Dollar Thrifty Profit Slides in Q1
Net income for the first quarter of 2011 is $16.5 million, down from $27.3 million a year earlier. Rental revenues were adversely impacted by the winter storms and a weakened pricing environment following the storms, the company said.
Dollar Thrifty Automotive Group, Inc. reported results on Thursday for the first quarter ended March 31, 2011. Net income for the 2011 first quarter was $16.5 million, compared to net income of $27.3 million, for the first quarter of 2010. The company's total revenue for the quarter was $348.3 million, consistent with the comparable 2010 period.
DTAG noted that the decline in net income was anticipated and resulted primarily from the decision to reduce vehicle dispositions during the quarter, which reduced gains on sales of vehicles compared to the prior year period.
The Company also noted that earnings were negatively impacted by merger-related expenses of $3.5 million and $1.7 million incurred during the first quarter of 2011 and 2010, respectively. Additionally, the Company noted that on a comparative basis, gains on risk vehicle sales declined $17.8 million in the first quarter of 2011, down from $25.7 million in 2010 to $7.9 million in 2011, as the Company held vehicles to mitigate the potential risk of supply disruptions and support increased rental day demand.
Fleet cost per vehicle was $251 per month in the first quarter of 2011, compared to $206 per month in the first quarter of 2010. The increase in fleet cost per vehicle resulted primarily from a decrease in gains on disposition of risk vehicles of $17.8 million compared to the prior year period. This decrease was attributable to approximately 7,600 fewer vehicles disposed of on a year-over-year basis. Vehicle utilization for the first quarter of 2011 was 79.7 percent, down from 80.3 percent during last year's first quarter. Vehicle rental revenues for the quarter were also in line with prior year levels as a 2.7 percent increase in rental days was offset by a 2.7 percent decrease in revenue per day. The average fleet for the quarter was up 3.5 percent compared to the prior year period.
"Our results for the quarter exceeded our previously announced expectations as business strengthened during the latter part of the quarter, with March revenues coming in very strong. We are particularly pleased with our performance this quarter considering the operating environment caused by the severe winter storms in January and February. The company generated a Corporate Adjusted EBITDA margin of 10.4 percent during a seasonally weak quarter for the industry," said Scott L. Thompson, President and Chief Executive Officer.
"As previously disclosed, first quarter rental revenues were adversely impacted by the significant winter storms in January and February, with a loss of rental days and a weakened pricing environment following the storms. We are pleased with the subsequent recovery in revenues, and believe the industry is now well positioned headed into the summer peak season," said Thompson.
The company reported no new news regarding the FTC's ruling on the Avis Budget merger.
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