Dollar Thrifty Automotive Group has reported its financial results for the third quarter, with net income down from $66.6 million to $55.5 million. Corporate Adjusted EBITDA also fell from $117.6 million to $98.2 million. These figures are due to $5.7 million in expenses related to the merger, as no similar expenses were incurred during the same period last year. The company also noted that sales of risk vehicles dropped from $17.4 million to $5.2 million due to a lower average gain per unit from refinements in base depreciation rates to lower volatility and reduced gains in fleet costs.
During the third quarter, which ended September 30, rental revenue at Dollar Thrifty increased from $435.6 million to $442.3 million. Monthly revenue per unit slightly declined from $1,289 to $1,235. The number of rental days grew 7.1%, which was somewhat offset by a 5.1% decline in revenue per day. The group was able to reach 84.7% utilisation – up from 83.9%. The average fleet of rentals that were operated during the period rose 6% compared to last year.
The cost of each vehicle was an average $246, which is much more than the $186 a month during the third quarter last year. This increased cost was partially due to a $12.2 million fall in gains on risk vehicle sales and a higher average base depreciation. Dollar Thrifty says the rise in base depreciation rates was due to a huge refreshment of the fleet during the first half. Along with the replacements, a large amount of 2010 year vehicles were replaced with newer models.
Direct operating and vehicles costs, combined with administrative, selling and general costs, amounted to $270.2 million – up slightly from $262.4 million. The increase was mostly due to the $5.7 million merger-related expenses. Excluding these expenses, operating costs amounted to 57.4% of revenues – down from 58.1%. Net interest expenses fell from $19.6 million to $12.2 million, which primarily reflects Dollar Thrifty’s legacy fleet financing facilities being refinanced to lower interest rates during the second half of last year.
The group also reported figures for the first nine months of the year, with net income up from $125.6 million to $145.3 million. Corporate Adjusted EBITDA rose from $235.1 million to $263.3 million. A total of $10.3 million in merger-related expenses were incurred during the period as well. Gains for risk vehicle sales slightly fell from $43.1 million to $42 million.
Dollar Thrifty also noted that it’s revising its guidance for the full-year. Corporate Adjusted EBITDA (excluding expenses related to its merger) is expected to be between $300 million and $310 million – up from between $285 million and $310 million.
Dollar Thrifty Automotive Group chairman, president and chief executive Scott L. Thompson says that they are thrilled to report another strong quarter, which has added to a robust year-to-date performance. Excluding costs related to the merger with Hertz, they have generated $269 million in Corporate Adjusted EBITDA for the year thus far. In spite of a struggling economic environment and prices in the industry remaining soft, the combination of rising demand for car rentals, the disciplined management of the fleet and an ongoing focus on operational efficiencies has allowed them to continue delivering strong results.