Dollar Thrifty Automotive Group Inc. today reported results for the second quarter ended June 30, 2010. Net income for the 2010 second quarter was $42.3 million, compared to net income of $12.4 million in the year-ago period.
Non-GAAP net income for the 2010 second quarter was $38.0 million, compared to non-GAAP net income of $6.9 million, for the 2009 second quarter. 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 second quarter of 2010 of $74.3 million, compared to $20.9 million in the second quarter of 2009. The company noted that it incurred merger-related expenses of $6.8 million during the quarter, negatively impacting reported results. Excluding these merger-related expenses, corporate adjusted EBITDA for the second quarter of 2010 was $81.1 million.
"The company's ongoing efforts in the areas of revenue management, expense control and fleet management continue to reap significant benefits, as demonstrated by our sixth consecutive quarter of year-over-year double-digit growth in corporate adjusted EBITDA," said Scott L. Thompson, president and chief executive officer. "Our day-to-day focus continues to be on improving the company's return on assets while maximizing our cash flow. I am pleased to report that we are on track to make 2010 the most profitable year in the history of the company."
On a same-store basis, rental revenues for locations that were open during the second quarter of both 2010 and 2009 were up 2.9 percent compared to last year's second quarter. For the quarter ended June 30, 2010, Dollar Thrifty's total revenue was $396.2 million, as compared to $399.6 million for the comparable 2009 period. The decline in total revenue was primarily driven by a decline in vehicle leasing revenue, resulting from a planned reduction in vehicles leased to franchisees. Vehicle rental revenue for the quarter was consistent on a year-over-year basis as an 80 basis point improvement in rate per day offset a 50 basis point decline in rental days. The second quarter 2010 average fleet was down 0.8 percent compared to the second quarter of 2009, while the ending fleet was up 0.9 percent from the second quarter of 2009.
"We are pleased with the results for the quarter, having realized increases in transaction days and utilization on a same-store basis, while continuing to realize pricing improvement in a more challenging and competitive pricing environment. Based on our solid second quarter results combined with our current reservation book and our outlook for the economy, we expect revenue growth going forward," said Thompson.
Vehicle depreciation per unit for the second quarter of 2010 totaled $193 per month as the company continued to benefit from the overall strength of the used vehicle market, in addition to changes the company made in 2009 to its fleet planning and remarketing operations that were designed to lower fleet depreciation costs per unit and mitigate enterprise risk. Vehicle utilization was 80.8 percent, up 20 basis points from last year's second quarter.
Operating expenses (direct vehicle and operating expenses and selling, general and administrative expenses) were higher in the second quarter of 2010 compared to the same quarter in 2009 primarily as a result of $6.8 million of merger-related costs incurred, in addition to a $3 million increase in self insured vehicle liability reserves related to a vicarious liability claim that is currently under appeal by the company. These costs were partially offset by ongoing cost reduction efforts and cost efficiency initiatives. As a percentage of revenues, operating expenses totaled 62.7 percent of revenues in the second quarter of 2010, compared to 61.0 percent in the second quarter of 2009, primarily as a result of the cost increases noted above.
Interest expense, net of interest income, for the second quarter of 2010 declined $1.3 million on a year-over-year basis primarily as a result of approximately $300 million in net reduction in the debt outstanding for 2010 compared to 2009, partially offset by reduced interest income as the company deployed the excess cash balances on hand in 2009 to reduce indebtedness, and to reinvest in the rental fleet.