ST. GEORGE, Utah, Oct. 30, 2019 /PRNewswire/ --
Third Quarter Highlights:
- $1.79 earnings per diluted share,
up 14% from $1.57 in Q3 2018
- Pre-tax income of $119 million,
up from $110 million in Q3 2018; net
income of $91 million, up from
$83 million in Q3 2018
- Five new E175 aircraft scheduled for delivery in Q4 2019 under
a previously announced agreement
SkyWest, Inc. (NASDAQ: SKYW) ("SkyWest") today reported
financial and operating results for Q3 2019, including net income
of $91 million, or $1.79 per diluted share, compared to net income
of $83 million, or $1.57 per diluted share, for Q3 2018. Earnings
per diluted share increased 14% in Q3 2019 from Q3 2018, primarily
due to SkyWest's ongoing fleet transition. SkyWest has added 13 new
E175 aircraft and 11 new CRJ900 aircraft since Q3 2018 and reduced
aircraft ownership costs through early lease buyouts on 52 aircraft
executed in 2019.
Commenting on the results, Chip
Childs, Chief Executive Officer and President of SkyWest,
said, "We were pleased to deliver another solid quarter as we
continue executing our fleet strategy and remain positioned for
future opportunity based on strong demand for our product. I want
to thank our SkyWest professionals for their excellent work during
the quarter."
Financial Highlights
Revenue was $760 million in Q3 2019, down from $829 million in Q3 2018 due to the sale of
ExpressJet Airlines ("ExpressJet") in January 2019. Excluding ExpressJet revenue in Q3
2018, Q3 2019 revenue increased $71
million, primarily from adding 24 new aircraft since Q3
2018.
Operating expenses were $614
million in Q3 2019, down from $691
million in Q3 2018, also due to the sale of ExpressJet.
Excluding ExpressJet operating expenses in Q3 2018, Q3 2019
operating expenses increased $62
million, primarily from growth in operations as a result of
additional aircraft placed into service since Q3 2018.
Operational Update
Aircraft deliveries under
previously announced deals for Delta
New E175 aircraft to be financed and operated by SkyWest:
- Five aircraft scheduled for delivery in Q4 2019
- Six aircraft scheduled for delivery from early to mid-2020
New CRJ900 aircraft to be financed by Delta and operated by
SkyWest:
- One aircraft delivered in Q3 2019
- One aircraft scheduled for delivery in mid-2020
Used E175 aircraft financed by Delta and operated by
SkyWest:
- Six aircraft scheduled for in-service dates from early to
mid-2020
During Q3 2019, SkyWest acquired four CRJ900 aircraft under an
early lease buyout. These four aircraft are scheduled to expire
under SkyWest's flying agreement with Delta in 2020.
SkyWest also anticipates removing eight CRJ700s from its flying
agreement with Delta by the end of 2020. As previously announced,
SkyWest has an agreement with Delta to replace these 12 used CRJ
aircraft with 12 new aircraft. Following their agreement
expirations, SkyWest anticipates utilizing these 12 used aircraft
in various ways: placing them with other partners, using the
airframe/engines as spare parts and/or leasing the
airframes/engines to third parties.
Aircraft deliveries under previously announced deals for
American
SkyWest is scheduled to place ten used CRJ700 aircraft with
American throughout 2020 including seven used aircraft that SkyWest
anticipates acquiring from a third party and three used aircraft
that SkyWest expects to source through upcoming contract
expirations with another SkyWest partner.
Lease agreement with a third party for 29 CRJ700 aircraft
SkyWest has placed four of 29 CRJ700 aircraft under a previously
announced lease agreement with a third party for a ten-year term as
of September 30, 2019. SkyWest
anticipates the remaining aircraft will be placed under lease in
increments through mid-2020.
Capital and Liquidity
SkyWest had $572 million in cash
and marketable securities at September 30,
2019, up from $550 million at
June 30, 2019. During the third
quarter of 2019, SkyWest:
- Used $25 million to repurchase
stock under SkyWest's $250 million
share repurchase program
- Used $30 million to acquire four
CRJ900 aircraft under an early lease buyout
- Used $39 million to acquire spare
engines and $33 million for other
spare aircraft parts and maintenance assets
Total debt at September 30, 2019
was $3.0 billion, down from
$3.1 billion as of June 30, 2019.
About SkyWest
SkyWest, Inc. is the holding company for SkyWest Airlines and
SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has
a fleet of nearly 500 aircraft connecting millions of passengers
each month to over 250 destinations and provides commercial air
service in cities throughout North
America with nearly 2,300 daily flights. SkyWest Airlines
operates through partnerships with United Airlines, Delta Air
Lines, American Airlines and Alaska Airlines to carry more than 40
million passengers annually. Based in St.
George, Utah, SkyWest continues to set the standard for
excellence across the regional industry with exceptional value for
customers, shareholders and its more than 14,000 employees.
SkyWest will host its conference call to discuss third quarter
2019 results today, October 30, 2019,
at 2:30 p.m. Mountain Time. The
conference call number is 1-877-418-5293 for domestic callers,
1-866-605-3852 for Canada callers
and 1-412-717-9593 for other international callers. Please call up
to ten minutes in advance to ensure you are connected prior to the
start of the call. The conference call will also be available live
on the Internet at
https://www.webcaster4.com/Webcast/Page/1088/31930. This press
release and additional information regarding SkyWest, including
access information for the digital rebroadcast of the third quarter
2019 earnings call, participation at investor conferences, investor
presentations and monthly traffic statistic releases, can be
accessed at inc.skywest.com.
Forward Looking-Statements
In addition to historical information, this release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as
"forecasts," "expects," "intends," "believes," "anticipates,"
"estimates," "should," "likely" and similar expressions identify
forward-looking statements. Such statements include, but are not
limited to, statements about the continued demand for our product,
the potential benefits resulting from the sale of ExpressJet,
including reduced risk, increased flexibility, efficiency and
improved positioning for market opportunities, the scheduled
aircraft deliveries for SkyWest Airlines in upcoming years and the
related removal from service and/or placement into service of
certain aircraft, the expected terms, timing and benefits related
to SkyWest's leasing and joint venture transactions, as well as
SkyWest's future financial and operating results, plans,
objectives, expectations, estimates, intentions and outlook, and
other statements that are not historical facts. All forward-looking
statements included in this release are made as of the date hereof
and are based on information available to SkyWest as of such date.
SkyWest assumes no obligation to update any forward-looking
statements for any reason. Readers should note that many factors
could affect the future operating and financial results of SkyWest
and could cause actual results to vary materially from those
expressed in forward-looking statements set forth in this release.
These factors include, but are not limited to, the prospects of
entering into agreements with existing or other carriers to fly new
aircraft, ongoing negotiations between SkyWest and its major
partners regarding their contractual obligations, uncertainties
regarding operation of new aircraft, the ability to attract and
retain qualified pilots, the impact of regulatory issues such as
pilot rest rules and qualification requirements, and the ability to
obtain aircraft financing.
Actual operational and financial results of SkyWest will likely
also vary, and may vary materially, from those anticipated,
estimated, projected or expected for a number of other reasons,
including, in addition to those identified above: the challenges of
competing successfully in a highly competitive and rapidly changing
industry; developments associated with fluctuations in the economy
and the demand for air travel; the financial stability of SkyWest's
major partners and any potential impact of their financial
condition on the operations of SkyWest; fluctuations in flight
schedules, which are determined by the major partners for whom
SkyWest conducts flight operations; variations in market and
economic conditions; significant aircraft lease and debt
commitments; residual aircraft values and related impairment
charges; labor relations and costs; the impact of global
instability; rapidly fluctuating fuel costs, and potential fuel
shortages; the impact of weather-related or other natural disasters
on air travel and airline costs; aircraft deliveries; the ability
to attract and retain qualified pilots and other unanticipated
factors. Risk factors, cautionary statements and other conditions
which could cause SkyWest's actual results to differ materially
from management's current expectations are contained in SkyWest's
filings with the Securities and Exchange Commission, including its
most recent Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q.
SkyWest, Inc. and
Subsidiaries
|
Condensed
Consolidated Statements of Income
|
(Dollars and Shares
in Thousands, Except per Share Amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
OPERATING
REVENUES
|
|
|
|
|
|
|
|
|
Flying
agreements
|
$
738,838
|
|
$
816,057
|
|
$
2,164,173
|
|
$
2,377,659
|
|
Airport
customer service and other
|
21,457
|
|
13,218
|
|
64,199
|
|
40,531
|
|
Total operating
revenues
|
760,295
|
|
829,275
|
|
2,228,372
|
|
2,418,190
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Salaries, wages
and benefits
|
251,414
|
|
301,378
|
|
752,768
|
|
901,775
|
|
Aircraft
maintenance, materials and repairs
|
133,521
|
|
142,285
|
|
376,572
|
|
423,665
|
|
Depreciation
and amortization
|
92,795
|
|
86,088
|
|
272,929
|
|
246,386
|
|
Aircraft
fuel
|
31,063
|
|
30,258
|
|
87,570
|
|
87,208
|
|
Airport-related
expenses
|
27,808
|
|
25,655
|
|
89,237
|
|
80,852
|
|
Aircraft
rentals
|
17,676
|
|
36,827
|
|
55,840
|
|
119,015
|
|
Special
items
|
-
|
|
-
|
|
21,869
|
|
-
|
|
Other operating
expenses
|
59,577
|
|
68,859
|
|
184,634
|
|
206,511
|
|
Total operating
expenses
|
613,854
|
|
691,350
|
|
1,841,419
|
|
2,065,412
|
|
OPERATING
INCOME
|
146,441
|
|
137,925
|
|
386,953
|
|
352,778
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
Interest
income
|
3,542
|
|
2,283
|
|
11,081
|
|
5,692
|
|
Interest
expense
|
(31,606)
|
|
(31,440)
|
|
(96,884)
|
|
(86,485)
|
|
Other income,
net
|
361
|
|
1,157
|
|
47,367
|
|
3,470
|
|
Total other
expense, net
|
(27,703)
|
|
(28,000)
|
|
(38,436)
|
|
(77,323)
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
118,738
|
|
109,925
|
|
348,517
|
|
275,455
|
|
PROVISION FOR INCOME
TAXES
|
27,399
|
|
26,879
|
|
80,945
|
|
62,189
|
|
NET INCOME
|
$
91,339
|
|
$
83,046
|
|
$
267,572
|
|
$
213,266
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER
SHARE
|
$
1.80
|
|
$
1.60
|
|
$
5.24
|
|
$
4.10
|
|
DILUTED EARNINGS PER
SHARE
|
$
1.79
|
|
$
1.57
|
|
$
5.19
|
|
$
4.03
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares
|
|
|
|
|
|
|
|
|
Basic
|
50,746
|
|
52,039
|
|
51,111
|
|
52,002
|
|
Diluted
|
51,129
|
|
52,981
|
|
51,568
|
|
52,976
|
|
SkyWest, Inc. and
Subsidiaries
|
Summary of
Consolidated Balance Sheets
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
September
30,
2019
|
|
December
31,
2018
|
Cash and marketable
securities
|
$
571,506
|
|
$
689,329
|
Other current
assets
|
238,883
|
|
331,465
|
Total current
assets
|
810,389
|
|
1,020,794
|
Property and
equipment, net
|
5,245,792
|
|
4,963,732
|
Deposit on
aircraft
|
50,906
|
|
42,012
|
Other long-term
assets
|
490,572
|
|
286,674
|
Total
assets
|
$
6,597,659
|
|
$
6,313,212
|
|
|
|
|
Current portion,
long-term debt
|
$
362,582
|
|
$
350,206
|
Other current
liabilities
|
598,957
|
|
574,620
|
Total current
liabilities
|
961,539
|
|
924,826
|
|
|
|
|
Long-term debt, net
of current maturities
|
2,622,236
|
|
2,809,768
|
Other long-term
liabilities
|
897,624
|
|
614,337
|
Stockholders'
equity
|
2,116,260
|
|
1,964,281
|
Total liabilities and
stockholders' equity
|
$
6,597,659
|
|
$
6,313,212
|
Unaudited
Operating Highlights – SkyWest Airlines
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2019
|
2018
|
Change
|
|
2019
|
2018
|
Change
|
|
Block
hours
|
375,933
|
355,264
|
5.8%
|
|
1,096,104
|
1,028,492
|
6.6%
|
|
Departures
|
219,272
|
207,074
|
5.9%
|
|
627,799
|
592,139
|
6.0%
|
|
|
|
|
|
|
|
|
|
|
Adjusted flight
completion
|
99.9%
|
99.9%
|
0.0 pts
|
|
99.9%
|
99.9%
|
0.0 pts
|
|
Raw flight
completion
|
98.5%
|
98.9%
|
(0.4) pts
|
|
97.8%
|
98.5%
|
(0.7) pts
|
|
|
|
|
|
|
|
|
|
|
Passengers
carried
|
11,568,831
|
10,784,556
|
7.3%
|
|
32,566,966
|
30,101,561
|
8.2%
|
|
Passenger load
factor
|
83.9%
|
83.0%
|
0.9 pts
|
|
82.3%
|
81.6%
|
0.7 pts
|
|
|
|
|
|
|
|
|
|
|
Average passenger
trip length
|
501
|
489
|
2.5%
|
|
501
|
490
|
2.2%
|
|
On January 22, 2019, SkyWest
completed the sale of ExpressJet to a third party. The unaudited
operating highlights above include SkyWest Airlines only and
exclude ExpressJet in both periods for comparability purposes.
Adjusted flight completion percent excludes weather
cancellations. Raw flight completion includes weather
cancellations.
SkyWest, Inc. and
Subsidiaries
Additional Operational Information
(unaudited)
SkyWest's total fleet in service increased by one aircraft
during Q3 2019, as follows:
Aircraft in
scheduled service at June 30, 2019:
|
|
|
482
|
|
Additions:
|
|
|
|
|
New CRJ900
aircraft:
|
|
|
1
|
|
Aircraft in
scheduled service at September 30, 2019:
|
|
|
483
|
|
SkyWest's total fleet in service decreased by 91 aircraft over
the last 12 months, as follows:
Aircraft in
scheduled service at September 30, 2018:
|
|
|
574
|
|
Additions:
|
|
|
|
|
New E175
aircraft:
|
13
|
|
|
|
New CRJ900
aircraft:
|
11
|
|
|
|
Total new aircraft
added:
|
|
|
24
|
|
Used aircraft
transitioned back into service, net
|
|
|
18
|
|
SkyWest Airlines
removals:
|
|
|
|
|
CRJ900
aircraft:
|
|
|
(5)
|
|
ExpressJet
removals:
|
|
|
|
|
ERJ145
aircraft:
|
(100)
|
|
|
|
CRJ700
aircraft:
|
(28)
|
|
|
|
|
|
|
(128)
|
|
Aircraft in
scheduled service at September 30, 2019:
|
|
|
483
|
|
SkyWest, Inc. and
Subsidiaries
|
Additional
Operational Information (continued and unaudited)
|
|
Completed Block Hours
by Aircraft Type
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
SkyWest
Airlines:
|
2019
|
|
2018
|
|
Variance %
|
|
2019
|
|
2018
|
|
Variance %
|
|
E175s
|
135,780
|
|
120,694
|
|
12.5%
|
|
395,776
|
|
329,667
|
|
20.1%
|
|
CRJ900s
|
31,595
|
|
28,175
|
|
12.1%
|
|
93,988
|
|
84,588
|
|
11.1%
|
|
CRJ700s
|
75,612
|
|
68,621
|
|
10.2%
|
|
224,448
|
|
201,687
|
|
11.3%
|
|
CRJ200s
|
132,946
|
|
137,774
|
|
(3.5)%
|
|
381,892
|
|
412,550
|
|
(7.4)%
|
|
Total Block
Hours
|
375,933
|
|
355,264
|
|
5.8%
|
|
1,096,104
|
|
1,028,492
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft in Scheduled
Service and Block Hour Production Forecast for 2019
|
|
|
As of
12/31/2018
|
|
As of
3/31/2019
|
|
As of
6/30/2019
|
|
As of
9/30/2019
|
|
As of
12/31/2019
|
|
|
SkyWest Airlines
aircraft (1):
|
(Actual)
|
|
(Actual)
|
|
(Actual)
|
|
(Actual)
|
|
(Estimate)
|
|
|
E175s
|
146
|
|
147
|
|
151
|
|
151
|
|
156
|
|
|
CRJ900s
|
41
|
|
43
|
|
42
|
|
43
|
|
43
|
|
|
CRJ700s
|
99
|
|
99
|
|
99
|
|
99
|
|
94
|
|
|
CRJ200s
|
184
|
|
187
|
|
190
|
|
190
|
|
190
|
|
|
Total SkyWest
Airlines
|
470
|
|
476
|
|
482
|
|
483
|
|
483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
12/31/2018
|
|
|
|
|
|
|
|
|
|
|
ExpressJet aircraft
(1):
|
(Actual)
|
|
|
|
|
|
|
|
|
|
|
ERJ145s
|
100
|
|
|
|
|
|
|
|
|
|
|
CRJ200s
|
16
|
|
|
|
|
|
|
|
|
|
|
CRJ700s
|
10
|
|
|
|
|
|
|
|
|
|
|
Total
ExpressJet
|
126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2018
|
|
Q1 2019
|
|
Q2 2019
|
|
Q3 2019
|
|
Q4 2019
|
|
Total 2019
|
SkyWest Airlines
(2):
|
|
(Actual)
|
|
(Actual)
|
|
(Actual)
|
|
(Actual)
|
|
(Estimate)
|
|
(Estimate)
|
Block Hours
|
|
351,928
|
|
349,389
|
|
370,782
|
|
375,933
|
|
369,000
|
|
1,465,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The aircraft count
in the table above excludes aircraft removed from SkyWest's
scheduled service. Actual fleet counts may vary from the forecast
due to timing of aircraft removed from service, timing of aircraft
placed into service when transitioning between flying contracts,
and timing of new aircraft deliveries.
|
|
|
|
As of September
30, 2019, SkyWest leased four CRJ200s, four CRJ700s and five
CRJ900s to third parties (these aircraft are excluded from the
table above).
|
|
|
(2)
|
Actual production
may vary from estimates for various reasons including, but not
limited to, timing of aircraft removals and deliveries and
anticipated flight completion rates. Actual block hours presented
for Q4 2018 and Q1 2019 in the table above exclude block hours
operated by ExpressJet prior to the sale of ExpressJet on January
22, 2019. ExpressJet generated approximately 17,000 block hours in
the month of January 2019 through the date of sale. ExpressJet also
generated 81,500 block hours in Q4 2018.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/skywest-inc-announces-third-quarter-2019-profit-300947791.html
SOURCE SkyWest, Inc.