Dollar Thrifty Automotive Group, Inc. has reported financial results for the third quarter ended Sept. 30, 2012, showing that net income was $55.5 million, or $1.91 per diluted share, compared to net income of $66.6 million, or $2.13 per diluted share, for the third quarter of 2011, a decline of 16.7 percent. The company also reported corporate adjusted EBITDA for the third quarter of 2012 of $98.2 million, compared to $117.6 million in the third quarter of 2011.

The company noted that its GAAP pretax income and corporate adjusted EBITDA for the third quarter of 2012 were negatively impacted by merger-related expenses of $5.7 million, while no such expenses were incurred during the third quarter of 2011. Additionally, the company noted that gains on sales of risk vehicles totaled $5.2 million in the third quarter of 2012, down from $17.4 million in the third quarter of 2011.

For the quarter ended Sept. 30, 2012, the company's vehicle rental revenue was $442.3 million, compared to $435.6 million in the third quarter of 2011. Monthly revenue per unit was $1,235 in the third quarter of 2012 compared to $1,289 for the same period last year. The company realized rental day growth of 7.1 percent, which was partially offset by a 5.1 percent decrease in revenue per day. Utilization in the third quarter of 2012 was 84.7 percent, compared to 83.9 percent in the third quarter of 2011. The average rental fleet operated during the quarter increased 6 percent compared with the prior-year period.

Fleet cost per vehicle was $246 per month in the third quarter of 2012, compared to $186 per month in the third quarter of 2011. The increase in fleet cost per vehicle was partially attributable to a $12.2 million decrease in gains on sales of risk vehicles, combined with higher average base depreciation rates compared to the third quarter of 2011. The company noted that gains on sales of risk vehicles totaled $5.2 million during the third quarter of 2012 compared to $17.4 million in the third quarter of 2011 on a comparable number of risk vehicle sales. The decline in gains on risk vehicle sales was attributable to a lower average gain per unit sold as a result of refinements to base depreciation rates to reduce gains and lower volatility in fleet costs.

The increase in base depreciation rates in the third quarter of 2012 primarily resulted from the significant fleet refresh in the first half of 2012. In conjunction with the fleet replacement cycle, a large number of model year 2010 vehicles that were in the fleet during 2011, and had residual values in excess of book values, were replaced with newer vehicles.

Direct vehicle and operating expenses and selling, general and administrative expenses (operating expenses) totaled $270.2 million in the third quarter of 2012 compared to $262.4 million in the third quarter of 2011. This increase was primarily due to $5.7 million in merger-related expenses incurred in the third quarter of 2012, while no such expenses were incurred in the 2011 third quarter. Excluding these merger-related expenses, operating expenses totaled 57.4 percent of revenues for the third quarter of 2012, compared to 58.1 percent of revenues in the third quarter of 2011. Interest expense, net, declined to $12.2 million in the third quarter of 2012, down from $19.6 million in the third quarter of 2011. The decrease in interest expense primarily reflects the company's refinancing of its legacy fleet financing facilities at lower interest rates in the second half of 2011.

For the nine months ended Sept. 30, 2012, net income was $145.3 million, or $4.94 per diluted share, compared to net income of $125.6 million, or $4.03 per diluted share, for the comparable period in 2011. The company reported corporate adjusted EBITDA for the nine months ended Sept. 30, 2012, of $263.3 million, compared to $235.1 million for the nine months ended Sept. 30, 2011. The company noted it incurred merger-related expenses of $5.7 million and $4.6 million for the nine months ended Sept. 30, 2012 and 2011, respectively.

Additionally, the company noted that gains on risk vehicle sales totaled $42 million for the nine months ended Sept. 30, 2012, compared to $43.1 million for the nine months ended Sept. 30, 2011.

As of Sept. 30, 2012, the company had $457 million in cash and cash equivalents, and an additional $250 million in restricted cash and investments primarily available for the purchase of vehicles and/or repayment of vehicle financing obligations. The company noted that, as a result of its fleet refresh cycle and seasonal fleet investments, its investment in the fleet has increased approximately $410 million since Dec. 31, 2011. Those investments were funded by a blend of unrestricted cash, restricted cash and vehicle debt. Non-vehicle capital expenditures for the nine months ended Sept. 30, 2012, totaled approximately $14 million. Investments in fleet will decline significantly during the balance of the year, which will result in an increase in cash and cash equivalents by year-end.

As of Sept. 30, 2012, the company had approximately $41 million of letters of credit outstanding and available capacity of approximately $409 million under its $450 million Revolving Credit Facility. The company's tangible net worth was $725 million as of Sept. 30, 2012, and the company had no corporate debt outstanding.

The company noted that, based on its year-to-date performance through Sept. 30, 2012, and its outlook for the fourth quarter, it is revising guidance for the full year of 2012 for corporate adjusted EBITDA and earnings per share, both excluding merger-related expenses. The company further noted that its previously announced guidance for rental revenue and fleet cost expectations for the full year of 2012 remain unchanged. The company revised its guidance for corporate adjusted EBITDA, excluding merger-related expenses, for the full year of 2012 to a range of $300 million to $310 million, up from its prior guidance of $285 million to $310 million. Additionally, the company revised its estimate for diluted earnings per share, excluding merger-related expenses, to a range of $5.50 to $5.75 per share for 2012, up from its previously announced range of $5.25 to $5.70 per share.