TULSA, Okla. -

Touting a rather robust fourth quarter and an all-time high for full-year profit, Dollar Thrifty said it closed 2010 with its eighth straight quarter of double-digit year-over-year corporate adjusted EBITDA gains.

Specifically, quarterly corporate adjusted EBITDA came in at $30.2 million, up more than 15 percent year-over-year.

“This quarter marks our eighth consecutive quarter of year-over-year double-digit growth in corporate Adjusted EBITDA,” said Dollar Thrifty president and chief executive officer Scott Thompson.

“Additionally, excluding the impact of merger-related expenses, 2010 full-year results represent an approximate $100 million improvement in corporate adjusted EBITDA compared to the previous best year in the company’s history,” he continued.

“We are proud of the company’s financial performance despite the lethargic economic environment in 2010. We appreciate our employees’ contributions to the company’s success and their ongoing focus on providing outstanding service to our value-oriented customers,” Thompson shared.

Quarterly net income reached $12.5 million ($0.41 per diluted share), up from $11.5 million ($0.42 per diluted share) in the year-ago period. Both periods’ results account for a $0.14 per diluted share favorable impact dealing with changes in the fair values of derivatives and impairments of long-lived assets.

Meanwhile, Dollar Thrifty increased its non-GAAP net income from $7.7 million ($0.28 per diluted share) in the fourth quarter of 2009 to $8.3 million ($0.27 per diluted share) in the most recent period.

Non-GAAP net income generally excludes either the increase or decrease in fair value of derivatives and non-cash charges related to impairments of long-lived assets, net of related tax impact, officials explained.

They went on to note that during the fourth quarter there were merger-related costs totaling $2.1 million that downwardly affected GAAP and non-GAAP income.

“Additionally, the company noted that on a comparative basis, gains on risk vehicle sales declined in the fourth quarter of 2010 by $16.3 million as compared to same period last year,” DTAG said.

Likewise, the aforementioned corporate EBITDA results for the fourth quarter were also pushed downward by the $2.1 million in merger-related expenses. Moreover, the corporate EBITDA results account for the $16.3 million decrease in gains for risk-vehicle sales.

Moving along, quarterly revenue climbed from $345.3 million to $349.1 million on a year-over-year basis. Breaking it down, Dollar Thrifty saw a 1.6-percent lift in vehicle rental revenues, thanks largely to a 2.8-percent transaction days hike.

The upswing in transaction days, though, was counteracted somewhat by declining revenue per day, which fell 1.2 percent.

The company saw a 1.6-percent increase in average fleet. Meanwhile, there was a 90-basis-point jump in utilization on a year-over-year basis.

“Revenue for the quarter was in line with our expectations, as overall transaction volumes continued to reflect an improving travel market,” Thompson shared.

“We experienced a minor decline in fourth quarter revenue per day as we faced a slightly more competitive market and a very difficult comparison, having achieved a 12 percent increase in revenue per day in the fourth quarter of 2009,” he added.

Dollar Thrifty’s monthly per vehicle deprecation cost in the fourth quarter was at $308. This average is up from $274 per month during 2009, but reflects the company’s expectations for 2011.

Dollar Thrifty said the driver of the spike in per vehicle depreciation costs was the $16.3 million year-over-year decrease in gains on disposition of risk vehicles.

“This decrease was attributable to approximately 11,000 fewer vehicles disposed of on a year-over-year basis, and gains on sales of risk vehicles normalizing in the fourth quarter of 2010 from the record levels in 2009,” the company explained.

Quarterly vehicle utilization came in at 79.7 percent. In the fourth quarter of 2009, it was at 78.8 percent.

DTAG’s Full-Year Performance

Moving along, the company delved into more detail regarding its full-year 2010 results.

It posted net income of $131.2 million ($4.34 per diluted share). Full-year net income during 2009 was at $45 million ($1.88). This upswing occurred even though diluted shares outstanding jumped 25 percent because of the November 2009 equity offering.

"Net income in 2010 included a net positive impact of $0.54 per diluted share related to favorable changes in fair value of derivatives and long-lived asset impairments, compared to a net positive impact on income of $0.65 per diluted share in 2009," officials stated.

There was a negative impact on net income of about $13.2 million ($0.44 per diluted share) from after-tax merger-related expenses in 2010.

Rental revenue remained static year-over-year. There was a 90-basis-point dip in transaction days that a 90-basis-point upswing in per-day revenue counteracted.

Meanwhile, Dollar Thrifty reported non-GAAP net income of $115 million ($3.80 per diluted share), up from $29.6 million ($1.24 per diluted share) in 2009.

“Non-GAAP net income excludes the (increase) decrease in fair value of derivatives and non-cash charges related to the impairment of long-lived assets, net of related tax impact,” Dollar Thrifty explained. “Excluding the impact of merger-related expenses mentioned above, non-GAAP net income for the full year of 2010 would have been $4.24 per diluted share, compared to $1.24 per diluted share in the prior year period.”

Dollar Thrifty’s corporate adjusted EBITDA totaled $258.3 million when the aforementioned merger-related costs are taken out of the equation. This marks about a 160-percent year-over-year lift.

"For Dollar Thrifty, 2010 was a transition year, a year in which we moved effectively from a turnaround strategy to one focused on maximizing profitability,” Thompson shared. “We capitalized on our long-established value brands, numerous profit enhancement initiatives and our significantly improved financial strength.

“I am pleased to report the company successfully navigated the transition, resulting in the most profitable year in the company’s history by a wide margin,” he added. “I am even more pleased to report that we also improved our customer satisfaction scores, evidencing our balancing of long-term and short-term objectives.”

Liquidity

Dollar Thrifty said it had cash and cash equivalents totaling $563 million as of year’s end plus $277 million in restricted cash and investments. The latter sum is available mostly to buy vehicles and for paying vehicle financing obligations.

Tangible net worth as of year’s end was $515 million.

Dollar Thrifty said it brought it $950 million in new fleet financing capacity last year. Its outstanding debt at the end of 2010 was $300 million lighter than where it was in 2009 and about $1.1 billion lighter than the 2008 level.

Merger Details

Continuing on, Dollar Thrifty also provided an update with regards to the Federal Trade Commission as it relates to Avis Budget Group potentially buying the company’s common stock.

Dollar Thrifty said it “believes progress has been made” in the FTC talks, but the company stressed that the FTC’s stance on competitive issues “remains uncertain.”

Dollar Thrifty submitted on Wednesday its certification of substantial compliance with the Second Request, and Avis Budget had done the same on Feb. 4.
Officials expect that they will know more about the FTC’s stance soon.

“The FTC is performing an extensive review as it appropriately considers the proposed transaction. The process began in May of 2010, and we are eager to bring clarity to this matter for our shareholders and employees,” Thompson noted.

Expectations for 2011

As far as this year, Dollar Thrifty is anticipating corporate adjusted EBITDA to come in between $175 million and $200 million.

“We are excited about the Company’s competitive position going into 2011. We have two long-established value brands, broad distribution of our products, competitive operating costs, significant and growing world-wide franchisee base business, minimal corporate leverage combined with significant tangible net worth, and, lastly and most importantly, a very talented workforce,” Thompson pointed out.

“Consistent with 2010, our primary objective will be to maximize return on assets for our shareholders, and we will consider all potential options to achieve that objective,” he added.

Share Repurchase

In other news from the company, Dollar Thrifty said Thursday that up to a $100 million repurchase of company stock has been given the green light by its board of directors.

The repurchase program is discretionary and no expiration date will be set.

Officials stressed that market conditions and other factors will determine the times and amounts at which shares are repurchased. They also emphasized applicable limitations under the senior secured credit facilitations may be put on the share repurchases.

“Over the past few years, the Company has demonstrated the ability to generate significant and sustainable cash flow,” Thompson noted.

“While our primary focus is to invest in the business in a manner that generates a high return on assets, we will evaluate all appropriate alternatives for investment of cash, including the potential return of excess cash to our shareholders through the program we are announcing today,” he concluded.