Dollar Thrifty Automotive Group Inc. (DTG) reported results on Nov. 1 for the third quarter that ended Sept. 30. Net income for the 2011 third quarter was $66.6 million, or $2.13 per diluted share, compared to a net income of $49.2 million, or $1.62 per diluted share, for the third quarter of 2010.
Net income for the third quarter of 2011 included a charge of $0.01 per diluted share related to a decrease in fair value of derivatives, compared to income of $0.13 per diluted share for the third quarter of 2010 related to an increase in fair value of derivatives.
Non-GAAP net income for the 2011 third quarter was $66.9 million, or $2.14 per diluted share, compared to non-GAAP net income of $45.8 million, or $1.51 per diluted share, for the 2010 third quarter. Non-GAAP net income 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.
DTG reported corporate adjusted EBITDA for the third quarter of 2011 of $117.6 million, compared to $81.8 million in the third quarter of 2010.
The company noted that its GAAP and non-GAAP earnings as well as its corporate adjusted EBITDA for the third quarter of 2010 were negatively impacted by $11.9 million of merger-related expenses, while the third quarter of 2011 was not impacted by such expenses.
"We are pleased that the company is reporting the highest quarterly profit in its history,” said Scott L. Thompson, DTG president and CEO. “We remain keenly focused on profitable revenue growth, productivity initiatives, cost control and disciplined fleet management."
For this third quarter, DTG’s total revenue was $451.7 million, as compared to $443.5 million for the comparable 2010 period. Vehicle rental revenue for the quarter was up 2.4 percent, driven by a 4.1 percent increase in rental days, partially offset by a 1.7 percent decrease in revenue per day.
The average fleet for the quarter was up 4.3 percent compared to the prior year period. Vehicle utilization in the third quarter of 2011 was 83.9 percent, compared to 84.0 percent in the third quarter of 2010.
Fleet cost per vehicle was $186 per month in the third quarter of 2011, compared to $262 per month in the third quarter of 2010. The company's base depreciation rate continued to benefit from the overall strength of the used vehicle market and the resulting favorable impact on residual values.
DTG noted that gains on sales of risk vehicles, a component of vehicle depreciation, totaled $17.4 million in the third quarter of 2011, up from $10.0 million in the third quarter of 2010. The average gain per vehicle sold during the third quarter of 2011 was $1,125 per unit, compared to $632 per unit in the third quarter of 2010.
Direct vehicle and operating expenses and selling, general and administrative expenses totaled $262.4 million in the third quarter of 2011, compared to $263.6 million in the third quarter of 2010. The decrease in operating expenses primarily resulted from a reduction in merger-related expenses of $11.9 million, partially offset by an increase in direct costs attributable to the overall increase in fleet size and increased ancillary revenues.
Excluding merger-related expenses, operating expenses totaled 58.1 percent of revenues for the third quarter of 2011, compared to 56.7 percent of revenues for the third quarter of 2010.
DTG noted that although the operating expense percentage increased, the increase was attributable to direct costs associated with increased sales penetration of certain ancillary products, such as pre-paid fuel and toll road products. The company noted that the increased expense associated with incremental ancillary sales was more than fully recovered through rental revenues.
"We are pleased with the rental day growth achieved this quarter and the strength of our forward bookings,” Thompson said. “Although the pricing environment was a headwind this quarter, we continue to benefit from a favorable used vehicle market and our efficient, low-cost operating structure.”