DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. 
By TULSA, Okla., May 9, 2012 /PRNewswire/ -- Dollar Thrifty Automotive Group, Inc. (NYSE: DTG) today reported results for the first quarter ended March 31, 2012. Net income for the 2012 first quarter was $40.4 million, or $1.35 per diluted share, compared to net income of $16.5 million, or $0.53 per diluted share for the first quarter of 2011. The Company also reported Corporate Adjusted EBITDA for the first quarter of 2012 of $76.8 million, compared to $36.3 million in the first quarter of 2011.
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"We are pleased to report another record quarter, and the highest first quarter profit in the Company's history," said Scott L. Thompson, Chairman, President and Chief Executive Officer. "A strong used car market, combined with continued emphasis in the areas of cost control, productivity initiatives, fleet utilization and balance sheet management enabled us to achieve another record quarter, in spite of a competitive rate environment."
For the quarter ended March 31, 2012, the Company's vehicle rental revenue was $339.1 million, compared with $332.3 million for the same period in 2011. The increase in vehicle rental revenue for the quarter was driven by a 6.5 percent increase in rental days, partially offset by a 4.2 percent decrease in revenue per day. Vehicle utilization for the first quarter of 2012 was 81.0 percent, up from 79.7 percent during last year's first quarter. Revenue per unit per month for the first quarter of 2012 was $1,115, compared to $1,131 per unit per month in the first quarter of 2011.
"Demand for our value-oriented product offerings is strong, as evidenced by our rental day growth this quarter," said Thompson. "The recovery in the leisure travel market continues to show steady improvement, and as we head into the peak season we are pleased with the strength of our forward reservation bookings."
Fleet cost per vehicle was $136 per month in the first quarter of 2012, compared to $251 per month in the first quarter of 2011. The decrease in fleet cost per vehicle per month resulted primarily from lower overall depreciation rates on the Company's fleet due to the ongoing strength of the used vehicle market and improved fleet strategies. Additionally, the Company noted that vehicle remarketing volumes increased significantly on a year-over-year basis due to a substantial fleet refresh cycle currently underway. The Company sold approximately 14,400 risk vehicles at a total gain of $14.3 million during the first quarter of 2012, compared to approximately 6,900 risk vehicles at a total gain of $7.9 million in the first quarter of 2011. The average fleet for the quarter was up 3.6 percent compared to the prior-year period.
Direct vehicle and operating expenses and selling, general and administrative expenses (operating expenses) for the first quarter of 2012 totaled 64.5 percent of revenues, compared to 65.3 percent of revenues in the first quarter of 2011. The decrease was primarily attributable to $3.5 million of merger-related expenses incurred in 2011 that did not recur in 2012. Interest expense, net, declined to $17.1 million in the first quarter of 2012, down from $21 million in the first quarter of 2011. The decrease in interest expense primarily reflects the Company's refinancing of its legacy fleet financing facilities at lower interest rates in the second half of 2011.
Liquidity and Capital Resources
As of March 31, 2012, the Company had $492 million in cash and cash equivalents, and an additional $214 million in restricted cash and investments primarily available for the purchase of vehicles and/or repayment of vehicle financing obligations. The Company noted that it has made seasonal fleet investments of approximately $290 million since December 31, 2011. Those investments were funded by a blend of unrestricted cash, restricted cash and vehicle debt. Non-vehicle capital expenditures for the quarter totaled approximately $5 million.
The Company noted that subsequent to quarter-end, it reduced its outstanding letters of credit supporting its secured vehicle financing facilities by approximately $145 million, utilizing a portion of its excess cash on hand to meet the collateral enhancement requirements under those facilities. This use of cash is expected to save the Company $6 million on an annualized basis by eliminating the interest cost associated with leveraged sources of collateral enhancement. The Company retains the flexibility to replace this cash collateral with funds borrowed under its Revolving Credit Facility or the issuance of letters of credit as it deems appropriate.
With respect to share repurchase activity, the Company noted that it repurchased 64,200 shares at an average price of $78.19 during the quarter. These repurchases are in addition to the previously disclosed 1.45 million shares repurchased by the Company on February 9, 2012 under a forward stock repurchase agreement. As of March 31, 2012, the Company had approximately $295 million in share repurchase capacity remaining under its share repurchase program.
As of March 31, 2012, the Company's tangible net worth was $635 million, and the Company had no corporate debt outstanding.
2012 Outlook Update
As previously announced, based on first quarter performance, current overall economic conditions, expectations for continued strength in the domestic used vehicle market and continued improvement in travel volumes, the Company noted that it has revised its full year guidance for diluted earnings per share to be within a range of $5.00 to $5.60. Additionally, Corporate Adjusted EBITDA for the full year of 2012 is expected to be within a range of $285 million to $310 million.
Webcast and Conference Call Information
A conference call to review the Company's first quarter 2012 results will be held at 8:00 a.m. CDT on Wednesday, May 9, 2012. Scott Thompson, Chairman, President and Chief Executive Officer, will lead the call. Also participating will be Cliff Buster, Chief Financial Officer. A live audio webcast of the call will be available on the Company's website www.dtag.com. Domestic participants should call 888-603-9215 and use the passcode "Dollar Thrifty." The number for international participants is 203-827-7046. Please call in approximately 10 minutes prior to the beginning of the call.
A replay of the conference call will be made available one hour following its conclusion. To access the domestic audio replay, call 866-365-2452. The international replay number is 203-369-0220. The audio replay of the call will be available through May 23, 2012. It will also be available on the Investor Information page of the corporate website for one year.
About Dollar Thrifty Automotive Group, Inc.
Through its Dollar Rent A Car and Thrifty Car Rental brands, the Company has been serving value-conscious leisure and business travelers since 1950. The Company maintains a strong presence in domestic leisure travel in virtually all of the top U.S. and Canadian airport markets, and also derives a significant portion of its revenue from international travelers to the U.S. under contracts with various international tour operators. Dollar and Thrifty have approximately 280 corporate locations in the United States and Canada, with approximately 5,900 employees located mainly in North America. In addition to its corporate operations, the Company maintains global service capabilities through an expansive franchise network of approximately 1,300 franchise locations in 82 countries. For additional information, visit www.dtag.com or the brand sites at www.dollar.com and www.thrifty.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements" about our expectations, plans and performance. These statements use such words as "may," "will," "expect," "believe," "intend," "should," "could," "anticipate," "estimate," "forecast," "project," "plan" and similar expressions. These statements do not guarantee future performance and Dollar Thrifty Automotive Group, Inc. assumes no obligation to update them. Risks and uncertainties relating to our business that could materially affect our future results include:
-- constraints on our growth and profitability given the challenges we face
in increasing our market share in the key airport and local markets we
serve, high barriers to entry in the insurance replacement market,
capital and other constraints on expanding company-owned stores
internationally and the challenges we would face in further reducing our
expenses;
-- the impact of the continuing challenging global economic environment,
the ongoing Eurozone sovereign debt issues and governmental actions to
address budget deficits through austerity and other measures, which are
fueling concerns about global economic prospects and could materially
adversely affect unemployment rates and consumer discretionary spending,
including for international inbound travel to the United States and for
leisure travel more generally, on which we are substantially dependent;
-- the continuing significant political unrest and other concerns involving
certain oil-producing countries, which has contributed to price
volatility for petroleum products, and in recent periods higher average
gasoline prices, which could affect both broader economic conditions and
consumer spending levels;
-- the impact of pricing and other actions by competitors;
-- our ability to manage our fleet mix to match demand and meet our target
for vehicle depreciation costs, particularly in light of the significant
level of risk vehicles (i.e., those vehicles not acquired through a
guaranteed residual value program) in our fleet and our exposure to
wholesale used vehicle prices;
-- the cost and other terms of acquiring and disposing of automobiles and
the impact of conditions in the used vehicle market on our vehicle cost,
including the impact on vehicle depreciation costs in 2012 based on
pricing volatility in the used vehicle market;
-- our ability to reduce our fleet capacity as and when projected by our
plans;
-- the continuing strength of the U.S. automotive industry on which we
depend for vehicle supply;
-- airline travel patterns, including disruptions or reductions in air
travel resulting from capacity reductions, pricing actions, severe
weather conditions, industry consolidation or other events, particularly
given our dependence on leisure travel;
-- access to reservation distribution channels, particularly as the role of
the Internet and mobile applications increases in the marketing and sale
of travel-related services;
-- the effectiveness of actions we take to maintain a low cost structure
and to manage liquidity;
-- the impact of repurchases of our common stock pursuant to our share
repurchase program;
-- our ability to obtain cost-effective financing as needed without unduly
restricting our operational flexibility;
-- our ability to comply with financial covenants, and the impact of those
covenants on our operating and financial flexibility;
-- whether our preliminary expectations about our federal income tax
position are affected by changes in our expected fleet size or
operations or further legislative initiatives relating to taxes in the
United States or elsewhere;
-- our ability to continue to defer the reversal of prior period tax
deferrals and the availability of accelerated depreciation payments in
future periods, the lack of either of which could result in material
cash federal income tax payments in future periods;
-- the cost of regulatory compliance, costs and other effects of potential
future initiatives, including those directed at climate change and its
effects, and the costs and outcome of pending litigation;
-- disruptions in the operation or development of information and
communication systems that we rely on, including those relating to
methods of payment;
-- local market conditions where we and our franchisees do business,
including whether franchisees will continue to have access to capital as
needed; and
-- the impact of other events that can disrupt consumer travel, such as
natural and man-made catastrophes, pandemics, social unrest and actual
and perceived threats or acts of terrorism.
Forward-looking statements should be considered in light of information in this press release and other filings we make with the Securities and Exchange Commission.
Table 1
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Dollar Thrifty Automotive Group, Inc.
Consolidated Statement of Income
--------------------------------
(In thousands, except share and per share data)
Unaudited
Three months ended As % of
March 31, Total revenues
2012 2011 2012 2011
---- ---- ---- ----
Revenues:
Vehicle rentals $339,089 $332,272 95.2% 95.4%
Other 17,185 16,075 4.8% 4.6%
Total revenues 356,274 348,347 100.0% 100.0%
Costs and Expenses:
Direct vehicle and operating 184,212 178,305 51.7% 51.2%
Vehicle depreciation and lease
charges, net 41,731 74,174 11.7% 21.3%
Selling, general and
administrative 45,548 48,947 12.8% 14.1%
Interest expense, net 17,068 20,977 4.8% 6.0%
Total costs and expenses 288,559 322,403 81.0% 92.6%
(Increase) decrease in fair value of
derivatives 276 (3,474) 0.1% (1.0%)
--- ------ --- -----
Income before income taxes 67,439 29,418 18.9% 8.4%
Income tax expense 27,068 12,895 7.6% 3.7%
Net income $40,371 $16,523 11.3% 4.7%
======= ======= ==== ===
Earnings per share:
Basic $1.40 $0.57
Diluted $1.35 $0.53
Weighted average number
of shares outstanding:
Basic 28,748,434 28,760,628
Diluted 29,985,307 31,052,645
Table 2
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Dollar Thrifty Automotive Group, Inc.
Selected Operating and Financial Data
-------------------------------------
Three months ended
March 31, 2012
--------------
OPERATING DATA:
Vehicle Rental Data:
Average number of vehicles
operated 101,417
% change from prior year 3.6%
Number of rental days 7,476,770
% change from prior year 6.5%
Vehicle utilization 81.0%
Percentage points change from
prior year 1.3 p.p.
Average revenue per day $45.35
% change from prior year (4.2%)
Monthly average revenue per
vehicle $1,115
% change from prior year (1.4%)
Average depreciable fleet 102,587
% change from prior year 4.0%
Monthly average depreciation (net)
per vehicle $136
% change from prior year (45.8%)
FINANCIAL DATA: (in millions)
(unaudited)
Non-vehicle depreciation and
amortization $6
Non-vehicle interest expense 3
Non-vehicle interest income -
Non-vehicle capital expenditures 5
Cash paid for/(refund of) income
taxes (8)
Selected Balance Sheet Data
---------------------------
(In millions)
March 31, December 31,
2012 2011 2011
---- ---- ----
(unaudited)
Cash and cash equivalents $492 $519 $509
Restricted cash and investments 214 160 353
Revenue-earning vehicles, net 1,756 1,682 1,468
Vehicle debt 1,473 1,406 1,400
Non-vehicle debt (corporate debt) - 146 -
Stockholders' equity 655 559 608
Tangible Net Worth Calculation
------------------------------
(In millions)
March 31, December 31,
2012 2011 2011
---- ---- ----
(unaudited)
Stockholders' equity $655 $559 $608
Less: Software, net (20) (23) (22)
Tangible net worth $635 $536 $586
Table 3
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Dollar Thrifty Automotive Group, Inc.
Non-GAAP Measures
-----------------
Corporate Adjusted EBITDA means earnings, excluding the impact of the (increase) decrease in fair value of derivatives, before non-vehicle interest
expense, income taxes, non-vehicle depreciation, amortization, and certain other items as shown below. The Company believes Corporate Adjusted
EBITDA is important as it provides a supplemental measure of the Company's liquidity by adjusting earnings to exclude certain non-cash items, taxes
and corporate-level capital structure decisions (i.e. non-vehicle interest), thus, allowing the Company's management, including the chief operating
decision maker, as well as investors and analysts, to evaluate the Company's operating cash flows based on the core operations of the Company.
Additionally, the Company believes Corporate Adjusted EBITDA is a relevant measure of operating performance in providing a measure of profitability
that focuses on the core operations of the Company while excluding certain items that do not directly reflect ongoing operating performance. The
Company's management, including the chief operating decision maker, uses Corporate Adjusted EBITDA to evaluate the Company's performance and in
preparing monthly operating performance reviews and annual operating budgets. The items excluded from Corporate Adjusted EBITDA, but included in
the calculation of the Company's reported net income, are significant components of its consolidated statements of income, and must be considered
in performing a comprehensive assessment of overall financial performance. Corporate Adjusted EBITDA is not defined under GAAP and should not
be considered as an alternative measure of the Company's net income, cash flow or liquidity. Corporate Adjusted EBITDA amounts presented may not
be comparable to similar measures disclosed by other
companies.
Three months ended
March 31,
2012 2011
---- ----
(in thousands)
Reconciliation of Net
Income to
Corporate Adjusted EBITDA
-------------------------
Net income - as reported $40,371 $16,523
(Increase) decrease in fair
value of derivatives 276 (3,474)
Non-vehicle interest
expense 2,609 2,471
Income tax expense 27,068 12,895
Non-vehicle depreciation 4,536 4,840
Amortization 1,775 1,866
Non-cash stock incentives 1,625 1,209
Other (1,431) (4)
Corporate Adjusted EBITDA $76,829 $36,326
======= =======
Reconciliation of Corporate
Adjusted EBITDA
to Cash Flows From
Operating Activities
---------------------
Corporate Adjusted EBITDA $76,829 $36,326
Vehicle depreciation, net
of gains/losses from
disposal 41,731 74,165
Non-vehicle interest
expense (2,609) (2,471)
Change in assets and
liabilities and other (521) 26,270
---- ------
Net cash provided by
operating activities (a) $115,430 $134,290
======== ========
Memo:
Net cash used in investing
activities $(193,522) $(229,522)
Net cash provided by
financing activities (a) $61,264 $150,627
Full Year
2012 2011
---- ----
(in millions)
Reconciliation of Pretax
Income to (forecasted) (actual)
Corporate Adjusted EBITDA
-------------------------
Pretax income $246 - $271 $261
(Increase) decrease in fair
value of derivatives (2012
amount is YTD March 2012) - (3)
Non-vehicle interest
expense 7 11
Non-vehicle depreciation 19 19
Amortization 7 7
Non-cash stock incentives 7 3
Other (1) -
Corporate Adjusted EBITDA $285 - $310 $298
=========== ====
(a) Certain reclassifications have been made to the 2011 financial information to conform to the classifications used
in 2012.
SOURCE Dollar Thrifty Automotive Group, Inc.
