EXHIBIT 99.1
PINNACLE AIRLINES REPORTS FIRST QUARTER EARNINGS OF $8.1 MILLION
MEMPHIS, TENN. April 29, 2004--Pinnacle Airlines Corp. (NASDAQ: PNCL) today
reported first quarter operating revenue of $133.9 million, resulting in revenue
growth over the comparable period in 2003 of 33%. The company produced operating
income of $14.3 million, an operating margin of 10.7%, and net income of $8.1
million, or diluted earnings per share ("EPS") of $0.37.
The Company's available seat miles ("ASMs") increased by 60%, block hours
increased by 51%, and cycles increased by 36%, during the three months ended
March 31,2004, compared to the same period in 2003. The term "block hours"
refers to the elapsed time between an aircraft leaving a gate and arriving at a
gate, and the term "cycles" refers to an aircraft's departure and corresponding
arrival. The increases were driven primarily by the growth in the Company's
fleet of Canadair Regional Jets ("CRJs"), 11 of which were added during the
three months ended March 31, 2004. By adding 29 aircraft since March 31, 2003,
the Company has grown its fleet by 50% to include 87 CRJs at March 31, 2004.
In connection with its Initial Public Offering of stock in November 2003,
Pinnacle and Northwest Airlines amended their operating agreement to grow the
Company's fleet to 129 CRJs by the end of 2005, extend their agreement through
2017 and lower the target operating margin provided in the agreement from 14% to
10%. Under the 14% target margin in effect during 2003, the Company recorded
passenger revenue of $98.6 million and operating income of $14.3 million, an
operating margin of 14.3%, and net income of $8.0 million, or diluted EPS of
$0.37. If the reduced target margin had been in effect during 2003, Pinnacle's
growth during the first quarter of 2004 in passenger revenue and operating
income would have been approximately 42% and 44%, respectively, compared to the
same period in 2003.
Interest expense for the first quarter of 2004 decreased by $0.3 million
compared to the same period in 2003 due primarily to decreased borrowings from
Northwest.
The company generated $8.4 million of cash from operations during the quarter
and had $36.6 million in cash and cash equivalents on March 31, 2004.
"Pinnacle Airlines is in a period of the fastest growth in its history," said
Philip H. Trenary, President and CEO of Pinnacle Airlines. "Considering the
recent performance of the Company, it is a tribute to the People of Pinnacle
that they can run a great airline despite all of the growth and change."
Pinnacle's first quarter results will be discussed in more detail on April 29,
2004, at 2:30 p.m. CDT via teleconference. The live audio Webcast of the call
will be available on Pinnacle's Web site at www.nwairlink.com. There will also
be a replay of the call available beginning at approximately 5:30 p.m. CDT at
the same Web address.
Non-GAAP Disclosures
This release, and certain tables accompanying this release, includes certain
financial information not prepared in accordance with generally accepted
accounting principles ("GAAP") regarding passenger revenue and operating income
for the first quarter of 2003 as if the target operating margin under the
agreement with Northwest had been 10%. The Company believes that this
information is useful to investors as it indicates more clearly the Company's
comparative year-to-year operating results. Management may also use this
information to better understand the Company's underlying operating results.
None of this information should be considered a substitute for any measures
prepared in accordance with GAAP. The Company has included its reconciliations
of these non-GAAP financial measures to the most comparable GAAP financial
measures in the accompanying schedules.
About Pinnacle
Pinnacle Airlines, Corp. operates through its wholly owned subsidiary, Pinnacle
Airlines, Inc., as a regional airline that provides airline capacity to
Northwest Airlines. The Company operates as a Northwest Airlink carrier at
Northwest's domestic hub airports in Detroit, Minneapolis/St. Paul and Memphis.
Pinnacle currently operates an all-jet fleet of 87 Canadair Regional Jets and
offers scheduled passenger service with 508 daily departures to 83 cities in 30
states and one Canadian province. Pinnacle Airlines maintains its headquarters
in Memphis, Tennessee, and employs more than 2,200 People.
Forward Looking Statement
This press release contains various forward-looking statements that are based on
management's beliefs, as well as assumptions made by and information currently
available to management. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Such
statements are subject to certain risks, uncertainties and assumptions,
including those set forth in our filings with the Securities and Exchange
Commission, which are available to investors at our web-site or online from the
Commission. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove erroneous, actual results may vary
materially from results that were anticipated or projected. The Company does not
intend to update these forward-looking statements before its next required
filing with the Securities and Exchange Commission.
For further information, please visit our web-site at www.nwairlink.com.
# # #
PINNACLE AIRLINES CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED MARCH 31,
----------------------------
2004 2003
--------- ---------
Operating revenues:
Passenger $ 133,387 $ 98,605
Other 492 1,957
--------- ---------
Total operating revenues 133,879 100,562
Operating expenses:
Salaries, wages and benefits 23,219 19,156
Aircraft fuel and taxes 16,540 10,881
Aircraft maintenance, materials and repairs 5,646 2,966
Aircraft rentals 43,620 29,539
Other rentals and landing fees 8,077 6,777
Ground handling services 13,503 9,324
Depreciation and amortization 721 712
Other 8,209 6,868
--------- ---------
Total operating expenses 119,535 86,223
--------- ---------
Operating income 14,344 14,339
Operating income as a percentage of operating revenue 10.7% 14.3%
Nonoperating income (expense)
Interest expense (1,235) (1,571)
Miscellaneous income, net 85 104
--------- ---------
Total nonoperating expense (1,150) (1,467)
--------- ---------
Income before income taxes 13,194 12,872
Income tax expense 5,140 4,848
--------- ---------
Net income $ 8,054 $ 8,024
========= =========
Basic earnings per share $ 0.37 $ 0.37
========= =========
Diluted earnings per share $ 0.37 $ 0.37
========= =========
Shares used in computing basic earnings per share 21,892 21,892
========= =========
Shares used in computing diluted earnings per share 21,905 21,892
========= =========
PINNACLE AIRLINES CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
MARCH 31, DECEMBER 31,
2004 2003
--------- ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 36,600 $ 31,523
Receivables, principally from Northwest, net 18,641 17,307
Spare parts and supplies, net 3,986 3,773
Prepaid expenses and other assets 7,363 6,810
Deferred income taxes 2,505 2,549
--------- ---------
Total current assets 69,095 61,962
Property and equipment:
Aircraft and rotable spares 32,275 32,779
Other property and equipment 14,102 14,081
Office furniture and fixtures 1,258 1,258
--------- ---------
47,635 48,118
Less accumulated depreciation (14,105) (13,832)
--------- ---------
Net property and equipment 33,530 34,286
Deposits with Northwest 15,225 13,300
Cost in excess of net assets acquired, net 18,422 18,422
--------- ---------
Total assets $ 136,272 $ 127,970
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable $ 14,576 $ 9,798
Accrued expenses 10,763 11,622
Line of credit 10,000 10,000
Income taxes payable 4,459 5,596
Current portion of deferred credits 227 217
Current portion of note payable to Northwest 12,000 12,000
--------- ---------
Total current liabilities 52,025 49,233
Deferred credits 658 719
Deferred income taxes 6,917 6,400
Note payable to Northwest 117,000 120,000
Commitments and contingencies
Stockholders' equity (deficiency):
Preferred stock, par value $0.01 per share; 1,000,000 shares authorized,
no shares issued -- --
Series A preferred stock, stated value $100 per share; one share
authorized, issued and outstanding -- --
Series common stock, par value $0.01 per share; 5,000,000 shares
authorized; no shares issued -- --
Common stock, $0.01 par value:
Authorized shares--40,000,000
Issued and outstanding shares--21,892,060 219 219
Additional paid-in capital 84,973 84,973
Retained earnings (deficit) (125,520) (133,574)
--------- ---------
Total stockholders' equity (deficiency) (40,328) (48,382)
--------- ---------
Total liabilities and stockholders' equity (deficiency) $ 136,272 $ 127,970
========= =========
PINNACLE AIRLINES CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED MARCH 31,
----------------------------
2004 2003
--------- ---------
OPERATING ACTIVITIES
Net income $ 8,054 $ 8,024
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 721 712
Loss on disposal of equipment and rotable spares 24 125
Deferred income taxes 562 494
Provision for spare parts and supplies obsolescence 35 24
Reduction of deferred credits (51) (42)
Changes in operating assets and liabilities:
Receivables (1,335) (5,870)
Spare parts and supplies 117 (562)
Prepaid expenses and other assets (2,478) 8,002
Accounts payable and accrued expenses 3,919 (4,825)
Income taxes payable (1,137) 3,894
--------- ---------
Cash provided by operating activities 8,431 9,976
INVESTING ACTIVITIES
Purchases of property and equipment (709) (4,671)
Proceeds from the sale of property and equipment 355 --
--------- ---------
Cash used in investing activities (354) (4,671)
FINANCING ACTIVITIES
Payments on long-term debt (3,000) (5,000)
Repayments on line of credit with bank -- (4,245)
Net borrowings under line of credit with Northwest -- 9,800
--------- ---------
Cash (used in) provided by financing activities (3,000) 555
--------- ---------
Net increase in cash and cash equivalents 5,077 5,860
Cash and cash equivalents at beginning of period 31,523 4,580
--------- ---------
Cash and cash equivalents at end of period $ 36,600 $ 10,440
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 2,297 $ 1,583
Income tax payments $ 5,716 $ 460
OTHER NON-CASH TRANSACTIONS
Note payable issued to Northwest as a dividend $ -- $ 200,000
Settlement of accounts with Northwest as a dividend $ -- $ 15,500
PINNACLE AIRLINES CORP.
RECONCILIATION OF NON-GAAP DISCLOSURES (UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED MARCH 31,
----------------------------------
2004 2003 % Increase
-------- -------- ----------
PASSENGER REVENUE
Passenger revenue in accordance with GAAP $133,387 $ 98,605 35%
Adjustment to reduce target operating margin to 10% from 14% -- (4,382)
-------- -------- --------
Adjusted passenger revenue with 10% target operating margin $133,387 $ 94,223 42%
======== ======== ========
OPERATING INCOME
Operating income in accordance with GAAP $ 14,344 $ 14,339 0%
Adjustment to reduce target operating margin to 10% from 14% -- (4,382)
-------- -------- --------
Adjusted operating income with 10% target operating margin $ 14,344 $ 9,957 44%
======== ======== ========
(PINNACLE AIRLINES CORP. LOGO)
OPERATING STATISTICS - 2001
Three Months Ended
----------------------------------------------------- Year Ended
March 31 June 30 September 30 December 31 December 31
-------- ------- ------------ ----------- -----------
Revenue passengers (in thousands) 383 538 555 555 2,031
Revenue passenger miles (in thousands) 118,033 165,306 191,508 198,548 673,395
Available seat miles (in thousands) 225,528 269,582 317,849 340,661 1,153,620
Passenger load factor 52.3% 61.3% 60.3% 58.3% 58.4%
Block Hours
- -----------
CRJs 8,165 12,850 17,147 20,422 58,584
Turboprops 19,279 17,344 15,915 13,607 66,145
Cycles
- ------
CRJs 6,237 9,222 11,999 13,780 41,238
Turboprops 14,259 12,431 11,160 9,720 47,570
Average daily utilization (block hours)
- ---------------------------------------
CRJs 8.57 8.59 7.81 7.92 8.22
Turboprops 7.94 8.29 7.51 6.43 7.54
Average length of aircraft flight (miles) 278 297 315 325 318
Number of operating aircraft (end of period)
- --------------------------------------------
CRJs 12 19 25 30 30
Turboprops 24 24 24 24 24
Number of employees (at end of period) 1,801 2,068 2,124 1,738 1,738
(PINNACLE AIRLINES CORP. LOGO)
OPERATING STATISTICS - 2002
Three Months Ended
----------------------------------------------------- Year Ended
March 31 June 30 September 30 December 31 December 31
-------- ------- ------------ ----------- -----------
Revenue passengers (in thousands) 564 732 799 843 2,938
Revenue passenger miles (in thousands) 207,278 269,809 303,219 310,875 1,091,181
Available seat miles (in thousands) 379,310 397,522 451,190 486,130 1,714,151
Passenger load factor 54.6% 67.9% 67.2% 63.9% 63.7%
Block Hours
- -----------
CRJs 25,064 28,499 32,983 38,343 124,889
Turboprops 11,815 7,974 5,140 1,580 26,509
Cycles
- ------
CRJs 16,438 19,372 22,776 26,892 85,478
Turboprops 8,216 6,083 4,439 1,524 20,262
Average daily utilization (block hours)
- ---------------------------------------
CRJs 8.11 8.62 8.68 8.45 8.47
Turboprops 6.08 5.94 4.93 2.31 4.81
Average length of aircraft flight (miles) 339 335 349 356 353
Number of operating aircraft (end of period)
- --------------------------------------------
CRJs 35 37 43 51 51
Turboprops 18 12 7 -- --
Number of employees (at end of period) 1,837 2,156 2,226 2,403 2,403
(PINNACLE AIRLINES CORP. LOGO)
OPERATING STATISTICS - 2003
Three Months Ended
----------------------------------------------------- Year Ended
March 31 June 30 September 30 December 31 December 31
-------- ------- ------------ ----------- -----------
Revenue passengers (in thousands) 829 1,132 1,256 1,324 4,540
Revenue passenger miles (in thousands) 293,392 439,776 516,851 547,612 1,797,631
Available seat miles (in thousands) 512,553 635,503 732,112 797,832 2,678,000
Passenger load factor 57.2% 69.2% 70.6% 68.6% 67.1%
Block Hours 42,888 49,903 56,146 61,709 210,646
Cycles 30,969 35,400 38,746 41,783 146,898
Average daily utilization (block hours) 8.36 8.70 9.07 9.19 8.83
Average length of aircraft flight (miles) 346 376 397 405 384
Fleet of operating aircraft (end of period) 58 65 70 76 76
Number of employees (at end of period) 2,329 2,423 2,438 2,253 2,253
(PINNACLE AIRLINES CORP. LOGO)
OPERATING STATISTICS - 2004
Three Months Ended
------------------------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
Revenue passengers (in thousands) 1,229 -- -- --
Revenue passenger miles (in thousands) 513,097 -- -- --
Available seat miles (in thousands) 818,689 -- -- --
Passenger load factor 62.7%
Block Hours 64,769 -- -- --
Cycles 42,185 -- -- --
Average daily utilization (block hours) 8.44 -- -- --
Average length of aircraft flight (miles) 416 -- -- --
Fleet of operating aircraft (end of period) 87 -- -- --
Number of employees (at end of period) 2,228