1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-14719
SKYWEST, INC.
Incorporated under the laws of Utah 87-0292166
(I.R.S. Employer ID No.)
444 South River Road
St. George, Utah 84790
(801) 634-3000
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at February 10, 1997
Common stock, no par value 10,120,961
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SKYWEST, INC.
TABLE OF CONTENTS
Part I - Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
As of December 31, 1996 and
March 31, 1996 3
Condensed Consolidated Statements of
Income For the Three Months and Nine
Months Ended December 31, 1996 and 1995 5
Condensed Consolidated Statements of
Cash Flows For the Nine Months Ended
December 31, 1996 and 1995 6
Notes to Condensed Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 12
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PART I. FINANCIAL INFORMATION
SKYWEST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
ASSETS
December 31, March 31,
1996 1996
--------- ---------
CURRENT ASSETS:
Cash and cash equivalents $ 38,459 $ 24,529
Available-for-sale securities 18,469 19,097
Receivables, net 8,211 12,893
Inventories 10,487 8,923
Other current assets 9,280 11,020
--------- ---------
Total current assets 84,906 76,462
--------- ---------
PROPERTY AND EQUIPMENT:
Flight equipment 178,976 171,840
Buildings and ground equipment 42,499 39,092
Deposits on flight equipment 3,603 3,603
Rental vehicles 3,646 2,237
--------- ---------
228,724 216,772
Less-accumulated depreciation and
amortization (86,595) (71,701)
--------- ---------
142,129 145,071
--------- ---------
OTHER ASSETS 5,645 6,017
--------- ---------
$ 232,680 $ 227,550
========= =========
See notes to condensed consolidated financial statements.
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SKYWEST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Dollars in Thousands)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, March 31,
1996 1996
--------- ---------
CURRENT LIABILITIES:
Trade accounts payable $ 29,124 $ 23,740
Current maturities of long-term debt 6,268 6,236
Accrued payroll 4,907 5,451
Air traffic liability 1,631 1,485
Taxes other than income taxes 1,417 1,330
Current portion of deferred credits -- 1,614
Fleet restructuring accrual 889 3,788
--------- ---------
Total current liabilities 44,236 43,644
--------- ---------
LONG-TERM DEBT, net of current maturities 48,907 53,736
--------- ---------
DEFERRED INCOME TAXES PAYABLE 15,784 14,370
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock 88,947 88,183
Retained earnings 55,091 47,902
Treasury stock (20,285) (20,285)
--------- ---------
Total stockholders' equity 123,753 115,800
--------- ---------
$ 232,680 $ 227,550
========= =========
See notes to condensed consolidated financial statements.
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SKYWEST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------ ------------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
OPERATING REVENUES:
Passenger $ 55,684 $ 49,377 $ 177,768 $ 150,113
Freight 1,050 1,128 3,120 3,291
Public service and other 308 552 980 1,667
Nonairline 7,553 7,934 32,582 33,476
------------ ------------ ------------ ------------
64,595 58,991 214,450 188,547
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Flying operations 26,587 21,967 75,536 63,035
Aircraft, traffic and passenger service 9,563 8,277 27,234 23,717
Maintenance 6,804 8,185 21,594 22,264
Promotion and sales 7,119 7,032 22,155 18,843
General and administrative 2,575 2,431 9,320 8,346
Depreciation and amortization 4,742 3,861 13,644 10,930
Nonairline 8,941 8,906 31,026 31,716
------------ ------------ ------------ ------------
66,331 60,659 200,509 178,851
------------ ------------ ------------ ------------
OPERATING (LOSS) INCOME (1,736) (1,668) 13,941 9,696
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (311) (208) (1,507) (1,208)
Interest income 614 685 1,853 1,998
Gain on sales of property and equipment 98 69 339 202
------------ ------------ ------------ ------------
401 546 685 992
------------ ------------ ------------ ------------
(LOSS) INCOME BEFORE BENEFIT (PROVISION)
FOR INCOME TAXES (1,335) (1,122) 14,626 10,688
BENEFIT (PROVISION) FOR INCOME TAXES 514 440 (5,623) (4,172)
------------ ------------ ------------ ------------
NET (LOSS) INCOME $ (821) $ (682) $ 9,003 $ 6,516
============ ============ ============ ============
NET (LOSS) INCOME PER COMMON SHARE $ (.08) $ (.07) $ .89 $ .63
============ ============ ============ ============
WEIGHTED AVERAGE SHARES 10,095,925 10,324,826 10,073,152 10,322,384
============ ============ ============ ============
See notes to condensed consolidated financial statements.
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SKYWEST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
FOR THE
NINE MONTHS ENDED
DECEMBER 31,
1996 1995
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 9,003 $ 6,516
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 13,644 10,930
Gain on sales of property and equipment (339) (205)
Maintenance expense related to disposition of rotable spares 82 90
Increase in deferred income taxes 1,414 1,523
Amortization of deferred credits (1,614) (1,098)
Nonairline depreciation and amortization 2,643 1,978
Tax benefit from exercise of common stock options 56 --
Changes in operating assets and liabilities:
Decrease (increase) in receivables 4,682 (1,725)
Increase in inventories (1,564) (1,690)
Decrease in other current assets 1,740 2,288
Increase in trade accounts payable 1,979 6,893
Decrease in other current liabilities (311) (462)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 31,415 25,038
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of available-for-sale securities 628 3,060
Acquisition of property and equipment:
Flight equipment (7,611) (41,742)
Deposits on flight equipment -- (3,053)
Buildings and ground equipment (3,609) (5,234)
Rental vehicles (2,850) (2,502)
Proceeds from sales of property and equipment 1,538 3,214
Decrease in deposits on flight equipment -- 4,310
Increase in other assets (184) (107)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (12,088) (42,054)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt -- 30,920
Issuance of common stock 708 379
Purchase of treasury stock -- (261)
Payment of cash dividends (1,308) (1,755)
Reduction of long-term debt (4,797) (2,992)
-------- --------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (5,397) 26,291
-------- --------
Increase in cash and cash equivalents 13,930 9,275
Cash and cash equivalents at beginning of period 24,529 27,416
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 38,459 $ 36,691
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 1,431 $ 1,139
Income taxes 3,944 3,090
See notes to condensed consolidated financial statements.
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SKYWEST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Consolidated Financial Statements
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. These condensed consolidated financial
statements reflect all adjustments which, in the opinion of management, are
necessary to present fairly the results of operations for the interim periods
presented. All adjustments are of a normal recurring nature. Certain information
and disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
following disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed consolidated financial
statements be read in conjunction with the consolidated financial statements and
the notes thereto included in the Company's latest annual report on Form 10-K.
The results of operations for the three and nine months ended December 31, 1996
are not necessarily indicative of the results that may be expected for the year
ending March 31, 1997.
Note B - Available-for-sale Securities
Available-for-sale securities are carried at the lower of aggregate cost or
market value.
Note C - Income Taxes
For the three and nine months ended December 31, 1996 and 1995, the Company
provided for income taxes based upon the estimated annualized effective tax
rate. Under the provisions of Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes", the Company has classified the net
current and noncurrent deferred tax assets and liabilities, which at
December 31, 1996, included a current deferred tax asset of approximately
$1.9 million and a deferred tax liability of approximately $15.8 million.
Note D - Net Income (Loss) Per Common Share
Net income (loss) per common share is calculated based upon the weighted average
shares outstanding during the periods. No material dilution results from common
stock equivalents which are outstanding options to purchase common stock.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
AIRLINE OPERATING STATISTICS
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------- ---------------------------------------
1996 1995 % Change 1996 1995 % Change
--------- --------- --------- ---------- ----------- -----------
Passengers carried 639,599 579,141 10.4% 1,986,371 1,721,704 15.4%
Revenue passenger miles (000s) 172,235 152,941 12.6% 540,043 453,900 19.0%
Available seat miles (000s) 351,044 312,678 12.3% 1,053,935 938,176 12.3%
Passenger load factor 49.1% 48.9% 0.2 pts 51.2% 48.4% 2.8 pts
Passenger breakeven load factor 49.4% 49.8% (0.4)pts 48.2% 46.3% 1.9 pts
Yield per revenue passenger mile $ .323 $ .323 - $ .329 $ .331 (0.6%)
Cost per available seat mile $ .164 $ .166 (1.2%) $ .162 $ .158 2.5%
Average passenger trip (miles) 269 264 1.9% 272 264 3.0%
For the Three Months Ended December 31, 1996 and 1995
For the quarter ended December 31, 1996, the Company experienced record levels
of passenger enplanements and operating revenues. Revenue passenger miles
("RPMs") increased 12.6 percent while available seat miles ("ASMs") increased
12.3 percent due to additional aircraft deliveries related to the Company's
equipment transition program. Operating revenues increased to $64.6 million for
the quarter ended December 31, 1996, compared to $59.0 million for the quarter
ended December 31, 1995. Nonairline revenues decreased slightly to $7.6 million
for the quarter ended December 31, 1996, compared to $7.9 million for the
quarter ended December 31, 1995. Due to increased fuel costs and a short-fall in
passenger traffic at Scenic Airlines, Inc., the Company's results were a net
loss of $.8 million or $.08 per share for the quarter ended December 31, 1996,
compared to a net loss of $.7 million or $.07 per share for the quarter ended
December 31, 1995.
Passenger revenues, which represented 86.2 percent of total operating revenues,
increased 12.8 percent to $55.7 million for the quarter ended December 31, 1996,
compared to $49.4 million or 83.7 percent of total operating revenues for the
quarter ended December 31, 1995. The increase is attributable to a 12.6 percent
increase in RPMs. The increase in RPMs is due to higher load factors on regional
jets which are serving new SkyWest destinations such as San Francisco,
California, Pasco, Washington and Colorado Springs, Colorado. The Company has
also upgraded service, with regional jets, to previously served destinations in
California such as Ontario, Palm Springs and Orange County, as well as Tucson,
Arizona. In addition, the Company has acquired 14 new cabin-class Brasilia
aircraft which are being used to replace Metroliner aircraft as their leases
terminate. The RPMs have also increased as a result of increased passenger
acceptance of the Brasilia aircraft and due to better equipment dispatch
reliability for these new aircraft. Yield per RPM was flat at $.323 for both
quarters ended December 31, 1996 and 1995. As a result, revenue per ASM was also
flat at $.163 for both quarters ended December 31, 1996 and 1995.
Due to the Company's transition program whereby Metroliner aircraft are being
replaced by cabin-class aircraft, ASM's increased 12.3 percent. In addition, as
RPM's increased at a faster rate than ASM's, load factor increased .2 points to
49.1 percent for the quarter ended December 31, 1996, compared to 48.9 percent
for the quarter ended December 31, 1995. As a result, the negative spread
between actual and breakeven load factor was .3 points for the quarter ended
December 31, 1996, compared to .9 points for the quarter ended December 31,
1995.
Total operating expenses and interest increased 9.5 percent to $66.6 million for
the quarter ended December 31, 1996, compared to $60.9 million for the quarter
ended December 31, 1995. As a percentage of consolidated operating revenues,
total operating expenses and interest were 103 percent for both quarters ended
December 31, 1996 and 1995. For the quarter ended December 31, 1996, total
airline operating expenses and interest (excluding nonairline expenses) were
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
101 percent of airline operating revenues compared to 102 percent for the
quarter ended December 31, 1995. In spite of increased fuel and distribution
expenses, airline operating costs per ASM (including interest expense) decreased
to 16.4(cent) for the quarter ended December 31, 1996, compared to 16.6(cent)
for the quarter ended December 31, 1995. The lower cost per ASM is attributable
to flying larger turboprop and jet aircraft which operate at lower unit costs.
Factors relating to the change in operating expenses are discussed below.
Salaries, wages and employee benefits decreased as a percentage of airline
operating revenues to 26.1 percent for the quarter ended December 31, 1996, from
27.1 percent for the quarter ended December 31, 1995, as a result of revenues
increasing faster than personnel related expenses. The average number of
full-time equivalent employees for the quarter ended December 31, 1996 was
2,160, compared to 2,052 for the quarter ended December 31, 1995. The increase
in number of personnel was due to hiring flight attendants and customer service
personnel to support increased operations. Salaries, wages, and employee
benefits per ASM decreased to 4.2(cent) for the quarter ended December 31, 1996,
compared to 4.4(cent) for the quarter ended December 31, 1995.
Aircraft costs, including aircraft rent and depreciation, increased as a
percentage of airline operating revenues to 22.8 percent for the quarter ended
December 31, 1996, from 20.8 percent for the quarter ended December 31, 1995.
Aircraft costs per ASM increased slightly to 3.7(cent) for the quarter ended
December 31, 1996, compared to 3.4(cent) for the quarter ended December 31,
1995. The increase is due primarily to a decrease in aircraft utilization.
Maintenance expense decreased as a percentage of airline operating revenues to
8.3 percent for the quarter ended December 31, 1996, compared to 12.0 percent
for the quarter ended December 31, 1995. This decrease was the result of the
utilization of more Brasilia aircraft which are more efficient than Metroliner
aircraft, as well as a reduction in the average age of the fleet. Maintenance
expense per ASM decreased to 1.4(cent) for the quarter ended December 31, 1996,
from 2.0(cent) for the quarter ended December 31, 1995.
Fuel costs increased as a percentage of airline operating revenues to 14.2
percent for the quarter ended December 31, 1996, from 12.0 percent for the
quarter ended December 31, 1995, primarily due to an increase in the average
fuel price per gallon to $1.00 from $.86. Fuel costs per ASM increased to
2.3(cent) for the quarter ended December 31, 1996, compared to 1.9(cent) for the
quarter ended December 31, 1995, as a result of these increased charges.
Other expenses, primarily consisting of commissions, landing fees, station
rentals, computer reservation system fees and hull and liability insurance,
decreased as a percentage of airline operating revenues to 29.3 percent for the
quarter ended December 31, 1996, from 29.6 percent for the quarter ended
December 31, 1995.
Nonairline expenses were consistent at $8.9 million in each of the quarters
ended December 31, 1996 and 1995. Additionally, the average number of full-time
equivalent employees was 301 for the quarter ended December 31, 1996, compared
to 293 at December 31, 1995.
For the Nine Months Ended December 31, 1996 and 1995
For the nine months ended December 31, 1996, the Company experienced record
levels of passenger enplanements and operating revenues. Revenue passenger miles
increased 19.0 percent while available seat miles increased 12.3 percent due to
additional aircraft deliveries related to its equipment transition program.
Operating revenues increased to $214.4 million for the nine months ended
December 31, 1996, compared to $188.5 million for the nine months ended December
31, 1995. Nonairline revenues decreased slightly to $32.6 million for the nine
months ended December 31, 1996, compared to $33.5 million for the nine months
ended December 31, 1995. Net income was $9.0 million or $.89 per share for the
nine months ended December 31, 1996, compared to $6.5 million or $.63 per share
for the nine months ended December 31, 1995.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
Passenger revenues, which represented 82.9 percent of total operating revenues,
increased 18.4 percent to $177.8 million for the nine months ended December 31,
1996, compared to $150.1 million or 79.6 percent of total operating revenues for
the nine months ended December 31, 1995. The increase is attributable to a 19.0
percent increase in RPMs which was offset by a .6 percent decrease in yield per
RPM. The increase in RPMs is due to the addition of two regional jets which are
serving new SkyWest destinations such as San Francisco, California, Pasco,
Washington, and Colorado Springs, Colorado. The Company has also upgraded
service, with regional jets, to previously served destinations in California
such as Ontario, Palm Springs and Orange County, as well as Tucson, Arizona. In
addition, the Company has acquired 14 new cabin-class Brasilia aircraft which
are being used to replace Metro aircraft as their leases terminate. The RPMs
have also increased as a result of higher passenger acceptance of the Brasilia
aircraft and due to better equipment dispatch reliability for these new
aircraft. Yield per RPM decreased only .6 percent to $.329 for the nine months
ended December 31, 1996, compared to $.331 for the nine months ended December
31, 1995, primarily due to a 3.0 percent increase in the average passenger trip
length resulting from the operation of more Canadair Regional Jets where the
average trip length is approximately 460 miles. Although yield per RPM decreased
.6 percent , revenue per ASM increased 4.8 percent to $17.3 for the nine months
ended December 31, 1996, compared to $16.5 for the nine months ended December
31, 1995.
Due to the Company's transition program whereby Metroliner aircraft are being
replaced by cabin-class aircraft, ASM's increased 12.3 percent. In addition, as
RPM's increased at a faster rate than ASM's, load factor increased 2.8 points to
51.2 percent for the nine months ended December 31, 1996, compared to 48.4
percent for the nine months ended December 31, 1995. In addition, the increased
passenger enplanements resulted in a positive spread between actual and
breakeven load factor of 3.0 points for the nine months ended December 31, 1996,
compared to 2.1 points for the nine months ended December 31, 1995.
Total operating expenses and interest increased 12.2 percent to $202.0 million
for the nine months ended December 31, 1996, compared to $180.1 million for the
nine months ended December 31, 1995. As a percentage of consolidated operating
revenues, total operating expenses and interest decreased to 94.2 percent for
the nine months ended December 31, 1996, from 95.5 percent for the comparable
nine months ended December 31, 1995. For the nine months ended December 31,
1996, total airline operating expenses and interest (excluding nonairline
expenses) were 94.0 percent of airline operating revenues compared to 95.7
percent for the nine months ended December 31, 1995. The improved margin is the
result of increased passenger enplanements and operating revenue which has
outpaced the increase in operating expenses. Primarily, as a result of increased
fuel and distribution expenses, airline operating costs per ASM (including
interest expense) increased to 16.2(cent) for the nine months ended December 31,
1996, from 15.8(cent) for the comparable nine months ended December 31, 1995.
Factors relating to the change in operating expenses are discussed below.
Salaries, wages and employee benefits decreased as a percentage of airline
operating revenues to 24.8 percent for the nine months ended December 31, 1996,
from 26.4 percent for the nine months ended December 31, 1995, as a result of
revenues increasing faster than personnel related expenses. The average number
of full-time equivalent employees for the nine months ended December 31, 1996,
was 2,155 compared to 2,041 for the nine months ended December 31, 1995. The
increase in number of personnel was due to hiring flight attendants and customer
service personnel to support increased operations. Salaries, wages and employee
benefits per ASM decreased slightly to 4.3(cent) for the quarter ended December
31, 1996, compared to 4.4(cent) for the quarter ended December 31, 1995.
Aircraft costs, including aircraft rent and depreciation, decreased as a
percentage of airline operating revenues to 20.2 percent for the nine months
ended December 31, 1996, from 20.5 percent for the nine months ended December
31, 1995. Aircraft costs per ASM increased slightly to 3.5(cent) for the quarter
ended December 31, 1996, compared to 3.4(cent) for the quarter ended December
31, 1995.
Maintenance expense decreased as a percentage of airline operating revenues to
8.5 percent for the nine months ended December 31, 1996, from 10.6 percent for
the nine months ended December 31, 1995. This decrease was the result of the
utilization of more Brasilia aircraft which are more efficient than Metroliner
aircraft, as well as a reduction in the average age of the fleet. Maintenance
expense per ASM decreased slightly to 1.5(cent) for the nine months ended
December 31, 1996, from 1.7(cent) for the nine months ended December 31, 1995.
Fuel costs increased as a percentage of airline operating revenues to 12.4
percent for the nine months ended December 31, 1996, from 10.8 percent for the
nine months ended December 31, 1995, primarily due to an increase in the average
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
fuel price per gallon to $.94 from $.79. Fuel costs per ASM increased to
2.1(cent) for the nine months ended December 31, 1996, from 1.8(cent) for the
nine months ended December 31, 1995, as a result of these increased charges.
Other expenses, primarily consisting of commissions, landing fees, station
rentals, computer reservation system fees and hull and liability insurance,
increased as a percentage of airline operating revenues to 27.2 percent for the
nine months ended December 31, 1996, from 26.6 percent for the nine months ended
December 31, 1995. The increase is due primarily to significant rate increases
in customer reservation system boarding fees and related passenger handling
charges.
Nonairline expenses decreased 2.2 percent to $31.0 million for the nine months
ended December 31, 1996, compared to $31.7 million for the nine months ended
December 31, 1995, due to a decreased volume of activity. Additionally, the
average number of full-time equivalent employees was 308 for the nine months
ended December 31, 1996, compared to 300 for the nine months ended December 31,
1995.
Liquidity and Capital Resources
The Company had working capital of $40.7 million and a current ratio of 1.9:1 at
December 31, 1996, compared to working capital of $32.8 million and a current
ratio of 1.8:1 at March 31, 1996. During the first nine months of fiscal 1997,
the Company invested $7.6 million in flight equipment, $6.7 million in
buildings, ground equipment and other fixed assets, reduced long-term debt by
$4.8 million and paid cash dividends of $1.3 million. The principal sources of
cash during the first nine months of fiscal 1997 were $31.4 million provided by
operating activities and $2.9 million from the sale of securities, property and
equipment, and the issuance of common stock. These factors resulted in a $13.9
million cash and cash equivalents increase.
At December 31, 1996, the Company's long-term debt to equity position was 28
percent debt and 72 percent equity compared to 32 percent debt and 68 percent
equity at March 31, 1996.
SkyWest took delivery of 12 new Brasilia aircraft during the first nine months
of fiscal 1997 and has agreed to purchase three additional Brasilia aircraft and
related spare parts inventory and support equipment at a future aggregate cost
of approximately $24 million, including estimated cost escalations. These
aircraft are scheduled for delivery during the remainder of fiscal 1997.
Depending in large part upon the state of the aircraft financing market and
general economic conditions at the time, management will determine whether to
purchase aircraft with available cash or acquire the aircraft through
third-party long-term loans or lease arrangements. The Company also has options
to acquire 10 additional Brasilia aircraft at fixed prices (subject to cost
escalation and delivery schedules) exercisable through fiscal 1999. Options to
acquire an additional ten Canadair Regional Jets have been obtained and are
exercisable at any time with no expiration.
The Company has available $5.0 million in an unsecured bank line of credit with
interest payable at the bank's base rate less one-quarter percent, which was 8.0
percent at December 31, 1996. In addition, the Company has available $.5 million
in an unused reducing revolving credit facility bearing interest at the bank's
base rate plus one half percent. The amount available under the facility will
expire December 1, 1997. There were no amounts outstanding on either of the
facilities as of December 31, 1996.
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PART II. OTHER INFORMATION
SKYWEST, INC.
Item 6:
a. Exhibits - Financial Data Schedule Exhibit 27
b. Reports on Form 8-K - There were no reports on Form 8-K filed during
the quarter ended December 31, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SKYWEST, INC.
Registrant
February 10, 1997 BY: /s/ Bradford R. Rich
----------------------------------------
Bradford R. Rich
Executive Vice President - Finance,
Chief Financial Officer and Treasurer
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