TULSA, Okla. -

Along with completing an amendment to its senior secured credit facility on Monday, Dollar Thrifty Automotive Group revealed its financial performance expectations for the third quarter.

The company projected third-quarter rental review to increase by approximately 2 percent year-over-year. Consistent with the trends experienced during the first half of the year, Dollar Thrifty noted that it expects transaction day growth of 3 to 4 percent, partially offset by a decrease in revenue per day, compared to the prior year.

Executives went on to forecast corporate adjusted EBITDA, excluding merger-related expenses, is expected to range from $110 to $120 million for the third quarter. Their corporate adjusted EBITDA, excluding merger-related expenses, for the third quarter of the last fiscal year totaled $93.7 million.

The company mentioned it expects gains from sales of risk vehicles to be approximately $18 million in the third quarter, compared to approximately $10 million of gains in the same period a year ago.

DTAG also pointed out its previously announced guidance for the full-year 2011 for rental revenues and fleet costs, as well as its targeted range for corporate adjusted EBITDA, excluding merger related expenses of $270 to $290 million, remain unchanged.

Dollar Thrifty Amends Senior Secured Credit Facility

Also announced Monday, Dollar Thrifty completed an amendment to its senior secured credit facility. The decision increased the aggregate amount of share repurchases permitted under the facility.

The company simultaneously revealed its board of directors has increased the authorization of the share repurchase program previously announced on Feb. 24 from $100 million to $400 million. 

Under the terms of the amendment, executives explained their restricted payment basket for share repurchases has been increased to provide for share repurchases up to $300 million, plus 50 percent of cumulative net income since Jan. 1.

At the time of any share repurchase, the company must maintain minimum liquidity of $100 million, comprised of either cash, available revolver capacity or a combination thereof.

Additionally, DTAG is not permitted to utilize borrowings under the revolver for purposes of share repurchases. 

The company said all other terms of the credit facility remain unchanged, including the pricing and maturity date.

The final maturity date of the credit facility is scheduled for June 2013. 

“We appreciate the ongoing support of our lending group and their recognition of the company’s robust financial condition,” stated Scott Thompson, DTAG’s president and chief executive officer.

“The company has a substantial cash position, no corporate leverage and is generating significant operating cash flow. This amendment provides us some flexibility to begin to address the efficiency of our capital structure,” Thompson highlighted.

Under the terms of the share repurchase program, the company’s board of directors has authorized the repurchase of up to $400 million of DTAG stock. The share repurchase program is discretionary and has no expiration date.

The company indicated it expects to complete share repurchases of up to $100 million per quarter over the course of the next four quarters. DTAG also anticipated that purchases will be executed through accelerated stock buyback programs each quarter.

Officials acknowledged the timing and amount of share repurchases will be based on market conditions and other factors.

Furthermore, DTAG may also repurchase shares in privately negotiated transactions, pursuant to derivative instruments or other types of transactions and arrangements.

The company added the share repurchase program may be increased, suspended or discontinued at any time.

“As previously stated, our primary focus is to properly invest in our business to maximize our return on assets and shareholder value,” Thompson stressed.

“Given the company’s significant cash position and lack of corporate leverage, we believe that returning low earning excess cash through the share repurchase program is appropriate,” he continued.

“We intend to execute share repurchases in a measured fashion in order to retain financial strength and optionality during these uncertain times,” Thompson went on to say.

As previously reported by Auto Remarketing, Avis Budget Group recently abandoned its attempts to acquire DTAG, while Hertz Global Holdings still is in the mix. For the story, click here.