Zipcar Ups Revenue, Profits Flat in Q2

CAMBRIDGE, Mass. -- Zipcar, Inc. reportes 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.

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