale of ZEV Credits of $2.5 million.US GAAP
net income for the full year 2012 was $14.7 million, or $0.35 per diluted
share, compared to a loss of $7.2 million, or ($0.24) per share, in 2011.

Non-GAAP Results

Adjusted EBITDA for the 2012 fourth quarter increased to $7.3 million, which
excludes the effect of the aforementioned release of the valuation allowance,
gains on the sale of ZEV Credits and costs associated with Hurricane Sandy,
compared to $5.9 million in the prior year period. For the full year 2012,
adjusted EBITDA was $17.2 million compared to $10.9 million in 2011. Adjusted
EBITDA for all comparable periods exclude other costs and income as stated in
the reconciliation of adjusted EBITDA below.

Change to Quarterly Conference Call Policy

Due to the previously announced Merger Agreement, Zipcar will not host a
conference call in conjunction with today's release of its fourth quarter and
full-year results and will not be updating prior financial guidance or
providing financial guidance for future periods.

About Zipcar

Zipcar is the world's leading car-sharing network with more than 777,000
members and 9,700 vehicles in urban areas and college campuses throughout the
United States, Canada, the United Kingdom, Spain and Austria. 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. More information is available at www.zipcar.com.

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.Zipcar defines Adjusted EBITDA as earnings before non-vehicle
depreciation, non-vehicle interest expense, interest income, amortization,
preferred stock warrant liability adjustment, stock compensation expenses,
acquisition and integration costs, taxes, including the benefit from the
release of the valuation allowance, loss of equity-method investee, other
income related to Zero Emission Vehicle (ZEV) credits and other gains or
losses associated with events of a non-recurring nature, such as costs related
to Hurricane Sandy and transaction costs related to the Merger Agreement.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

Any statements in this press release about future expectations, plans and
prospects for Zipcar, including statements about the expected timetable for
consummation of the merger, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995. These
statements contain the words "believes," "anticipates," "plans," "expects,"
"will" and similar expressions. Actual results may differ materially from
those currently anticipated due to a number of risks and uncertainties that
are subject to change based on factors that are, in many instances, beyond
Zipcar's control. Risks and uncertainties that could cause results to differ
from expectations include: uncertainties as to the timing of the merger;
uncertainties as to how Zipcar stockholders will vote their shares with
respect to the merger; the risk that competing offers will be made; the
possibility that various closing conditions for the transaction may not be
satisfied or waived, including that a governmental entity may prohibit, delay
or refuse to grant approval for the consummation of the transaction; the
effects of disruption from the transaction making it more difficult to
maintain relationships with employees, members, business partners or
governmental entities, other business effects, including the effects of
industry, economic or political conditions outside of Zipcar's control;
transaction costs; actual or contingent liabilities; or other risks and
uncertainties discussed in documents filed with the U.S. Securities and
Exchange Commission (the "SEC") by Zipcar, including factors discussed in the
"Risk Factors" section of Zipcar's Annual Report on Form 10-K for the year
ended December 31, 2011, and other documents Zipcar periodically files with
the SEC. In addition, the forward-looking statements included in this press
release represent Zipcar's views as of the date of this press release. Zipcar
anticipates that subsequent events and developments will cause its views to
change. However, while Zipcar may elect to update these forward-looking
statements at some point in the future, it specifically disclaims any
obligation to do so. These forward-looking statements should not be relied
upon as representing Zipcar's views as of any date subsequent to the date of
this press release.

Additional Information about the Proposed Transaction with Avis Budget and
Where You Can Find It

Zipcar filed with the SEC a definitive proxy statement on February 4, 2013 and
has filed and may file with the SEC other relevant materials in connection
with the proposed acquisition of Zipcar by Avis Budget. The definitive proxy
statement was mailed to Zipcar stockholders on February 5, 2013. Before making
any voting or investment decisions with respect to the transaction, investors
and security holders of Zipcar are urged to read the proxy statement and the
other relevant materials because they contain important information about the
transaction and Zipcar. Investors and security holders may obtain free copies
of these documents and other documents filed with the SEC at the SEC's website
at www.sec.gov. In addition, investors and security holders may obtain free
copies of the documents filed with the SEC by accessing Zipcar's website at
www.zipcar.com by clicking on the "Investor Relations" link, then clicking on
the "Financial Information" link, and then clicking on the "SEC Filings" link,
or by writing to Zipcar at 25 First Street, 4th Floor, Cambridge,
Massachusetts 02141, Attention: Secretary.

ZIP-F

Contacts:

Investor Relations:
Jonathan Schaffer, The Blueshirt Group
Phone: 212-871-3953
Email: ir@zipcar.com

Media Relations:
Karen CK Drake, Vice President of Communications, Zipcar
Phone: 617-336-4323
Email: pr@zipcar.com

Zipcar, Inc
Condensed Consolidated Statements of Operations
(Unaudited)
                                               Three Months Ended      Year Ended
                                               December 31,            December 31,
                                               2012        2011        2012        2011
(inthousands,exceptshareandpersharedata)                                  
                                                                                
Revenue                                         $70,694    $62,898    $278,868   $241,649
Cost and expenses                                                                
Fleet operations                                44,141     40,329      173,613     159,185
Member services and fulfillment (1)             5,237       4,779       20,007      19,460
Research and development (1)                    1,251       893         4,522       3,948
Selling, general and administrative (1)         16,208      13,904      71,558      57,117
Amortization of acquired intangible assets      689         869         3,070       3,892
Total operating expenses                        67,526      60,774      272,770     243,602
Income (loss) from operations                   3,168       2,124       6,098       (1,953)
Other income (expense)                                                           
Interest income                                 119         63          367         128
Interest expense                                (1,146)     (839)       (4,385)     (8,634)
Other, net                                      594         2,513       1,170       3,041
Income (loss) before income taxes               2,735       3,861       3,250       (7,418)
Provision (benefit) for income taxes            (10,881)    (6)         (10,937)    (270)
Net income (loss)                               13,616      3,867       14,187      (7,148)
Less: net (income) loss attributable to         210         (5)         489         (4)
redeemable noncontrolling interest
Net income (loss) attributable to Zipcar, Inc.  $13,826   $3,862    $14,676   $(7,152)
                                                                                
Net income (loss) attributable to common stockholders per share:                                         
Basic                                           $0.35     $0.10     $0.37     $(0.24)
Diluted                                         $0.34     $0.09     $0.35     $(0.24)
Weighted average number of common shares
outstanding used incomputing per share                                          
amounts:
Basic                                           40,051,721 39,292,172 39,852,035 29,379,940
Diluted                                         41,201,893 42,150,756 41,545,494 29,379,940
                                                                                
(1) Stock-based compensation is included in above line items                                             
                                                                                
                                               Three Months Ended      Year Ended
                                               December 31,            December 31,
                                               2012        2011        2012        2011
                                                                                
                                                                                
Member services and fulfillment                 $58        $24        $209       $93
Research and development                        49          45          205         165
Selling, general, and administrative            1,260       970         5,147       3,850
                                               $1,367     $1,039     $5,561     $4,108
                                                                                

Zipcar, Inc
Reconciliation of adjusted EBITDA
(Unaudited)
                                                                 
                               For the Three Months Ended For the Year Ended
(in thousands)                  December 31,               December 31,
                               2012          2011         2012      2011
Reconciliation of Adjusted                                        
EBITDA
Net income (loss) attributable  $13,826      $3,862      $14,676  $(7,152)
to Zipcar, Inc.
Non-vehicle depreciation        1,052         595          3,225     2,376
Amortization                    689           869          3,070     3,892
Non-vehicle interest expense    61            29           162       5,098
Interest income                 (119)         (63)         (367)     (128)
Preferred stock warrant         --          --         --      724
liability adjustment
Stock compensation              1,367         1,039        5,561     4,108
Acquisition and integration     227           2,090        1,766     5,626
cost
Merger related cost             751           --          751       --
Taxes                           (10,881)      (6)          (10,937)  (270)
Zero Emission Vehicle credits   (1,296)       (2,500)      (3,028)   (3,361)
Hurricane Sandy                 952           --           952       --
Loss of equity-method investee  624           --           1,325     --
Adjusted EBITDA                 $7,253      $5,915     $17,156 $10,913
                                                                 

Zipcar, Inc
Condensed Consolidated Balance Sheets
(Unaudited)
                                             December 31, December 31,
                                             2012         2011
(inthousands,exceptshareandpersharedata)                              
                                                         
Assets                                                    
Current assets                                            
Cash and cash equivalents                     $45,255     $61,658
Short-term marketable securities              22,238       24,788
Accounts receivable, net of allowance for     6,613        7,452
doubtful accounts
Restricted cash                               2,253        381
Deferred tax asset                            4,190        --
Prepaid expenses and other current assets     13,728       13,665
Total current assets                          94,277       107,944
Long-term marketable securities               16,258       13,809
Property and equipment, net                   159,350      103,789
Goodwill                                      107,523      99,696
Intangible assets                             2,887        4,754
Restricted cash                               13,532       7,277
Noncurrent deferred tax asset                 18,632       --
Deposits and other noncurrent assets          16,682       7,269
Total assets                                  $429,141    $344,538
Liabilities and Equity                                    
Current liabilities                                       
Accounts payable                              $6,472      $6,069
Accrued expenses                              26,223       20,003
Deferred revenue                              21,182       19,369
Deferred tax liability                        150          --
Current portion of capital lease obligations  14,424       11,367
and other debt
Total current liabilities                     68,451       56,808
Capital lease obligations and other debt, net 94,716       58,908
of current portion
Deferred tax liability, net of current        11,698       --
portion
Deferred revenue, net of current portion      4,925        4,659
Other liabilities                             778          2,313
Total liabilities                             180,568      122,688
                                                         
Commitments and contingencies                             
                                                         
Non-controlling interest                      1,073        400
Stockholders'equity:                                     
Common stock, $0.001 par value                40           40
Additional paid-in capital                    302,635      294,107
Accumulated deficit                           (57,975)     (72,651)
Accumulated other comprehensive (loss) gain   2,800        (46)
Total stockholders' equity                    247,500      221,450
Total liabilities and equity                  $429,141    $344,538
                                                         

Zipcar, Inc
Key financial and operating metrics
(Unaudited)
                                                                 
                               For the Three Months Ended For the Year Ended
                               December 31,               December 31,
                               2012          2011         2012      2011
Key Financial and Operating                                       
Metrics:
Ending members                  777,689      673,257     777,689  673,257
Ending vehicles                 9,763        8,904       9,763    8,904
Usage revenue per vehicle per   $64         $63        $63     $63
day
Total revenue per member per    $91         $94        $377    $392
period
Cost per new account            $54         $54        $71     $58
Average monthly member          97.6%         97.8%        97.6%     97.8%
retention
Adjusted EBITDA (in thousands)  $7,253      $5,915     $17,156 $10,913
                                                                 

                             For the Three Months Ended For the Year Ended
                             December 31,               December 31,
                             2012          2011         2012       2011
                                                                
                                                                
Established Markets:                                             
Ending members               395,868      350,253     395,868   350,253
Ending vehicles              4,807        4,581       4,807     4,581
Usage revenue per vehicle    $69         $70        $69      $69
per day
Revenue (in thousands)       $38,313     $35,595    $155,878 $136,426
Income before tax (in        $10,397     $9,932     $38,893  $31,013
thousands)
                                                                
 
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