Allegiant Travel Company Reports Third Quarter 2009 Financial Results
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LAS VEGAS, Oct. 19 /PRNewswire-FirstCall/ -- Allegiant Travel Company (Nasdaq: ALGT), parent company of Allegiant Air and Allegiant Vacations, today reported the following financial results for the third quarter 2009 and comparisons to prior year equivalents:
Unaudited 3Q09 3Q08 Change
--------- ---- ---- ------
Total operating revenue (millions) $133.1 $116.9 13.9 %
Operating income (millions) $21.9 $8.1 170.3 %
Operating margin 16.5% 6.9% 9.6pp
Net income (millions) $13.8 $4.9 181.7 %
Diluted earnings per share $0.68 $0.24 183.3 %
Scheduled Service:
Average fare - scheduled service $67.09 $86.32 (22.3)%
Average fare - ancillary 33.35 32.28 3.3 %
Average fare - total $100.44 $118.60 (15.3)%
Total revenue per ASM (cents) 9.96 12.75 (21.9)%
Average passengers per departure 132 137 (3.6)%
Load factor 89.9% 93.8% -3.9pp
Average stage length (miles) 888 856 3.7 %
Total System*:
Operating expense per passenger $83.00 $111.60 (25.6)%
Operating expense per passenger, excluding fuel $50.31 $53.33 (5.7)%
Average departures per aircraft per day 2.75 2.30 19.6 %
Average stage length (miles) 818 815 0.4 %
--------------------------- --- --- ----
* Total system includes scheduled service, fixed-fee contract and
non-revenue flying
Allegiant Travel Company also reported the following balance sheet information:
Unaudited ($millions) September 30, 2009 June 30, 2009 Change ($mm)
-------------------- ------------------ ------------- -----------
Unrestricted cash (including
short-term investments) 222.4 228.2 (5.8)
Unrestricted cash net of air
traffic liability 138.1 138.3 (0.2)
Total debt, including capital
leases 54.8 60.7 (5.9)
----------------------------- ---- ---- ----
"We are pleased to report these very strong results in not only our historically weakest quarter, but also in what has been an exceptionally trying economic environment," stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. "Moreover these results were produced with a 47% increase in scheduled service departures over the third quarter of 2008. In the third quarter of 2008, we squeezed capacity hard to compensate for extraordinarily high fuel prices. This year we returned to more normal third-quarter aircraft utilization which in combination with a seven-aircraft increase in our fleet resulted in high year-over-year growth against a backdrop of continued industry capacity cuts. Notwithstanding our somewhat dramatic snap-back of capacity, our unit revenue declines were largely in-line with the industry and we produced a record third quarter 16% operating margin and a 182% increase in net income, validating our decision to return to a 'business-as-usual' third quarter.
"Looking forward, we are cautiously optimistic that better times are in the offing. Scheduled fares, both air fare and ancillary per passenger, bounced off their lows of the second quarter. It's a little early to declare victory, but we certainly like the trend, which is continuing into the fourth quarter. Speaking of the fourth quarter, please note that last year we enjoyed a powerful combination of low fuel prices and air fares that had not declined, which makes the fourth quarter of 2008 a very difficult comp.
"I am very pleased to note that, as is more fully described in a separate press release, Andrew C. Levy, our long-time Managing Director - Planning and CFO, has been promoted by our Board of Directors to the position of President of Allegiant Travel Company. Andrew has been integral to the successful rebirth of Allegiant since 2001, and this promotion recognizes his central role in directing this endeavor. Andrew retains the title of CFO.
"We also received some nice recognition recently when Allegiant Travel Company was ranked second in the 2009 edition of the Forbes Magazine "200 Best Small Companies" list. This is, as much as anything, a tribute to our excellent team members who have done a terrific job during these difficult economic times, particularly as the industry experienced unprecedented revenue declines this spring and summer," concluded Gallagher.
Andrew C. Levy, President & CFO, stated, "Cost management was excellent in the third quarter, with a material benefit from our decision to return utilization to a more normal level. Cost per passenger excluding fuel declined to $50.31 in the third quarter from $53.33 in the prior year, which understates the improvement since system load factor was 3.8 percentage points lower than last year. Please note these figures include bonus accrual, which has increased significantly in 2009 since it is tied to profitability and therefore further disguises underlying cost improvement. Excluding bonus accrual, cost per passenger excluding fuel declined to $48.70 in the quarter from $52.50 a year ago.
"Our balance sheet continues to be among the strongest in the industry. We ended the quarter with unrestricted cash and short-term investments of $222.4 million, down from $228.2 million at the end of the prior quarter. Our unrestricted cash usually dips from the end of the second quarter to the end of the third driven by seasonally lower advance sales but the reduction this year is significantly less than in each of the three prior years. Excluding air traffic liability, cash decreased slightly from $138.3 million to $138.1 million sequentially. Our debt outstanding declined from $60.7 million at June 30, 2009 to $54.8 million at September 30. Capital expenditures during the third quarter were $5.8 million, mostly for the purchase of three part-out aircraft, improvements made to an aircraft prior to its placement in service and the purchase of ground service equipment.
"Given our strong financial position, we continue to evaluate the market for opportunistic purchases of high-quality MD-80 aircraft, which has the potential to substantially impact 2009 and/or 2010 capital expenditure guidance," Levy concluded.
Under the share repurchase program our Board of Directors approved in January 2009 and amended in July, we spent $6.8 million in open market transactions during the third quarter to acquire 172,377 shares of the Company's Common Stock at an average price of $39.52 per share. In the first three quarters of 2009, the Company spent $24.4 million in open market transactions repurchasing a total of 637,902 shares at an average price of $38.26 per share. We currently have a total of $10.6 million in unused stock repurchase authority remaining under our current Common Stock repurchase plan.
MD-80 Aircraft in Service* September 30, September 30,
2009 2008
------------------------- ------------- -------------
Owned (including capital leases) 40 35
Leased 4 2
--- ---
Total 44 37
----- --- ---
* Does not include two aircraft acquired but not placed in service as of
September 30, 2009.
During the third quarter of 2009, we placed one owned aircraft in service. In the fourth quarter, we expect to place in service two owned aircraft, one before Thanksgiving and the other before the Winter holiday. These are the final two deliveries to Allegiant of six MD-80s we acquired in 2008 that were on lease with a third party. We expect to continue to add high quality MD-80 aircraft to our fleet at attractive prices without the need for external financing.
In the third quarter, Allegiant Air announced nine new routes to begin in the fourth quarter, including five routes to Phoenix-Mesa, two to Orlando, and one each to Tampa Bay/St. Petersburg and Ft. Lauderdale.
Network Summary* September 30, September 30,
2009 2008
--------------- ------------- -------------
Major leisure destinations 6 5
Other leisure destinations 5 4
Small cities served 58 54
-- --
Total cities served 69 63
Routes to Las Vegas 40 38
Routes to Orlando 29 26
Routes to Tampa Bay/St. Petersburg 19 15
Routes to Phoenix-Mesa 15 9
Routes to Southern California (Los
Angeles) 11 0
Routes to Ft. Lauderdale 4 6
Other routes 9 4
--- ---
Total routes 127 98
------------ --- --
* includes cities served seasonally
At this time, Allegiant Travel Company provides the following guidance to investors. All items are subject to revision. Allegiant Air expects:
-- Fourth quarter 2009 year-over-year total system departure growth of
about 15% and ASM growth of about 23%.
-- Fourth quarter 2009 year-over-year scheduled departure growth of about
16% and scheduled ASM growth of about 23%.
-- To average about 2.4 departures per aircraft per day and to average
about 5.6 block hours per aircraft per day in the fourth quarter of
2009.
-- Full-year 2009 total system departure growth of about 20% and ASM growth
of about 22% over 2008.
-- Full-year 2009 scheduled departure growth of about 24% and scheduled ASM
growth of about 26% over 2008.
-- First quarter 2010 year-over-year total system departure growth of about
7% and ASM growth of about 15%.
-- First quarter 2010 year-over-year scheduled departure growth of about 7%
and scheduled ASM growth of about 15%.
-- Fourth quarter maintenance expenditure of $120,000-130,000 per aircraft
per month.
-- Fourth quarter 2009 operating expense per passenger, excluding fuel to
be in-line with that of the fourth quarter of 2008.
-- To operate 46 aircraft by the end of 2009 and to operate at least 52
aircraft by the end of 2010, including the scheduled retirement of one
MD-87 at the end of the first quarter of 2010.
-- 2009 capital expenditures of $36 million and 2010 capital expenditures
of approximately $50 million.
At this time we have no fuel hedges in place.
Allegiant Travel Company will host a conference call with analysts at noon East Coast time tomorrow, October 20, 2009, to discuss its third quarter 2009 financial results. A live broadcast of the conference call will be available via the Company's Investor Relations website homepage at http://ir.allegiantair.com. The webcast will also be archived in the "Events & Presentations" section of the website.
About the Company
Las Vegas-based Allegiant Travel Company (NASDAQ: ALGT) is focused on linking travelers in small cities to major leisure destinations such as Las Vegas, Orlando, Fla., Tampa/St. Petersburg, Fla., Phoenix-Mesa, Los Angeles and Fort Lauderdale, Fla. Through its subsidiary, Allegiant Air, the Company operates a low-cost, high-efficiency, all-jet passenger airline offering air travel both on a stand-alone basis and bundled with hotel rooms, rental cars and other travel related services. ALGT/G
Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in this press release that are not historical facts are forward-looking statements. These forward-looking statements are only estimates or predictions based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include our statements regarding future operating expense, maintenance expense per aircraft, ASM growth, departure growth, fleet growth and expected capital expenditures, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "anticipate," "intend," "plan," "estimate", "project", "hope" or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, the effect of the economic downturn on leisure travel, increases in fuel prices, terrorist attacks, risks inherent to airlines, demand for air services to our leisure destinations from the markets served by us, our ability to implement our growth strategy, possible unionization efforts, our fixed obligations, our dependence on our leisure destination markets, our ability to add, renew or replace gate leases, our competitive environment, problems with our aircraft, dependence on fixed fee customers, our reliance on our automated systems, economic and other conditions in markets in which we operate, governmental regulation, increases in maintenance costs and insurance premiums and cyclical and seasonal fluctuations in our operating results.
Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.
Detailed financial information follows:
Allegiant Travel Company
Consolidated Statements of Income
Three Months Ended September 30, 2009 and 2008
(in thousands, except per share amounts)
(Unaudited)
Three months ended
September 30,
------------------ Percent
2009 2008 change
---- ---- ------
OPERATING REVENUE:
Scheduled service revenue $81,075 $73,796 9.9
Fixed fee contract revenue 11,274 14,234 (20.8)
Ancillary revenue 40,291 27,591 46.0
Other revenue 465 1,265 (63.2)
--- -----
Total operating revenue 133,105 116,886 13.9
------- -------
OPERATING EXPENSES:
Aircraft fuel 43,777 56,795 (22.9)
Salary and benefits 22,305 17,272 29.1
Station operations 13,875 10,309 34.6
Maintenance and repairs 12,985 10,099 28.6
Sales and marketing 3,907 3,099 26.1
Aircraft lease rentals 507 517 (1.9)
Depreciation and amortization 7,633 6,219 22.7
Other 6,176 4,459 38.5
----- -----
Total operating expenses 111,165 108,769 2.2
------- -------
OPERATING INCOME 21,940 8,117 170.3
------ -----
As a percent of total operating
revenue 16.5% 6.9%
OTHER EXPENSE:
Loss (earnings) from unconsolidated
affiliates, net 22 (13) N/M
Interest income (593) (878) (32.5)
Interest expense 1,040 1,302 (20.1)
----- -----
Total other expense 469 411 14.1
--- ---
INCOME BEFORE INCOME TAXES 21,471 7,706 178.6
------ -----
As a percent of total operating
revenue 16.1% 6.6%
PROVISION FOR INCOME TAXES 7,695 2,816 173.3
----- -----
NET INCOME $13,776 $4,890 181.7
======= ======
As a percent of total operating
revenue 10.3% 4.2%
Earnings per share:
Basic $0.69 $0.24 187.5
Diluted $0.68 $0.24 183.3
Weighted average shares outstanding:
Basic 19,822 20,223 (2.0)
Diluted 20,120 20,467 (1.7)
Allegiant Travel Company
Operating Statistics
Three Months Ended September 30, 2009 and 2008
(Unaudited)
Three months ended
September 30,
------------------ Percent
2009 2008 change*
---- ---- -------
OPERATING STATISTICS
Total system statistics
Passengers 1,339,407 974,600 37.4
Revenue passenger miles (RPMs)
(thousands) 1,173,831 858,100 36.8
Available seat miles (ASMs)
(thousands) 1,350,284 946,366 42.7
Load factor 86.9% 90.7% (3.8)
Operating revenue per ASM (cents) 9.86 12.35 (20.2)
Operating expense per ASM (CASM)
(cents) 8.23 11.49 (28.4)
Fuel expense per ASM (cents) 3.24 6.00 (46.0)
CASM, excluding fuel (cents) 4.99 5.49 (9.1)
Operating expense per passenger $83.00 $111.60 (25.6)
Fuel expense per passenger $32.68 $58.27 (43.9)
Operating expense per passenger,
excluding fuel $50.31 $53.33 (5.7)
Departures 11,117 7,835 41.9
Block hours 24,356 17,153 42.0
Average stage length (miles) 818 815 0.4
Average number of operating aircraft
during period 44.0 37.0 18.9
Total aircraft in service end of
period 44 37 18.9
Average departures per aircraft per
day 2.75 2.30 19.6
Average block hours per aircraft per
day 6.0 5.0 20.0
Full-time equivalent employees at
end of period 1,519 1,282 18.5
Fuel gallons consumed (thousands) 23,346 16,507 41.4
Average fuel cost per gallon $1.88 $3.44 (45.3)
Scheduled service statistics
Passengers 1,208,306 854,833 41.3
Revenue passenger miles (RPMs)
(thousands) 1,095,291 745,188 47.0
Available seat miles (ASMs)
(thousands) 1,218,951 794,730 53.4
Load factor 89.9% 93.8% (3.9)
Departures 9,181 6,223 47.5
Average passengers per departure 132 137 (3.6)
Block hours 21,425 14,210 50.8
Yield (cents) 7.40 9.90 (25.3)
Scheduled service revenue per ASM
(cents) 6.65 9.28 (28.3)
Ancillary revenue per ASM (cents) 3.31 3.47 (4.6)
---- ----
Total revenue per ASM (cents) 9.96 12.75 (21.9)
Average fare - scheduled service $67.09 $86.32 (22.3)
Average fare - ancillary 33.35 32.28 3.3
----- -----
Average fare - total $100.44 $118.60 (15.3)
Average stage length (miles) 888 856 3.7
Fuel gallons consumed (thousands) 20,442 13,629 50.0
Average fuel cost per gallon $2.05 $3.88 (47.2)
Percent of sales through website
during period 85.3% 85.8% (0.5)
* except load factor and percent of sales through website, which is
percentage point change
Allegiant Travel Company
Consolidated Statements of Income
Nine Months Ended September 30, 2009 and 2008
(in thousands, except per share amounts)
(Unaudited)
Nine months ended
September 30,
------------------ Percent
2009 2008 change
---- ---- ------
OPERATING REVENUE:
Scheduled service revenue $260,982 $253,175 3.1
Fixed fee contract revenue 30,886 41,068 (24.8)
Ancillary revenue 126,156 83,846 50.5
Other revenue 5,187 3,495 48.4
----- -----
Total operating revenue 423,211 381,584 10.9
------- -------
OPERATING EXPENSES:
Aircraft fuel 119,012 192,357 (38.1)
Salary and benefits 69,345 51,558 34.5
Station operations 40,874 32,821 24.5
Maintenance and repairs 36,882 31,914 15.6
Sales and marketing 12,768 11,103 15.0
Aircraft lease rentals 1,419 2,461 (42.3)
Depreciation and amortization 21,766 17,190 26.6
Other 16,943 15,024 12.8
------ ------
Total operating expenses 319,009 354,428 (10.0)
------- -------
OPERATING INCOME 104,202 27,156 283.7
------- ------
As a percent of total operating
revenue 24.6% 7.1%
OTHER EXPENSE:
Loss on fuel derivatives, net - 11 N/M
(Earnings) loss from unconsolidated
affiliates, net (62) 30 N/M
Interest income (1,974) (3,638) (45.7)
Interest expense 3,158 4,206 (24.9)
----- -----
Total other expense 1,122 609 84.2
----- ---
INCOME BEFORE INCOME TAXES 103,080 26,547 288.3
------- ------
As a percent of total operating
revenue 24.4% 7.0%
PROVISION FOR INCOME TAXES 37,290 9,339 299.3
------ -----
NET INCOME $65,790 $17,208 282.3
======= =======
As a percent of total operating
revenue 15.5% 4.5%
Earnings per share:
Basic $3.28 $0.85 285.9
Diluted $3.23 $0.84 284.5
Weighted average shares outstanding:
Basic 20,045 20,295 (1.2)
Diluted 20,360 20,531 (0.8)
Allegiant Travel Company
Operating Statistics
Nine Months Ended September 30, 2009 and 2008
(Unaudited)
Three months ended
September 30,
------------------ Percent
2009 2008 change*
---- ---- -------
OPERATING STATISTICS
Total system statistics
Passengers 4,108,161 3,282,810 25.1
Revenue passenger miles (RPMs)
(thousands) 3,637,768 2,957,915 23.0
Available seat miles (ASMs)
(thousands) 4,152,029 3,395,714 22.3
Load factor 87.6% 87.1% 0.5
Operating revenue per ASM (cents) 10.19 11.24 (9.3)
Operating expense per ASM (CASM)
(cents) 7.68 10.44 (26.4)
Fuel expense per ASM (cents) 2.87 5.66 (49.3)
CASM, excluding fuel (cents) 4.82 4.77 1.0
Operating expense per passenger $77.65 $107.97 (28.1)
Fuel expense per passenger $28.97 $58.60 (50.6)
Operating expense per passenger,
excluding fuel $48.68 $49.37 (1.4)
Departures 33,666 27,361 23.0
Block hours 75,308 62,083 21.3
Average stage length (miles) 829 837 (1.0)
Average number of operating aircraft
during period 41.9 36.1 16.1
Total aircraft in service end of
period 44 37 18.9
Average departures per aircraft per
day 2.94 2.77 6.1
Average block hours per aircraft per
day 6.6 6.3 4.8
Full-time equivalent employees at
end of period 1,519 1,282 18.5
Fuel gallons consumed (thousands) 71,323 58,995 20.9
Average fuel cost per gallon $1.67 $3.26 (48.8)
Scheduled service statistics
Passengers 3,795,377 2,958,101 28.3
Revenue passenger miles (RPMs)
(thousands) 3,424,042 2,656,359 28.9
Available seat miles (ASMs)
(thousands) 3,783,741 2,951,035 28.2
Load factor 90.5% 90.0% 0.5
Departures 28,645 22,413 27.8
Average passengers per departure 132 132 -
Block hours 67,233 53,223 26.3
Yield (cents) 7.62 9.53 (20.0)
Scheduled service revenue per ASM
(cents) 6.90 8.58 (19.6)
Ancillary revenue per ASM (cents) 3.33 2.84 17.3
---- ----
Total revenue per ASM (cents) 10.23 11.42 (10.4)
Average fare - scheduled service $68.76 $85.59 (19.7)
Average fare - ancillary 33.24 28.34 17.3
----- -----
Average fare - total $102.00 $113.93 (10.5)
Average stage length (miles) 882 884 (0.2)
Fuel gallons consumed (thousands) 63,554 50,465 25.9
Average fuel cost per gallon $1.80 $3.54 (49.2)
Percent of sales through website
during period 86.2% 86.6% (0.4)
* except load factor and percent of sales through website, which is percentage point change
SOURCE Allegiant Travel Company
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