ALGT Allegiant Travel Company

First quarter 2022 GAAP diluted (loss) per share of $(0.44)

First quarter 2022 diluted (loss) per share, excluding recognition bonus⁽¹⁾ of $(0.12)⁽¹⁾⁽²⁾

LAS VEGAS, May 4, 2022 /PRNewswire/ -- Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the first quarter 2022, as well as comparisons to prior years:

"The first quarter marked a sizable shift in the demand environment," stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. "For the first time since the onset of the pandemic, we observed both load factor and TRASM improvements over 2019 during the month of March. Despite a nearly 40 percent increase in the cost per fuel gallon throughout the quarter, we recognized a more than 21 percent operating margin during March. These demand trends have persisted, and we now expect second quarter total revenue to be up as much as 30 percent compared to 2019 revenue.

"We continue making progress on further expanding our Allegiant 2.0 strategy. We are awaiting DOT approval for our joint venture with Viva Aerobus and are on track to begin selling flights to Mexico by the end of the year. Our Allways Allegiant World Mastercard continues to exceed expectations. New cardholders were up 99 percent compared to the first quarter of 2019. During 2021 we averaged 10,000 new cardholders per month while in this most recent quarter we added 45 thousand (March was the first month with more than 18 thousand cardholders acquired). Our Allways Rewards program now has more than one million active members. Rewards members average more total itineraries annually as well as higher ancillary and third-party take rates compared to non-members. Overall our total ancillary fare per passenger was nearly $68 for the quarter. During the quarter we began accepting reservations for our Sunseeker Resort which is due to open this time next year. Although too early to determine trends, the average daily rate for bookings to date is more than 50 percent higher than the average daily rate we used in our model.

"We have adjusted our growth rate for the second quarter to better align with the high fuel cost environment and prioritize operational performance. We now expect capacity to increase roughly 12 percent year-over-three year. We expect these capacity adjustments will help drive TRASM increases of nearly 20 percent during the second quarter. Additionally, I have been encouraged by improvements in operational performance the past several weeks. While we are mindful of future slowdowns in the economy as the Fed begins its necessary tightening, we are bullish our historic industry leading performances in difficult times will continue as well as the substantial opportunities we see for new routes and continued growth in the coming years.

"In closing I want to thank our more than five thousand team members for their efforts throughout the quarter. The operating environment continues to be a challenge. In recognition of their hard work, we approved a special bonus accrual consistent with levels paid to our team members during 2019, despite not meeting internal profit-sharing targets during the quarter."

• Loss before income taxes of $10.6 million
• GAAP operating income of $7.2 million, yielding an operating margin of 1.4 percent
• Achieved a 21 percent operating margin during the month of March, despite a more than 40 percent increase in the average fuel cost per gallon throughout the quarter
• Consolidated EBITDA⁽²⁾ of $53.5 million, yielding an EBITDA margin of 10.7 percent
• Total operating revenue was $500.1 million, up 10.7 percent year over three-year
• Scheduled capacity up 18.7 percent year over three-year
• Continued sequential improvement in load factor, with March loads exceeding March of 2019, the first load factor improvement over 2019 since the onset of the pandemic
• Fixed fee revenue of $13.4 million, up 26.6 percent year over three-year, with March being the third highest performing month for fixed fee revenue in company history
• TRASM down 6.3 percent for the quarter versus 2019, but March TRASM in excess of March of 2019 on capacity growth of 14.4 percent
• Total average fare of $131.15, up 2.7 percent from the first quarter of 2019
• Total average fare - third party products of $6.06, up 21.0 percent year over three-year driven by Allways Allegiant World Mastercard strength
• 131 percent growth in Allways Allegiant World Mastercard cash compensation during the quarter, as compared with 2019
• 11 of the past 12 months have been top performing months for new cardholder acquisitions with March activity a program record of 18 thousand new cardholders
•  Operating CASM, excluding fuel and recognition bonus ^{(1) (2)} of 6.95 cents, up 4.2 percent when compared with the first quarter of 2019, driven primarily by costs related to increased irregular operations
• Expanded the network by announcing 12 new routes and one new aircraft base in Provo, Utah, bringing total routes served to 617 and 132 cities

• Total cash and investments at March 31, 2022 were $1.2 billion
• $176.0 million in total operating cash inflow for the first quarter 2022
• Total debt at March 31, 2022 was $1.8 billion
• Net debt at March 31, 2022 was $563.0 million, a more than 40 percent reduction from pre-pandemic levels
• Debt principal payments of $37.3 million during the quarter
• Air traffic liability at March 31, 2022 was $453 million
• Balance related to future scheduled flights is $394 million
• Balance related to travel vouchers issued for future use is $59 million

• First quarter capital expenditures of $74 million, which included $56 million for aircraft pre-delivery deposits, used aircraft induction costs, and other related costs, as well as $18 million in other airline capital expenditures
• First quarter deferred heavy maintenance spend was $7 million

• Updated budget to $618 million, primarily due to inflationary pressures on materials as well as supply chain delays
• Anticipated opening second quarter 2023
• Total project spend as of March 31, 2022 was $275 million with $87 million funded by debt and the remaining $188 million funded by Allegiant
• First quarter capital expenditures were $64 million, of which 100 percent was funded by debt

Aircraft Fleet Plan by End of Period

• Updated fleet count shifting three aircraft inductions into 2023 due to labor and supply chain constraints

The table above is provided based on the company's current plans and is subject to change

Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. ET Wednesday, May 4 to discuss its first quarter 2022 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.

Las Vegas-based Allegiant (NASDAQ: ALGT) is an integrated travel company with an airline at its heart, focused on connecting customers with the people, places and experiences that matter most. Since 1999, Allegiant Air has linked travelers in small-to-medium cities to world-class vacation destinations with all-nonstop flights and industry-low average fares. Today, Allegiant's fleet serves communities across the nation, with base airfares less than half the cost of the average domestic round trip ticket. For more information, visit us at Allegiant.com. Media information, including photos, is available at http://gofly.us/iiFa303wrtF.

Media Inquiries: mediarelations@allegiantair.com

Investor Inquiries: 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 airline operations, revenue and expenses, available seat mile growth, expected capital expenditures, the timing of aircraft acquisitions and retirements, the number of contracted aircraft to be placed in service in the future, our ability to consummate announced aircraft transactions, number of possible future markets that may be served, the implementation of a joint alliance with Viva Aerobus, the development of our Sunseeker Resort, as well as other information concerning future results of operations, business strategies, financing plans, industry environment and potential growth opportunities. 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," "guidance," "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 impact and duration of the COVID-19 pandemic on airline travel and the economy, liquidity issues resulting from the effect of the COVID-19 pandemic on our business, restrictions imposed on us as a result of accepting grants and loans under the payroll support programs, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on third parties to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed , the effect of economic conditions on leisure travel, debt covenants and balances, the ability to finance aircraft to be acquired, the ability to obtain necessary U.S. and Mexican government approvals to implement the announced alliance with Viva Aerobus and to otherwise prepare to offer international service, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the possible loss of key personnel, economic and other conditions in markets in which we operate, the ability to successfully develop a resort in Southwest Florida, governmental regulation, increases in maintenance costs 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:

Appendix A
Non-GAAP Presentation
Three Months Ended March 31, 2022 and 2021
(Unaudited)

Net loss excluding recognition bonus and net loss per share excluding recognition bonus both eliminate the effect of a recognition bonus awarded despite not meeting internal profit-sharing targets. As such, these are non-GAAP financial measures.

EBITDA, as presented in this press release, is a supplemental measure of our performance that is not required by, or presented in accordance with, accounting principles generally accepted in the United States ("GAAP"). It is not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to net income or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.

We define "EBITDA" as earnings before interest, taxes, depreciation and amortization. We caution investors that amounts presented in accordance with this definition may not be comparable to similar measures disclosed by other issuers, because not all issuers and analysts calculate EBITDA in the same manner.

We use EBITDA to evaluate our operating performance and liquidity and this is among the primary measures used by management for planning and forecasting of future periods. We believe the presentation of EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by management and makes it easier to compare our results with other companies that have different financing and capital structures. EBITDA has important limitations as an analytical tool. These limitations include the following:

• EBITDA does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments to purchase capital equipment;
• EBITDA does not reflect interest expense or the cash requirements necessary to service principal or interest payments on our debt;
• although depreciation and amortization are non-cash charges, the assets that we currently depreciate and amortize will likely have to be replaced in the future, and EBITDA does not reflect the cash required to fund such replacements; and
• other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

Presented below is a quantitative reconciliation of EBITDA to the most directly comparable GAAP financial performance measure, which we believe is net income (loss). We believe the presentation of EBITDA is relevant and useful for investors because it allows them to better compare our results to other airlines.

In addition to EBITDA as defined above, we have included a separate EBITDA as defined by certain credit agreements. This measurement of EBITDA adjusts for Sunseeker net loss, stock compensation expense, amortization of debt issuance costs, (gain)/loss on disposal of assets, tax provision - in excess of cash paid, special non-recurring items, and other items.

The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of non-GAAP financial measures in this press release 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 measure, which is net loss and net loss per share and a reconciliation of the non-GAAP measures to the most comparable GAAP measure. Our utilization of non-GAAP measurements is not meant to be considered in isolation or as a substitute for operating income (loss), net income (loss) or other measures of financial performance prepared in accordance with GAAP. Our use of these non-GAAP measures may not be comparable to similarly titled measures employed by other companies in the airline and travel industry. The reconciliation of each of these measures to the most comparable GAAP measure for the periods is indicated below.

View original content to download multimedia:https://www.prnewswire.com/news-releases/allegiant-travel-company-first-quarter-financial-results-301539916.html

SOURCE Allegiant Travel Company