FT. LAUDERDALE, Fla. –- ANC Rental Corp. President and CEO William Plamondon said last week that competitor lawsuits, aimed at blocking efforts to combine Alamo and National airport operations, have thrown the company's reorganization six to eight months off schedule.
"However, with the cooperation of the overwhelming number of airports, this reorganization effort is substantially complete, and the U.S. Court of Appeals for the Third Circuit has recently put an end to our competitors' frivolous attacks," Plamondon said in a statement dated Feb. 11. He predicted that the company would return to profitability during 2003.
ANC filed for Chapter 11 bankruptcy in November 2001. In the past year, both Hertz and Avis have filed lawsuits trying to block ANC's dual-branding efforts. The aim of ANC's consolidation project is to slash operating costs and airport concession fees. ANC has already consolidated 112 locations, both on and off airport, Plamondon said. His statement was included in a filing submitted to the U.S. Securities and Exchange Commission (SEC).
Plamondon added that the company expects newly approved agreements with National licensees to produce more corporate revenue. Many existing National licensees have opted to dual-brand as well, serving both National and Alamo customers.
"To date, we have entered into new agreements with licensees representing well over 60% of our licensee revenue and expect this reorganization effort also to be completed in the first part of this year," Plamondon said.
Plamondon denounced reports that ANC's reorganization effort is failing and that the company's financial woes continue to mount.
"In spite of this progress, we are disappointed and angered to hear from many of our customers that certain competitors continue to approach them with false messages concerning our imminent demise and excerpts from the financial reports that we are required to file as part of the bankruptcy process," Plamondon said.
In recent SEC filings, some of ANC's costs have substantially exceeded budget projections. For example, the company's airport/agency concession fees paid in December 2002 totaled $14.9 million. But the 2003 budget projected a cost of $4.5 million for concession fees for the month. Vehicle holding costs for December totaled nearly $80.3 million, though the budget had projected them to total $61.9 million.
But such budget discrepancies don't tell the whole story, Plamondon noted.
"First of all, these are debtor-only reports," Plamondon said. "They do not reflect ANC's wholly owned non-debtor subsidiaries, which generated approximately $129 million income in 2002, and they exclude the over $590 million in net consolidated assets of these subsidiaries."
Further, Plamondon added, the 2002 numbers include write-offs of non-cash items ($260 million), nonrecurring losses from discontinued operations ($92 million), one-time restructuring charges ($65 million), and expenses related to excess accruals that won't result in a cash expense ($50 million).
"In fact, our 2002 loss from continuing operations before one-time charges is less than half of our 2001 loss," Plamondon said.
In a swipe at Hertz, Plamondon made a playful reference to one of Hertz's own advertising tag lines: "Are these reports a fair representation of ANC and its financial prospects? Not exactly!"
Moreover, Plamondon said, ANC is not running out of money. "Throughout our reorganization, our secured creditors have consensually permitted us to use their cash in a series of cash collateral orders, each of which we have managed well ahead of our cash flow projections," he added.
