Stocks Down at Dollar Thrifty, Not Surprisingly

The stock in Tulsa-based Dollar Thrifty Automotive Group is down 95 percent, but it was not like the company did not see it coming.
DTG expected a significant loss during the fourth quarter and said so back in November.
The new management team, led by Scott L. Thompson, president and chief executive, sees the operating environment to remain difficult as the overall deterioration in the economy results in a significant decline in consumer demand.
Dollar Thrifty reported a $72.2 million net loss for the fourth quarter, compared to a net loss of $30.6 million a year ago. DTG’s fourth quarter revenue was $355.1 million, down 8 percent from the $389.2 million reported at the same time in 2007.
This car rental company relies on leisure travelers and is susceptible to a downturn as consumers cut spending.
Rental revenue was down 9.8 percent to $336.7 million for the three-month period, as compared to the same period in 2007. The decline was driven by a 6.8 percent decrease in revenue per day and a 3.2 percent deterioration in rental days.
For 2008, DTG reported a net loss of $340.4 million, compared to 2007 when the company reported $1.2 million net income.
Industry-wide, companies were shedding their fleets, creating even more negative pressure on revenues.
That combination resulted in a 9 percent revenue decline on a year-over-year basis, Thompson said.
Moody’s Investors Service, for instance, predicts that the default rate on corporate bonds – which foretells bankruptcies – will be three times higher in 2009 than in 2008, and 15 times higher than in 2007. That could equate to 25 significant bankruptcies per month
Dollar Thrifty is closely tied to Chrysler, which supplies 80 percent of its fleet. Moody’s predicts that if Chrysler declares Chapter 11, Dollar Thrifty would suffer deeply as well.
One direct step Dollar Thrifty took was to sign a multi-year secondary supply agreement with Ford Motor Co., to provide an alternative source of vehicles to meet demand.
Dollar Thrifty expects this year will continue to be a difficult operating environment as uncertainty surrounding the timing of the U.S. economic recovery will continue to weigh on consumer confidence, Thompson said.
“At the same time, challenges with credit markets and used vehicle residuals are expected to continue to impact fleet capacity and possibly fleet costs,” he said in DTG’s most recent earnings statement.
Vehicle rental revenues are estimated to be down 6 to 12 percent for the full year of 2009 compared to 2008.
“The rental car industry is facing a multiple of external factors that have combined to put pressure on major aspects of our business. As we move forward in 2009, our primary objective is preservation of liquidity and enhancement of operating cash flow to ensure that we maintain maximum flexibility to address the uncertainties ahead,” Thompson said.
Spirit Awards Unleashes Logo, Theme
The Mayor’s Entrepreneurial Spirit Award unveiled its new logo and theme.
“What’s Your Big Idea? Unleash It” reflects the spirit of the business model competition that enters its third year this spring.
The program will begin accepting applications April 2. Each year, three Tulsa entrepreneurs are selected to receive checks of $30,000, $5,000 and $2,500 from Spirit Awards partner SpiritBank. Last year, more than 100 hopefuls submitted business plans for their ideas.
The Spirit Awards also announced this week a strategic partnership with the Tulsa Business Journal in a move that will provide continuing in-depth coverage of the awards process
The theme “What’s Your Big Idea? Unleash It” was used by the Kauffman Foundation of Kansas City last year. The Spirits Award were inspired in part by that foundation’s work.
President Obama also used the words “What’s Your Big Idea? Unleash It” in his speech for Lincoln’s birthday.
Maybe Time Really is an Asterisk
A chart accompanying the story, “Area Municipalities Graded on Permits,” published in the Feb. 2, 2009, edition of the Tulsa Business Journal, reported an inaccurately long time required to obtain a building permit in the city of Glenpool, city officials said. The chart reported results from a study completed by The Steven C. Agee Economic Research and Policy Institute at Oklahoma City University’s Meinders School of Business in conjunction with the Society of Industrial and Office Realtors.
The data gathered from eight municipalities in the Tulsa Metro area demonstrated the fees and timelines associated with new industrial and office projects in the various municipalities. The data printed for the City of Glenpool showing an 11-week average to obtain a building permit was incorrect, officials said. The correct data from the City of Glenpool demonstrates that it can take from one to two weeks to obtain a building permit for a commercial, office or industrial project.

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