Zipcar Reports 2012 Third Quarter Results

Revenue of $78.2 million; adjusted EBITDA of $6.5 million; US GAAP net income of $4.3 million, or $0.10 per diluted share

Nov 8, 2012

CAMBRIDGE, Mass., Nov. 8, 2012 (GLOBE NEWSWIRE) -- Zipcar, Inc. (Nasdaq:ZIP), the world's leading car sharing network, today reported results for the third quarter ended September 30, 2012.

Recent Highlights

Third quarter revenue increased 15% to $78.2 million compared to $68.1 million in the prior year period
Total members grew 18% from the prior year period to over 767,000 at quarter end Third quarter adjusted EBITDA of $6.5 million compared to $4.6 million in the prior year period
Third quarter US GAAP net income of $4.3 million, or $0.10 per diluted share, compared to net income of $651,000, or $0.02 per diluted share in the prior year period
Launched Miami as 20th major metro market
Surpassed the 300 mark of campuses participating in the Zipcar for University program
Continued European expansion with completion of the integration of Barcelona-based Avancar, Spain's largest car sharing service, and the acquisition of, a leading Austrian car sharing network
Launched Zipvan service in Seattle, Los Angeles, Philadelphia and Portland, Oregon

"With our strong results in the quarter, we have raised our full-year guidance and we are on track to deliver 2012 as Zipcar's first full year of profitability on a US GAAP basis. This is an exciting milestone for our company," commented Scott Griffith, Chairman and CEO. "We expanded our global leadership position by integrating our operations in Barcelona and by acquiring a leading car sharing provider in Austria. Additionally, we have strengthened our technology edge with the successful launch of a new platform and have enhanced both our membership marketing programs and offerings, including a further rollout of our Zipvan cargo van service that is expected to be available in all of our major North American markets in 2013."

Summary Results

For the 2012 third quarter, revenue increased 15% to $78.2 million compared to $68.1 million in the prior year period. Revenue growth in the 2012 third quarter resulted primarily from an 18% increase in membership to over 767,000 members at quarter end. Usage revenue per vehicle per day was unchanged at $65 versus the prior year period. Usage revenue represented $66.9 million in the third quarter of 2012, compared to $58.8 million in the prior year period with fee revenue representing substantially all of the remaining revenue in both periods. Fee revenue represented 14.3% of total revenue in the 2012 third quarter compared to 13.6% in the prior year period.

In Zipcar's Established Markets — Boston, New York, Washington, D.C. and San Francisco — third quarter revenue grew 15% to $45.0 millioncompared to $39.3 million in the prior year period due primarily to new member additions. Income before tax for the Established Markets increased to 29% of revenue in the third quarter of 2012 compared to 23% in the prior year period.

Third quarter US GAAP net income increased to $4.3 million, or $0.10 per diluted share, which includes the positive impact of $1.7 million on sale of Zero Emission Vehicle (ZEV) credits, compared to net income of $651,000, or $0.02 per diluted share in the prior year period.

Non-GAAP Results

Adjusted EBITDA for the 2012 third quarter increased to $6.5 million, which excludes the aforementioned $1.7 million in ZEV credits, compared to $4.6 million in the prior year period as a result of revenue growth and operating leverage.

"Our results reflect another quarter of solid revenue growth and increased profitability," commented Ed Goldfinger, Chief Financial Officer. "The margin expansion we reported reflects continued operational efficiencies as well as the positive impact of the transition of our domestic fleet to lower cost ABS financing which has progressed ahead of plan for the year."


For the 2012 fourth quarter, Zipcar expects revenue in the range of $67 million to $71 million. Adjusted EBITDA for the period is expected to range from$4.5 million to $7.5 million and US GAAP net income is expected to range from break-even to $3.0 million. For the full year 2012, revenue is expected in the range of $275 million to $279 million. Full year 2012 adjusted EBITDA is expected to range from $14.5 million to $17.5 million and US GAAP net income is expected to range from $1.0 million to $4.0 million. The above guidance incorporates the estimated impact from Hurricane Sandy with respect to lost revenue, vehicle damage and increased operating costs. Zipcar's average share count is expected to be approximately 40 million shares for the fourth quarter and full year. Common stock equivalents of approximately 1.5 million shares would be included to the extent Zipcarrecords positive US GAAP net income.

Conference Call, Webcast, and Slide Presentation

Zipcar will host a conference call today at 4:30 pm Eastern Time to discuss its 2012 third quarter results and financial outlook. To access the conference call, please dial 877-407-8029 (U.S.) or 201-689-8029 (international) approximately 10 minutes prior to the start of the call. The conference call will also be available via live webcast under the investor relations section of Zipcar's website at

If you are unable to listen to the live conference call, a replay will be available through November 15, 2012, and can be accessed by dialing 877-660-6853 (U.S.) or 201-612-7415 (international). Callers will be prompted for replay conference ID number 401516#. An archived version of the webcast will also be available under the investor relations section of Zipcar's website at

About Zipcar

Zipcar is the world's leading car sharing network with more than 767,000 members and 10,000 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

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, Inc., or the Company, 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, loss of equity-method investee, other income related to Zero Emission Vehicle credits and other gains or losses associated with events of a non-recurring nature. 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

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the Company's continued rollout of its Zipvan service and the Company's financial guidance for the fourth quarter of 2012 and for the full year 2012. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control. The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to the Company's ability to profitably attract new members and retain existing customers, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which the Company operates or may operate, the Company's ability to continue to promote and maintain its brand in a cost-effective manner, the Company's ability to manage growth, the Company's ability to successfully expand its business internationally, and other risks detailed in the Company's publicly available filings with the Securities and Exchange Commission, which are available on Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent the Company's views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. The Company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release.



Investor Relations:
Jonathan Schaffer or Mandy Cheuk, The Blueshirt Group
Phone: 212-871-3953 (Jonathan)
or 212-331-8430 (Mandy)

Media Relations:
Karen CK Drake, Vice President of Communications, Zipcar
Phone: 617-336-4323

Zipcar, Inc
Condensed Consolidated Statements of Operations
  Three Months Ended 
September 30,
Nine Months Ended 
September 30,
  2012 2011 2012 2011
(in thousands, except share and per share data)        
Revenue $ 78,232 $ 68,059 $ 208,174 $ 178,751
Cost and expenses        
Fleet operations 45,814 43,365 129,472 118,856
Member services and fulfillment (1) 5,515 5,543 14,770 14,681
Research and development (1) 1,279 1,083 3,271 3,055
Selling, general and administrative (1) 20,540 15,803 55,350 43,213
Amortization of acquired intangible assets 742 956 2,381 3,023
Total operating expenses 73,890 66,750 205,244 182,828
Income (loss) from operations 4,342 1,309 2,930 (4,077)
Other income (expense)        
Interest income 95 45 248 65
Interest expense (1,244) (810) (3,239) (7,795)
Other, net 1,017 (186) 576 528
Income (loss) before income taxes 4,210 358 515 (11,279)
(Benefit) provision for income taxes 1 (304) (56) (264)
Net income (loss) 4,209 662 571 (11,015)
Less: net (income) loss attributable to redeemable noncontrolling interest 111 (11) 279 1
Net income (loss) attributable to Zipcar, Inc.  $ 4,320  $ 651  $ 850  $ (11,014)
Net income (loss) attributable to common stockholders per share:        
Basic  $ 0.11  $ 0.02  $ 0.02  $ (0.42)
Diluted  $ 0.10  $ 0.02  $ 0.02  $ (0.42)
Weighted average number of common shares outstanding used in         
computing per share amounts:        
Basic  39,961,460  38,904,375  39,784,986  26,039,538
Diluted  41,434,740  42,479,718  41,737,033  26,039,538
(1) Stock-based compensation is included in above line items        
  Three Months Ended 
September 30,
Nine Months Ended 
September 30,
  2012 2011 2012 2011
Member services and fulfillment $ 54 $ 20 $ 151 $ 69
Research and development 66 39 156 120
Selling, general, and administrative 1,412 1,056 3,887 2,880
  $ 1,532 $ 1,115 $ 4,194 $ 3,069
  For the Three Months Ended 
September 30,
For the Nine Months Ended 
September 30,
  2012 2011 2012 2011
  (in thousands)
Reconciliation of Adjusted EBITDA        
Net income (loss) attributable to Zipcar, Inc. $ 4,320 $ 651 $ 850 $ (11,014)
Stock compensation 1,532 1,115 4,194 3,069
Amortization 742 956 2,381 3,023
Non-vehicle depreciation 872 615 2,173 1,781
Acquisition and integration cost 438 1,548 1,539 3,537
Loss of equity-method investee 389 -- 701 --
Non-vehicle interest expense 37 31 101 5,068
Interest income (95) (45) (248) (65)
Taxes 1 (304) (56) (264)
Preferred stock warrant liability adjustment --  --   --   724
Zero Emission Vehicle credits (1,732)  --   (1,732)  (861)
Adjusted EBITDA  $ 6,504  $ 4,567  $ 9,903  $ 4,998
Zipcar, Inc
Condensed Consolidated Balance Sheets
  September 30, 2012 December 31, 2011
(in thousands, except share and per share data)    
Current assets    
Cash and cash equivalents $ 43,380 $ 61,658
Short-term marketable securities 21,511 24,788
Accounts receivable, net of allowance for doubtful accounts 9,510 7,452
Restricted cash 9,235 381
Prepaid expenses and other current assets 15,127 13,665
Total current assets 98,763 107,944
Long-term marketable securities 17,547 13,809
Property and equipment, net 175,839 103,789
Goodwill 107,430 99,696
Intangible assets 3,561 4,754
Restricted cash 10,082 7,277
Deposits and other noncurrent assets 16,414 7,269
Total assets $ 429,636 $ 344,538
Liabilities and Equity    
Current liabilities    
Accounts payable $ 7,161 $ 6,069
Accrued expenses 27,207 20,003
Deferred revenue 23,359 19,369
Current portion of capital lease obligations and other debt 18,097 11,367
Total current liabilities 75,824 56,808
Capital lease obligations and other debt, net of current portion 115,372 58,908
Deferred revenue, net of current portion 4,988 4,659
Other liabilities 484 2,313
Total liabilities 196,668 122,688
Commitments and contingencies    
Non-controlling interest 1,248 400
Stockholders' equity:    
Common stock, $0.001 par value 40 40
Additional paid-in capital 300,632 294,107
Accumulated deficit (71,801) (72,651)
Accumulated other comprehensive (loss) gain 2,849 (46)
Total stockholders' equity 231,720 221,450
Total liabilities and equity $ 429,636 $ 344,538
Zipcar, Inc
Key financial and operating metrics
  For the Three Months Ended 
September 30,
For the Nine Months Ended 
September 30, 
  2012 2011 2012 2011
Key Financial and Operating Metrics:      
Ending members  767,481  649,627  767,481  649,627
Ending vehicles  10,645  9,489  10,645  9,489
Usage revenue per vehicle per day  $ 65  $ 65  $ 63  $ 62
Total revenue per member per period  $ 103  $ 108  $ 286  $ 298
Cost per new account  $ 70  $ 55  $ 77  $ 59
Average monthly member retention 97.3% 97.3% 97.7% 97.8%
Adjusted EBITDA (in thousands)  $ 6,504  $ 4,567  $ 9,903  $ 4,998
  For the Three Months Ended 
September 30,
For the Nine Months Ended 
September 30,
  2012 2011 2012 2011
Established Markets:        
 Ending members  391,422  340,814  391,422  340,814
 Ending vehicles  5,495  5,006  5,495  5,006
 Usage revenue per vehicle per day  $ 70  $ 70  $ 69  $ 68
 Revenue (in thousands)  $ 45,016  $ 39,313  $ 117,565  $ 100,831
 Income before tax (in thousands)  $ 13,005  $ 9,061  $ 28,496  $ 21,081


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