LAS VEGAS, May 12, 2020 /PRNewswire/ -- Allegiant
Travel Company (NASDAQ: ALGT) today reported the following
financial results for the first quarter 2020, as well as
comparisons to the prior year:
Consolidated
|
Three Months Ended
March 31,
|
Percent
Change
|
(unaudited) (in
millions, except per share amounts)
|
2020
|
|
2019
|
|
Total operating
revenue
|
$
|
409.2
|
|
|
$
|
451.6
|
|
(9.4)
|
%
|
Operating income
(loss)
|
(117.8)
|
|
|
91.1
|
|
(229.3)
|
|
Income (loss) before
income taxes
|
(130.7)
|
|
|
73.9
|
|
(276.9)
|
|
Net income
(loss)
|
(33.0)
|
|
|
57.1
|
|
(157.8)
|
|
Diluted earnings
(loss) per share
|
$
|
(2.08)
|
|
|
$
|
3.52
|
|
(159.1)
|
|
|
Consolidated -
adjusted
|
Three Months Ended
March 31,
|
Percent
Change
|
(unaudited) (in
millions, except per share amounts)
|
2020
|
|
2019
|
|
Adjusted operating
income(1)
|
$
|
55.1
|
|
|
$
|
91.1
|
|
(39.5)
|
|
Adjusted income
before income taxes(1)
|
42.2
|
|
|
73.9
|
|
(42.9)
|
|
Adjusted net
income(1)
|
33.3
|
|
|
57.1
|
|
(41.7)
|
|
Adjusted diluted
earnings per share (1)
|
$
|
2.05
|
|
|
$
|
3.52
|
|
(41.8)
|
|
|
|
|
Airline
only
|
Three Months Ended
March 31,
|
Percent
Change
|
(unaudited)
|
2020
|
|
2019
|
|
Airline operating
revenue (millions)(1)
|
$
|
404.7
|
|
|
$
|
448.3
|
|
(9.7)
|
%
|
Airline operating
income (millions)(1)
|
51.1
|
|
|
98.5
|
|
(48.1)
|
|
Airline operating
margin
|
12.6
|
%
|
|
22.0
|
%
|
(42.7)
|
|
Airline income before
income taxes (millions) (1)
|
$
|
38.8
|
|
|
$
|
81.5
|
|
(52.4)
|
|
Airline fully diluted
earnings per share(1)
|
$
|
1.89
|
|
|
$
|
3.98
|
|
(52.5)
|
|
|
|
|
|
|
Airline CASM ex fuel
(cents)(1)
|
6.51
|
|
|
6.40
|
|
1.7
|
|
(1)
Denotes a non-GAAP financial measure.
Refer to the Non-GAAP Presentation section within this document for
further information.
|
"The events that have unfolded over the last eight weeks are
truly unprecedented," stated Maurice J.
Gallagher, Jr., chairman and CEO of Allegiant Travel
Company. "We began to see the first signs of demand weakness at the
end of February, with a steep downward demand trajectory by
mid-March. Despite March revenues down nearly 40 percent year over
year, we finished the quarter with airline-only EPS of $1.89 per share and an airline-only operating
margin of 12.6 percent. These numbers are a true testament to the
flexibility of our model and our ability to right-size capacity
quickly and seamlessly.
"Since the onset of the pandemic, we have been laser-focused on
ensuring the health and safety of our employees and passengers.
Enhancing our cleaning procedures, adding health precautions and
employing smart principles of social distancing, we recently
launched our Going the Distance for Health and Safety
initiative as a resource to customers, the details of which can be
found in the bullets below. It outlines a set of principles which
are as much a part of our DNA as flying from small cities to
vacation destinations. These principles are designed to evolve with
travel needs, as a permanent part of our operation.
"In addition to health and safety enhancements, we took early
and decisive action to preserve liquidity and reduce cash burn.
These measures, outlined below, have brought immediate and
significant progress over the past few weeks. Most notably, more
than 25 percent of our team members have strengthened these efforts
by participating in voluntary leave and pay reduction programs. I
am humbled by their generosity and personal investment in our
company. These investments will help preserve jobs and the company
alike. The effect of these combined liquidity preservation measures
has reduced daily cash burn to roughly $2.1
million a day, in a matter of a few weeks.
"As previously reported, we will receive $172 million in payroll support under the CARES
Act, of which $86 million has been
received to date, with the remainder being paid in installments. In
addition, we will receive nearly $100
million in federal income tax refunds during the second
quarter of 2020 related to favorable net operating loss (NOL)
carryback rules as outlined by the CARES Act. We anticipate another
projected $100 million or more early
next year related to 2020 expected losses and capital expenditures.
I look at this very material $200
million plus in federal income tax refunds as our 'equity'
offering other carriers are currently pursuing in the market. With
these refunds and our aggressive cost and capital expenditure
savings, we believe we have sufficient liquidity going forward.
Should we project a need for additional funds, we have up to
$276 million of dry powder available
through the end of September from the CARES Act loan program.
"Near term is painful and will continue to be painful. But I
believe our model, given the current economic impact, is
best-suited to withstand the brutal impact from this pandemic. In
the near term, we will most likely shrink our fleet by as many as
25 aircraft. These aircraft, particularly the motors, will 'seed'
our near and long-term ability to materially reduce planned engine
overhauls, beginning in 2020 and for years thereafter. Going
forward, the market will favor buyers, not sellers as has been the
case the past few years. We will be able to use our expertise, as
we did with the MD80s, to purchase aircraft and associated parts at
what we believe will be substantial discounts to recent prices. We
will 'manage' planned overhauls via our balance sheet versus
expensive overhaul shop visits. Another substantial advantage is
that we do not have meaningful aircraft purchase commitments
in 2021 and beyond. The combination of our retirements and the
greatly reduced cost of used aircraft and their motors is a key
part of both our near-term liquidity benefit and long-term - 2021
and beyond - reduced capital requirements for our growth.
Finally, I am reminded of a saying I used with our MD80s, namely
'we were a non-capital-intensive business in a capital-intensive
industry.'
"Going forward, we are prepared to make tough choices and take
any steps necessary to adapt and right-size our cost structure.
Since the outset of the COVID-19 crisis, we have taken proactive
measures to adjust quickly and aggressively to meet the demands of
this challenging and changing environment. With that said, our
low-cost business model has proven its resilience during past
economic downturns, and we expect it will support our ability to
rebound here as well. The Allegiant model, based on simplicity,
flexibility and optionality is well-suited for these difficult
environments."
Covid-19 Responses - Going the Distance for Health and
Safety
- Enhanced aircraft cleaning, including regular treatment
with an advanced antimicrobial protectant that kills viruses, germs
and bacteria on contact for 14 days. Our treatment schedule, along
with regular cleaning processes, far exceeds manufacturer
guidelines
- Social distancing principles at check-in, boarding and
on-board, including limiting adjacent row seating and allowing only
customers on the same itinerary to utilize middle seats as
practicable
- Volatile Organic Compound (VOC) air filters that ensure the air
quality on our planes exceeds HEPA standards
- Complimentary health and safety kits, which include a
single-use face mask, a pair of non-latex disposable gloves and
cleaning wipes, provided to all of our customers
- Crew members wear face masks on board and gloves during
in-flight service
-
- All in-flight service offerings consist of prepackaged, factory
sealed goods
- In-flight service frequency has been reduced to once per
flight
Network and Customer Experience
- Reduced April capacity by 87.4 percent
-
- Evaluating May and June and expect significant capacity
reductions based on diminished leisure demand trends
- Waived change and cancellation fees for all customers
for future travel
- Extended expiry on credit vouchers to two years
Cash Outlay Reduction - as much as $375 million in cash outlay reductions to our
initial 2020 plan
- Suspended all stock buybacks and dividends
- Executives reduced salaries by 50 percent and Board
members are foregoing cash compensation
-
- Neither the chairman and CEO nor the president draw a
salary
- Enacted a hiring freeze and offering voluntary
leave
-
- More than 1,100 team members are currently participating in
some form of pay reduction program
- Suspended nearly all contractor positions, subscriptions,
non-essential training and travel
- Suspended all non-essential capital expenditures including
non-airline subsidiaries
- Extended payment terms and renegotiating contracts with
vendors
CARES Act Relief
- Payroll support in the amount of $171.9 million comprised of $150.3 million in direct grants and a
$21.6 million low-interest, unsecured
10-year loan.
-
- Received first installment of $86
million with remainder expected over the next three
months
- Warrants will be issued to the U.S. Department of the Treasury
to purchase 25,898 shares at a strike price of $83.33 per share
- Federal income tax refund of $94
million related to 2018 and 2019 net operating loss
carrybacks
- Anticipated federal income tax refund of $100 million expected to be
received between March and May 2021 for 2020 net
operating loss carryback
- Submitted application under the Loan Program with the option to
access up to $276 million secured
loan through September 2020
Balance Sheet, Cash and Liquidity
- Total cash and investments at March 31st and April 30th were $464 million and $517
million(1), respectively
- Repriced Term Loan B facility with a 150 basis points rate
reduction and upsized by $100
million in February
- Obtained financing of $31
million in April secured by two A320 aircraft
- Current 2Q20 cash burn is expected to be $2.1 million per day(2)
-
- Cash burn assumes gross bookings for 2Q20 average $750 thousand per day
- 3Q20 cash burn is expected to be $1.5
million per day assuming gross bookings average $750 thousand per day
- Further sources of liquidity expected during the second quarter
around $163 million,
including:
-
- Additional payroll support from CARES Act in the amounts of
$68.7 million
- Federal income tax refund of $94
million related to net operating losses from 2018 and
2019
- Reduced full year capital expenditures by $260 million
-
- $100 million reduction in airline
capital expenditures
-
- Expect all remaining 2020 aircraft and engine acquisitions to
be financed
- $160 million reduction in
non-airline capital expenditures
- We currently have 28 unencumbered aircraft and 8
unencumbered spare engines with an appraised value of roughly
$431 million
- Air traffic liability at March 31
and April 30 was $304 million and $305
million, respectively
-
- March 31 and April 30 balance related to future scheduled
flights are $137 million and
$95 million
- March 31 and April 30 balance related to travel vouchers
issued for future use are $167
million and $210 million
(1) April 30 ending cash
balance of $517 million includes the
first installment payment received under the CARES Act Payroll
Support Program of $86
million.
(2) Daily cash burn defined as cash from operations less debt
and rent obligations and capital expenditure outflows excluding
aircraft and engine acquisitions as they are expected to be
financed. Excludes impact of CARES Act Payroll Support Program
funding.
Non-airline Subsidiaries
- Nearly all non-airline subsidiary spend has been
suspended indefinitely
- COVID-19 triggered impairment review and as a result of
the uncertainty moving forward, the company recognized a total
impairment of $163 million over its
non-airline subsidiaries:
-
- Sunseeker impairment of $137
million - suspended construction indefinitely
-
- No plans for future capital commitments from Allegiant
- Exploring potential strategic partnerships
- Nonstop impairment of $18
million - reorganized to be self-sufficient, not requiring
future funding from the airline
-
- Warren location temporarily closed - produced positive cash
flow prior to closing
- Permanently closed Utah
locations
- Teesnap impairment of $8
million - reorganized to be self-sufficient, not requiring
future funding from the airline
-
- Remains an asset held for sale
First quarter 2020 results
- TRASM decreased 13.4 percent
-
- March capacity cut 23.3 percent and down 12.2 percent year over
year
- Airline only CASM, excluding fuel increased 1.7 percent
on capacity growth of 4.0 percent
-
- CASM, excluding fuel had been on track to be down 2.0 percent
on capacity growth of 16.0 percent prior to COVID-19 scheduling
changes
Allegiant Travel Company will host a conference call with
analysts at 4:30 p.m. ET Tuesday, May
12 to discuss its first quarter 2020 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.
In connection with the COVID-19 pandemic, we have taken
advantage of the SEC release allowing us to delay the filing of our
Form 10-Q for the first quarter 2020 and our proxy statement. We
now expect to file our Form 10-Q by May 31,
2020 and our proxy statement the week of June 8, 2020. With this delay, we are now
planning to hold our annual stockholders meeting on Tuesday, August 4, 2020.
Allegiant Travel Company
Las Vegas-based Allegiant
(NASDAQ: ALGT) is an integrated travel company with an airline at
its heart, focused on connecting customers with premier leisure
experiences - from vacations to hometown family entertainment.
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 all-Airbus fleet serves communities
across the nation, with base airfares less than half the cost of
the average domestic roundtrip 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 and
capacity, the efficacy of cost saving measures, future
expenditures, our ability to access additional funds from the
Treasury, cash burn, aircraft financings,
expected capital expenditures, 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, 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 under contract,
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 and finance 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:
Allegiant Travel
Company
|
Consolidated
Statements of Income
|
(in thousands,
except per share amounts)
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
Percent
|
|
2020
|
|
2019
|
|
change
|
OPERATING
REVENUE:
|
|
|
|
|
|
Passenger
revenue
|
$
|
378,911
|
|
|
$
|
419,977
|
|
|
(9.8)
|
|
Third party
products
|
15,976
|
|
|
17,141
|
|
|
(6.8)
|
|
Fixed fee contract
revenue
|
8,919
|
|
|
10,575
|
|
|
(15.7)
|
|
Other
revenue
|
5,375
|
|
|
3,929
|
|
|
36.8
|
|
Total operating
revenue
|
409,181
|
|
|
451,622
|
|
|
(9.4)
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
Salary and
benefits
|
112,646
|
|
|
119,411
|
|
|
(5.7)
|
|
Aircraft
fuel
|
88,813
|
|
|
99,682
|
|
|
(10.9)
|
|
Depreciation and
amortization
|
43,699
|
|
|
36,182
|
|
|
20.8
|
|
Station
operations
|
40,999
|
|
|
38,965
|
|
|
5.2
|
|
Maintenance and
repairs
|
21,795
|
|
|
22,824
|
|
|
(4.5)
|
|
Sales and
marketing
|
18,455
|
|
|
20,926
|
|
|
(11.8)
|
|
Aircraft lease
rental
|
962
|
|
|
—
|
|
|
NM
|
Other
|
26,717
|
|
|
22,554
|
|
|
18.5
|
|
Special
charges
|
172,900
|
|
|
—
|
|
|
NM
|
Total operating
expense
|
526,986
|
|
|
360,544
|
|
|
46.2
|
|
OPERATING INCOME
(LOSS)
|
(117,805)
|
|
|
91,078
|
|
|
(229.3)
|
|
OTHER (INCOME)
EXPENSE:
|
|
|
|
|
|
Interest
expense
|
18,153
|
|
|
18,083
|
|
|
0.4
|
|
Capitalized
interest
|
(4,067)
|
|
|
(1,503)
|
|
|
170.6
|
|
Interest
income
|
(2,311)
|
|
|
(3,201)
|
|
|
(27.8)
|
|
Loss on
extinguishment of debt
|
1,222
|
|
|
3,677
|
|
|
(66.8)
|
|
Other, net
|
(76)
|
|
|
103
|
|
|
(173.8)
|
|
Total other
expense
|
12,921
|
|
|
17,159
|
|
|
(24.7)
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
(130,726)
|
|
|
73,919
|
|
|
(276.9)
|
|
INCOME TAX PROVISION
(BENEFIT)
|
(97,717)
|
|
|
16,795
|
|
|
(681.8)
|
|
NET INCOME
(LOSS)
|
$
|
(33,009)
|
|
|
$
|
57,124
|
|
|
(157.8)
|
|
Earnings (loss) per
share attributable to common shareholders(1):
|
|
|
|
|
|
Basic
|
($2.08)
|
|
|
$3.52
|
|
|
(159.1)
|
|
Diluted
|
($2.08)
|
|
|
$3.52
|
|
|
(159.1)
|
|
Weighted average
shares outstanding used in computing earnings per share
attributable to common shareholders(1):
|
|
|
|
|
|
Basic
|
15,952
|
|
|
16,011
|
|
|
(0.4)
|
|
Diluted
|
15,952
|
|
|
16,013
|
|
|
(0.4)
|
|
|
|
|
|
NM - Not
meaningful
|
|
|
(1) The Company's
unvested restricted stock awards are considered participating
securities as they receive non-forfeitable rights to cash dividends
at the same rate as common stock. The Basic and Diluted earnings
per share calculations for the periods presented reflect the
two-class method mandated by ASC Topic 260, "Earnings Per Share."
The two-class method adjusts both the net income and the shares
used in the calculation. Application of the two-class method did
not have a significant impact on the Basic and Diluted earnings per
share for the periods presented.
|
|
Allegiant Travel
Company
|
Operating
Statistics
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
Percent
|
|
2020
|
|
2019
|
|
change
(1)
|
OPERATING
STATISTICS
|
|
|
|
|
|
Total system
statistics:
|
|
|
|
|
|
Passengers
|
3,175,450
|
|
|
3,450,278
|
|
|
(8.0)
|
|
Available seat miles
(ASMs) (thousands)
|
4,067,671
|
|
|
3,910,239
|
|
|
4.0
|
|
Operating expense per
ASM (CASM) (cents)
|
12.96
|
|
|
9.22
|
|
|
40.6
|
|
Fuel expense per ASM
(cents)
|
2.18
|
|
|
2.55
|
|
|
(14.5)
|
|
Operating CASM,
excluding fuel (cents)
|
10.77
|
|
|
6.67
|
|
|
61.5
|
|
Airline only
operating CASM, excluding fuel (cents)
|
6.51
|
|
|
6.40
|
|
|
1.7
|
|
ASMs per gallon of
fuel
|
85.7
|
|
|
84.1
|
|
|
1.9
|
|
Departures
|
26,312
|
|
|
25,200
|
|
|
4.4
|
|
Block
hours
|
62,123
|
|
|
59,819
|
|
|
3.9
|
|
Average stage length
(miles)
|
895
|
|
|
904
|
|
|
(1.0)
|
|
Average number of
operating aircraft during period
|
93.5
|
|
|
79.6
|
|
|
17.5
|
|
Average block hours
per aircraft per day
|
7.3
|
|
|
8.3
|
|
|
(12.0)
|
|
Full-time equivalent
employees at end of period
|
4,436
|
|
|
4,067
|
|
|
9.1
|
|
Fuel gallons consumed
(thousands)
|
47,479
|
|
|
46,474
|
|
|
2.2
|
|
Average fuel cost per
gallon
|
$
|
1.87
|
|
|
$
|
2.14
|
|
|
(12.6)
|
|
Scheduled service
statistics:
|
|
|
|
|
|
Passengers
|
3,154,606
|
|
|
3,421,538
|
|
|
(7.8)
|
|
Revenue passenger
miles (RPMs) (thousands)
|
2,925,482
|
|
|
3,191,045
|
|
|
(8.3)
|
|
Available seat miles
(ASMs) (thousands)
|
3,964,009
|
|
|
3,802,132
|
|
|
4.3
|
|
Load
factor
|
73.8
|
%
|
|
83.9
|
%
|
|
(10.1)
|
|
Departures
|
25,484
|
|
|
24,344
|
|
|
4.7
|
|
Block
hours
|
60,346
|
|
|
57,963
|
|
|
4.1
|
|
Total passenger
revenue per ASM (TRASM) (cents)(2)
|
9.96
|
|
|
11.50
|
|
|
(13.4)
|
|
Average fare -
scheduled service(3)
|
$
|
64.02
|
|
|
$
|
69.64
|
|
|
(8.1)
|
|
Average fare -
air-related charges(3)
|
$
|
56.10
|
|
|
$
|
53.10
|
|
|
5.6
|
|
Average fare - third
party products
|
$
|
5.06
|
|
|
$
|
5.01
|
|
|
1.0
|
|
Average fare -
total
|
$
|
125.18
|
|
|
$
|
127.75
|
|
|
(2.0)
|
|
Average stage length
(miles)
|
900
|
|
|
908
|
|
|
(0.9)
|
|
Fuel gallons consumed
(thousands)
|
46,105
|
|
|
45,068
|
|
|
2.3
|
|
Average fuel cost per
gallon
|
$
|
1.87
|
|
|
$
|
2.13
|
|
|
(12.2)
|
|
Percent of sales
through website during period
|
93.1
|
%
|
|
93.6
|
%
|
|
(0.5)
|
|
Other
data:
|
|
|
|
|
|
Rental car days
sold
|
481,046
|
|
|
471,598
|
|
|
2.0
|
|
Hotel room nights
sold
|
92,004
|
|
|
105,015
|
|
|
(12.4)
|
|
|
|
(1) Except load
factor and percent of sales through website, which is percentage
point change.
|
|
(2) Various
components of this measurement do not have a direct correlation to
ASMs. These figures are provided on a per ASM basis to facilitate
comparison with airlines reporting revenues on a per ASM
basis.
|
|
(3) Reflects
division of passenger revenue between scheduled service and
air-related charges in Company's booking path.
|
|
Summary Balance
Sheet
|
|
Unaudited
(millions)
|
3/31/2020
|
|
12/31/2019
|
|
Percent
Change
|
|
(unaudited)
|
|
|
|
|
Unrestricted cash and
investments
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
138.4
|
|
|
$
|
121.9
|
|
|
13.5
|
%
|
Short-term
investments
|
314.9
|
|
|
335.9
|
|
|
(6.3)
|
|
Long-term
investments
|
11.0
|
|
|
15.5
|
|
|
(29.0)
|
|
Total unrestricted
cash and investments
|
464.3
|
|
|
473.3
|
|
|
(1.9)
|
|
Debt
|
|
|
|
|
|
Current maturities of
long-term debt and finance lease obligations, net of related
costs
|
223.6
|
|
|
173.3
|
|
|
29.0
|
|
Long-term debt and
finance lease obligations, net of current maturities and related
costs
|
1,264.4
|
|
|
1,248.6
|
|
|
1.3
|
|
Total debt
|
1,488.0
|
|
|
1,421.9
|
|
|
4.6
|
|
Total Allegiant
Travel Company shareholders' equity
|
809.9
|
|
|
883.6
|
|
|
(8.3)
|
|
|
|
Summary Cash
Flow
|
|
|
Three Months Ended
March 31,
|
|
Percent
|
Unaudited
(millions)
|
2020
|
|
2019
|
|
Change
|
Cash provided by
operating activities
|
$
|
106.3
|
|
|
$
|
160.1
|
|
|
(33.6)
|
%
|
Changes in air
traffic liability
|
53.9
|
|
|
64.0
|
|
|
(15.8)
|
|
Changes in working
capital, ex air traffic liability
|
(189.5)
|
|
|
(16.1)
|
|
|
NM
|
Purchase of property
and equipment, including capitalized interest
|
134.5
|
|
|
122.6
|
|
|
9.7
|
|
Cash dividends paid
to shareholders
|
11.5
|
|
|
11.4
|
|
|
0.9
|
|
Proceeds from the
issuance of long-term debt
|
100.0
|
|
|
494.0
|
|
|
(79.8)
|
|
Principal payments on
long-term debt & finance lease obligations
|
34.4
|
|
|
386.3
|
|
|
(91.1)
|
|
EPS Calculation
The following table sets forth the computation of net income per
share, on a basic and diluted basis, for the periods indicated
(share count and dollar amounts other than per-share amounts in
table are in thousands):
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Basic:
|
|
|
|
Net income
(loss)
|
$
|
(33,009)
|
|
|
$
|
57,124
|
|
Less net income
allocated to participating securities
|
(236)
|
|
|
(799)
|
|
Net income (loss)
attributable to common stock
|
$
|
(33,245)
|
|
|
$
|
56,325
|
|
Earnings (loss) per
share, basic
|
$
|
(2.08)
|
|
|
$
|
3.52
|
|
Weighted-average
shares outstanding
|
15,952
|
|
|
16,011
|
|
Diluted:
|
|
|
|
Net income
(loss)
|
$
|
(33,009)
|
|
|
$
|
57,124
|
|
Less net income
allocated to participating securities
|
(236)
|
|
|
(798)
|
|
Net income (loss)
attributable to common stock
|
$
|
(33,245)
|
|
|
$
|
56,326
|
|
Earnings (loss) per
share, diluted
|
$
|
(2.08)
|
|
|
$
|
3.52
|
|
Weighted-average
shares outstanding
|
15,952
|
|
|
16,011
|
|
Dilutive effect of
stock options and restricted stock
|
16
|
|
|
31
|
|
Adjusted
weighted-average shares outstanding under treasury stock
method
|
15,968
|
|
|
16,042
|
|
Participating
securities excluded under two-class method
|
(16)
|
|
|
(29)
|
|
Adjusted
weighted-average shares outstanding under two-class
method
|
15,952
|
|
|
16,013
|
|
Appendix A
Non-GAAP
Presentation
Three Months Ended March 31, 2020 and
2019
(Unaudited)
Adjusted operating income, adjusted income before income taxes,
adjusted net income and adjusted diluted earnings per share (also
referred to as diluted earnings per share, excluding special items
and adjusted for tax), all eliminate the effect of the non-cash
impairment charge for the non-airline subsidiaries as well as an
airline special expense, related directly to COVID 19, which is not
reflective of our ongoing operating performance. The adjusted
diluted earnings per share also ignores a one-time tax benefit
allowed under the CARES Act. As such, all of these are
non-GAAP financial measures.
In addition, airline operating revenue, airline operating
income, airline income before income taxes, airline net income,
airline operating expense, and airline fully diluted earnings per
share (also referred to as airline only fully diluted earnings per
share, adjusted for tax) all eliminate the effects of non-airline
operating activity, which is not reflective of the airline
operating performance. Airline earnings before interest, taxes,
depreciation and amortization ("Airline EBITDA") eliminates the
effects of non-airline operating activity and other items. Airline
only diluted earnings per share also ignores a one-time tax benefit
allowed under the CARES Act, but does reflect an assumed tax rate
on the airline only income before taxes. As such, all of these
are non-GAAP financial measures.
EBITDA, as presented in this press release, and the various
airline only metrics disclosed, are supplemental measures of our
performance that are not required by, or presented in accordance
with, accounting principles generally accepted in the United States ("GAAP"). They are not
measurements 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 it is among the primary measures used by management
for planning and forecasting of future periods. We believe the
presentation of this measure 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. We believe the presentation of
EBITDA and the airline only measures is relevant and useful for
investors because it allows them to better gauge the performance of
the airline and to 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 losses on impairment, Sunseeker
calculation of net income/(loss), stock compensation expense,
amortization of debt issuance costs, (gain)/loss on disposal of
assets, tax provision - in excess of cash paid, and special
non-recurring 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
operating revenue, operating income, net income, operating
expenses, and diluted earnings 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, net income 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.
Reconciliation of
Non-GAAP Financial Measures
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Reconciliation of
adjusted operating income (loss) (millions)
|
|
|
|
Operating income
(loss) as reported (GAAP)
|
$
|
(117.8)
|
|
$
|
91.1
|
Special
items:
|
|
|
|
Impairment of non-airline
subsidiaries
|
163.4
|
|
—
|
Airline special
item expense
|
9.5
|
|
—
|
Adjusted operating
income (loss) (1)
|
55.1
|
|
91.1
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Reconciliation of
adjusted income (loss) before income taxes
(millions)
|
|
|
|
Income (loss) before
income taxes as reported (GAAP)
|
$
|
(130.7)
|
|
$
|
73.9
|
Special
items:
|
|
|
|
Impairment of non-airline
subsidiaries
|
163.4
|
|
—
|
Airline special item
expense
|
9.5
|
|
—
|
Adjusted income
(loss) before income taxes (1)
|
42.2
|
|
73.9
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Reconciliation of
adjusted net income (millions)
|
|
|
|
Adjusted income
(loss) before income taxes (per calculation in previous table)
(1)
|
$
|
42.2
|
|
$
|
73.9
|
Adjusted income tax
provision (1) (2)
|
8.9
|
|
16.8
|
Adjusted net income
excluding special items and adjusted for tax
(1)
|
33.3
|
|
57.1
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Reconciliation of
adjusted diluted earnings (loss) per share
|
|
|
|
Adjusted net income
excluding special items and adjusted for tax (millions) (per
calculation in previous table) (1)
|
$
|
33.3
|
|
$
|
57.1
|
|
|
|
|
Diluted shares used
for computation (thousands) (3)
|
15,972
|
|
16,013
|
|
|
|
|
Diluted earnings
(loss) per share as reported (GAAP)
|
(2.08)
|
|
3.52
|
Adjusted fully
diluted earnings per share (1)
|
2.05
|
|
3.52
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Reconciliation of
airline operating CASM excluding fuel (millions, unless otherwise
noted)
|
|
|
|
Consolidated
operating expense (GAAP)
|
$
|
527.0
|
|
$
|
360.5
|
Less aircraft fuel
expense
|
88.8
|
|
99.7
|
Less non-airline
operating expense (1)
|
173.4
|
|
10.7
|
Total airline
operating expense less fuel expense (1)
|
264.8
|
|
250.1
|
|
|
|
|
System available seat
miles
|
4,067.7
|
|
3,910.2
|
Cost per available
seat mile (cents) as reported
|
12.96
|
|
9.22
|
Cost per available
seat mile excluding fuel and non-airline operating expense (cents)
(1)
|
6.51
|
|
6.40
|
|
Three Months Ended
March
31,
|
|
Trailing Twelve
Months
Ended March 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
airline operating revenue, operating income (loss), net income
(loss), and EBITDA (millions, unless otherwise
noted)
|
|
|
|
|
|
|
|
Operating revenue as
reported (GAAP)
|
$
|
409.2
|
|
|
$
|
451.6
|
|
|
$
|
1,798.5
|
|
|
$
|
1,693.6
|
|
Non-airline operating
revenue (1)
|
4.5
|
|
|
3.3
|
|
|
19.6
|
|
|
10.4
|
|
Airline operating
revenue (1)
|
404.7
|
|
|
448.3
|
|
|
1,778.9
|
|
|
1,683.2
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) as reported (GAAP)
|
(117.8)
|
|
|
91.1
|
|
|
155.1
|
|
|
254.6
|
|
Non-airline operating
loss (1)
|
(168.9)
|
|
|
(7.4)
|
|
|
(186.3)
|
|
|
(17.8)
|
|
Airline operating
income (1)
|
51.1
|
|
|
98.5
|
|
|
341.4
|
|
|
272.4
|
|
Airline operating
margin
|
12.6
|
%
|
|
22.0
|
%
|
|
19.2
|
%
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
Net income (loss) as
reported (GAAP)
|
(33.0)
|
|
|
57.1
|
|
|
142.0
|
|
|
163.7
|
|
Non-airline net loss
(1)
|
(169.5)
|
|
|
(7.6)
|
|
|
(188.4)
|
|
|
(18.0)
|
|
Airline net income
(1)
|
136.5
|
|
|
64.7
|
|
|
330.4
|
|
|
181.7
|
|
|
|
|
|
|
|
|
|
Airline net income
(1)
|
136.5
|
|
|
64.7
|
|
|
330.4
|
|
|
181.7
|
|
Airline interest
expense, net (1)
|
11.2
|
|
|
13.2
|
|
|
56.1
|
|
|
46.9
|
|
Airline income tax
provision (benefit) (1)
|
(97.7)
|
|
|
16.8
|
|
|
(45.4)
|
|
|
40.1
|
|
Airline depreciation
and amortization (1)
|
42.5
|
|
|
35.2
|
|
|
158.3
|
|
|
134.9
|
|
Airline loss on debt
extinguishment (1)
|
1.2
|
|
|
3.7
|
|
|
1.2
|
|
|
3.7
|
|
Airline EBITDA
(1)
|
93.7
|
|
|
133.6
|
|
|
500.6
|
|
|
407.3
|
|
Average number of
aircraft in service (#)
|
93.5
|
|
|
79.6
|
|
|
89.0
|
|
|
88.5
|
|
Airline EBITDA per
aircraft
|
1.0
|
|
|
1.7
|
|
|
5.6
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
Trailing Twelve
Months
Ended March 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
airline EBITDA to EBITDA as defined by certain credit agreements
(millions)
|
|
|
|
|
|
|
|
Airline
EBITDA(1)
|
$
|
93.7
|
|
|
$
|
133.6
|
|
|
$
|
500.6
|
|
|
$
|
407.3
|
|
Adjusting items
(4)
|
103.1
|
|
|
(5.7)
|
|
|
107.4
|
|
|
2.8
|
|
EBITDA as defined by
certain credit agreements (1)
|
196.8
|
|
|
127.9
|
|
|
608.0
|
|
|
410.1
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Reconciliation of
airline diluted earnings (loss) per share (millions, unless
otherwise noted)
|
|
|
|
Net income (loss) as
reported (GAAP)
|
$
|
(33.0)
|
|
|
$
|
57.1
|
|
Airline net income
(1)
|
136.5
|
|
|
64.7
|
|
Airline income tax
provision (benefit) (1)
|
(97.7)
|
|
|
16.8
|
|
Airline income before
income taxes (1)
|
38.8
|
|
|
81.5
|
|
Adjusted income tax
(2)
|
8.1
|
|
|
—
|
|
Adjusted airline net
income, adjusted for tax (1)
|
30.7
|
|
|
81.5
|
|
|
|
|
|
Diluted shares used
for computation (thousands) (3)
|
15,972
|
|
|
16,013
|
|
|
|
|
|
Diluted earnings
(loss) per share as reported (per share) (GAAP)
|
$
|
(2.08)
|
|
|
$
|
3.52
|
|
|
|
|
|
Airline fully diluted
earnings per share (per share) (1)
|
$
|
1.89
|
|
|
$
|
3.98
|
|
|
|
(1) Denotes
non-GAAP figure.
|
|
(2) Adjusted
income tax for 2020 utilizes a 21.0% effective rate.
|
|
(3) Approximately
20 thousand shares were added to the calculation as excluding them
would have been antidilutive
|
|
(4) Adjusting
items includes the following: loss on impairment, Sunseeker net
income/(loss), stock compensation expense, amortization of debt
issuance costs, (gain)/loss on disposal of assets, tax provision -
in excess of cash paid, and other special non-recurring
items.
|
|
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SOURCE Allegiant Travel Company