Dollar Thrifty Automotive Group Reports Second Quarter Earnings
Board of Directors Authorizes Stock Repurchase Program
TULSA, Okla., July 30 -- Dollar Thrifty Automotive Group, Inc. , today reported results for the second quarter ended June 30, 2003. Total revenue for the 2003 second quarter was $304.1 million, a 0.5 percent increase over the 2002 second quarter. Net income for the quarter was $6.3 million, or $.25 per diluted share. For the comparable 2002 quarter, net income was $17.5 million, or $.70 per diluted share.
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For the first six months of 2003, total revenue was $554.6 million, a 1.7 percent increase over the first half of 2002. Net income for the six-month period was $6.9 million, or $.28 per diluted share, compared to $29.7 million, or $1.19 per diluted share, for the first six months of 2002.
DTG is pleased to announce that its Board of Directors has authorized the repurchase of up to $30 million of the Company's stock over the next two years. "With improving travel industry conditions, we are confident that DTG's ongoing cash flow will exceed what is required to operate our business, including our aggressive internal growth strategy," Joseph E. Cappy, Chairman and CEO, said. This program will be funded from ongoing excess cash flow after funding business growth initiatives, including the accelerated franchise acquisition program. The timing and amount of share repurchases will be subject to market and business conditions. Repurchases will be made from time to time in the open market or through privately negotiated transactions.
For the 2003 second quarter, DTG recorded vehicle rental revenue of $243.7 million, a 1.6 percent increase over the 2002 second quarter. This growth was driven by an 8.0 percent increase in rental days, partially offset by a 5.9 percent decrease in revenue per day. The rental day growth was driven by a 1.8 percent increase from same stores and a 6.2 percent increase from franchise acquisitions and greenfield locations. "Lower industry pricing and a weak used car market, driven by high retail incentives on new cars offered by automobile manufacturers, continued to negatively impact our results," Cappy said.
DTG remains focused on its growth strategy and recently announced the acquisition of the Houston, Texas; Atlanta, Georgia; and Ontario, California, franchise operations of Thrifty. During the second quarter, DTG also announced that franchisees of Dollar Rent A Car and Thrifty Car Rental brands will be able to operate franchises of both Dollar and Thrifty in select markets in which the company has decided not to operate corporately. The first dual franchised operation opened June 1 in Colorado Springs, Colorado, with a current Dollar Rent A Car franchisee opening a new in-terminal Thrifty location.
Also, Thrifty franchisees from Des Moines, Iowa; Harrisburg, Pennsylvania; and Greenville/Spartanburg and Charleston, South Carolina, will soon be opening Dollar in-terminal locations in their respective cities. In addition, DTG greenfield operations commenced in Tucson, Arizona, and Daytona Beach, Florida, during the second quarter. DTG Canada continued its aggressive implementation of co-branding throughout the Canadian airports. Dollar now operates corporately in the Toronto, Montreal, Calgary, Winnipeg, Ottawa and Halifax airports on a co-branding basis with Thrifty thereby increasing the DTG profile throughout Canada.
"We continue to implement efficiencies through combining our operations and systems," Cappy said. "In mid-July, we announced that one of our three reservations centers will close in September and call volume will be redirected among the two remaining reservation centers. In addition, we now have all U.S. corporate stores operating on a single operating system with standardized processing and controls, and have completed the consolidation of our Florida accounting office into the world headquarters in Tulsa.
"Regarding the outlook, we believe there are particular signs of encouragement," Cappy said. "In the short-term, we are seeing increased travel volume during the peak summer travel season and it appears that we have seen the bottom of used car prices. In the long-term, we are pleased with our progress on executing our internal growth strategy and believe our focus on accretive franchise acquisitions will continue to expand our revenue growth. In addition, we continue to press for additional efficiencies and costs savings. Our financial position and our prospects for generating cash flow remain strong. Looking ahead to the third quarter of this year, while industry pricing has been improving, we still expect revenue per day in the third quarter to be 2 percent to 3 percent below last year's third quarter and earnings per share for the third quarter of 2003 to fall below the $.85 earned for the third quarter of 2002."
The Dollar Thrifty Automotive Group, Inc. second quarter 2003 earnings release conference call will be held on Wednesday, July 30, 2003, at 10:00 a.m. (central daylight time). Those interested in listening to the conference call live may access the call via Web cast at the corporate Web site, dtag.com, or by dialing 888-425-9978 (domestic) or 630-395-0027 (international), using the pass code "Dollar Thrifty." An audio replay of the conference call will be available through August 13, 2003, by calling 800-333-1767 (domestic) or 402-220-0198 (international). The replay will also be available via the corporate Web site for one year.
Dollar Thrifty Automotive Group, Inc., a Fortune 1000 Company, is headquartered in Tulsa, Oklahoma, and has approximately 6,000 worldwide employees. Focused on being the low-cost provider in the car rental industry, the company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value-conscious leisure travelers in more than 70 countries. With operations at most major airports, Dollar and Thrifty have approximately 800 corporate and franchised locations in the United States and Canada. Additional information can be found by visiting dtag.com.
Some of the statements contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Dollar Thrifty Automotive Group, Inc. believes such forward-looking statements are based upon reasonable assumptions, such statements are not guarantees of future performance and certain factors could cause results to differ materially from current expectations. These factors include: price and product competition; economic and competitive conditions in markets and countries where the companies' customers reside and where the companies and their franchisees operate; airline travel patterns; changes in capital availability or cost; costs and other terms related to the acquisition and disposition of automobiles; costs of conducting business and changes in structure or operations; and certain regulatory and environmental matters. Should one or more of these risks or uncertainties, among others, materialize, actual results could vary from those estimated, anticipated or projected. Dollar Thrifty Automotive Group, Inc. undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.
Dollar Thrifty Automotive Group, Inc.
Consolidated Statement of Income
(In thousands, except share and per share data)
Unaudited
Three months ended As % of
June 30, Total revenues
2003 2002 2003 2002
Revenues:
Vehicle rentals $243,713 $239,946 80.1% 79.3%
Vehicle leasing 41,444 43,509 13.6% 14.4%
Fees and services 14,317 15,391 4.7% 5.1%
Other 4,625 3,622 1.6% 1.2%
Total revenues 304,099 302,468 100.0% 100.0%
Costs and Expenses:
Direct vehicle
and operating 112,185 109,063 36.9% 36.1%
Vehicle depreciation
and lease charges,
net 109,526 92,583 36.0% 30.6%
Selling, general
and administrative 47,706 48,623 15.7% 16.1%
Interest expense, net 22,508 23,432 7.4% 7.7%
Total costs
and expenses 291,925 273,701 96.0% 90.5%
Income before
income taxes 12,174 28,767 4.0% 9.5%
Income tax expense 5,845 11,227 1.9% 3.7%
Net income $ 6,329 $17,540 2.1% 5.8%
Earnings per share:
Basic $0.26 $0.72
Diluted $0.25 $0.70
Weighted average
number of shares
outstanding:
Basic 24,492,981 24,257,511
Diluted 25,290,040 25,088,515
Six months ended As % of
June 30, Total revenues
2003 2002 2003 2002
Revenues:
Vehicle rentals $442,071 $435,479 79.7% 79.9%
Vehicle leasing 78,668 75,307 14.2% 13.8%
Fees and services 27,863 28,484 5.0% 5.2%
Other 5,980 5,955 1.1% 1.1%
Total revenues 554,582 545,225 100.0% 100.0%
Costs and Expenses:
Direct vehicle
and operating 210,768 196,697 38.0% 36.1%
Vehicle depreciation
and lease
charges, net 198,356 164,792 35.8% 30.2%
Selling, general
and administrative 89,796 90,635 16.2% 16.6%
Interest expense, net 41,777 43,278 7.5% 8.0%
Total costs
and expenses 540,697 495,402 97.5% 90.9%
Income before
income taxes 13,885 49,823 2.5% 9.1%
Income tax expense 6,962 20,150 1.3% 3.7%
Net income $ 6,923 $29,673 1.2% 5.4%
Earnings per share:
Basic $0.28 $1.23
Diluted $0.28 $1.19
Weighted average
number of shares
outstanding:
Basic 24,474,926 24,205,672
Diluted 25,164,647 24,838,336
Dollar Thrifty Automotive Group, Inc.
Consolidated Operating Statistics
Three months Six months
ended ended
June 30, June 30,
2003 2003
Vehicle Rental Data: (includes new stores)
Average number of vehicles operated 78,521 72,340
% change from prior year 6.3% 8.8%
Number of rental days 5,998,645 10,877,664
% change from prior year 8.0% 8.0%
Vehicle utilization 84.0% 83.1%
Percentage points change from prior year 1.4 p.p. (0.6) p.p.
Average revenue per day $40.63 $40.64
% change from prior year (5.9%) (6.0%)
Monthly average revenue per vehicle $1,035 $1,019
% change from prior year (4.4%) (6.7%)
Same Store Vehicle Rental Data: (excludes new stores)
Average number of vehicles operated 73,849 67,540
% change from prior year 0.0% 1.6%
Number of rental days 5,653,443 10,166,581
% change from prior year 1.8% 1.0%
Vehicle Leasing Data:
Average number of vehicles leased 30,518 29,156
% change from prior year (3.4%) 4.3%
Monthly average revenue per vehicle $453 $450
% change from prior year (1.3%) 0.2%
Selected Balance Sheet Data
(In thousands)
June 30, December 31,
2003 2002 2002
(Unaudited)
Cash and cash equivalents $62,488 $87,042 $ 143,485
Restricted cash
and investments 114,170 61,770 334,849
Revenue-earning vehicles, net 2,697,354 2,480,449 1,994,200
Total assets 3,496,117 3,242,072 3,116,434
Total debt 2,585,642 2,439,491 2,224,303
Stockholders' equity 502,536 490,771 499,481
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