Dollar Thrifty Automotive Group, Inc. (NYSE: DTG) today reported results for the fourth quarter and year ended December 31, 2011. Net income for the 2011 fourth quarter was $33.9 million, or $1.08 per diluted share, compared to net income of$12.5 million, or $0.41 per diluted share, in the fourth quarter of 2010. Net income for the fourth quarter of 2011 was negatively impacted by $0.01 per diluted share related to changes in fair value of derivatives, compared to a favorable impact on net income of $0.14 per diluted share related to changes in fair value of derivatives in the fourth quarter of 2010.
Non-GAAP net income for the 2011 fourth quarter was $34.1 million, or $1.09 per diluted share, compared to non-GAAP net income of $8.3 million, or $0.27 per diluted share, for the 2010 fourth quarter. Non-GAAP net income excludes the (increase) decrease in fair value of derivatives and non-cash charges related to impairments of long-lived assets, net of related tax impact.
The Company reported Corporate Adjusted EBITDA for the fourth quarter of 2011 of $63.5 million, an increase of 110 percent compared to $30.2 million reported for the fourth quarter of 2010. The Company noted that Corporate Adjusted EBITDA in the fourth quarter of 2010 was negatively impacted by $2.1 million of merger-related expenses, while no such expenses were incurred in the fourth quarter of 2011.
"We are pleased to announce that for the second consecutive year, the Company is reporting record earnings," said Scott L. Thompson, Chairman, President and Chief Executive Officer. "During 2011, we benefitted from a robust used vehicle market, a recovering travel market with increasing demand for value-oriented product offerings, and our ongoing focus on expense control and productivity initiatives."
For the quarter ended December 31, 2011, the Company's total revenue was $353.7 million, as compared to $349.1 million for the comparable 2010 period. Vehicle rental revenues for the quarter were up 1.0 percent, driven primarily by a 5.2 percent increase in rental days that was partially offset by a 4.0 percent decrease in revenue per day. Vehicle utilization for the fourth quarter of 2011 was 81.1 percent, up from 79.7 percent during last year's fourth quarter. The average fleet for the quarter was up 3.4 percent.
Per vehicle depreciation cost totaled $218 per month in the fourth quarter of 2011 compared to $308 per vehicle per month in the fourth quarter of 2010. The Company's base depreciation rates continue to benefit from the overall strength of the used vehicle market and the resulting favorable impact on residual values. The Company also noted that gains on sales of risk vehicles, a component of vehicle depreciation, totaled $3.8 million in the fourth quarter of 2011, up from a loss of $0.1 million in the fourth quarter of 2010.
Direct vehicle and operating expenses and selling, general and administrative expenses declined to 60.2 percent of revenues for the fourth quarter of 2011, compared to 61.5 percent of revenues in the fourth quarter of 2010. The decrease in expenses was primarily the result of favorable vehicle-related insurance costs, personnel productivity initiatives and a decline in merger-related expenses compared to the prior year. Interest expense declined to $18.6 million in the fourth quarter of 2011, a decline of $5.3 million from prior year levels.
Full Year Results
For the year ended December 31, 2011, net income was $159.6 million, or $5.11 per diluted share, compared to $131.2 million, or$4.34 per diluted share, for the year ended December 31, 2010. Net income in 2011 and 2010 included net favorable impacts of$0.06 per diluted share and $0.54 per diluted share, respectively, related to favorable changes in fair value of derivatives and long-lived asset impairments.
The Company noted that net income for the full year of 2011 was negatively impacted by $2.7 million of after-tax merger-related expenses, or $0.09 per diluted share, compared to $13.2 million, or $0.44 per diluted share, for the full year of 2010. The Company also noted that rental revenue increased approximately one percent on a year-over-year basis, driven by a 3.8 percent increase in rental days, partially offset by a 2.9 percent decrease in revenue per day.
Non-GAAP net income for the year ended December 31, 2011 was $157.7 million, or $5.05 per diluted share, compared to non-GAAP net income of $115.0 million, or $3.80 per diluted share, for the same period in 2010. Non-GAAP net income excludes the (increase) decrease in fair value of derivatives and non-cash charges related to the impairment of long-lived assets, net of related tax impact. Excluding the impact of merger-related expenses mentioned above, non-GAAP net income for the full year of 2011 would have been $160.4 million, or $5.13 per diluted share, compared to $128.2 million, or $4.24 per diluted share, in the prior year period.
Corporate Adjusted EBITDA for the year ended December 31, 2011, excluding merger-related expenses, was $303.2 million, an increase of approximately $45 million from the $258.3 million reported for the full year of 2010.
Liquidity and Capital Resources
During 2011, the Company repaid all of its outstanding corporate debt totaling $143 million and fully funded its previously announced $100 million forward stock repurchase agreement. The Company ended the year with no corporate leverage and unrestricted cash of $509 million. Additionally, as of December 31, 2011, the Company had $353 million in restricted cash and investments primarily available for the purchase of vehicles and/or repayment of vehicle financing obligations.
The Company further strengthened its liquidity in 2011 by adding or renewing fleet financing capacity totaling $1.5 billion. As a result of these actions, the Company noted that it has effectively pre-funded its upcoming fleet debt maturities for 2012, and has significantly extended its fleet financing maturity profile into 2013 and beyond.
On February 16, 2012, the Company successfully completed a new five-year $450 million senior secured credit facility that increased the Company's available revolving credit capacity by approximately $220 million, and extended the maturity date of the senior secured credit facility to 2017 from 2013. In addition to the incremental financing capacity available for general corporate purposes, the new facility provides the Company with greatly improved flexibility to manage growth initiatives and capital structure initiatives. The new facility contains various financial and other covenants, including, among others, limitations on liens, investments, restricted payments (such as share repurchases and dividend payments), and the incurrence of debt, as well as requirements to maintain a minimum corporate interest coverage ratio, minimum Corporate Adjusted EBITDA and a maximum corporate leverage ratio.
The Company's tangible net worth at December 31, 2011 was $586 million, after considering the impact of the $100 million share repurchase agreement executed and fully funded in the fourth quarter.
Share Repurchase Program
During February 2012, the Company completed its previously announced $100 million forward stock repurchase agreement, repurchasing 1,451,193 shares of Company stock, or approximately 5 percent of the Company's outstanding shares, at an average price of approximately $68.91. After giving effect to the share repurchase, the Company noted it now has approximately 28.1 million common shares outstanding.
The Company's previously authorized share repurchase program provides the Company with the ability to repurchase up to an additional $300 million of shares in future periods. The share repurchase program is discretionary and has no expiration date. The timing and amount of future share repurchases will be based on market conditions, limitations in the senior secured credit facility and other factors. The Company may repurchase shares under forward stock repurchase agreements, accelerated share repurchase programs, directly in the open market, in privately negotiated transactions, pursuant to derivative instruments or plans complying with SEC Rule 10b5-1 or other types of transactions and arrangements. The Company currently expects to repurchase shares in 2012; however, the share repurchase program may be increased, suspended or discontinued at any time.
Resource: PRNewswire
