Dollar Thrifty Automotive Group Reports Third Quarter Earnings
Company Benefits From Growth Strategy; Continues Aggressive Acquisition Plan
TULSA, Okla., Oct. 29 -- Dollar Thrifty Automotive Group, Inc. today reported results for the third quarter ended September 30, 2003. Total revenue for the 2003 third quarter was $370.5 million, a 9.7 percent increase over the 2002 third quarter. Pretax income was $35.1 million, up 3.1 percent from last year's third quarter. Net income for the quarter was $21.4 million, or $.84 per diluted share. For the comparable 2002 quarter, net income was $21.2 million, or $.85 per diluted share.
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For the first nine months of 2003, total revenue was $925.0 million, a 4.8 percent increase over the first nine months of 2002. Net income for the first nine months was $28.3 million, or $1.12 per diluted share, compared to $50.9 million, or $2.05 per diluted share, for the first nine months of 2002.
Vehicle rental revenue was $308.7 million, a 15.2 percent increase over the 2002 third quarter. This growth was driven by a 17.9 percent increase in rental days of which 9.8 percent was generated from franchise acquisitions and greenfield locations and 8.1 percent was generated from stores operated in both years. Vehicle leasing revenue was $41.9 million for the quarter, down 20.5 percent from last year's third quarter due to franchise acquisitions and fewer vehicles leased to franchisees.
"DTG benefited from a strong seasonal increase in summer travel," Gary L. Paxton, President and Chief Executive Officer, said. "We were very pleased to see strong same store volume increases along with improving pricing trends. DTG's revenue per day was down 2.3 percent from last year's third quarter, which was a significant improvement from the 5.9 percent drop experienced during the second quarter. We also did a good job of matching capacity to demand resulting in very strong fleet utilization of 85.2 percent."
DTG continues to execute on the key elements of its growth strategy that includes: (1) acquiring both Dollar and Thrifty franchises in key U.S. and Canadian markets, and (2) establishing dual franchises internationally and in smaller U.S. and Canadian markets that allow franchisees to operate both the Dollar and Thrifty brands.
During the third quarter, DTG acquired the U.S. Thrifty Car Rental franchise operations in Atlanta, Houston, Miami, Ft. Lauderdale, West Palm Beach, Florida, and Ontario, California. Effective November 1, DTG will acquire the Thrifty Car Rental franchise operations in Las Vegas and in Hartford, Connecticut. Both Dollar and Thrifty will open greenfield operations at the Richmond, Virginia, airport on November 1. The addition of these key operations, combined with the previously announced acquisitions and openings of greenfield locations, will add approximately 13,500 vehicles on an annualized basis to the company's U.S. rental fleet.
In Canada, DTG completed the acquisition of the Edmonton franchise during the quarter. DTG Canada now operates both the Dollar and Thrifty brands corporately in Calgary, Winnipeg, Ottawa, Toronto, Montreal, Edmonton and Halifax, and operates the Thrifty brand corporately in Vancouver. This substantially completes our strategy of acquiring franchise operations in key Canadian airport markets.
DTG also made progress on its U.S. dual franchise growth initiatives during the third quarter. Thrifty franchisees in Des Moines, Iowa, Harrisburg, Pennsylvania, and Myrtle Beach, South Carolina, have opened new Dollar in- terminal locations, in addition to their separate Thrifty Car Rental operations.
"Going forward, we are optimistic," Paxton said. "We have made impressive progress transitioning the Thrifty system to corporate operations in key U.S. airport markets and will aggressively continue that effort. In addition to growth through acquisitions, economic indicators continue to be favorable to support increasing travel demand and fuel organic growth. On the cost side, we are achieving operating efficiencies from the combination of our operations. These savings are being offset by implementation costs in 2003, however, we will begin seeing benefits in 2004.
"Regarding the outlook for the fourth quarter, we currently expect revenue per day to be flat to down 2 percent from last year's fourth quarter, and for same store rental day volume to increase by six percent to eight percent."
On August 11, DTG implemented the company's stock repurchase program authorizing the repurchase of up to $30 million of DTG stock over the next two years. During the third quarter DTG repurchased 82,200 shares at a total cost of approximately $2 million.
The Dollar Thrifty Automotive Group, Inc. third quarter 2003 earnings release conference call will be held on Wednesday, October 29, 2003, at 10:00 a.m. (central 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 888-566-5777 (domestic) or 415-228-4995 (international), using the pass code "Dollar Thrifty." An audio replay of the conference call will be available through November 12, 2003, by calling 800-964-4650 (domestic) or 402-998-1124 (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 7,000 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 travelers in approximately 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 www.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
September 30, Total revenues
2003 2002 2003 2002
Revenues:
Vehicle rentals $308,691 $268,019 83.3% 79.4%
Vehicle leasing 41,863 52,653 11.3% 15.6%
Fees and services 15,372 15,408 4.2% 4.6%
Other 4,525 1,588 1.2% 0.4%
Total revenues 370,451 337,668 100.0% 100.0%
Costs and Expenses:
Direct vehicle and operating 148,129 122,958 40.0% 36.4%
Vehicle depreciation
and lease charges, net 110,790 109,821 29.9% 32.5%
Selling, general
and administrative 51,694 43,803 14.0% 13.0%
Interest expense, net 24,765 27,066 6.6% 8.0%
Total costs and expenses 335,378 303,648 90.5% 89.9%
Income before income taxes 35,073 34,020 9.5% 10.1%
Income tax expense 13,709 12,813 3.7% 3.8%
Net income $21,364 $21,207 5.8% 6.3%
Earnings per share:
Basic $0.87 $0.87
Diluted $0.84 $0.85
Weighted average number
of shares outstanding:
Basic 24,517,960 24,328,726
Diluted 25,496,094 24,955,874
Nine months ended As % of
September 30, Total revenues
2003 2002 2003 2002
Revenues:
Vehicle rentals $750,762 $703,498 81.2% 79.7%
Vehicle leasing 120,531 127,960 13.0% 14.5%
Fees and services 43,235 43,892 4.7% 5.0%
Other 10,505 7,543 1.1% 0.8%
Total revenues 925,033 882,893 100.0% 100.0%
Costs and Expenses:
Direct vehicle and operating 358,897 319,655 38.8% 36.2%
Vehicle depreciation and lease
charges, net 309,146 274,613 33.4% 31.1%
Selling, general and
administrative 141,490 134,438 15.3% 15.2%
Interest expense, net 66,542 70,344 7.2% 8.0%
Total costs and expenses 876,075 799,050 94.7% 90.5%
Income before income taxes 48,958 83,843 5.3% 9.5%
Income tax expense 20,671 32,963 2.2% 3.7%
Net income $28,287 $50,880 3.1% 5.8%
Earnings per share:
Basic $1.16 $2.10
Diluted $1.12 $2.05
Weighted average number
of shares outstanding:
Basic 24,489,428 24,247,140
Diluted 25,244,005 24,878,002
Dollar Thrifty Automotive Group, Inc.
Selected Operating and Financial Data
Three months Nine months
ended ended
September 30, September 30,
2003 2003
OPERATING DATA:
Vehicle Rental Data: (includes new stores)
Average number of vehicles operated 94,335 79,752
% change from prior year 16.5% 11.8%
Number of rental days 7,391,000 18,268,664
% change from prior year 17.9% 11.8%
Vehicle utilization 85.2% 83.9%
Percentage points change from
prior year 1.1 p.p. 0.0 p.p.
Average revenue per day $41.77 $41.10
% change from prior year (2.3%) (4.6%)
Monthly average revenue per vehicle $1,091 $1,046
% change from prior year (1.1%) (4.5%)
Same Store Vehicle Rental Data:
(excludes new stores)
Average number of vehicles operated 86,153 73,813
% change from prior year 6.4% 3.4%
Number of rental days 6,775,193 16,941,774
% change from prior year 8.1% 3.7%
Vehicle Leasing Data:
Average number of vehicles leased 30,659 29,663
% change from prior year (18.7%) (5.0%)
Monthly average revenue per vehicle $455 $451
% change from prior year (2.4%) (0.9%)
FINANCIAL DATA: (in millions)
Non-vehicle depreciation and
amortization $5 $15
Non-vehicle capital expenditures
(excludes acquisitions) 4 13
Cash paid for/(refund of) income taxes (25) (22)
Selected Balance Sheet Data
(In millions)
September 30, December 31,
2003 2002 2002
(Unaudited)
Cash and cash equivalents $142 $110 $143
Restricted cash and investments 411 355 335
Revenue-earning vehicles, net 2,388 2,212 1,994
Total debt 2,582 2,385 2,224
Stockholders' equity 532 499 499
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