Hertz Global (HTZ) - Get Report said there is "substantial doubt" that it will be able to continue as a going concern as the car-rental giant struggles with losses brought on by the economic shutdown from the coronavirus pandemic.
Shares of the the Estero, Fla., company, battered by travel bans and shelter-in-place orders throughout the country, at last check were off 4% to $3.06.
"If our business does not recover quickly and we are unable to successfully restructure our substantial indebtedness, obtain further waivers or forbearance or raise additional capital, there is substantial doubt that we will be able to continue as a going concern," the car rental giant said in a Securities and Exchange Commission filing.
Hertz said it believed it would save about $2.5 billion annually by taking a series of steps, including laying off staff, reducing capital spending, canceling new orders, and selling excess fleet before the used-car market shut down.
On Monday Hertz reported its first-quarter loss widened to $356 million, or $2.50 a share, from $147 million, or $1.54, in the year-earlier quarter. Adjusted losses came to $1.78 a share.
Revenue totaled $1.92 billion, down from $2.11 billion.
A survey of analysts by FactSet had called for an adjusted loss of $1.21 a share on sales of $1.95 billion.
The company had total debt of $18.75 billion as of March 31 and said its lenders had extended the deadline for certain loan repayments to May 22.
Hertz said that during the quarter it drew down $595 million from a credit line and ended the period with about $1 billion in cash and cash equivalents.
President and Chief Executive Kathryn V. Marinello said in a statement. that "we started the year with positive momentum, extending the strong growth trajectory of the past three years, reflecting consistent increases in both price and volume, productivity improvements and best-in-class fleet management.”
"Yet in just two months, the outbreak of the coronavirus created a major business disruption as global travel demand dropped to almost zero and the U.S. used-car market effectively shut down," she said.
Last week, The Wall Street Journal reported the car-rental company had hired FTI Consulting to help prepare for a possible bankruptcy filing.