TULSA, Okla. -- Dollar Thrifty Automotive Group Inc. reported yesterday that net income for 2003's first quarter was $0.6 million (two cents a share) compared to $12.1 million (49 cents a share) during the same period in 2002. However, total revenue for the quarter was $250.5 million, up 3.2% from last year's first quarter.
"The first quarter was very significant for DTG in several ways," said Joseph E. Cappy, chairman and CEO of DTG. "First, this marks the first full quarter since the implementation of our new operating structure and growth strategy, which has allowed us to continue to grow revenue during very difficult travel industry conditions. Next, despite geopolitical events, a difficult economy and depressed travel industry conditions, we were able to maintain profitable operations during the quarter. Lower industry pricing and a weak used car market, driven by increased new car retail incentives offered by automobile manufacturers, caused our results to fall well below last year's record first quarter."
For the quarter, DTG generated record vehicle rental revenue of $198.4 million, a 1.4% increase over the 2002 first quarter. This growth was driven by an 8.1% increase in rental days, partially offset by a 6.1% decrease in revenue per day. Same-store vehicle rental revenue declined by 5.6%, while acquisitions and greenfield locations added 7%. Vehicle leasing revenue increased 17.1% as a result of strong vehicle orders by franchisees.
In February, DTG set a key part of its new growth strategy in motion by acquiring Hawaii's Thrifty Car Rental franchise. The deal consists of six key locations, including four in-terminal airport operations in Kahului, Maui; Lihue, Kauai; and Kona and Hilo on the Big Island. The other two are located off airport in Honolulu and Waikiki.
Also in February DTG acquired the master franchise rights to the Dollar brand in Canada. The purchase brought 30 Dollar franchised locations under DTG management, adding to the company's 129 Thrifty corporate and franchised locations in Canada. Both brands are now managed by the newly named subsidiary, Dollar Thrifty Automotive Group Canada Inc.
Moreover, DTG launched greenfield operations for Dollar in Milwaukee and for Thrifty in Charlotte, N.C. The company also acquired the Thrifty franchise in Manchester, N.H., during the first quarter.
"The outlook for the remainder of the year remains uncertain," Cappy said. "Airline traffic is still below prior-year levels and industry pricing remains weak. We are optimistic that the early successes in Iraq will result in renewed consumer confidence, and we will soon see increased travel. We are pressing for efficiencies as we continue the process of combining operations and systems, as well as for growth as we pursue our franchise acquisition program. Our financial position is strong, and our focus continues to be on positioning DTG for long-term prosperity."