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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. A reconciliation of non-GAAP to GAAP results is included in Table 3.
"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 Chief Executive Officer.
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 1.0 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.
Liquidity and Capital Resources
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, the Company 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.
Outlook
The Company 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.
Web cast and conference call information
The Dollar Thrifty Automotive Group, Inc. first quarter 2009 earnings conference call will be held on Wednesday, May 6, 2009, at 10:00 a.m. (CDT). Those interested in listening to the conference call live may access the call via Web cast at the corporate Web site, www.dtag.com, or by dialing 888-946-7608 (domestic) or 630-395-0278 (international) using the pass code "Dollar Thrifty." An audio replay of the conference call will be available through May 20, 2009, by calling 800-879-5513 (domestic) or 402-220-4734 (international). The replay will also be available via the corporate Web site for one year.
About Dollar Thrifty Automotive Group, Inc.
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 over 70 countries. Dollar and Thrifty have over 700 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's approximately 6,800 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. For additional information, visit www.dtag.com or the brand sites at www.dollar.com and www.thrifty.com.
This press release contains "forward-looking statements" about our expectations, plans and performance. These statements use such words as "may," "will," "expect," "believe," "intend," "should," "could," "anticipate," "estimate," "forecast," "project," "plan" and similar expressions. These statements do not guarantee future performance and Dollar Thrifty Automotive Group, Inc. assumes no obligation to update them. Forward-looking statements should be considered in light of information in this press release and other filings with the Securities and Exchange Commission (the "SEC"). Risks and uncertainties that could materially affect future results include:
-- the impact of persistent pricing and demand pressures, particularly in
light of the continuing volatility in the global financial markets,
constrained credit markets and concerns about global economic prospects,
which have continued to depress consumer confidence and spending levels
and could affect the ability of our customers to meet their payment
obligations to us;
-- the impact on us, the U.S. automotive industry and prospects for the
economy as a whole of the pending bankruptcy proceeding of Chrysler, our
principal supplier, including whether Chrysler will consummate a plan of
reorganization or be forced to liquidate; the impact of the proceeding
and any plan of reorganization on the timing and amount of payments
Chrysler may make to us under residual value guarantees it provides to
us and whether Chrysler will continue to provide those guarantees; the
impact of the proceeding on residual values of Chrysler vehicles
(including particularly any discontinued brands), which could adversely
affect our recoveries in the used car market; and whether our plans to
mitigate the impact of Chrysler's bankruptcy on our business and
prospects are successful;
-- the impact on the U.S. automotive industry and prospects for the economy
as a whole of the potential bankruptcy or significant restructuring of
GM;
-- the impact of further federal initiatives to stabilize and revitalize
the U.S. automotive industry, including the potential adverse impact on
residual values of vehicles in our fleet of any federal incentive
program that promotes the replacement of high fuel consumption vehicles
with more fuel efficient vehicles;
-- the impact of pricing and other actions by competitors, particularly if
demand deteriorates further;
-- airline travel patterns, including further disruptions or reductions in
air travel resulting from airline bankruptcies, industry consolidation,
capacity reductions and pricing actions;
-- the cost and other terms of acquiring and disposing of automobiles and
the impact of current adverse conditions in the used car market on our
ability to reduce our fleet capacity as and when projected by our plans;
-- our ability to manage our fleet mix to match demand and reduce vehicle
depreciation costs, particularly as we increase the level of Non-Program
Vehicles (those without a guaranteed residual value) and our exposure to
the used car market;
-- the impact of our strategy to increase holding periods for vehicles in
our fleet, including potential adverse customer perceptions of the
quality of our fleet and increased servicing costs;
-- volatility in gasoline prices;
-- our ability to obtain cost-effective financing as needed without unduly
restricting operational flexibility, particularly if global economic
conditions deteriorate further, and our ability to comply with
financial covenants or to obtain necessary amendments or waivers, and
the impact of the terms of those amendments, such as potential
reductions in lender commitments;
-- our ability to manage the consequences under our financing agreements of
a default by any of the Monolines that provide credit support for our
asset backed financing structures, such as Financial Guaranty Insurance
Company and Syncora Guarantee, which guarantee an aggregate of
approximately $900 million of our debt;
-- whether counterparties under our derivative instruments will continue to
perform as required; whether ongoing governmental and regulatory
initiatives in the United States and elsewhere to stabilize the
financial markets will be successful;
-- the effectiveness of other actions we take to manage costs and liquidity
and whether further reductions in the scope of our operations will be
necessary;
-- disruptions in information and communication systems we rely on,
including those relating to methods of payment;
-- access to reservation distribution channels;
-- the cost of regulatory compliance and the outcome of pending litigation;
-- local market conditions where we and our franchisees do business,
including whether franchisees will continue to have access to capital as
needed; and
-- the impact of natural catastrophes and terrorism.
This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained on Tables 3 and 4 to this release.
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
March 31, Total revenues
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Vehicle rentals $345,313 $377,971 95.3% 95.3%
Other 17,109 18,535 4.7% 4.7%
------ ------ --- ---
Total revenues 362,422 396,506 100.0% 100.0%
------- ------- ----- -----
Costs and Expenses:
Direct vehicle and
operating 185,016 215,363 51.0% 54.3%
Vehicle depreciation and
lease charges, net 119,984 122,662 33.1% 30.9%
Selling, general and
administrative 46,887 53,672 12.9% 13.5%
Interest expense, net 26,154 22,137 7.3% 5.7%
Goodwill and long-lived
asset impairment 261 350,144 0.1% 88.3%
--- ------- --- ----
Total costs and expenses 378,302 763,978 104.4% 192.7%
------- ------- ----- -----
(Increase) decrease in fair
value of derivatives (5,045) 28,147 (1.4%) 7.1%
------ ------ ---- ---
Loss before income taxes (10,835) (395,619) (3.0%) (99.8%)
Income tax benefit (1,895) (97,677) (0.5%) (24.7%)
------- --------- ---- -----
Net loss $(8,940) $(297,942) (2.5%) (75.1%)
======= ========= ==== =====
Loss per share: (a)
Basic $(0.42) $(14.07)
Diluted $(0.42) $(14.07)
Weighted average number
of shares outstanding: (a)
Basic 21,483,042 21,174,980
Diluted 21,483,042 21,174,980
(a) Because the Company incurred a loss from continuing operations in the
first quarter of 2009 and 2008, outstanding stock options,
performance awards and employee and director compensation shares
deferred are anti-dilutive. Accordingly, basic and diluted weighted
average shares outstanding are equal for such periods.
Table 2
Dollar Thrifty Automotive Group, Inc.
Selected Operating and Financial Data
-------------------------------------
Three months ended
March 31, 2009
--------------
OPERATING DATA:
Vehicle Rental Data:
Average number of vehicles operated 99,875
% change from prior year (10.2%)
Number of rental days 7,382,178
% change from prior year (12.2%)
Vehicle utilization 82.1%
Percentage points change from prior year (1.0) p.p.
Average revenue per day $46.78
% change from prior year 4.1%
Monthly average revenue per vehicle $1,152
% change from prior year 1.7%
Average depreciable fleet 101,933
% change from prior year (8.8%)
Monthly average depreciation (net) per vehicle $392
% change from prior year 7.1%
FINANCIAL DATA: (in millions) (unaudited)
Non-vehicle depreciation and amortization $7
Non-vehicle interest expense 5
Non-vehicle interest income (1)
Non-vehicle capital expenditures (excludes acquisitions) 2
Franchise acquisitions -
Cash paid for (refund of) income taxes 5
Selected Balance Sheet Data
---------------------------
(In millions)
March 31, December 31,
2009 2008 2008
---- ---- ----
(unaudited)
Cash and cash equivalents (b) $193 $136 $230
Restricted cash and investments 574 267 597
Revenue-earning vehicles, net 1,486 2,598 1,946
Vehicle debt 1,693 2,342 2,310
Non-vehicle debt (corporate debt) 158 248 178
Stockholders' equity 207 269 215
Adjusted Tangible Net Worth Calculation
---------------------------------------
(In millions)
March 31, December 31,
2009 2008 2008
---- ---- ----
(unaudited)
Stockholders' equity $207 $269 $215
Less: Intangible assets, net (28) (35) (30)
Plus: Accumulated other comprehensive loss 29 14 29
-- -- --
Adjusted tangible net worth $208 $248 $214
==== ==== ====
(b) 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, such minimum balance is
included in cash and cash equivalents herein.
Table 3
Dollar Thrifty Automotive Group, Inc.
Non-GAAP Measures
-----------------
Non-GAAP pretax income (loss), Non-GAAP net income (loss) and Non-GAAP EPS
exclude the impact of the (increase) decrease in fair value of
derivatives and the impact of goodwill and long-lived asset impairments,
net of related tax impact (as applicable), from the reported GAAP measure.
Due to volatility resulting from the mark-to-market treatment of the
derivatives and the nature of the non-cash impairments, the Company
believes non-GAAP measures provide an important assessment of year over
year operating results. See table below for a reconciliation of non-GAAP
to GAAP results.
The following table reconciles reported GAAP pretax loss per the
income statement to non-GAAP pretax loss:
Three months ended
March 31,
2009 2008
---- ----
(in thousands)
Loss before income taxes - as reported $(10,835) $(395,619)
(Increase) decrease in fair value of derivatives (5,045) 28,147
Goodwill and long-lived asset impairment 261 350,144
-------- --------
Pretax loss - non-GAAP $(15,619) $(17,328)
======== ========
The following table reconciles reported GAAP net loss per the income
statement to non-GAAP net loss:
Three months ended
March 31,
2009 2008
---- ----
(in thousands)
Net loss - as reported $(8,940) $(297,942)
(Increase) decrease in fair value of derivatives,
net of tax (2,967) 16,542
Goodwill and long-lived asset impairment, net
of tax 114 265,183
-------- --------
Net loss - non-GAAP $(11,793) $(16,217)
======== ========
The following table reconciles reported GAAP diluted earnings (loss) per
share ("EPS") to non-GAAP diluted EPS:
Three months ended
March 31,
2009 2008
---- ----
EPS, diluted - as reported $(0.42) $(14.07)
EPS impact of (increase) decrease in fair value of
derivatives, net of tax (0.14) 0.78
EPS impact of goodwill and long-lived asset
impairment, net of tax 0.01 12.52
------ ------
EPS, diluted - non-GAAP $(0.55) $(0.77)
====== ======
Table 4
Dollar Thrifty Automotive Group, Inc.
Non-GAAP Measures
-----------------
Corporate Adjusted EBITDA means earnings, excluding the impact of the
(increase) decrease in fair value of derivatives, before non-vehicle
interest expense, income taxes, non-vehicle depreciation, amortization,
and certain other items specified in the Company's Senior Secured Credit
Facility. The Company believes Corporate Adjusted EBITDA is important as
it is utilized in the calculation of financial covenants in the Company's
credit agreement and provides investors with a supplemental measure of the
Company's liquidity by adjusting earnings to exclude non-cash items
consistent with the requirements in the Company's financial covenants.
The Company has revised its calculation of Corporate Adjusted EBITDA for
all periods presented to be consistent with the Company's credit
agreement. EBITDA is not defined under GAAP and should not be considered
as an alternative measure of the Company's net income, operating
performance, cash flow or liquidity. Corporate Adjusted EBITDA amounts
presented may not be comparable to similar measures disclosed by
other companies.
Three months ended
March 31,
2009 2008
---- ----
(in thousands)
Reconciliation of Net Loss to
Corporate Adjusted EBITDA
-------------------------
Net loss - as reported $(8,940) $(297,942)
(Increase) decrease in fair value of derivatives (5,045) 28,147
Non-vehicle interest expense 4,754 4,590
Income tax benefit (1,895) (97,677)
Non-vehicle depreciation 5,340 5,242
Amortization 1,998 1,642
Non-cash stock incentives 1,118 868
Goodwill and long-lived asset impairment 261 350,144
Other - 45
------- -------
Corporate Adjusted EBITDA $(2,409) $(4,941)
======= =======
Reconciliation of Corporate Adjusted EBITDA
to Cash Flows From Operating Activities
---------------------------------------
Corporate Adjusted EBITDA $(2,409) $(4,941)
Vehicle depreciation, net of gains/losses from
disposal 119,811 122,281
Non-vehicle interest expense (4,754) (4,590)
Change in assets and liabilities, net of
acquisitions, and other 129,050 43,268
------- ------
Net cash provided by operating activities $241,698 $156,018
======== ========
Memo:
Net cash provided by (used in) investing
activities $262,826 $(53,880)
Net cash used in financing activities $(641,159) $(66,807)
SOURCE Dollar Thrifty Automotive Group, Inc.
http://www.dtag.com
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