Dollar Thrifty Automotive reports Q1 2008 results
Dollar Thrifty Automotive Group, Inc today reported results for the first quarter ended March 31, 2008. The net loss for the 2008 first quarter was $297.9 million, or $14.07 loss per diluted share, compared to net income of $5.2 million, or $0.21 per diluted share, for the comparable 2007 quarter


/Automotive News Articles/ - TULSA, OK, May 14, 2008 - Dollar Thrifty Automotive Group, Inc today reported results for the first quarter ended March 31, 2008. The net loss for the 2008 first quarter was $297.9 million, or $14.07 loss per diluted share, compared to net income of $5.2 million, or $0.21 per diluted share, for the comparable 2007 quarter. The decrease in first quarter net income year over year included a $12.52 loss per diluted share related to the impairment of goodwill and other intangible assets and a $0.78 decrease in fair value of derivatives.

The non-GAAP net loss for the 2008 first quarter was $16.2 million, or $0.77 loss per diluted share as compared to net income of $9.8 million, or $0.40 per diluted share for the 2007 first quarter. Non-GAAP net income (loss) excludes from GAAP net income (loss) the (increase) decrease in fair value of derivatives and the non-cash charges related to the impairment of oodwill and other intangible assets, net of related tax impact. A reconciliation of non- GAAP to GAAP results is included in Table 3.

For the quarter ended March 31, 2008, the Company¡¯s total revenue was $396.5 million, as compared to $398.0 million for the comparable 2007 period. Vehicle rental revenue in the 2008 first quarter was $378.0 million, a two percent increase over the 2007 first quarter as a result of an increase of approximately three percent in rental days and a decrease of one percent in revenue per day.

¡°As we had anticipated, weakness in demand and pricing in January, coupled with an increase in fleet costs, adversely affected our performance in the quarter,¡± said Gary L. Paxton, President and Chief Executive Officer. ¡°Since February, key operating trends have improved and are more positive. Looking back on the last six months, we believe that December and January represented a trough in terms of both pricing and demand.¡±

¡°The Company recently completed a round of financing, as we renewed our conduit facility and commercial paper program and liquidity facility,¡± saidMr. Paxton. ¡°This financing, coupled with ongoing efforts to better optimize our fleet levels, utilization and holding periods, provides us with sufficient capacity to meet our peak vehicle financing needs in 2008, even as the Company¡¯s 2004 Series medium term notes fully amortize by June.¡± Mr. Paxton noted that the Company has no additional maturities of asset backed medium term notes until 2010.

Although revenue per day improved through the quarter, it did not improve enough to overcome a decline in January, ending down approximately one percent year over year. Vehicle depreciation costs per vehicle increased approximately 31 percent in the first quarter of 2008 over the first quarter of 2007, and were above the Company¡¯s expectations due primarily to softness in the used car market. Vehicle utilization for the first quarter was flat with last year reflecting a weak January 2008. The Company expects that its new fleet optimization software, together with the anticipated extension of fleet holding periods, should moderate the increase in vehicle depreciation costs over the course of the year and should enable the Company to operate a more efficient fleet program.

The Company was required to record a non-cash impairment charge for goodwill and other intangible assets in the first quarter of 2008. Under SFAS No. 142, ¡°Goodwill and Other Intangible Assets¡±, the Company is required on at least an annual basis to perform an impairment analysis on goodwill and other intangible assets.

This analysis includes, among other things, a reconciliation of current equity market capitalization to shareholders¡¯ equity. As a result of the decline in the Company¡¯s stock price, the Company¡¯s total shareholders¡¯ equity at March 31, 2008 exceeded its equity market capitalization, including the application of a reasonable control premium, for this same period. The Company is required to place greater emphasis on the current stock price than on management¡¯s long-range forecast in performing its impairment assessment.

The Company performed the required steps for impairment analysis and concluded that goodwill and other intangible assets (related to reacquired franchise rights) were impaired. The Company recorded a $281.2 million non-cash charge (pre-tax) related to the impairment of the entire goodwill ($223.2 million after-tax) and a $69.0 million non-cash charge (pre-tax) related to the impairment of the entire reacquired franchise rights ($42.0 million after-tax) during the first quarter of 2008.

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