TULSA, Okla. -

Counting a healthy used-car market as one of the factors helping its success in 2011, Dollar Thrifty Automotive Group notched its most profitable full-year and fourth-quarter ever.

Commenting on the latest yearly and quarterly earnings report released Tuesday, Dollar Thrifty chairman, president and chief executive officer Scott Thompson said: “We are pleased to announce that for the second consecutive year  the company is reporting record earnings.

“During 2011, we benefitted from a robust used vehicle market, a recovering travel market with increasing demand for value-oriented product offerings, and our ongoing focus on expense control and productivity initiatives,” he added.

Delving into the specifics, Dollar Thrifty pulled in $159.6 million in net income last year, up from $131.2 million in 2010.

Officials noted that net income in 2010 was positively impacted by $0.54 per diluted share due to favorable changes in fair value of derivatives and long-lived asset impairments. Meanwhile, the same favorable impact boosted 2011 net income by $0.06 per diluted share.

Additionally, there was a $2.7 million negative impact on 2011 net income from after-tax merger-related costs. The same factors negatively affected 2010 net income by $13.2 million.

Non-GAAP net income for 2011 came in at $157.7 million, up from $115 million a year ago. With merger-related expenses taken out of the equation, non-GAAP net income was $160.4 million in 2011 and $128.2 million for 2010.

Corporate adjusted EBITDA (with merger-related expenses off the table) totaled $303.2 million, up around $45 million year-over-year.

Revenues came in at $1.55 billion, up from $1.54 billion the year before. There was roughly a 1-percent gain in rental revenue, which came in at  $1.48 billion. Pushing the rental hike was the 3.8-percent rental day gain, with the 2.9-percent drop in revenue per day holding the increase back a bit. 

Fourth Quarter

Moving along to share quarterly results, DTAG generated net income of $33.9 million during the period, up more than $21 million from the fourth quarter of 2010.

Net income totals in both periods were impacted by changes in the fair value of derivatives. The fourth quarter of 2011 was negatively affected by $0.01 per diluted share, while the year-ago period was positively impacted by $0.14 per diluted share.

As for non-GAAP net income, it totaled $34.1 million in the latest quarter, more than four times as high as the $8.3 million generated a year earlier.

The fourth-quarter corporate adjusted EBITDA reached $63.5 million, more than double the $30.2 million from a year ago. There was a negative impact of $2.1 million to the 2010 period from merger-related expenses, while the 2011 period did not incur any.

Liquidity, Other Financial Metrics

Officials noted that DTAG paid down all of its $143 million in outstanding corporate debt  last year while also fully funding a forward stock repurchase agreement of $100 million.

At the end of the year, DTAG’s unrestricted cash was at $509 million and the company had no corporate leverage. Moreover, there was also restricted cash and investments of $353 million for DTAG to use mostly to buy vehicles or repay vehicle financing obligations.

DTAG added or renewed $1.5 billion worth of fleet financing capacity last year, as well.

As of year’s end, the tangible net worth of Dollar Thrifty came out at $586 million, once the share repurchase agreement was executed and fully funded.

The company completed the share repurchase program this month.

Projections for 2012

Looking forward, Dollar Thrifty believes its rental revenues will climb between 3 percent and 5 percent year-over-year in 2012, with vehicle depreciation costs projected to range from $220 per vehicle per month to $240.

DTAG is forecasting a strong drop-in interest expense. The company attributes this mostly to “lower overall interest rates on the company’s fleet financing facilities as compared to the fixed rates on matured and maturing financing facilities, and the repayment of all of the company’s corporate debt in 2011.”

Somewhat counteracting those decreases will likely be “higher rates on the newly completed revolver and the expected re-leveraging of our Canadian fleet,” officials noted.

All in all, Dollar Thrifty believes corporate adjusted EBITDA will come in somewhere between $275 million and $300 million.

"We expect an improving U.S. travel market and a solid used vehicle market in 2012. Our well established value-oriented rental car offerings are positioned well for a slow growth recovery,” Thompson shared.

“The company strives for continuous improvement in all aspects of its operations on a daily basis, and we will continue to push for improvements in profitability, productivity and customer service in 2012,” he added. “As we have stated before, our primary objective is to maximize return on assets for our shareholders, and we will consider all potential options to achieve that objective.”

Shareholder Rights Plan

In other news from the company, Dollar Thrifty also said Tuesday that an amendment to the company’s shareholder rights plan has been given the green light from the board of directors.

The amendment extends the expiration date of shareholder rights plan to May 30, 2013. Previously, it was set to expire on May 30 of this year.

Explaining the plan in more detail, officials noted that it was adopted May 18, 2011 and gives shareholders the option to buy shares of a new series of
preferred stock in certain circumstances. DTAG enacted this plan to “deter any attempt to obtain control of the company in a manner or on terms that are not in the best interests of the company and all shareholders.”

This plan, of course, came about when Hertz and Avis Budget were both perusing the company.

“When our board of directors adopted the rights plan last year, we believed that it would be a short-term measure pending clarification of the antitrust regulatory processes in respect of the applications by Hertz and Avis Budget to purchase our common stock,” Thompson explained.

“Regrettably, almost one year later, complete clarity has not been achieved. As the circumstances underlying the determination to adopt the rights plan have not fundamentally changed, our board believes that it would be imprudent and inconsistent with its fiduciary duties not to maintain the protections of the
rights plan as we monitor the actions of our competitors,” he continued.

“The scarcity value of our long-established brands, unleveraged capital position and cash rich balance sheet requires protection from parties that may not be acting in the best interests of all of our stockholders,” Thompson concluded.