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Allegiant Travel Company News
Allegiant Travel Company Reports Fourth Quarter, Full Year 2007 Financial Results, Announces $25 Million Share Repurchase Program
Unaudited 4Q07 4Q06 Change Total operating revenue (millions) $101.0 $63.1 59.9% Operating income (millions) $6.1 $7.4 -17.8% Operating margin 6.0% 11.7% -5.7pp Net income (loss) (millions) $4.8 ($1.5) N/M Diluted earnings per share $0.23 ($0.17) N/M Diluted non-GAAP earnings per share adjusted by excluding non-cash mark-to-market loss/gain on fuel derivatives and (in 2006) one-time tax accrual (reconciled to GAAP on pgs. 9 and 14) $0.24 $0.24 0.0% Scheduled Service: Ancillary revenue per passenger $24.30 $18.84 29.0% Total revenue per ASM (cents) 9.36 8.68 7.8% Average stage length (miles) 922 945 (2.4)% Total System*: Operating expense per ASM or CASM (cents) 8.69 7.59 14.5% CASM, excluding fuel (cents) 4.21 4.34 (3.0)% Average stage length (miles) 899 912 (1.4)% Unaudited 2007 2006 Change Total operating revenue (millions) $360.6 $243.4 48.2% Operating income (millions) $44.1 $22.6 95.4% Operating margin 12.2% 9.3% 2.9pp Net income (loss) (millions) $31.5 $8.7 260.5% Diluted earnings per share $1.53 $0.52 194.2% Diluted non-GAAP earnings per share adjusted by excluding non-cash mark-to-market loss/gain on fuel derivatives and (in 2006) one-time tax accrual (reconciled to GAAP on pgs. 9 and 14) $1.48 $0.96 54.2% Scheduled Service: Ancillary revenue per passenger $21.53 $16.11 33.6% Total revenue per ASM (cents) 9.46 8.47 11.7% Average stage length (miles) 923 1,006 (8.3)% Total System*: Operating expense per ASM or CASM (cents) 8.19 7.69 6.5% CASM, excluding fuel (cents) 4.25 4.15 2.4 % Average stage length (miles) 906 966 (6.2)%
*Total system includes scheduled service, fixed fee contract and non-revenue flying.
"2007 was an outstanding year for our company," said Maurice J. Gallagher, Jr., Chairman, CEO and President of Allegiant Travel Company. "We grew revenues by 48.2% to
Gallagher continued, "The tremendous efforts of our team members enabled us to achieve a great deal in the fourth quarter. We established three new bases, including two new major leisure destinations of
Gallagher concluded, "Lastly our Board of Directors has authorized a share repurchase program to acquire up to
Andrew C. Levy, CFO & Managing Director — Planning, stated, "We have made many changes to our route network, our pricing and our future planning in keeping with our goal to deliver double digit operating margins in spite of current high fuel prices. The changes made to date have been effective, but we have more hard work to do to ensure we can reach our margin targets. We remain steadfast in our determination to deliver the highest margins in the industry."
"Our balance sheet and liquidity remain very strong. We ended the quarter with
Levy continued, "We again are pleased with our cost management. Cost per ASM, excluding fuel, decreased by 3.0% compared with the prior year despite a 1.4% decline in average stage length."
During the fourth quarter, Allegiant Air initiated service to two new major leisure destinations (
Network Summary* January 29, Year End Year End 2008 2007 2006 \"World-class leisure destinations\" 5 5 3 Small cities served 53 53 47 Total cities served 58 58 50 Routes to Las Vegas 36 37 34 Routes to Orlando 27 27 21 Routes to Tampa Bay/St. Petersburg 14 14 12 Routes to Phoenix-Mesa 13 13 0 Routes to Ft. Lauderdale 11 12 0 Other routes 2 2 0 Total routes 103 105 67 * includes cities served seasonally
During the fourth quarter, we placed three MD-80s in service, bringing our operating fleet to 32 MD-80 aircraft at year end 2007. We also purchased three additional MD-80 aircraft in the fourth quarter 2007. We placed these three aircraft in service subsequent to year-end 2007 and now have an operating fleet of 35 aircraft. We have a commitment to purchase two additional MD-80 aircraft for delivery to us by the early part of the second quarter of 2008. We expect to have these aircraft in our operating fleet by the end of the second quarter 2008, for a total operating fleet of 37 MD-80s.
The following table summarizes year-over-year and recent changes in Allegiant Air's fleet: MD-80 Aircraft in Service January 29, Year End Year End 2008 2007 2006 Owned (including capital leases) 31 28 22 Leased 4 4 2 Total 35 32 24
At this time, Allegiant Travel Company provides the following guidance to investors, which are subject to revision:
— We expect first quarter 2008 year-over-year departure growth of at least 42% and ASM growth of at least 35%. — We expect second quarter 2008 year-over-year departure growth of at least 35% and ASM growth of at least 25%. — We expect full year 2008 year-over-year departure growth of at least 35% and ASM growth of at least 30%. — By the end of 2008, Allegiant Air expects to operate at least 40 MD-80 aircraft. There currently appear to be sufficient high-quality MD-80 aircraft available on the market to support Allegiant Air growth. — We expect 2008 capital expenditures of $45 million, comprising $36 million for six aircraft and $9 million for engines and other.
The Company is hedged to a negligible amount of its anticipated scheduled service jet fuel consumption for the first quarter of 2008 and does not have any fuel hedges for later periods.
Allegiant Travel Company will host a conference call with analysts at
About the Company
Las Vegas-based Allegiant Travel Company (NASDAQ: ALGT), is focused on linking travelers in small cities to world-class leisure destinations such as
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 ASM growth, departure growth, fleet growth and expected capital expenditures, as well as 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" 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 http://www.sec.gov. These risk factors include, without limitation, increases in fuel prices, terrorist attacks, risks inherent to airlines, demand for air services to
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.
(Logo: http://www.newscom.com/cgi-bin/prnh/20060516/LATU102LOGO) Detailed financial information follows: Allegiant Travel Company Consolidated Statements of Operations Quarters Ended December 31, 2007 and 2006 (in thousands, except per share amounts) (Unaudited) Three months ended December 31, Percent 2007 2006 change OPERATING REVENUE: Scheduled service revenue $72,816 $46,620 56.2 Fixed fee contract revenue 7,138 6,497 9.9 Ancillary revenue 20,443 10,019 104.0 Other revenue 559 - N/M Total operating revenue 100,956 63,136 59.9 OPERATING EXPENSES: Aircraft fuel 48,884 23,900 104.5 Salary and benefits 14,698 10,049 46.3 Station operations 8,705 6,192 40.6 Maintenance and repairs 7,612 5,248 45.0 Sales and marketing 3,428 2,338 46.6 Aircraft lease rentals 879 825 6.5 Depreciation and amortization 4,379 2,985 46.7 Other 6,313 4,229 49.3 Total operating expenses 94,898 55,766 70.2 OPERATING INCOME 6,058 7,370 (17.8) As a percent of total operating revenue 6.0% 11.7% OTHER (INCOME) EXPENSE: (Gain) loss on fuel derivatives, net (361) 1,266 N/M Earnings from joint venture, net (160) - N/M Interest income (2,326) (930) 150.1 Interest expense 1,386 1,547 (10.4) Total other (income) expense (1,461) 1,883 N/M INCOME BEFORE INCOME TAXES 7,519 5,487 37.0 As a percent of total operating revenue 7.4% 8.7% PROVISION FOR INCOME TAXES 2,748 7,033 (60.9) NET INCOME (LOSS) $4,771 ($1,546) N/M As a percent of total operating revenue 4.7% -2.4% Earnings per share Basic $0.23 ($0.17) N/M Diluted $0.23 ($0.17) N/M Weighted average shares outstanding: Basic 20,651 9,028 128.7 Diluted 20,939 9,028 131.9 Unaudited pro forma data for 2006 (reflecting change in tax status)(1): Income before income taxes $7,519 $5,487 37.0 Pro-forma provision for income taxes 2,748 1,975 39.1 Pro-forma net income $4,771 $3,512 35.8 Unaudited pro-forma net income per share data for 2006 (reflecting change in tax status): Basic pro-forma net income per share $0.23 $0.39 (41.0) Diluted pro-forma net income per share $0.23 $0.20 15.0
(1) Prior to its
Allegiant Travel Company Operating Statistics Quarters Ended December 31, 2007 and 2006 (Unaudited) Three months ended December 31, Percent 2007 2006 change* OPERATING STATISTICS Total system statistics Passengers 894,834 579,516 54.4 Revenue passenger miles (RPMs) (thousands) 848,933 560,738 51.4 Available seat miles (ASMs) (thousands) 1,092,135 734,761 48.6 Load factor 77.7% 76.3% 1.4 Operating revenue per ASM (cents) 9.24 8.59 7.6 Operating expense per ASM or CASM (cents) 8.69 7.59 14.5 CASM, excl fuel (cents) 4.21 4.34 (3.0) Departures 8,192 5,442 50.5 Block hours 19,603 13,131 49.3 Average stage length (miles) 899 912 (1.4) Avg number of operating aircraft during period 30.3 21.9 38.4 Total aircraft in service end of period 32 24 33.3 Full-time equivalent employees at end of period 1,180 846 39.5 Fuel gallons consumed (thousands) 18,511 12,325 50.2 Average fuel cost per gallon $2.64 $1.94 36.1 Scheduled service statistics Passengers 841,117 531,718 58.2 Revenue passenger miles (RPMs) (thousands) 790,821 512,657 54.3 Available seat miles (ASMs) (thousands) 996,759 652,469 52.8 Load factor 79.3% 78.6% 0.7 Departures 7,293 4,667 56.3 Block hours 17,835 11,615 53.5 Yield (cents) 9.21 9.09 1.3 Scheduled service revenue per ASM (cents) 7.31 7.15 2.2 Ancillary revenue per ASM (cents) 2.05 1.54 33.1 Total revenue per ASM (cents) 9.36 8.68 7.8 Average fare — scheduled service $86.57 $87.68 (1.3) Average fare — ancillary 24.30 18.84 29.0 Average fare — total $110.87 $106.52 4.1 Average stage length (miles) 922 945 (2.4) Percent of sales through website during period 85.5% 86.3% (0.8)
* except load factor and percent of sales through website, which is percentage point change
Allegiant Travel Company Non-GAAP Presentations Quarters Ended December 31, 2007 and 2006 (in thousands, except per share and per ASM amounts) (Unaudited)
Unlike many airlines, we do not qualify for fuel hedge accounting treatment under FAS 133. To facilitate investor comparisons with airlines that do qualify for fuel hedge accounting, we provide adjusted non-GAAP measures of net income and operating expense as if we did qualify for fuel hedge accounting, by excluding the mark-to-market non-cash gains or losses on fuel derivatives from net income and by treating cash gains or losses realized on fuel derivatives as part of aircraft fuel expense. Adjusted net income for fourth quarter 2006 also eliminates the effect of a one-time tax adjustment recorded upon our conversion from a limited liability company to a corporation at the time of our initial public offering in
The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of non-GAAP financial measures, Adjusted net income and Adjusted aircraft fuel expense, to supplement our consolidated financial statements presented on a GAAP basis, Regulation G requires us to include in this press release a presentation of the most directly comparable GAAP measures, which are Net income or loss (which reflects the mark-to-market non-cash loss or gain on fuel derivatives and the tax accrual upon our conversion to a corporation), and Aircraft fuel expense (which is not impacted by the cash gain or loss on fuel derivatives), and a reconciliation of the non-GAAP measures to the most comparable GAAP measures. Our utilization of non-GAAP measurements is not meant to be considered in isolation or as a substitute for net income, aircraft fuel expense and other measures of financial performance prepared in accordance with GAAP. Adjusted net income and adjusted aircraft fuel expense are not GAAP measurements and our use of them may not be comparable to similarly titled measures employed by other companies in the airline industry. The reconciliations to GAAP measures follow:
Derivation of adjusted net income (net of one-time tax accrual) from GAAP net income: (in thousands, except per Three months ended December 31, Percent share amounts) 2007 2006 change Net income (loss) $4,771 ($1,546) N/M Recognition of net deferred tax liabilities upon C-corporation conversion - 6,425 N/M Net of recognition of net deferred tax liabilities upon C-corporation conversion: Adjusted net income $4,771 $4,879 (2.2) Adjusted earnings per share: Basic $0.23 $0.54 (57.4) Diluted $0.23 $0.28 (17.9)
Derivation of adjusted net income (excluding non-cash mark-to-market loss or gain on fuel derivatives and one-time tax accrual) from adjusted net income (net of one-time tax accrual) as derived in the table above:
(in thousands, except Three months ended December 31, Percent per share amounts) 2007 2006 change Adjusted net income (net of one time tax accrual) $4,771 $4,879 (2.2) Mark-to-market non-cash loss (gain) on fuel derivatives 343 (959) N/M Tax impact of mark-to-market non-cash loss/gain on fuel derivatives (125) 341 N/M Net of mark-to-market non-cash loss/gain on fuel derivatives: Adjusted net income $4,989 $4,261 17.1 Adjusted earnings per share: Basic $0.24 $0.47 (48.9) Diluted $0.24 $0.24 - Derivation of adjusted aircraft fuel expense: Three months ended December 31, Percent (in thousands) 2007 2006 change Aircraft fuel expense $48,884 $23,900 104.5 Cash (gain) loss on fuel derivatives (704) 2,225 N/M Adjusted aircraft fuel expense $48,180 $26,125 84.4
Derivation of operating cost per ASM treating cash (gain) loss on fuel derivatives as part of total operating expense per ASM:
Three months ended December 31, Percent (in cents) 2007 2006 change Total operating expense per ASM 8.69 7.59 14.5 Cash (gain) loss on fuel derivatives per ASM (0.06) 0.30 N/M Operating cost per ASM treating cash gain or loss on fuel derivatives as part of operating expenses 8.63 7.89 9.4
Split of (gain) loss on fuel derivatives into cash-settled portion and mark-to-market non-cash portion:
Three months ended December 31, Percent (in thousands) 2007 2006 change Mark-to-market non-cash loss (gain) on fuel derivatives $343 ($959) N/M Cash (gain) loss on fuel derivatives (704) 2,225 N/M (Gain) loss on fuel derivatives, net ($361) $1,266 N/M Allegiant Travel Company Consolidated Statements of Income Years Ended December 31, 2007 and 2006 (in thousands, except per share amounts) (Unaudited) Years ended December 31, Percent 2007 2006 change OPERATING REVENUE: Scheduled service revenue $258,943 $178,349 45.2 Fixed fee contract revenue 35,378 33,743 4.8 Ancillary revenue 64,988 31,258 107.9 Other revenue 1,264 - N/M Total operating revenue 360,573 243,350 48.2 OPERATING EXPENSES: Aircraft fuel 152,149 101,561 49.8 Salary and benefits 50,761 34,950 45.2 Station operations 33,724 24,866 35.6 Maintenance and repairs 25,764 19,482 32.2 Sales and marketing 12,803 9,293 37.8 Aircraft lease rentals 3,004 5,102 (41.1) Depreciation and amortization 15,992 10,584 51.1 Other 22,316 14,959 49.2 Total operating expenses 316,513 220,797 43.4 OPERATING INCOME 44,060 22,553 95.4 As a percent of total operating revenue 12.2% 9.3% OTHER (INCOME) EXPENSE: (Gain) loss on fuel derivatives, net (2,613) 4,193 N/M Earnings from joint venture, net (457) - N/M Other expense 63 - N/M Interest income (9,161) (2,973) 208.1 Interest expense 5,523 5,517 0.1 Total other (income) expense (6,645) 6,737 N/M INCOME BEFORE INCOME TAXES 50,705 15,816 220.6 As a percent of total operating revenue 14.1% 6.5% PROVISION FOR INCOME TAXES: 19,196 7,076 171.3 NET INCOME $31,509 $8,740 260.5 As a percent of total operating revenue 8.7% 3.6% Earnings per share Basic $1.56 $1.23 26.8 Diluted $1.53 $0.52 194.2 Weighted average shares outstanding: Basic 20,243 7,092 185.4 Diluted 20,529 16,961 21.0 Unaudited pro forma data for 2006 (reflecting change in tax status)(1): Income before income taxes $50,705 $15,816 220.6 Pro-forma provision for income taxes 19,196 5,694 237.1 Pro-forma net income $31,509 $10,122 211.3 Unaudited pro-forma net income per share data for 2006 (reflecting change in tax status): Basic pro-forma net income per share $1.56 $1.43 9.1 Diluted pro-forma net income per share $1.53 $0.60 155.0
(1) Prior to its
Allegiant Travel Company Operating Statistics Years Ended December 31, 2007 and 2006 (Unaudited) Years ended December 31, Percent 2007 2006 change* OPERATING STATISTICS Total system statistics Passengers 3,264,506 2,179,367 49.8 Revenue passenger miles (RPMs) (thousands) 3,140,927 2,251,341 39.5 Available seat miles (ASMs) (thousands) 3,865,337 2,871,071 34.6 Load factor 81.3% 78.4% 2.9 Operating revenue per ASM (cents) 9.33 8.48 10.0 Operating expense per ASM or CASM (cents) 8.19 7.69 6.5 CASM, excl fuel (cents) 4.25 4.15 2.4 Departures 28,788 20,074 43.4 Block hours 68,488 50,584 35.4 Average stage length (miles) 906 966 (6.2) Avg # of operating aircraft during period 27.8 20.8 33.7 Total aircraft in service end of period 32 24 33.3 Full-time equivalent employees at period end 1,180 846 39.5 Fuel gallons consumed (thousands) 66,035 47,984 37.6 Average fuel cost per gallon $2.30 $2.12 8.5 Scheduled service statistics Passengers 3,017,843 1,940,456 55.5 Revenue passenger miles (RPMs) (thousands) 2,844,358 1,996,559 42.5 Available seat miles (ASMs) (thousands) 3,423,783 2,474,285 38.4 Load factor 83.1% 80.7% 2.4 Departures 25,088 16,634 50.8 Block hours 60,607 43,391 39.7 Yield (cents) 9.10 8.93 1.9 Scheduled service revenue per ASM (cents) 7.56 7.21 4.9 Ancillary revenue per ASM (cents) 1.90 1.26 50.8 Total revenue per ASM (cents) 9.46 8.47 11.7 Average fare — scheduled service $85.80 $91.91 (6.6) Average fare — ancillary 21.53 16.11 33.6 Average fare — total $107.34 $108.02 (0.6) Average stage length (miles) 923 1,006 (8.3) Percent of sales through website during period 86.6% 85.9% 0.7
* except load factor and percent of sales through website, which is percentage point change
Allegiant Travel Company Non-GAAP Presentations Years Ended December 31, 2007 and 2006 (in thousands, except per share and per ASM amounts) (Unaudited)
Unlike many airlines, we do not qualify for fuel hedge accounting treatment under FAS 133. To facilitate investor comparisons with airlines that do qualify for fuel hedge accounting, we provide adjusted non-GAAP measures of net income and operating expense as if we did qualify for fuel hedge accounting, by excluding the mark-to-market non-cash gains or losses on fuel derivatives from net income and by treating cash gains or losses realized on fuel derivatives as part of aircraft fuel expense. Adjusted net income for 2006 also eliminates the effect of a one-time tax adjustment recorded upon our conversion from a limited liability company to a corporation at the time of our initial public offering in
The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of non-GAAP financial measures, Adjusted net income and Adjusted aircraft fuel expense, to supplement our consolidated financial statements presented on a GAAP basis, Regulation G requires us to include in this press release a presentation of the most directly comparable GAAP measures, which are Net income (which reflects the mark-to-market non-cash loss or gain on fuel derivatives and the tax accrual upon our conversion to a corporation), and Aircraft fuel expense (which is not impacted by the cash gain or loss on fuel derivatives), and a reconciliation of the non-GAAP measures to the most comparable GAAP measures. Our utilization of non-GAAP measurements is not meant to be considered in isolation or as a substitute for net income, aircraft fuel expense and other measures of financial performance prepared in accordance with GAAP. Adjusted net income and adjusted aircraft fuel expense are not GAAP measurements and our use of them may not be comparable to similarly titled measures employed by other companies in the airline industry. The reconciliations to GAAP measures follow:
Derivation of adjusted net income (net of one-time tax accrual) from GAAP net income: (in thousands, except per Years ended December 31, Percent share amounts) 2007 2006 change Net income $31,509 $8,740 260.5 Recognition of net deferred tax liabilities upon C-corporation conversion - 6,425 N/M Net of recognition of net deferred tax liabilities upon C-corporation conversion: Adjusted net income $31,509 $15,165 107.8 Adjusted earnings per share: Basic $1.56 $2.14 (27.1) Diluted $1.53 $0.89 71.9
Derivation of adjusted net income (excluding non-cash mark-to-market loss or gain on fuel derivatives and one-time tax accrual) from adjusted net income (net of one-time tax accrual) as derived in the table above:
(in thousands, except per Years ended December 31, Percent share amounts) 2007 2006 change Adjusted net income (net of one time tax accrual) $31,509 $15,165 107.8 Mark-to-market non-cash (gain) loss on fuel derivatives (1,702) 1,641 N/M Tax impact of mark-to-market non-cash loss/gain on fuel derivatives 644 (584) N/M Net of mark-to-market non-cash loss/gain on fuel derivatives: Adjusted net income $30,451 $16,222 87.7 Adjusted earnings per share: Basic $1.50 $2.29 (34.5) Diluted $1.48 $0.96 54.2 Derivation of adjusted aircraft fuel expense: Years ended December 31, Percent 2007 2006 change Aircraft fuel expense $152,149 $101,561 49.8 Cash (gain) loss on fuel derivatives (911) 2,552 N/M Adjusted aircraft fuel expense $151,238 $104,113 45.3
Derivation of operating cost per ASM treating cash (gain) loss on fuel derivatives as part of total operating expense per ASM:
Years ended December 31, Percent (in cents) 2007 2006 change Total operating expense per ASM 8.19 7.69 6.5 Cash (gain) loss on fuel derivatives per ASM (0.02) 0.09 N/M Operating cost per ASM treating cash gain or loss on fuel derivatives as part of operating expenses 8.17 7.78 5.0
Split of (gain) loss on fuel derivatives into cash-settled portion and mark-to-market non-cash portion:
Years ended December 31, Percent (in thousands) 2007 2006 change Mark-to-market non-cash (gain) loss on fuel derivatives ($1,702) $1,641 N/M Cash (gain) loss on fuel derivatives (911) 2,552 N/M (Gain) loss on fuel derivatives, net ($2,613) $4,193 N/M
SOURCE Allegiant Travel Company
