On Oct. 26, Dollar Thrifty Automotive Group Inc. (DTAG) reported results for the third quarter ended Sept. 30, 2009. Net income for the 2009 third quarter was $30.1 million, or $1.29 per diluted share, compared to net income of $18.9 million, or $0.87 per diluted share, for the comparable 2008 quarter. The net income for the third quarter of 2009 included income of $0.15 per diluted share, compared to a loss of $0.02 per diluted share in last year's third quarter, both of which related to changes in fair value of derivatives.
Non-GAAP net income for the 2009 third quarter was $26.8 million, or $1.15 per diluted share, compared to non-GAAP net income of $19.3 million, or $0.89 per diluted share for the 2008 third quarter. Non-GAAP net income (loss) excludes the (increase) decrease in fair value of derivatives, net of related tax impact. Corporate Adjusted EBITDA for the third quarter of 2009 was $54.7 million, compared to $43.4 million in the third quarter of 2008.
“In spite of the difficult economic environment, we achieved our third consecutive quarter of year-over-year improvement in both non-GAAP net income (loss) and Corporate Adjusted EBITDA,” said Scott L. Thompson, CEO and president. “The difficult steps we have taken over the past 12 months to maximize profitability and cash flow, combined with improvements in residual values, positively impacted this quarter. We expect both of these factors will continue to benefit future operating results.”
For the quarter ended Sept. 30, 2009, the company's total revenue was $438.9 million, as compared to $500.6 million for the comparable 2008 period. The decline in revenue was primarily driven by a 21.3 percent decrease in rental days, partially offset by an 11.5 percent improvement in revenue per day. Excluding the impact of location closures, rental days were down approximately 17 percent on a same store basis. The third quarter average fleet was down approximately 20 percent compared to last year's third quarter.
“Revenue for the quarter was in line with our expectations and consistent with our strategy of enhancing profitability by maintaining an optimal balance between transaction volume and pricing,” said Thompson. “During the month of September, we experienced rental revenue declines of only 3 percent compared to September 2008, and we currently expect year-over-year rental revenue growth for the month of October as increases in RPD are expected to fully offset volume declines, making October the first month since May of 2008 that the company would experience year-over-year growth in rental revenue. These trends, augmented by our visibility into forward reservations, indicate to us that we may have seen the worst of the rental revenue declines for this business cycle.”
Per vehicle depreciation cost of $315 per month in the third quarter of 2009 was approximately 3 percent lower than the comparable quarter of 2008. On a sequential basis, per vehicle depreciation costs declined approximately 14 percent as a result of improved residual values, longer hold periods, mix optimization and more effective remarketing. Vehicle utilization, a measure of fleet efficiency, was 84.2 percent, down 100 basis points from last year's third quarter. On a sequential basis, utilization was up 360 basis points from 80.6 percent in the second quarter of 2009.
Direct vehicle and operating expenses and selling, general and administrative expenses were lower in the third quarter of 2009 compared to the same quarter in 2008 as a result of transaction declines and cost reduction initiatives. Interest expense for the third quarter of 2009 declined as debt was reduced by $873 million, or approximately 33 percent, from September 2008 levels.