On May 6 Dollar Thrifty Automotive Group Inc. (DTAG) reported results for the first quarter ended March 31, 2009. The net loss for the 2009 first quarter was $8.9 million, or $0.42 loss per diluted share, compared to a net loss of $297.9 million, or $14.07 loss per diluted share, for the comparable 2008 quarter. The net loss for the first quarter of 2009 included income of $0.14 per diluted share related to an increase in fair value of derivatives, as compared to a loss of $0.78 per diluted share in last year's first quarter related to a decrease in fair value of derivatives. In addition, the first quarter loss for 2008 included non-cash charges of $12.52 per diluted share related to the impairment of goodwill and long-lived assets.
The non-GAAP net loss for the 2009 first quarter was $11.8 million, or $0.55 loss per diluted share, compared to a net loss of $16.2 million, or $0.77 loss per diluted share for the 2008 first quarter. Non-GAAP net loss excludes the (increase) decrease in fair value of derivatives and the non-cash charges related to the impairment of goodwill and long-lived assets, net of related tax impact.
“Although the company incurred a loss during this seasonally weak quarter, we are pleased to be ahead of plan. We are also pleased that the company's overall performance came in ahead of last year, particularly in light of the much weaker economic environment during the first quarter of 2009,” said Scott L. Thompson, president and CEO.
For the quarter ended March 31, 2009, the company's total revenue was $362.4 million, as compared to $396.5 million for the comparable 2008 period. Rental revenue for the quarter was $345.3 million, a decrease of 8.6 percent, as compared to the same period in 2008. The decline in rental revenue was driven by a 12.2 percent decrease in rental days, partially offset by a 4.1 percent improvement in revenue per day. The first quarter average fleet was down approximately 10 percent compared to last year's first quarter.
First quarter rental revenue comparisons were negatively impacted because the Easter holiday fell in the second quarter of 2009 versus the first quarter of 2008, and because February 2009 had one less transaction day than February 2008 due to leap year. Compared to the fourth quarter of 2008, first quarter 2009 rental revenue increased 2.5 percent, with revenue per day increasing 10.5 percent, partially offset by a 7.2 percent decline in rental days.
Per vehicle depreciation costs in the first quarter of 2009 decreased approximately 3.5 percent compared to the fourth quarter of 2008, although the cost per unit was approximately 7 percent higher compared to the first quarter of 2008, primarily due to the lower residual values resulting from challenging conditions in the used vehicle market. Vehicle utilization, a measure of fleet efficiency, was 82.1 percent, down 1 percentage point from last year's first quarter. Direct vehicle and operating costs were lower in the first quarter of 2009 driven by lower transactions coupled with lower costs per transaction.
As of March 31, 2009, the company had $193 million of cash and cash equivalents. Under the terms of the recent amendment to the Senior Secured Credit Facilities, the company is required to maintain a minimum cash balance of $100 million at all times, with $60 million of the minimum cash balance pledged as security for the repayment of those facilities. As of March 31, 2009 the company also had $574 million of restricted cash and investments primarily available for the purchase of vehicles and/or repayment of vehicle financing obligations.
During the quarter, the company repaid in full both the conduit and liquidity vehicle financing facilities, reducing its vehicle-related debt and restricted cash by $490 million. Additionally, in conjunction with the amendment of the Senior Secured Credit Facilities, the company prepaid $20 million of its term loan during the first quarter of 2009. The company's next scheduled debt maturity under its medium term note program will occur in the first quarter of 2010 when $400 million of outstanding notes begin amortizing over a six-month period.
The company's exposure to Chrysler LLC, its primary supplier, has been further reduced since March 31, 2009. At April 30, 2009, DTAG had approximately $11 million of trade receivables due from Chrysler, and estimated exposure of $28 million related to residual value guarantees provided by Chrysler, primarily related to program vehicles scheduled to be returned in the second half of 2009, as well as a limited number of vehicles that have been returned to auction but not yet sold.
The company is in full compliance with all of the financial covenants under its various financing arrangements with lenders. Adjusted tangible net worth for purposes of these covenants was $207.9 million at March 31, 2009. At that date, reported tangible net worth was $178.9 million or $8.24 per outstanding share.
DTAG expects 2009 will continue to be a difficult operating environment as uncertainty surrounding the U.S. economic recovery will continue to weigh on consumer confidence. The company expects vehicle rental revenues to be down 6 to 12 percent for the full year of 2009 compared to 2008. In spite of recent improvements in used vehicle market conditions, the company expects fleet costs to remain challenging on a year-over-year basis as uncertainty surrounding the U.S. automotive industry, including uncertainty associated with the pending bankruptcy proceeding involving Chrysler, and the potential impact that may have on residual values.
"While improvements in rate per day during the first quarter and recent improvements in used vehicle market conditions are positives for the industry, we remain cautious in our outlook for 2009. We continue to maintain maximum flexibility in our operating and fleet plans in order to adapt to changing market conditions. Our ongoing focus will continue to be in the areas of revenue enhancement and cost control in order to meet our primary objectives of enhancing liquidity and maximizing operating cash flow," said Thompson.
