HOUSTON, April 28 /PRNewswire/ -- ExpressJet Holdings,
Inc. (NYSE: XJT), parent company of regional and charter airline
operator, ExpressJet Airlines, Inc., today reported a first quarter
loss of $16.1 million or $0.93 per share. Excluding special items,
ExpressJet's loss totaled $12.7
million or $0.73 per
share.
(Logo:
http://www.newscom.com/cgi-bin/prnh/20080221/NYFNSN01LOGO)
Driving ExpressJet's financial performance during the quarter
was seasonally lower flight activity, cancellations and delays
caused by severe winter weather in the Northeast and Midwest, cost
increases that outpaced revenue growth and record low
attrition.
"Our employees did a great job of operating the airline in light
of the severe weather conditions of the first quarter," said
Pat Kelly, Interim President and
Chief Executive Officer. "Unfortunately, our financial
results were disappointing. It is clear now that to return to
sustained profitability, we need to reduce our costs further,"
Kelly added.
On April 19, ExpressJet announced
the Board of Directors selected industry veteran, Thomas M. Hanley as President and Chief
Executive Officer effective immediately. Tom assumed the
position from Interim President and Chief Executive Officer,
Pat Kelly. Pat will return to
his position on ExpressJet's Board of Directors effective
May 1, 2010.
"I would like to thank the ExpressJet Board for selecting me to
lead the company and Pat Kelly for
his leadership," said Tom Hanley.
"My goal will be to maintain ExpressJet's status as a leader
for operational excellence while returning the company to sustained
profitability. The keys to success at ExpressJet will be the
support and professionalism of our people, as we continue to focus
on safety, reliability, customer service, and renew our emphasis on
cost control," added Hanley.
Operational Overview
Partner Flying
Under its capacity purchase agreement with Continental Airlines,
ExpressJet flew 162,823 block hours using an average of 208
aircraft. The year-over-year improvement in block hours led
to ExpressJet utilizing each aircraft an average of 8 hours and 41
minutes per day-a 6.2% year-over-year improvement. In first
quarter 2010, ExpressJet generated 1.9 million revenue passenger
miles on 2.5 million available seat miles, producing a load factor
of 76% within its Continental Express operation.
ExpressJet continued the expansion phase of its United Express
operation, where it flew an average of 16 aircraft during the first
quarter. The United Express operation produced 14,432 block
hours or average daily utilization of 9 hours and 54 minutes per
day. Within the United Express operation, ExpressJet flew
197,244 available seat miles, generating 138,832 revenue passenger
miles and a load factor of 70.4%. Currently, ExpressJet
operates 22 aircraft in its United Express operation and expects to
add 10 additional aircraft on May 1,
2010.
Within Partner Flying, ExpressJet expects utilization to
continue improving as the economy recovers and it heads into the
seasonally stronger second and third quarters of the year.
Corporate Aviation (charter)
ExpressJet flew 3,027 block hours during the first quarter with
an average of 20 aircraft, 6.3% less than first quarter 2009 when
30 aircraft were allocated to ExpressJet's Corporate Aviation
(charter) fleet. With the addition of United Express flying,
ExpressJet expects to operate only six 50-seat aircraft within the
Corporate Aviation (charter) division for the remainder of 2010.
ExpressJet expects the resizing of the Corporate Aviation
(charter) fleet will enhance the revenue production per charter
aircraft on a go-forward basis.
Aviation Services
During the quarter, ExpressJet added one additional ground
handling station, for a total of 42 contracts at 31 stations.
Total activity during the quarter as measured by aircraft
turns was 18,512.
All Flying
ExpressJet operated a total of 244 aircraft during first quarter
and expects its 2010 fleet plan from May to December 2010 to consist of 244 fifty-seat
aircraft allocated as follows:
- 206 aircraft flying as Continental Express;
- 32 aircraft flying as United Express; and
- 6 aircraft flying within Corporate Aviation (charter).
Financial Overview
ExpressJet generated $189.3
million in revenues during the three months ended
March 31, 2010 versus $169.7 million for the three months ended
March 31, 2009.
Under its agreements with Continental and United, ExpressJet
generated $165 million in block hour
revenue and pass-through reimbursements during the first quarter
2010 versus $145 million during first
quarter 2009. Increased utilization of the Continental
Express fleet and the addition of United Express flying stand as
the primary drivers for revenue improvement during first quarter
2010. The first quarter 2010 block hour revenue was net of
$1.8 million paid to Continental for
utilization improvements and performance penalties, whereas in the
first quarter 2009, ExpressJet received $2.7
million from Continental for utilization shortfalls and
performance incentives.
The company experienced continued financial pressure within the
first quarter due to the slow economic recovery, and suffered an
approximately $3 million operating
income impact due to the severe winter weather. In addition,
increases in labor costs that exceeded revenue growth put pressure
on margins. ExpressJet incurred $1.5
million in start-up costs for the United Express operation
and expects to spend an additional $1.5
million as it adds 10 aircraft to the United Express
operation beginning May 1, 2010.
Additionally, the year-over-year fuel cost variance is
largely due to pass-through fuel purchases attributable to new
flying for United.
Revenue earned during the first quarter 2010 in Corporate
Aviation (charter) totaled $15.5
million. Aviation services revenue grew slightly in
the first quarter 2010 to $8.7
million.
ExpressJet ended the first quarter 2010 with $106.3 million in cash, cash equivalents and
short-term investments. The cash balance included
$20.4 million in restricted cash and
$9.1 million in short-term
investments, after accounting for adjustments to impair the value
of these assets.
Thus far in 2010, ExpressJet continued to improve its balance
sheet by:
- Collecting $18.2 million in tax
receivables, including a $16.5
million Federal tax receivable during first quarter 2010 and
a $1.7 million refund from the
State of New Jersey in April;
- Repurchasing $8.6 million par
value of its 11.25% Secured Convertible Notes due 2023 during first
quarter 2010;
- Monetizing $5 million in auction
rate securities in April 2010;
and
- Repaying approximately $2.5
million on the outstanding credit facility provided by
Citigroup related to its auction rate securities in April 2010 once the sale of $5 million in auction rate securities
settles.
ExpressJet's remaining auction rate securities balance equals
$6.1 million par value.
On April 27, the Board approved an
additional $20 million for the
securities repurchase program. With this increase, the
balance of ExpressJet's securities repurchase program, after the
$8.6 million purchase in the first
quarter, is $21.8 million. The
company expects any future purchases of securities under the
securities repurchase program to be made periodically in the open
market or in privately negotiated transactions.
After accounting for the repurchase, ExpressJet's balance on its
11.25% Secured Convertible Notes due 2023 is $43.6 million. This balance represents the
par value due to noteholders when the notes become due August 1, 2023, and a 26.1% reduction in the
principal balance from first quarter 2009. Following the
release of approximately $98.5
million of collateral in December
2009 by the trustee under the indenture governing the notes,
the required collateral under the remaining notes is $32.8 million in spare parts and $28.8 million in spare engines.
Capital expenditures during the quarter totaled approximately
$0.9 million compared to $1.3 million during first quarter 2009.
ExpressJet expects remaining capital expenditures for the
year to range from $8 million to $10
million to meet operational requirements, including those
required to support flying as United Express.
The company will discuss its first quarter 2010 results and
formally introduce its new President and Chief Executive Officer,
Tom Hanley, on Wednesday, April 28, 2010 at 10:00 a.m. EDT (9:00 a.m.
CDT). A live webcast of the call will be available at
www.expressjet.com. To access the conference call by phone,
dial (866) 638-3022 approximately 10 minutes prior to the scheduled
start time and ask to join the ExpressJet call. International
callers should dial (630) 691-2765.
About ExpressJet
ExpressJet Holdings operates several divisions designed to
leverage the management experience, efficiencies and economies of
scale present in its subsidiaries, including ExpressJet Airlines,
Inc. and ExpressJet Services, LLC. ExpressJet Airlines serves
134 scheduled destinations in North
America and the Caribbean
with approximately 1,200 departures per day. Operations
include capacity purchase agreements for United and Continental as
well as providing clients customized 50-seat charter options; and
supplying third-party aviation and ground handling services.
For more information, visit www.expressjet.com.
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EXPRESSJET
HOLDINGS, INC. AND SUBSIDIARIES
|
|
FINANCIAL SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
Increase/
(Decrease)
|
|
|
|
|
|
|
Operating Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
|
|
$
|
165,048
|
|
|
$
|
144,961
|
|
|
13.9%
|
|
|
Corporate
Aviation (charter)
|
|
|
15,521
|
|
|
|
16,050
|
|
|
(3.3%)
|
|
|
Ground
handling and other
|
|
|
8,712
|
|
|
|
8,698
|
|
|
0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
189,281
|
|
|
|
169,709
|
|
|
11.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages,
salaries and related costs
|
|
|
91,193
|
|
|
|
79,675
|
|
|
14.5%
|
|
|
Maintenance,
materials and repairs
|
|
|
44,921
|
|
|
|
38,440
|
|
|
16.9%
|
|
|
Other
rentals and landing fees
|
|
|
17,499
|
|
|
|
12,895
|
|
|
35.7%
|
|
|
Aircraft
fuel and related taxes
|
|
|
8,915
|
|
|
|
3,221
|
|
|
176.8%
|
|
|
Depreciation
and amortization
|
|
|
6,654
|
|
|
|
8,066
|
|
|
(17.5%)
|
|
|
Aircraft
rentals
|
|
|
6,434
|
|
|
|
5,472
|
|
|
17.6%
|
|
|
Outside
services
|
|
|
5,270
|
|
|
|
7,595
|
|
|
(30.6%)
|
|
|
Ground
handling
|
|
|
2,951
|
|
|
|
3,105
|
|
|
(5.0%)
|
|
|
Marketing and
distribution
|
|
|
28
|
|
|
|
1,325
|
|
|
(97.9%)
|
|
|
Other
operating expenses
|
|
|
19,889
|
|
|
|
20,931
|
|
|
(5.0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
203,754
|
|
|
|
180,725
|
|
|
12.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
|
(14,473)
|
|
|
|
(11,016)
|
|
|
31.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating Income /
(Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
sale of short-term investments, net
|
|
|
—
|
|
|
|
482
|
|
|
(100.0%)
|
|
|
Extinguishment
of debt
|
|
|
(1,717)
|
|
|
|
(79)
|
|
|
nm
|
|
|
Amortization
of debt discount
|
|
|
(1,751)
|
|
|
|
(150)
|
|
|
nm
|
|
|
Interest
expense, net of capitalized interest
|
|
|
(1,641)
|
|
|
|
(1,966)
|
|
|
(16.5%)
|
|
|
Interest
income
|
|
|
172
|
|
|
|
348
|
|
|
(50.6%)
|
|
|
Equity
investments loss, net
|
|
|
—
|
|
|
|
(377)
|
|
|
(100.0%)
|
|
|
Other,
net
|
|
|
(212)
|
|
|
|
(1,119)
|
|
|
(81.1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,149)
|
|
|
|
(2,861)
|
|
|
80.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before Income Taxes
|
|
|
(19,622)
|
|
|
|
(13,877)
|
|
|
41.4%
|
|
|
Income Tax Benefit
|
|
|
3,492
|
|
|
|
2,473
|
|
|
41.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(16,130)
|
|
|
$
|
(11,404)
|
|
|
41.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic & Diluted Loss per Common
Share
|
|
$
|
(0.93)
|
|
|
$
|
(0.67)
|
|
|
38.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Used in Computing Basic &
Diluted Loss per Common Share
|
|
|
17,354
|
|
|
|
17,031
|
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPRESSJET HOLDINGS, INC. AND
SUBSIDIARIES
|
|
|
|
|
|
|
|
|
FINAL STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partner
Flying
|
|
|
|
Corporate
Aviation
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March ,
2010
|
|
|
|
|
|
|
|
|
Revenue Passenger Miles (RPM)
(millions)
|
|
2,071
|
|
|
|
21
|
|
|
Available Seat Miles (ASM)
(millions)
|
|
2,742
|
|
|
|
47
|
|
|
Passenger Load Factor
|
|
75.5%
|
|
|
|
44.4%
|
|
|
Block Hours
|
|
177,255
|
|
|
|
3,027
|
|
|
Departures
|
|
95,963
|
|
|
|
2,056
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL
MEASURES
|
|
|
|
|
|
|
|
|
(In thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Reconciliation:
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(16,130)
|
|
|
$
|
(11,404)
|
|
|
Adjustments for special items
(gains):
|
|
|
|
|
|
|
|
|
Less: Realized
gain from sale of short-term investments(1)
|
|
—
|
|
|
|
(482)
|
|
|
Add: Realized
loss from extinguishment of debt(2)
|
|
1,717
|
|
|
|
79
|
|
|
Add: Realized
loss from amortization of debt discount(3)
|
|
1,751
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
|
Net loss excluding special items
(gains)(4)
|
$
|
(12,662)
|
|
|
$
|
(11,657)
|
|
|
|
|
|
|
|
|
|
|
|
Loss Per Share
Reconciliation:
|
|
|
|
|
|
|
|
|
Diluted loss per share
|
$
|
(0.93)
|
|
|
$
|
(0.67)
|
|
|
Adjustments for special items
(gains):
|
|
0.20
|
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share, excluding
special items (gains)(4)
|
$
|
(0.73)
|
|
|
$
|
(0.68)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During the quarter ended March 31,
2009, we sold a portion of our auction rate securities portfolio
and recognized gains of $0.5 million. No sales occurred during the
quarter ended March 31, 2010.
|
|
(2)
|
Repurchases of our convertible notes
during the quarter ended March 31, 2009, resulted in losses on
extinguishment of debt of $0.1 million, net of taxes.
Repurchases of our convertible notes during the quarter ended
March 31, 2010, resulted in losses on extinguishment of debt of
$1.7 million. Such gains and losses were calculated as the
difference between the fair value of the liability component
immediately prior to extinguishment and its book value.
|
|
(3)
|
In 2008, we recorded $27.8 million in
debt discount related to the refinancing of our convertible notes.
During the quarter ended March 31, 2009, we recognized $2.1 million
in amortization of that debt discount offset by an adjustment of
$1.9 million. During the quarter ended March 31, 2010, we
recognized $1.8 million in amortization of that debt discount.
|
|
(4)
|
By excluding special items, these
financial measures provide management and investors the ability to
measure and monitor ExpressJet's performance on a consistent
year-over-year basis.
|
|
|
|
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SOURCE ExpressJet Holdings, Inc.