TULSA, Okla. -
Dollar Thrifty Automotive Group’s corporate adjusted EBITDA showed double-digit improvement for the seventh straight time during third quarter, which marked what the company’s chief executive officer called the “best quarterly performance” that Dollar Thrifty has ever had.
Specifically, corporate adjusted EBITDA came in at $81.8 million, an increase of more than $27 million from the year-ago period. And when the $11.9 million of merger-related costs from the most recent period are taken out of the equation, the third-quarter figure goes up to $93.7 million.
The latter sum marks a 71-percent year-over-year gain.
“In spite of a slower than expected economic recovery and a reduction in car sale gains compared to the third quarter of 2009, the company delivered its seventh consecutive quarter of year-over-year double-digit growth in Corporate Adjusted EBITDA,” stated Scott Thompson, Dollar Thrifty’s president and CEO.
“This quarter is also the best quarterly performance in the company’s 60 year history,” he added. “Our employees continued to deliver customer service improvements, while achieving record financial performance, both of which are key to achieving our overall goal of maximizing return on assets.”
Meanwhile, the company reported $49.2 million in net income, up from $30.1 million a year ago.
Officials explained that included in both the third quarter and year-ago periods was income related to increases in the fair values of derivatives. For the most recent period, that income was $0.13 per diluted share. For the year-ago period, it was $0.15 per diluted share.
Dollar Thrifty’s non-GAAP income totaled $45.8 million, versus $26.8 million a year ago.
“Non-GAAP net income excludes the increase in fair value of derivatives and the non-cash charges related to the impairment of long-lived assets, net of related tax impact,” officials explained.
“The company noted that both its GAAP and non-GAAP pretax earnings were negatively impacted by $11.9 million of merger-related expenses incurred during the third quarter of 2010,” they added. “These merger-related expenses represent approximately $0.23 per diluted share for the third quarter of 2010.”
Continuing on, Dollar Thrifty generated $443.5 million in revenues, up a little more than 1 percent year-over-year.
The company saw a 1.6-percent uptick in vehicle rental revenue, which came in at $425.5 million. Spurring this increase was transaction days jumping 1.4 percent and revenue per day moving ahead 20 basis points.
Somewhat counteracting this revenue upswing was vehicle leasing revenue showing a drop. This drop-off stems from Dollar Thrifty’s plans to cut down its licensee leasing program.
Moving along, the company saw a 1.7-percent year-over-year uptick in average fleet during the third quarter
There was a 50-basis point decline in ending fleet on a year-over-year basis.
“We are extremely pleased with the results for the quarter, realizing increases in both transaction days and revenue per day, while continuing to decrease expenses across all areas of the company,” Thompson shared.
“In spite of a difficult year-over-year comparison resulting from a 12-percent improvement in revenue per day during the third quarter of 2009, we achieved a modest increase in revenue per day in the third quarter of 2010,” he continued.
As far as vehicle depreciation per unit, this was at $262 per month. Dollar Thrifty said this stemmed from the overall used market being stronger and the adjustments the company made to its fleet planning and remarketing operations.
Liquidity
Moving on to discuss Dollar Thrifty’s liquidity and capital resources, Dollar Thrifty said there was $519 million in cash and cash equivalents as of the end of the quarter. Moreover, there was also $290 million in restricted cash and investments, which are mainly earmarked for buying vehicles and/or repaying vehicle financing obligations.
Dollar Thrifty’s tangible net worth totaled $497 million at the end of the third quarter.
Looking Forward
Next up, Dollar Thrifty executive also offered some more guidance regarding its fourth-quarter projections.
Specifically, it is projected that Dollar Thrifty’s fourth-quarter rental revenue will improve anywhere from 2 percent to 4 percent on a year-over-year basis. Officials attribute this projected gain mainly to the period having more transaction days than the fourth quarter of 2009.
Meanwhile, there will likely be continued softening in gains from vehicle dispositions in the period, officials said. The resulting depreciation per unit per month would between $295 and $305.
Continuing on, Dollar Thrifty reaffirmed its projections for full-year corporate adjusted EBITDA, based on reported results and how the fourth quarter is shaping up to look like.
When not considering merger-related expenses, corporate adjusted EBITDA is projected be in the $240 million to $260 million range, officials said.
Dollar Thrifty had $99.4 million in corporate adjusted EBITDA a year ago.
Also, Dollar Thrifty reaffirmed that 2011 fleet costs per unit per month will likely be between $300 and $310.
“We believe the company is in the best competitive position in its history as a result of the significant growth in the company’s liquidity and corporate adjusted EBITDA, combined with minimal corporate leverage, substantial tangible net worth, a diversified rental fleet, and a dedicated workforce,” Thompson concluded.