Dollar Thrifty Automotive Group Reports Fourth Quarter and Full Year Earnings
Company Achieves Record Fourth Quarter and Full Year Revenue
TULSA, Okla., Feb. 9 -- Dollar Thrifty Automotive Group, Inc. today reported results for the fourth quarter and year ended December 31, 2004. Total revenue for the fourth quarter was a record $349 million, up 15 percent from the comparable 2003 quarter. Net income for the fourth quarter was $1.4 million, or $.05 per diluted share, compared to a net loss of $8.4 million, or $.33 per diluted share, for the 2003 fourth quarter. During the fourth quarter of 2003, the Company commenced implementation of Emerging Issues Task Force No. 02-16 "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor" ("EITF 02-16"). The Company would have earned $.11 per diluted share in the 2003 fourth quarter if EITF 02-16 had been in effect for all prior periods. The 2004 fourth quarter results were negatively impacted by higher costs for insurance reserves and Sarbanes-Oxley compliance.
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For the year ended December 31, 2004, the Company's revenue was a record $1.4 billion, a 16 percent increase over the prior year. Net income was $50.8 million, or $1.94 per diluted share, including the $.14 per share favorable cumulative effect of a change in accounting principle to adopt FASB Interpretation No. 46(R), "Consolidation of Variable Interest Entities". Net income for 2003 was $19.8 million, or $.78 per diluted share. The Company would have earned $1.29 per diluted share in 2003 if EITF 02-16 had been in effect for all prior periods.
The strong fourth quarter revenue growth was driven by a 19.9 percent increase in vehicle rental revenue resulting from a 21.7 percent increase in rental days. Same store rental days were up 8.2 percent and franchise acquisitions along with greenfield stores contributed another 13.5 percent to rental day growth. Vehicle leasing revenue declined from last year's fourth quarter primarily due to a shift of vehicles from franchise to corporate operations resulting from franchise acquisitions and to lower lease rates.
Gary Paxton, President and Chief Executive Officer, said, "2004 was a year of outstanding achievements for DTG with record revenue, record vehicle utilization and increased presence at the airports. It was also an outstanding year with respect to a key element of our growth strategy of acquiring both Dollar and Thrifty franchises in the U.S. and Canada. During the year, we acquired 16 markets previously held by franchisees, including Thrifty in Orlando and Los Angeles which are among the largest U.S. car rental markets. Since the implementation of our growth strategy in December 2002, we have acquired 44 U.S. and Canadian markets and opened seven new Dollar or Thrifty greenfield locations adding approximately 27,000 vehicles on an annualized basis to the Company's rental fleet."
As previously announced, the Company increased its share repurchase program from $30 million to $100 million. During the fourth quarter, the Company purchased 173,000 shares at a total cost of $4.7 million. Since announcing the program in July 2003, the Company has repurchased 870,300 shares at a total cost of $22.2 million. The repurchase of the remaining authorized shares is expected to be completed by December 31, 2006.
Outlook
"We expect continued growth in travel in 2005," Paxton said. "Also, we are becoming more optimistic regarding industry price increases in 2005 with announced plans by automobile manufacturers to constrain vehicle sales to the rental industry. We expect fewer opportunities for incremental low-cost fleet deals and rising interest rates to increase industry vehicle costs in 2005. We will continue to pursue franchise acquisitions and operating efficiencies from our consolidated operating model." The Company estimates 2005 earnings per share in the range of $2.00 to $2.20 based on achieving 6 to 7 percent growth in same store rental days as compared to 2004, with flat to a 2 percent increase in revenue per day and the impact of franchise acquisitions completed in 2004.
The Dollar Thrifty Automotive Group, Inc. fourth quarter/full year 2004 earnings conference call and live audio Web cast will be held on Wednesday, February 9, 2005, 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, http://www.dtag.com/, or by dialing 888-395-2045 (domestic) or 210- 234-8004 (international). An audio replay of the conference call will be available through February 23, 2005, by calling 888-662-6658 (domestic) or 402-220-6418 (international). The ID and pass code for both the domestic and international replay is "Dollar Thrifty." The replay will also be available via the corporate Web site for one year.
The Dollar Thrifty Automotive Group Annual Meeting of Stockholders will be held on May 20, 2005, at 11:00 a.m. (central time) at the Company's worldwide headquarters in Tulsa.
The Company has enhanced the "Investor Information" portion of its Web site, http://www.dtag.com/, by including information typically presented by management at investor meetings following the announcement of earnings. This information, which will generally be updated after each quarterly announcement, can be found under the "Investor Update" tab.
Dollar Thrifty Automotive Group, Inc. is a Fortune 1000 Company headquartered in Tulsa, Oklahoma. Driven by the mission "Value Every Time," the Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value-conscious travelers in approximately 70 countries. Dollar and Thrifty have over 800 corporate and franchised locations in the United States and Canada including operations at most major airports. The Company's more than 8,000 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. For additional information, visit http://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; natural hazards or catastrophes; incidents of terrorism; airline travel patterns; changes in capital availability or cost; costs and other terms related to the acquisition and disposition of automobiles; systems or communications failures; costs of conducting business and changes in structure or operations; and certain regulatory and environmental matters and litigation risks. 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.
Table 1
Dollar Thrifty Automotive Group, Inc.
Consolidated Statement of Operations
(In thousands, except share and per share data)
Unaudited
Three months ended As % of
December 31, Total revenues
2004 2003 2004 2003
Revenues:
Vehicle rentals $315,649 $263,359 90.4% 87.0%
Vehicle leasing 17,291 23,837 5.0% 7.9%
Fees and services 10,709 10,914 3.1% 3.6%
Other 5,537 4,743 1.5% 1.5%
Total revenues 349,186 302,853 100.0% 100.0%
Costs and Expenses:
Direct vehicle and operating 192,971 156,376 55.3% 51.6%
Vehicle depreciation and lease
charges, net 71,667 87,351 20.5% 28.9%
Selling, general and
administrative 58,822 48,085 16.8% 15.9%
Interest expense, net 22,341 22,754 6.4% 7.5%
Total costs and expenses 345,801 314,566 99.0% 103.9%
Income/(loss) before income taxes 3,385 (11,713) 1.0% (3.9%)
Income tax expense/(benefit) 2,024 (3,266) 0.6% (1.1%)
Net income/(loss) $1,361 $(8,447) 0.4% (2.8%)
Earnings/(loss) per share:
Basic $0.05 $(0.34)
Diluted $0.05 $(0.33)
Weighted average number
of shares outstanding:
Basic 24,841,352 24,682,355
Diluted 26,095,471 25,831,161
Year ended As % of
December 31, Total revenues
2004 2003 2004 2003
Revenues:
Vehicle rentals $1,276,023 $1,014,121 89.6% 82.6%
Vehicle leasing 80,456 144,368 5.7% 11.8%
Fees and services 54,176 54,149 3.8% 4.4%
Other 13,325 15,248 0.9% 1.2%
Total revenues 1,423,980 1,227,886 100.0% 100.0%
Costs and Expenses:
Direct vehicle and operating 735,451 524,528 51.6% 42.7%
Vehicle depreciation and lease
charges, net 293,684 387,242 20.6% 31.6%
Selling, general and
administrative 223,109 189,575 15.7% 15.4%
Interest expense, net 90,868 89,296 6.4% 7.3%
Total costs and expenses 1,343,112 1,190,641 94.3% 97.0%
Income before income taxes 80,868 37,245 5.7% 3.0%
Income tax expense 33,808 17,405 2.4% 1.4%
Income before cumulative effect of
a change in accounting principle 47,060 19,840 3.3% 1.6%
Cumulative effect of a change in
accounting principle 3,730 -- 0.3% 0.0%
Net income $50,790 $19,840 3.6% 1.6%
Basic earnings per share: (1)
Income before cumulative effect
of a change in accounting principle $1.89 $0.81
Cumulative effect of a change in
accounting principle 0.15 --
Net income $2.04 $0.81
Diluted earnings per share: (1)
Income before cumulative effect
of a change in accounting principle $1.79 $0.78
Cumulative effect of a change in
accounting principle 0.14 --
Net income $1.94 $0.78
Weighted average number
of shares outstanding:
Basic 24,947,791 24,537,787
Diluted 26,222,785 25,393,581
(1) Since basic and diluted earnings per share are computed independently
for each period and category, total per share amounts may not equal
the sum of the respective categories.
Table 2
Dollar Thrifty Automotive Group, Inc.
Consolidated Statement of Operations
with Reconciliation to
Pro Forma Consolidated Statement of Operations
(In thousands, except share and per share data)
Unaudited
To facilitate year over year comparisons, the following schedule provides
results for the three months and years ended December 31, 2004
and 2003, with reconciliation to pro forma results as if EITF 02-16 had
been in effect on a consistent basis for all periods.
Three Months Ended
December 31, 2004
EITF 02-16
As Reported Adjustment Pro Forma
Revenues:
Vehicle rentals $315,649 $-- $315,649
Vehicle leasing 17,291 -- 17,291
Fees and services 10,709 -- 10,709
Other 5,537 -- 5,537
Total revenues 349,186 -- 349,186
Costs and Expenses:
Direct vehicle and operating 192,971 -- 192,971
Vehicle depreciation and lease
charges, net 71,667 -- 71,667
Selling, general and
administrative 58,822 -- 58,822
Interest expense, net 22,341 -- 22,341
Total costs and expenses 345,801 -- 345,801
Income/(loss) before income taxes 3,385 -- 3,385
Income tax expense/(benefit) 2,024 -- 2,024
Net income/(loss) $1,361 $-- $1,361
Earnings/(loss) per share:
Basic $0.05 $-- $0.05
Diluted $0.05 $-- $0.05
Weighted average number
of shares outstanding:
Basic 24,841,352 24,841,352
Diluted 26,095,471 26,095,471
Three Months Ended
December 31, 2003
EITF 02-16
As Reported Adjustment Pro Forma
Revenues:
Vehicle rentals $263,359 $-- $263,359
Vehicle leasing 23,837 -- 23,837
Fees and services 10,914 -- 10,914
Other 4,743 -- 4,743
Total revenues 302,853 -- 302,853
Costs and Expenses:
Direct vehicle and operating 156,376 (7,352) 149,024
Vehicle depreciation and lease
charges, net 87,351 (11,627) 75,724
Selling, general and
administrative 48,085 -- 48,085
Interest expense, net 22,754 -- 22,754
Total costs and expenses 314,566 (18,979) 295,587
Income/(loss) before income taxes (11,713) 18,979 7,266
Income tax expense/(benefit) (3,266) 7,592 4,326
Net income/(loss) $(8,447) $11,387 $2,940
Earnings/(loss) per share:
Basic $(0.34) $0.46 $0.12
Diluted $(0.33) $0.44 $0.11
Weighted average number
of shares outstanding:
Basic 24,682,355 24,682,355
Diluted 25,831,161 25,831,161
Year ended
December 31, 2004
EITF 02-16
As Reported Adjustment Pro Forma
Revenues:
Vehicle rentals $1,276,023 $-- $1,276,023
Vehicle leasing 80,456 -- 80,456
Fees and services 54,176 -- 54,176
Other 13,325 -- 13,325
Total revenues 1,423,980 -- 1,423,980
Costs and Expenses:
Direct vehicle and operating 735,451 -- 735,451
Vehicle depreciation and lease
charges, net 293,684 (4,556) 289,128
Selling, general and
administrative 223,109 -- 223,109
Interest expense, net 90,868 -- 90,868
Total costs and expenses 1,343,112 (4,556) 1,338,556
Income before income taxes 80,868 4,556 85,424
Income tax expense 33,808 1,822 35,630
Income before cumulative effect of a
change in accounting principle 47,060 2,734 49,794
Cumulative effect of a change in
accounting principle 3,730 -- 3,730
Net income $50,790 $2,734 $53,524
Basic earnings per share: (1)
Income before cumulative effect of
a change in accounting principle $1.89 $0.11 $2.00
Cumulative effect of a change in
accounting principle 0.15 -- 0.15
Net income $2.04 $0.11 $2.15
Diluted earnings per share: (1)
Income before cumulative effect of
a change in accounting principle $1.79 $0.10 $1.90
Cumulative effect of a change in
accounting principle 0.14 -- 0.14
Net income $1.94 $0.10 $2.04
Weighted average number
of shares outstanding:
Basic 24,947,791 24,947,791
Diluted 26,222,785 26,222,785
Year ended
December 31, 2003
EITF 02-16
As Reported Adjustment Pro Forma
Revenues:
Vehicle rentals $1,014,121 $-- $1,014,121
Vehicle leasing 144,368 -- 144,368
Fees and services 54,149 -- 54,149
Other 15,248 -- 15,248
Total revenues 1,227,886 -- 1,227,886
Costs and Expenses:
Direct vehicle and operating 524,528 48,295 572,823
Vehicle depreciation and lease
charges, net 387,242 (69,630) 317,612
Selling, general and
administrative 189,575 -- 189,575
Interest expense, net 89,296 -- 89,296
Total costs and expenses 1,190,641 (21,335) 1,169,306
Income before income taxes 37,245 21,335 58,580
Income tax expense 17,405 8,534 25,939
Income before cumulative effect of a
change in accounting principle 19,840 12,801 32,641
Cumulative effect of a change in
accounting principle -- -- --
Net income $19,840 $12,801 $32,641
Basic earnings per share: (1)
Income before cumulative effect of
a change in accounting principle $0.81 $0.52 $1.33
Cumulative effect of a change in
accounting principle -- -- --
Net income $0.81 $0.52 $1.33
Diluted earnings per share: (1)
Income before cumulative effect of
a change in accounting principle $0.78 $0.50 $1.29
Cumulative effect of a change in
accounting principle -- -- --
Net income $0.78 $0.50 $1.29
Weighted average number
of shares outstanding:
Basic 24,537,787 24,537,787
Diluted 25,393,581 25,393,581
(1) Since basic and diluted earnings per share are computed independently
for each period and category, total per share amounts may not equal
the sum of the respective categories.
Table 3
Dollar Thrifty Automotive Group, Inc.
Selected Operating and Financial Data
Three months ended Year ended
December 31, 2004 December 31, 2004
OPERATING DATA:
Vehicle Rental Data:
(includes new stores)
Average number of vehicles operated 100,912 102,159
% change from prior year 23.2% 27.2%
Number of rental days 7,771,322 31,831,062
% change from prior year 21.7% 29.1%
Vehicle utilization 83.7% 85.1%
Percentage points change from
prior year (1.0) p.p. 1.0 p.p.
Average revenue per day $40.62 $40.09
% change from prior year (1.5%) (2.5%)
Monthly average revenue per vehicle $1,043 $1,041
% change from prior year (2.7%) (1.0%)
Same Store Vehicle Rental Data:
(excludes new stores)
Average number of vehicles operated 89,888 87,408
% change from prior year 9.7% 8.8%
Number of rental days 6,906,302 27,226,402
% change from prior year 8.2% 10.4%
Vehicle Leasing Data:
Average number of vehicles leased 14,793 17,519
% change from prior year (21.2%) (34.9%)
Monthly average revenue per vehicle $390 $383
% change from prior year (7.8%) (14.3%)
FINANCIAL DATA: (in millions)
(unaudited)
Non-vehicle depreciation and
amortization $7 $24
Non-vehicle capital expenditures
(excludes acquisitions) 13 31
Franchise acquisitions 28 78
Cash paid for income taxes -- 2
Selected Balance Sheet Data
(In millions)
December 31,
2004 2003
(Unaudited)
Cash and cash equivalents $204 $192
Restricted cash and investments 455 537
Revenue-earning vehicles, net 2,268 2,137
Total debt (all vehicle debt) 2,500 2,442
Stockholders' equity 603 533
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