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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good morning, welcome to the Dollar Thrifty Automotive Group third quarter earnings conference call. All participants will be able to listen only until the question-and-answer session of today's conference. This conference is also being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to Mr. Todd Dollenbach, Executive Director of Investor Relations. Sir, you may begin.
TODD DOLLENBACH (ph), EXECUTIVE DIRECTOR OF INVESTOR RELATIONS, DOLLAR THRIFTY AUTOMOTIVE GROUP INC.: Good morning, and welcome to the Dollar Thrifty Automotive Group Inc. third quarter 2003 earnings release conference call. The hosts are Gary Paxton, President and Chief Executive Officer, Steven Hildebrand, Chief Financial Officer, and Don Himelfarb, Chief Administrative Officer. Before we begin, council has asked that I provide you with the following information.
Some of the comments contained in this conference call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Dollar Thrifty Automotive Group Inc. believes such forward-looking statements are based upon reasonable assumptions, such statements are not guarantees of future performance and certain factors could cause results to differ materially from current expectations. They include price, product, competition, economic and competitive conditions and markets in countries where our customers reside and where our companies and franchisees operate, airline travel pattern, changes in Capital availability or cost, costs and other terms related to the acquisition and disposition of automobiles, cost of conducting business and changes in structure or operations and certain regulatory and environmental matters. Should one or more of these risks or uncertainties, among others, materialize, actual results could vary from those estimated, anticipated or projected.
Dollar Thrifty Automotive Group Inc. undertakes no obligation to update or revise forward-looking statements to reflect change assumptions. The current events or changes of future operating results over time. I would like to turn the call over to Mr. Gary Paxton, President and CEO of Dollar Thrifty Automotive Group Inc.
GARY PAXTON, PRES., CEO, DIRECTOR, DOLLAR THRIFTY AUTOMOTIVE GROUP INC.: Thank you, Todd. Welcome to our third quarter 2003 earnings release conference call. As you know, I have recently followed Joe Chafee as President and CEO of DTG and I'm pleased to report the transition is going well.
I would like to again thank Joe for the great leadership he provided us over the past 10 years. Joe's left us with a strong management team and a clear vision for future growth. Regarding the results of the third quarter of 2003, we are pleased to report strong revenue growth of 9.7 percent and a slight improvement in Net Income, which reached $21.4 million dollars, versus $21.2 million dollars for last year's third quarter. Earnings per Share were $.84 cents compared to $.85 cents for the prior period. During the third quarter, we enjoyed improving travel industry trends and saw stronger post-Labor Day travel than what we had seen since 2001. Further evidence in the strengthening of travel is the fact that airline traffic declined only 2.6 percent during the third quarter. After dropping 5.4 percent from prior year levels during the second quarter of this year. In addition to increased travel during the quarter, DTG managed capacity more closely to demand resulting in improved pricing trends and fleet utilization.
Revenue per day for our rental operations was down 2.3 percent from the prior year third quarter, but that was an improvement upon the 5.9 percent decline during the second quarter. Utilization came in at a very strong 85.2 percent, which was 1.1 percentage points above the same period last year. DTG continues to execute on the key elements of its growth strategy including acquiring both Dollar and Thrifty franchisees in key U.S. and Canadian markets and establishing a dual franchise model. This dual franchise operating model is being offered internationally and in smaller U.S. and Canadian markets and allows franchisee to operate both the Dollar and Thrifty brands. During the quarter, we announced the acquisition of Thrifty franchisee in the U.S. cities of Atlanta, Houston, Ontario, Miami, Fort Lauderdale, West Palm Beach and Las Vegas. All of the acquisitions, except Las Vegas, were completed during the third quarter. We expect to complete the Las Vegas acquisition on November 1st. We are pleased to announce that on November 1st we will be acquiring the Thrifty franchise in Hartford, Connecticut, and opening greenfield locations for both Dollar and Thrifty in Richmond, Virginia. So far in 2003, the purchase of key franchise operations including Las Vegas, along with the opening of greenfield locations, will add approximately 13,500 vehicles on an annualized basis to the company's U.S. rental fleet. Also during the quarter, our corporate operating entity in Canada, DTG Canada, completed the acquisition of the Thrifty Edmonton franchise. DTG Canada operates both the Dollar and Thrifty brands in Calvary, Winnipeg, Ottawa, Toronto, Montreal, Halifax, and Edmonton, and operates the Thrifty brand in Vancouver.
This substantially completes our strategy of acquiring franchise operations in key Canadian airport markets. These eight airport markets represent over 80 percent of the airline passenger enplanements in Canada. We continue to receive strong interests from Dollar and Thrifty franchisee with regards to our Dual Franchise Program that allows them the ability to operate both brands under a single ownership in certain markets. During the third quarter, we announced that franchisees in the U.S. cities of Harrisburg, Des Moines and Myrtle Beach have opened new Dollar Rent A Car locations, in addition to their separate Thrifty car rental operations. Since June 1st, five franchisees of either the Dollar or Thrifty brand have taken advantage of this program and have opened or will open 14 locations under their new agreements. We believe that …