Dollar Thrifty Automotive Group Reports Second Quarter Results

TULSA, Okla., Aug. 4  /PRNewswire-FirstCall/ -- Dollar Thrifty Automotive Group, Inc. (NYSE:DTG) today reported results for the second quarter ended June 30, 2009. Net income for the 2009 second quarter was $12.4 million, or $0.55 per diluted share, compared to net income of $10.8 million, or $0.49 per diluted share, for the comparable 2008 quarter.  The net income for the second quarter of 2009 included income of $0.24 per diluted share, compared to income of $0.72 per diluted share in last year's second quarter, both of which related to increases in fair value of derivatives.

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Non-GAAP net income for the 2009 second quarter was $6.9 million, or $0.30 per diluted share, compared to a non-GAAP net loss of $5.0 million, or $0.23 loss per diluted share for the 2008 second quarter. Non-GAAP net income (loss) excludes the (increase) decrease in fair value of derivatives, net of related tax impact. A reconciliation of non-GAAP to GAAP results is included in Table 3.

"We were pleased with this quarter's operating results, particularly in light of the contracting economy and the bankruptcy of Chrysler, one of our major suppliers," said Scott L. Thompson, Chief Executive Officer and President.  "Over the past two quarters, we have taken a number of steps to enhance our operating performance and cash flow, and those actions, combined with improved used vehicle residual values and firmer rental pricing, drove our improved second quarter performance."

For the quarter ended June 30, 2009, the Company's total revenue was $399.6 million, as compared to $445.7 million for the comparable 2008 period.  The decline in revenue was primarily driven by a 20.3 percent decrease in rental days, partially offset by a 12.1 percent improvement in revenue per day.  The second quarter average fleet was down approximately 15 percent compared to last year's second quarter.

"Revenue for the quarter was in line with our previously announced expectations and these results are consistent with our focus on maximizing return on assets, rather than on the revenue growth strategy employed in 2008," said Thompson.  "As we have previously stated, our focus for 2009 and beyond is on improving the quality of our revenue by concentrating on enhancing rate per day and, at times, sacrificing transaction days as necessary to achieve the optimal revenue mix."

Per vehicle depreciation cost of $365 per month in the second quarter of 2009 was approximately 1.1 percent lower than the comparable quarter of 2008.  On a sequential basis, per vehicle depreciation cost per month declined approximately 6.9 percent, primarily due to a lower proportion of program vehicles, escalating vehicle residual values and improved fleet management. Vehicle utilization, a measure of fleet efficiency, was 80.6 percent, down 5.1 percentage points from last year's second quarter as normal vehicle dispositions were disrupted by the Chrysler bankruptcy and management focused on enhancing the quality of revenues.  Direct vehicle operating expenses and selling, general and administrative expenses were lower in the second quarter of 2009 compared to the same quarter in 2008 as a result of transaction declines and cost reduction initiatives.  Interest expense for the second quarter declined due to significant debt reductions year over year.

Six Month Results

For the six months ended June 30, 2009, net income was $3.5 million, or $0.15 per diluted share, compared to a net loss of $287.2 million, or $13.49 loss per diluted share for the comparable period in 2008.  The net income for the six months ended June 30, 2009 included income of $0.38 per diluted share related to an increase in fair value of derivatives, compared to a loss of $0.04 per diluted share for the six months ended June 30, 2008 related to a decrease in fair value of derivatives.  In addition, the net loss for the six months ended June 30, 2008 included non-cash charges of $12.45 per diluted share related to the impairment of goodwill and long-lived assets.

The non-GAAP loss per diluted share for the six months ended June 30, 2009 was $0.23, compared to a non-GAAP loss per diluted share of $1.00 for the same period in 2008.  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.

Liquidity and Capital Resources

As of June 30, 2009, the Company had $263 million in cash and cash equivalents, including $100 million that represents a required minimum balance to be maintained as part of an amendment to the Company's Senior Secured Credit Facilities.  As of June 30, 2009, the Company also had $545 million in restricted cash and investments primarily available for the purchase of vehicles and/or repayment of vehicle financing obligations.

The Company is in full compliance with all of the financial covenants under its various financing arrangements with lenders.

Outlook

The Company expects the overall environment in the rental car industry to remain challenging in the second half of 2009, as economic conditions negatively impact consumer confidence and travel demand. Based on the Company's expected fleet size and projected industry-wide rental day demand, the Company narrowed its prior revenue guidance.  The Company now expects rental revenues to decline 8 to 10 percent for the full year of 2009 compared to 2008. Falling rental days are expected to be somewhat mitigated by an increase in rate per day.   For the remainder of 2009, management expects the used vehicle market to show year-over-year improvement.

"As we have previously stated, our focus for 2009 is on maximizing revenue per day, reducing expenses, de-leveraging our balance sheet and diversifying our fleet investment, all in order to properly position the Company for an expected economic recovery in 2010.  This quarter represents another step forward towards our recovery and demonstrates the earnings potential of our new strategy," said Thompson.

Web cast and conference call information

The Dollar Thrifty Automotive Group, Inc. second quarter 2009 earnings conference call will be held on Wednesday, August 5, 2009, at 9:00 a.m. (CDT). Those interested in listening to the conference call live may access the call via Web cast at the corporate Web site, http://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 August 19, 2009, by calling 800-944-3317 (domestic) or 402-220-3690 (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 http://www.dtag.com/ or the brand sites at http://www.dollar.com/ and http://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;
  --  whether efforts to stabilize and revitalize the U.S. automotive
      industry are successful and the impact of further federal initiatives
      to support the U.S. automotive industry, including the potential
      adverse impact on residual values of vehicles in our fleet of the
      recently enacted program to promote 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 whether improved conditions in the used car market will be
      sustained;
  --  our ability to defer gain on the disposition of our vehicles under our
      like-kind exchange program, which will be affected by the recent
      significant downsizing of our fleet, and the level of increased cash
      payments for federal and state income taxes we may be required to make
      if we are unable to defer such gain;
  --  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;
  --  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 an event of bankruptcy with respect to any of the monoline insurers
      that provide credit support for $1.5 billion of debt under our asset
      backed financing structures;
  --  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
                                         June 30,           Total revenues
                                    2009       2008         2009      2008
                                    ----       ----         ----      ----
  Revenues:
    Vehicle rentals             $379,194      $424,366      94.9%     95.2%
    Other                         20,419        21,364       5.1%      4.8%
                                 -------       -------     -----     -----
         Total revenues          399,613       445,730     100.0%    100.0%
                                 -------       -------     -----     -----

  Costs and Expenses:
    Direct vehicle and
     operating                   191,674       224,234      48.0%     50.3%
    Vehicle depreciation and
     lease charges, net          122,254       146,567      30.6%     32.9%
    Selling, general and
     administrative               52,118        55,011      13.0%     12.3%
    Interest expense, net         22,922        29,721       5.7%      6.7%
                                 -------       -------     -----     -----
         Total costs and
          expenses               388,968       455,533      97.3%    102.2%
                                 -------       -------      ----     -----

  (Increase) decrease in fair
   value of derivatives           (9,409)      (26,793)     (2.3%)    (6.0%)
                                 -------       -------     -----     -----
  Income before income taxes      20,054        16,990       5.0%      3.8%

  Income tax expense               7,650         6,225       1.9%      1.4%

                                 -------       -------     -----     -----
  Net income                     $12,404       $10,765       3.1%      2.4%
                                 =======       =======     =====     =====

  Earnings per share:
    Basic                          $0.58         $0.50
    Diluted                        $0.55         $0.49

  Weighted average number
   of shares outstanding:
    Basic                     21,561,578    21,412,826
    Diluted                   22,719,628    21,851,652



                                     Six months ended          As % of
                                         June 30,           Total revenues
                                    2009          2008      2009      2008
                                    ----          ----      ----      ----
  Revenues:
    Vehicle rentals             $724,507      $802,337      95.1%     95.3%
    Other                         37,528        39,899       4.9%      4.7%
                                 -------     ---------     -----     -----
         Total revenues          762,035       842,236     100.0%    100.0%
                                 -------     ---------     -----     -----

  Costs and Expenses:
    Direct vehicle and
     operating                   376,690       439,597      49.4%     52.2%
    Vehicle depreciation and
     lease charges, net          242,238       269,229      31.8%     32.0%
    Selling, general and
     administrative               99,005       108,683      13.0%     12.9%
    Interest expense, net         49,076        51,858       6.5%      6.1%
    Goodwill and long-lived
     asset impairment                261       350,144       0.0%     41.6%
                                 -------     ---------     -----     -----
         Total costs and
          expenses               767,270     1,219,511     100.7%    144.8%
                                 -------     ---------     -----     -----
   (Increase) decrease in fair
   value of derivatives          (14,454)        1,354      (1.9%)     0.2%
                                 -------     ---------     -----     -----

  Income (loss) before
   income taxes                    9,219      (378,629)      1.2%    (45.0%)

  Income tax expense
   (benefit)                       5,755       (91,452)      0.7%    (10.9%)

                                 -------     ---------     -----     -----
  Net income (loss)               $3,464     $(287,177)      0.5%    (34.1%)
                                 =======     =========     =====     =====

  Earnings (loss) per share:
   (a) (b)
    Basic                          $0.16       $(13.49)
    Diluted                        $0.15       $(13.49)

  Weighted average number
   of shares outstanding: (a)
    Basic                     21,522,527    21,293,902
    Diluted                   22,416,229    21,293,902


  (a)  Because the Company incurred a loss from continuing operations during
       the six months ended June 30, 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 period.

  (b)  The underlying diluted per share information is calculated from the
       weighted average common and common stock equivalents outstanding
       during each quarter, which may fluctuate based on quarterly income
       levels and market prices.  Therefore, the sum of the quarters' per
       share information may not equal the year-to-date amounts.



                                                                    Table 2

                    Dollar Thrifty Automotive Group, Inc.
                    Selected Operating and Financial Data
                    -------------------------------------



                                  Three months ended     Six months ended
                                     June 30, 2009         June 30, 2009
                                  ------------------     ----------------
  OPERATING DATA:

  Vehicle Rental Data:

    Average number of vehicles
     operated                          109,368               104,648
       % change from prior year          (15.2%)               (12.9%)
    Number of rental days            8,019,299            15,401,477
       % change from prior year          (20.3%)               (16.6%)
    Vehicle utilization                   80.6%                 81.3%
       Percentage points change
       from prior year                    (5.1) p.p.            (3.2) p.p.
    Average revenue per day             $47.29                $47.04
       % change from prior year           12.1%                  8.3%
    Monthly average revenue
     per vehicle                        $1,156                $1,154
       % change from prior year            5.5%                  3.7%

    Average depreciable fleet          111,727               106,857
       % change from prior year          (15.7%)               (12.6%)
    Monthly average depreciation
    (net)per vehicle                      $365                  $378
       % change from prior year           (1.1%)                 3.0%



  FINANCIAL DATA: (in millions)(unaudited)

    Non-vehicle depreciation and
     amortization                           $7                   $14
    Non-vehicle interest expense             2                     7
    Non-vehicle interest income              -                    (1)
    Non-vehicle capital expenditures         2                     4
    Cash paid for income taxes               5                    10



                         Selected Balance Sheet Data
                         ---------------------------
                                (In millions)

                                              June 30,     December 31,
                                            2009    2008      2008
                                            ----    ----      ----
                                            (unaudited)

    Cash and cash equivalents (c)           $263     $80      $230
    Restricted cash and investments          545     252       597
    Revenue-earning vehicles, net          1,465   2,599     1,946

    Vehicle debt                           1,685   2,307     2,310
    Non-vehicle debt (corporate debt)        158     188       178
    Stockholders' equity                     228     293       215




                    Adjusted Tangible Net Worth Calculation
                    ---------------------------------------
                                 (In millions)

                                              June 30,     December 31,
                                            2009    2008      2008
                                            ----    ----      ----
                                             (unaudited)

    Stockholders' equity                    $228    $293      $215
    Less:  Intangible assets, net            (28)    (35)      (30)
    Plus:  Accumulated other
     comprehensive loss                       22       2        29
                                            ----    ----      ----
    Adjusted tangible net worth             $222    $260      $214
                                            ====    ====      ====




  (c)  Under the terms of an 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 income (loss) per the
  income statement to non-GAAP pretax income (loss):


                                      Three months ended   Six months ended
                                            June 30,           June 30,
                                         2009     2008     2009       2008
                                         ----     ----     ----       ----
                                        (in thousands)     (in thousands)

  Income (loss) before income
   taxes -as reported                 $20,054  $16,990   $9,219  $(378,629)

  (Increase) decrease in fair
   value of derivatives                (9,409) (26,793) (14,454)     1,354

  Goodwill and long-lived asset
   impairment                               -        -      261    350,144

                                      -------  -------  -------   --------
  Pretax income (loss) - non-GAAP     $10,645  $(9,803) $(4,974)  $(27,131)
                                      =======  =======  =======   ========



  The following table reconciles  reported GAAP net income (loss) per the
  income statement to non-GAAP net income (loss):

                                      Three months ended   Six months ended
                                            June 30,           June 30,
                                         2009     2008     2009       2008
                                         ----     ----     ----       ----
                                        (in thousands)     (in thousands)

  Net income (loss) - as reported     $12,404  $10,765   $3,464  $(287,177)

  (Increase) decrease in fair
   value of derivatives, net of
   tax                                 (5,533) (15,746)  (8,500)       796

  Goodwill and long-lived asset
   impairment, net of tax                   -        -      114    265,183

                                       ------  -------  -------   --------
  Net income (loss) - non-GAAP         $6,871  $(4,981) $(4,922)  $(21,198)
                                       ======  =======  =======   ========




  The following table reconciles reported GAAP diluted earnings (loss) per
  share ("EPS") to non-GAAP diluted EPS:

                                      Three months ended   Six months ended
                                            June 30,           June 30,
                                         2009     2008     2009       2008
                                         ----     ----     ----       ----

  EPS, diluted - as reported            $0.55    $0.49    $0.15    $(13.49)

  EPS impact of (increase)
   decrease in fair value of
   derivatives, net of tax              (0.24)   (0.72)   (0.38)      0.04

  EPS Impact of goodwill and long-
   lived asset impairment, net of tax       -        -     0.01      12.45

                                        -----   ------   ------     ------
  EPS, diluted - non-GAAP (d)           $0.30   $(0.23)  $(0.23)    $(1.00)
                                        =====   ======   ======     ======


  (d)  Since each category of earnings per share is computed independently
       for each period, total per share amounts may not equal the sum of the
       respective categories.



                                                                    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
  Facilities.  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      Six months ended
                                          June 30,              June 30,
                                      2009       2008       2009       2008
                                      ----       ----       ----       ----
                                      (in thousands)        (in thousands)
  Reconciliation of Net Income
   (Loss) to Corporate Adjusted
   EBITDA
  -----------------------------

  Net income (loss)
   - as reported                   $12,404    $10,765     $3,464  $(287,177)

  (Increase) decrease in fair
   value of derivatives             (9,409)   (26,793)   (14,454)     1,354
  Non-vehicle interest expense       2,665      4,177      7,419      8,767
  Income tax expense (benefit)       7,650      6,225      5,755    (91,452)
  Non-vehicle depreciation           4,831      5,717     10,171     10,959
  Amortization                       2,022      1,517      4,020      3,159
  Non-cash stock incentives            788        973      1,906      1,841
  Goodwill and long-lived asset
   impairment                            -          -        261    350,144
  Other                                 (8)        77         (8)       122

                                   -------     ------    -------    -------
  Corporate Adjusted EBITDA        $20,943     $2,658    $18,534    $(2,283)
                                   =======     ======    =======    =======





  Reconciliation of Corporate
   Adjusted EBITDA to Cash Flows
   From Operating Activities
  ------------------------------

  Corporate Adjusted EBITDA        $20,943     $2,658    $18,534    $(2,283)

  Vehicle depreciation, net of
   gains/losses from disposal      121,997    146,229    241,808    268,510
  Non-vehicle interest expense      (2,665)    (4,177)    (7,419)    (8,767)
  Change in assets and
   liabilities, net of
   acquisitions, and other          12,394     39,317    141,444     82,585
                                    ------     ------    -------     ------
       Net cash provided by
        operating activities      $152,669   $184,027   $394,367   $340,045
                                  ========   ========   ========   ========

  Memo:
  Net cash provided by (used in)
   investing activities           $(73,839) $(138,413)  $188,987  $(192,293)
  Net cash used in financing
   activities                      $(9,323) $(101,647) $(650,482) $(168,454)


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DATASOURCE: Dollar Thrifty Automotive Group, Inc.



CONTACT:  H. Clifford Buster III, Chief Financial Officer,

[phone], or Chris Payne, Senior Manager, Corporate Communications,

[phone], , both of Dollar Thrifty Automotive

Group, Inc.



Web Site:  http://www.dtag.com/ 

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