Dollar Thrifty's Earnings Surge in Q3

Dollar Thrifty Automotive Group Inc. reported on Tuesday record results for the third quarter ended Sept. 30, 2010. Net income for the 2010 third quarter was $49.2 million, or $1.62 per diluted share, compared to net income of $30.1 million, or $1.29 per diluted share, for the comparable 2009 quarter.

Non-GAAP net income for the 2010 third quarter was $45.8 million, or $1.51 per diluted share, compared to non-GAAP net income of $26.8 million, or $1.15 per diluted share, for the 2009 third quarter.

DTAG noted that both its GAAP and non-GAAP pretax earnings were negatively impacted by $11.9 million of merger-related expenses incurred during the third quarter of 2010. These merger-related expenses represent approximately $0.23 per diluted share for the third quarter of 2010.

DTAG reported corporate adjusted EBITDA for the third quarter of 2010 of $81.8 million, compared to $54.7 million in the third quarter of 2009. Excluding the $11.9 million of merger-related expenses incurred during the quarter, corporate adjusted EBITDA for the third quarter of 2010 was $93.7 million, an increase of 71 percent compared to the third quarter of 2009.

"In spite of a slower than expected economic recovery and a reduction in car sale gains compared to the third quarter of 2009, the company delivered its seventh consecutive quarter of year-over-year double-digit growth in corporate adjusted EBITDA. This quarter is also the best quarterly performance in the company's 60 year history," said president and chief executive officer, Scott L. Thompson.

For the quarter ended Sept. 30, 2010, DTAG's total revenue was $443.5 million, as compared to $438.9 million for the comparable 2009 period. Vehicle rental revenues were up 1.6 percent for the quarter, driven by a 1.4 percent increase in transaction days, and a 20 basis point improvement in revenue per day. The increase in rental revenue was partially offset by a decline in vehicle leasing revenue resulting from the planned reduction in the company's licensee leasing program.

The average fleet for the third quarter of 2010 was up 1.7 percent on a year-over-year basis compared to the third quarter of 2009, while the ending fleet was down 50 basis points from the third quarter of 2009.

"We are extremely pleased with the results for the quarter, realizing increases in both transaction days and revenue per day, while continuing to decrease expenses across all areas of the company. In spite of a difficult year-over-year comparison resulting from a 12 percent improvement in revenue per day during the third quarter of 2009, we achieved a modest increase in revenue per day in the third quarter of 2010," Thompson said.

Vehicle depreciation per unit for the third quarter of 2010 totaled $262 per month as DTAG continued to benefit from the overall strength of the used-vehicle market and previously announced changes to fleet planning and remarketing operations. The company noted that gains on sales of risk vehicles, a component of vehicle depreciation, totaled approximately $10 million in the third quarter of 2010, declining from $16.8 million in the third quarter of 2009. Vehicle utilization was 84.0 percent compared to 84.2 percent in the third quarter of 2009.

For the nine months ended Sept. 30, 2010, net income was $118.7 million, or $3.93 per diluted share, compared to net income of $33.6 million, or $1.47 per diluted share, for the comparable period in 2009.

Non-GAAP net income for the nine months ended Sept. 30, 2010 was $106.8 million, or $3.53 per diluted share, compared to non-GAAP net income of $21.9 million, or $0.96 per diluted share, for the same period in 2009. Non-GAAP net income excludes the increase in fair value of derivatives and the non-cash charges related to the impairment of long-lived assets, net of related tax impact.

DTAG noted that both its GAAP and non-GAAP pretax earnings for the nine months ended September 30, 2010 were negatively impacted by $20.4 million of merger-related expenses. These merger-related expenses represent approximately $0.39 per diluted share for the nine months ended Sept. 30, 2010.

DTAG reported corporate adjusted EBITDA for the nine months ended Sept. 30, 2010 of $205.5 million, compared to $73.2 million for the nine months ended Sept. 30, 2009. Excluding year-to-date merger-related expenses of $20.4 million, corporate adjusted EBITDA for the nine months ended Sept. 30, 2010 was $225.9 million.

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