Six Month Results
For the six months ended June 30, 2010, net income was $69.6 million, compared to net income of $3.5 million in the year-ago period.
Non-GAAP net income for the six months ended June 30, 2010 was $61.0 million, compared to non-GAAP net loss of $4.9 million, for the same period in 2009. Non-GAAP net income (loss) excludes the (increase) decrease in fair value of derivatives and the non-cash charges related to the impairment of long-lived assets, net of related tax impact.
The company reported corporate adjusted EBITDA for the six months ended June 30, 2010 of $123.7 million, compared to $18.5 million for the six months ended June 30, 2009. The company noted that it incurred merger-related expenses of $8.5 million during the first half of 2010, negatively impacting reported results. Excluding these merger-related expenses, corporate adjusted EBITDA for the six months ended June 30, 2010 was $132.2 million.
Liquidity and Capital Resources
As of June 30, 2010, Dollar Thrifty had $370 million in cash and cash equivalents and an additional $114 million in restricted cash and investments primarily available for the purchase of vehicles and/or repayment of vehicle financing obligations. The company's tangible net worth as of June 30, 2010 was $443 million.
During the quarter, the company repaid $200 million of maturing medium term notes utilizing a combination of restricted cash and borrowings under newly completed fleet financing facilities. As previously reported, the company completed a two-year $200 million variable funding note facility in April 2010 which was fully drawn upon issuance. In addition, during June, the company completed a three-year $300 million variable funding note facility that is currently undrawn, and will provide additional liquidity for repayment of the company's next scheduled debt maturity of $600 million of medium term notes that begin amortizing in December 2010.
2010 Outlook - Update
In addition to announcing results for the quarter, the company reaffirmed its previously announced guidance updates for 2010 for revenue, fleet costs and corporate adjusted EBITDA, as well as for fleet costs for 2011.
As previously announced, the company expects rental revenue growth in 2010 of 1 to 2 percent over 2009 as growth in the back half of 2010 is expected to more than offset the decline realized during the first half of the year.
The Dollar Thrifty noted that it sold approximately 32,500 risk vehicles during the first half of 2010 at a cumulative pre-tax gain of $53.2 million. The company also noted that it expects gains from vehicle dispositions to decline significantly during the second half of 2010, and as a result, expects its depreciation per unit per month to be within a range from $300 to $310 per unit per month during the third and fourth quarters of 2010. Based on results for the first half of 2010, combined with the fleet cost outlook for the third and fourth quarters, the company expects its full year 2010 fleet cost to be $245 to $255 per unit per month.
Based on the company's actual results through the second quarter and its outlook for revenue and fleet costs for the remainder of 2010, the company expects corporate adjusted EBITDA, excluding merger-related expenses, to be within a range of $200 million to $220 million for the full year of 2010. The company's 2009 corporate adjusted EBITDA was $99.4 million.
In addition, the company reaffirmed its expected fleet cost for 2011 to be within a range of $300 to $310 per unit per month. The company noted that the ongoing positive effects of changes made in its operations and fleet management, combined with solid macroeconomic factors in the used car market, are expected to impact fleet costs in 2011 and beyond.