ALLEGIANT TRAVEL COMPANY REPORTS THIRD QUARTER 2009 FINANCIAL RESULTS
RECORD THIRD QUARTER MARGINS, THIRD QUARTER EPS INCREASES OVER 180%
Las Vegas, Nev., October 19, 2009 /PRNewswire/ – 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:
“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, 2009
September 30, 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, 2009
September 30, 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
Media Inquiries: Tyri Squyres +1-702-851-7370 mediarelations@allegiantair.com
Investor Inquiries: Robert Ashcroft +1-702-430-3275 ir@allegiantair.com
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:
1
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
)
2
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
3
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
)
4
Allegiant Travel Company Operating Statistics Nine Months Ended September 30, 2009 and 2008 (Unaudited)
Nine 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
5
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
