Dollar Thrifty Automotive Group – which operates the Dollar Rent a Car and Thrifty Car Rental brands – has reported results for its first quarter ended March 31. Net income increased to $40.4 million from the $16.5 million net income posted during the same period last year. Corporate Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $76.8 million, up from $36.3 million.
Car hire revenue grew to $339.1 million from $332.3 million last year, driven by a 6.5% rise in rental days. This was slightly offset by a 4.2% fall in revenue per day. Car utilisation was up from 79.7% to 81%, while revenue per unit per month was down slightly from $1,131 to $1,115. Fleet cost for every vehicle was down from $251 per month to $136 per month, which was the result of lower overall depreciation rates on its fleet due to improved fleet strategies and the ongoing strength of the used car market.
Vehicle remarketing volumes at Dollar Thrifty significantly grew year-on-year due to a big fleet refresh cycle, which is underway right now. About 14,400 risk vehicles have been sold with a total gain of $14.3 million. This is compared to the about 6,900 risk vehicles sold during the same period last year at a gain of $7.9 million. The average fleet was up 3.6% compared to last year.
Direct operating and vehicle expenses – along with general, administrative and selling expenses – totaled 64.5% of revenues, down from 65.3%. This decline was mostly due to $3.5 million in merger-related expenses in 2011 that didn’t recur in 2012. Net interest expense fell from $21 million to $17.1 million, which primarily demonstrates the refinancing of the company’s legacy fleet financing facilities at cheaper interest rates during the second half of last year.
As of the end of the first quarter, Dollar Thrifty had no outstanding corporate debt and its tangible net worth was $635 million. It had $492 million in cash and cash equivalents, as well as $214 million in restricted cash and investments, which is mostly available to buy vehicles and/or to repay vehicle financing obligations.
In its outlook for the year, Dollar Thrifty noted that it has revised its full year guidance for diluted earnings per share, which it predicts will be between $5 and $5.60. This is based on its performance in the first quarter, current overall economic conditions, continued improvement in travel volumes and expectations for continued strength in the domestic used car market. Plus, it expects Corporate Adjusted EBITDA for the full year to be between $285 million and $310 million.
Dollar Thrifty Automotive Group chairman, president and chief executive Scott L. Thompson says they are pleased to report another record quarter, as well as the highest first quarter profit in their history. A robust used vehicle market, continued focus on fleet utilisation, productivity initiatives, balance sheet management and cost control have combined to allow them to reach another record quarter – in spite of a competitive environment.
Thompson added that demand for their value-oriented offerings is strong, which is evident in their rental day growth during the period. Recovery in the leisure market continues to steadily improve, and they are pleased with the strength of their forward reservation bookings as the peak season approaches.
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