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Allegiant Travel Company Second Quarter 2015 Financial Results
Second Quarter 2015 Fully Diluted Earnings Per Share of $3.18

LAS VEGAS, July 29, 2015 (GLOBE NEWSWIRE) -- Allegiant Travel Company (NASDAQ:ALGT) today reported the following financial results for the second quarter 2015, as well as comparisons to prior year equivalents:

    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
Unaudited   2015 2014 Change   2015 2014 Change
Total operating revenue (millions)   $ 322.1     $ 290.5     10.9 %   $ 651.3     $ 593.1     9.8 %
Operating income (millions)   $ 92.8     $ 56.4     64.5 %   $ 200.9     $ 113.7     76.7 %
Operating margin     28.8 %     19.4   9.4 pp     30.8     19.2   11.6 pp
EBITDA (millions) *   $ 117.7     $ 76.4     54.1 %   $ 250.2     $ 152.2     64.4 %
EBITDA margin *     36.5 %     26.3 %   10.2 pp     38.4 %     25.7 %   12.7 pp
Net income (millions)   $ 54.3     $ 33.5     62.1 %   $ 119.2     $ 67.7     76.1 %
Diluted earnings per share   $ 3.18     $ 1.86     71.0 %   $ 6.93     $ 3.72     86.3 %
Return on capital employed **     14.8 %     17.5 %   (2.7 )pp        

* - see appendix for reconciliation of non-GAAP financial measures
** - see appendix for calculation

“We are very proud to report our 50th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “This is rare in our industry and demonstrates the flexibility of the company and the model through the extremes of the past dozen years.  During this streak, we have seen macro disruptions in our economy including extremely high oil prices, significant financial disruptions, and a recession.  Throughout these years, our model of maintaining low costs and the flexibility to react to this constantly changing landscape has been critical to our long term success.  Just as important to our success has been the contribution of our team members. Their meaningful efforts have been the foundation of our success."

Notable company highlights

  • Airbus aircraft - In April, purchased three additional Airbus aircraft to be placed in service in late 2015
  • Aircraft financing - Raised $26.5 million in debt secured by two A319 aircraft in June
  • Network growth - Second quarter scheduled ASMs grew by 17.4 percent; cities by 8.2 percent, routes by 16.7 percent.  As of June 30, the company is selling 275 routes versus 230 routes during the same time period last year
  • Debt rating upgrade - In June, Standard & Poor's Rating Services raised Allegiant's corporate credit rating to BB from BB-
  • Reauthorization of share repurchase - In July, the Board of Directors authorized an increase in the share repurchase authority to $100 million
  • Share repurchase - Returned approximately $29 million to shareholders through the repurchase of 179,310 shares during the second quarter
  • Recurring dividend - In January 2015, the Board of Directors approved a recurring quarterly cash dividend of $0.25 per share.  Shareholders of record as of May 20, 2015 were paid a total of $4.3 million on June 4, 2015
  • Increase to recurring dividend - In July, the Board of Directors approved an increase to the recurring quarterly cash dividend to $0.30 per share

Second quarter 2015 network trends

  • Airbus growth - 81 percent of second quarter scheduled service ASM growth was flown by Airbus aircraft
  • Airbus network - Airbus aircraft flew over 30 percent of the second quarter ASMs versus 22 percent a year ago
  • New route growth - New routes, routes that were not operated during the same period last year, accounted for 91 percent of the growth in the quarter

Third quarter 2015 revenue trends

  • TRASM guidance - Third quarter TRASM is expected to decrease between nine and seven percent versus the third quarter last year
  • New city growth - New cities, cities that have been in service for less than one year, are expected to be almost 17 percent of third quarter ASMs
  • Off peak flying - The number of seats flown on off peak days of the week account for almost 22 percent of the total in the third quarter versus 16 percent in the same quarter last year
  • Other impacts on TRASM - The September 11 fee, which went into effect in July of 2014, is expected to negatively impact third quarter TRASM by one percent
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
  2015 2014 Change   2015 2014 Change
Scheduled Service:              
Average fare - scheduled service $ 76.77     $ 89.63     (14.3 )%   $ 83.18     $ 94.50     (12.0 )%
Average fare - ancillary air-related charges $ 46.74     $ 40.65     15.0 %   $ 46.98     $ 41.21     14.0 %
Average fare - ancillary third party products $ 4.52     $ 4.58     (1.3 )%   $ 4.68     $ 4.88     (4.1 )%
Average fare - total $ 128.03     $ 134.86     (5.1 )%   $ 134.84     $ 140.59     (4.1 )%
Scheduled service passenger revenue per ASM (PRASM) (cents)   7.09       8.45     (16.1 )%     7.61       8.60     (11.5 )%
Total scheduled service revenue per ASM (TRASM) (cents)   11.82       12.71     (7.0 )%     12.33       12.79     (3.6 )%
Load factor   86.7     89.5   -2.8pp     87.4     88.9   -1.5pp
Passengers (millions)   2.4       2.1     15.0 %     4.7       4.2     11.9 %
Average passengers per scheduled departure   143       149     (4.0 )%     144       148     (2.7 )%
Average scheduled service stage length (miles)   912       924     (1.3 )%     926       950     (2.5 )%

ASMs = available seat miles
PRASM = scheduled passenger revenue per scheduled available seat mile
TRASM = (scheduled passenger revenue + ancillary air revenue + ancillary third party revenue) per scheduled available seat mile

Third party products performance

  • Rental car days - Second quarter rental car days increased 34.9 percent on a 15.0 percent increase in scheduled service passengers.  Car rental production drove a net car rental revenue increase of 28.1 percent versus the prior year
  • Hotel room nights - Second quarter hotel room night production decreased 9.6 percent in part due to a 2.2 percent decrease in Las Vegas passengers.  In addition, weakness in the Canadian dollar has disproportionately affected hotel take rate versus other ancillary products.  Notwithstanding, hotel room night production in Florida continues to improve as demonstrated by a 25.4 percent increase in room nights versus the prior year 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
Supplemental Ancillary Revenue Information                
Unaudited   2015 2014 Change   2015 2014 Change
Gross ancillary revenue - third party products (millions)     $ 36.0         $ 32.4       11.2 %     $ 73.3         $ 68.1       7.6 %
Cost of goods sold (millions)     $ (24.7       $ (22.2     11.3 %     $ (50.7       $ (46.8     8.1 %
Transaction costs* (millions)     $ (0.3       $ (0.5     (38.4 )%     $ (0.9       $ (1.0     (11.1 )%
Ancillary revenue - third party products (millions)     $ 11.0         $ 9.7       13.7 %     $ 21.8         $ 20.3       7.3 %
As percent of gross ancillary revenue - third party products       30.5         29.8     0.7 pp       29.7         29.8     (0.1 )pp
  As percent of income before taxes       12.7         18.2     (5.5 )pp       11.6         18.9     (7.3 )pp
Ancillary revenue - third party products/scheduled passenger     $ 4.52         $ 4.58       (1.3 )%     $ 4.68         $ 4.88       (4.1 )%
                 
Hotel room nights (thousands)       123.4           136.5       (9.6 )%       258.8           280.2       (7.6 )%
Rental car days (thousands)       330.6           245.0       34.9 %       634.1           526.3       20.5 %

* - Includes payment expenses and travel agency commissions.

Second quarter 2015 cost performance

  • CASM - For the quarter, total operating expense per ASM (CASM) decreased 16.6 percent year over year. 
  • CASM ex fuel impact - Second quarter CASM ex fuel was down 1.4 percent and outperformed initial expectations due to a smaller than expected writedown in MD-80 assets and better unit cost performance in stations costs within the quarter.  In addition our second quarter ex fuel results reflect a shift in engine overhaul expense into the third quarter 
  • Aircraft fuel - Quarterly fuel expense decreased 24.3 percent driven by a 35.0 percent decrease in our price per gallon which was offset by a 16.4 percent increase in gallons consumed.  Fuel efficiency, as defined as ASMs per gallon, was positively impacted by an increase in Airbus flying and slightly offset by a reduction in average stage length.  Airbus aircraft flew an average of approximately 8.5 hours a day versus 5.1 hours a day on the MD-80 aircraft
  • Salary and benefits - Quarterly salary and benefits expense increased 13.3 percent versus the prior year primarily due to an increase of approximately 25 percent in flight crew FTEs to support increased flying.  In addition, the company saw a meaningful increase in bonus accrual and as a result of the trailing twelve month operating margin exceeding 20 percent, the pilots' pay rates shifted to a higher pay band as of May 1, 2015.  Moving to this pay band is the equivalent of a four to seven percent increase in their hourly rate
  • Station operations - Quarterly station operations expense increased by 21.4 percent versus the prior year as system departures increased by 20.3 percent.  Stations expense on a per departure basis grew less than one percent versus the same period last year
  • Maintenance and repairs - Quarterly maintenance and repairs expense increased by 10.7 percent as the average fleet size grew 9.4 percent and the number of engine maintenance events increased to six from three last year
  • Depreciation and amortization - Quarterly depreciation and amortization expense increased 26.1 percent year over year due to a 9.4 percent increase in average number of aircraft in service and depreciation related to twelve owned A319 aircraft acquired in June 2014, currently on lease to a European carrier.  Excluding the twelve A319s, which are non ASM producing, depreciation and amortization expense would have increased 17 percent which reflects the effect of inducting more expensive Airbus aircraft into revenue service
  • Other expense - Other expense increased by 37.7 percent due to expenses to support improvement and development of technology projects
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
  2015 2014 Change   2015 2014 Change
Total System*:              
Operating expense per passenger $ 93.12     $ 109.22     (14.7 )%   $ 95.48     $ 113.69     (16.0 )%
Operating expense per passenger, excluding fuel $ 61.01     $ 60.47     0.9 %   $ 63.97     $ 63.07     1.4 %
Operating expense per ASM (CASM) (cents)   8.53       10.23     (16.6 )%     8.64       10.26     (15.8 )%
Operating expense, excluding fuel per ASM (CASM ex fuel) (cents)   5.58       5.66     (1.4 )%     5.79       5.69     1.8 %
Average block hours per aircraft per day   6.0       5.6     7.1 %     6.0       5.8     3.4 %
Average system stage length (miles)   896       912     (1.8 )%     912       936     (2.6 )%

* - Total system includes scheduled service, fixed-fee contract and non-revenue flying

Third quarter 2015 cost trends

  • CASM ex fuel - CASM ex fuel is expected to decrease between ten and eight percent compared to third quarter 2014
  • Salary and benefits expense - Expected to increase as a result of growth in FTEs to support scheduled service growth and moving the pilots into the higher pay band as detailed above
  • Maintenance and repairs expense - Expected to increase due to a higher number of expected engine overhauls versus last year and a shift in maintenance events from the second quarter to the third quarter
  • Depreciation and amortization expense - Expected to increase due to the growth of the Airbus A320 fleet

Full year 2015 cost trends

  • CASM ex fuel - Full year CASM ex fuel is expected to decrease between thirteen and eleven percent.  Excluding the fourth quarter 2014 non-cash impairment charge of $43.3 million, full year CASM ex fuel is expected to decrease between six and four percent
  • Maintenance and repairs expense per aircraft per month - Expected to be between $95 thousand and $105 thousand
  • Total ownership expense per aircraft per month - Total of depreciation expense and aircraft lease rental expense per aircraft per month is expected to be between $110 thousand and $115 thousand

Balance sheet highlights

  • Recurring dividend - Paid a quarterly cash dividend of $0.25 per share on June 4, 2015 to all shareholders of record as of May 20, 2015.  The Company intends to pay a third quarter $0.30 dividend on September 4, 2015 to all shareholders of record as of August 20, 2015
  • Share repurchases - Share repurchases totaled approximately $29 million for the second quarter
  • Shareholder returns - As of June 30, cash returned to shareholders was over $135 million for 2015.  $52 million was returned through dividends and $83 million through share repurchases
  • Capital expenditures - Five Airbus aircraft were purchased in the second quarter which drove the bulk of $68 million in CAPEX for the quarter.  Three of the aircraft were announced in April, one A320 was announced in June 2014, and the final aircraft was one of the eight A319s originally committed under an operating lease structure which the company converted to a purchase agreement in June 2014.  Full year CAPEX is expected to be approximately $290 million
  • Additional debt in the second quarter - In June 2015, the Company raised $26.5 million in debt secured by two A319 aircraft
Unaudited (millions) 6/30/2015   12/31/2014   Change
Unrestricted cash* $ 414.9       $ 416.8       (0.5 )%
Total debt $ 627.6       $ 593.1       5.8 %
Total Allegiant Travel Company stockholders’ equity $ 326.2       $ 292.9       11.4 %


  Six Months Ended June 30,    
Unaudited (millions)   2015       2014     Change
Capital expenditures $ 132.5     $ 257.0     (48.4 )%

* - Unrestricted cash includes investments in marketable securities.

At this time, Allegiant Travel Company provides the following guidance to investors, subject to revision.

Guidance, subject to revision    
     
  July 2015 3Q15  
Estimated TRASM year-over-year change (8) to (6)% (9) to (7)%  
       
Fixed fee and other revenue guidance   3Q15  
Fixed fee and other revenue (millions)   $11 to $13  
       
Capacity guidance      
System 3Q15 4Q15 FY15
 Departure year-over-year growth 23 to 27% 21 to 26%  
ASM year-over-year growth 21 to 25% 21 to 26% 15 to 18%
Scheduled      
Departure year-over-year growth 23 to 27% 21 to 26%  
ASM year-over-year growth 21 to 25% 21 to 26% 15 to 18%
       
Cost guidance 3Q15   FY15
CASM ex fuel – year-over-year change (10) to (8)%   (13) to (11)%
CASM ex fuel (excluding non-cash AC impairment charge) - year over year change     (6) to (4)%
       
CAPEX guidance     FY15
Capital expenditures (millions)     $ 290 

CASM ex fuel – cost per available seat mile excluding fuel expense


Aircraft fleet plan by end of period          
           
Aircraft - (seats per AC)   2Q15 3Q15 YE15 YE16
MD-80 (166 seats)   53   52   52   50  
757 (215 seats)   6   6   5   4  
A319 (156 seats)   7   7   10   17  
A320 (177 seats)   9   12   15   15  
Total   75   77   82   86  

Aircraft listed in table above include only in service aircraft and future aircraft under contract

Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. ET Wednesday, July 29, 2015 to discuss its second quarter 2015 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.

Allegiant, Travel is our deal.®

Las Vegas-based Allegiant Travel Company® (NASDAQ:ALGT) is focused on linking travelers in small cities to world-class leisure destinations. Through its subsidiary, Allegiant Air, the company operates a low-cost, high-efficiency, all-jet passenger airline, and offers other travel-related products such as hotel rooms, rental cars, and attraction tickets through its website, allegiant.com. The company has been named one of America’s 100 Best Small Companies by Forbes Magazine for four consecutive years.  ALGT/G

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 unit revenue, future operating expense, ASM growth, departure growth, fixed-fee and other revenues, expected capital expenditures, number of contracted aircraft to be placed in service in the future, as well as other 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," “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, volatility of fuel costs, labor issues, the effect of economic conditions on leisure travel, debt covenants, terrorist attacks, risks inherent to airlines, demand for air services to our leisure destinations from the markets served by us, our dependence on our leisure destination markets, our competitive environment, an accident involving or problems with our aircraft, our reliance on our automated systems, 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, aging aircraft and other 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
Three Months Ended June 30, 2015 and 2014
(in thousands, except per share amounts)
(Unaudited)
 
  Three Months Ended June 30,   Percent
  2015   2014   change
OPERATING REVENUE:          
Scheduled service revenue $ 186,311       $ 189,172       (1.5 )
Ancillary revenue:          
Air-related charges   113,432         85,781       32.2  
Third party products   10,976         9,657       13.7  
Total ancillary revenue   124,408         95,438       30.4  
Fixed fee contract revenue   2,986         2,963       0.8  
Other revenue   8,397         2,968       182.9  
Total operating revenue   322,102         290,541       10.9  
OPERATING EXPENSES:          
Aircraft fuel   79,087         104,495       (24.3 )
Salary and benefits   53,598         47,297       13.3  
Station operations   24,462         20,157       21.4  
Maintenance and repairs   23,727         21,427       10.7  
Sales and marketing   5,753         6,653       (13.5 )
Aircraft lease rentals   680         1,903       (64.3 )
Depreciation and amortization   24,904         19,750       26.1  
Other   17,135         12,446       37.7  
Total operating expenses   229,346         234,128       (2.0 )
OPERATING INCOME   92,756         56,413       64.4  
As a percent of total operating revenue   28.8 %       19.4      
OTHER (INCOME) EXPENSE:          
Earnings from unconsolidated affiliates, net   (55 )       (75 )     (26.7 )
Interest income   (542 )       (234 )     131.6  
Interest expense   7,017         3,591       95.4  
Total other expense   6,420         3,282       95.6  
INCOME BEFORE INCOME TAXES   86,336         53,131       62.5  
As a percent of total operating revenue   26.8 %       18.3 %      
PROVISION FOR INCOME TAXES   31,997         19,764       61.9  
NET INCOME   54,339         33,367       62.9  
Net loss attributable to noncontrolling interest             (132 )     NM*  
NET INCOME ATTRIBUTABLE TO ALLEGIANT TRAVEL COMPANY $ 54,339       $ 33,499       62.2  
Earnings per share to common stockholders (1):          
Basic $ 3.19       $ 1.87       70.6  
Diluted $ 3.18       $ 1.86       71.0  
Weighted average shares outstanding used in computing earnings per share to common stockholders (1):          
Basic   16,954         17,777       (4.6 )
Diluted   16,992         17,865       (4.9 )

* - 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 for the periods presented reflect the two-class method mandated by accounting guidance for the calculation of earnings per share. The two-class method adjusts both the net income and 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
Three Months Ended June 30, 2015 and 2014
(Unaudited)
 
  Three Months Ended June 30,   Percent
  2015   2014   change*
OPERATING STATISTICS          
Total system statistics          
Passengers 2,462,822     2,143,662     14.9  
Revenue passenger miles (RPMs) (thousands) 2,307,065     2,030,638     13.6  
Available seat miles (ASMs) (thousands) 2,690,457     2,289,201     17.5  
Load factor 85.7 %   88.7 %   (3.0 )
Operating revenue per ASM (RASM)** (cents) 11.97     12.69     (5.7 )
Operating expense per ASM (CASM) (cents) 8.53     10.23     (16.6 )
Fuel expense per ASM (cents) 2.95     4.56     (35.3 )
Operating CASM, excluding fuel (cents) 5.58     5.66     (1.4 )
Operating expense per passenger $ 93.12     $ 109.22     (14.7 )
Fuel expense per passenger $ 32.11     $ 48.75     (34.1 )
Operating expense per passenger, excluding fuel $ 61.01     $ 60.47     0.9  
ASMs per gallon of fuel 70.1     69.5     0.9  
Departures 17,659     14,675     20.3  
Block hours 40,919     34,466     18.7  
Average stage length (miles) 896     912     (1.8 )
Average number of operating aircraft during period 74.4     68.0     9.4  
Average block hours per aircraft per day 6.0     5.6     7.1  
Full-time equivalent employees at period end 2,557     2,241     14.1  
Fuel gallons consumed (thousands) 38,361     32,944     16.4  
Average fuel cost per gallon $ 2.06     $ 3.17     (35.0 )
Scheduled service statistics          
Passengers 2,426,985     2,110,481     15.0  
Revenue passenger miles (RPMs) (thousands) 2,279,600     2,002,546     13.8  
Available seat miles (ASMs) (thousands) 2,628,205     2,238,546     17.4  
Load factor 86.7 %   89.5 %   (2.8 )
Departures 16,949     14,157     19.7  
Average passengers per departure 143     149     (4.0 )
Scheduled service seats per departure 167.6     168.8     (0.7 )
Block hours 39,794     33,577     18.5  
Yield (cents) 8.17     9.45     (13.5 )
Scheduled service revenue per ASM (PRASM) (cents) 7.09     8.45     (16.1 )
Total ancillary revenue per ASM** (cents) 4.73     4.26     11.0  
Total scheduled service revenue per ASM (TRASM)** (cents) 11.82     12.71     (7.0 )
Average fare - scheduled service $ 76.77     $ 89.63     (14.3 )
Average fare - ancillary air-related charges $ 46.74     $ 40.65     15.0  
Average fare - ancillary third party products $ 4.52     $ 4.58     (1.3 )
Average fare - total $ 128.03     $ 134.86     (5.1 )
Average stage length (miles) 912     924     (1.3 )
Fuel gallons consumed (thousands) 37,379     32,159     16.2  
Average fuel cost per gallon $ 2.08     $ 3.20     (35.0 )
Percent of sales through website during period 95.0 %   93.2 %   1.8  

* Except load factor and percent of sales through website, which is percentage point change.
** Various components of these measurements 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

Allegiant Travel Company
Consolidated Statements of Income
Six months ended June 30, 2015 and 2014
(in thousands, except per share amounts)
(Unaudited)
 
  Six Months Ended June 30,   Percent
  2015   2014   change
OPERATING REVENUE:          
Scheduled service revenue $ 386,840       $ 392,693       (1.5 )
Ancillary revenue:          
Air-related charges   218,501         171,235       27.6  
Third party products   21,773         20,287       7.3  
Total ancillary revenue   240,274         191,522       25.5  
Fixed fee contract revenue   7,353         5,610       31.1  
Other revenue   16,874         3,241       420.6  
Total operating revenue   651,341         593,066       9.8  
OPERATING EXPENSES:          
Aircraft fuel   148,713         213,444       (30.3 )
Salary and benefits   112,151         93,736       19.6  
Station operations   48,314         42,390       14.0  
Maintenance and repairs   45,119         42,028       7.4  
Sales and marketing   12,854         14,461       (11.1 )
Aircraft lease rentals   1,398         11,332       (87.7 )
Depreciation and amortization   49,251         38,181       29.0  
Other   32,687         23,808       37.3  
Total operating expenses   450,487         479,380       (6.0 )
OPERATING INCOME   200,854         113,686       76.7  
As a percent of total operating revenue   30.8       19.2      
OTHER (INCOME) EXPENSE:          
Earnings from unconsolidated affiliates, net   (51 )       (71 )     (28.2 )
Interest income   (647 )       (439 )     47.4  
Interest expense   13,843         6,720       106.0  
Total other expense   13,145         6,210       111.7  
INCOME BEFORE INCOME TAXES   187,709         107,476       74.7  
As a percent of total operating revenue   28.8 %       18.1 %      
PROVISION FOR INCOME TAXES   68,548         40,034       71.2  
NET INCOME   119,161         67,442       76.7  
Net loss attributable to noncontrolling interest   (44 )       (278     (84.2 )
NET INCOME ATTRIBUTABLE TO ALLEGIANT TRAVEL COMPANY $ 119,205       $ 67,720       76.0  
Earnings per share to common stockholders (1):          
Basic $ 6.95       $ 3.74       85.8  
Diluted $ 6.93       $ 3.72       86.3  
Weighted average shares outstanding used in computing earnings per share to common stockholders (1):          
Basic   17,073         17,971       (5.0 )
Diluted   17,114         18,055       (5.2 )

(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 for the periods presented reflect the two-class method mandated by accounting guidance for the calculation of earnings per share. The two-class method adjusts both the net income and 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
Six months ended June 30, 2015 and 2014
(Unaudited)
 
  Six Months Ended June 30,   Percent
  2015   2014   change*
OPERATING STATISTICS          
Total system statistics          
Passengers 4,719,057     4,216,382     11.9  
Revenue passenger miles (RPMs) (thousands) 4,498,533     4,112,138     9.4  
Available seat miles (ASMs) (thousands) 5,216,488     4,670,340     11.7  
Load factor 86.2 %   88.0 %   (1.8 )
Operating revenue per ASM (RASM)** (cents) 12.49     12.70     (1.7 )
Operating expense per ASM (CASM) (cents) 8.64     10.26     (15.8 )
Fuel expense per ASM (cents) 2.85     4.57     (37.6 )
Operating CASM, excluding fuel (cents) 5.79     5.69     1.8  
Operating expense per passenger $ 95.48     $ 113.69     (16.0 )
Fuel expense per passenger $ 31.51     $ 50.62     (37.8 )
Operating expense per passenger, excluding fuel $ 63.97     $ 63.07     1.4  
ASMs per gallon of fuel 70.2     69.8     0.6  
Departures 33,646     29,176     15.3  
Block hours 79,652     70,814     12.5  
Average stage length (miles) 912     936     (2.6 )
Average number of operating aircraft during period 73.0     68.0     7.4  
Average block hours per aircraft per day 6.0     5.8     3.4  
Full-time equivalent employees at period end 2,557     2,241     14.1  
Fuel gallons consumed (thousands) 74,363     66,945     11.1  
Average fuel cost per gallon $ 2.00     $ 3.19     (37.3 )
Scheduled service statistics          
Passengers 4,650,688     4,155,509     11.9  
Revenue passenger miles (RPMs) (thousands) 4,443,218     4,061,734     9.4  
Available seat miles (ASMs) (thousands) 5,085,910     4,566,481     11.4  
Load factor 87.4 %   88.9 %   (1.5 )
Departures 32,270     28,092     14.9  
Average passengers per departure 144     148     (2.7 )
Scheduled service seats per departure 167.8     168.6     (0.5 )
Block hours 77,340     68,962     12.1  
Yield (cents) 8.71     9.67     (9.9 )
Scheduled service revenue per ASM (PRASM) (cents) 7.61     8.60     (11.5 )
Total ancillary revenue per ASM** (cents) 4.72     4.19     12.6  
Total scheduled service revenue per ASM (TRASM)** (cents) 12.33     12.79     (3.6 )
Average fare - scheduled service $ 83.18     $ 94.50     (12.0 )
Average fare - ancillary air-related charges $ 46.98     $ 41.21     14.0  
Average fare - ancillary third party products $ 4.68     $ 4.88     (4.1 )
Average fare - total $ 134.84     $ 140.59     (4.1 )
Average stage length (miles) 926     950     (2.5 )
Fuel gallons consumed (thousands) 72,379     65,366     10.7  
Average fuel cost per gallon $ 2.02     $ 3.22     (37.3 )
Percent of sales through website during period 95.2 %   93.7 %   1.5  

* Except load factor and percent of sales through website, which is percentage point change.
** Various components of these measurements 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


Allegiant Travel Company
Non-GAAP Presentations
Three and Six Months Ended June 30, 2015 and 2014
(Unaudited)

"EBITDA" represents earnings before interest expense, income taxes, depreciation and amortization. EBITDA is  not a calculation based on generally accepted accounting principles and should not be considered as an alternative to net income or operating income as an indicator of our financial performance or to cash flow as a measure of liquidity. EBITDA is included as a supplemental disclosure because we believe it is a useful indicator of our operating performance. Further, EBITDA is a well-recognized performance measurement that is frequently used by securities analysts, investors and other interested parties in comparing the operating performance of companies. We believe EBITDA is useful in evaluating our operating performance compared to our competitors because the calculation generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions and lease versus purchase decisions, which items may vary between periods and for different companies for reasons unrelated to overall operating performance. The following represents the reconciliation of EBITDA to net income for the periods indicated below.

The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of a non-GAAP financial measure 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 income as indicated above, and a reconciliation of the non-GAAP measure to the most comparable GAAP measure.  Our utilization of this non-GAAP measurement is not meant to be considered in isolation or as a substitute for net income or other measures of financial performance prepared in accordance with GAAP.  EBITDA is not a GAAP measurement and our use of EBITDA may not be comparable to similarly titled measures employed by other companies in the airline and travel industry. The reconciliation of EBITDA to GAAP net income follows.

  Three Months Ended June 30,   Percent
(in thousands) 2015   2014   change
Net income attributable to Allegiant Travel Company $ 54,339       $ 33,499       62.2 %
Plus (minus)          
Interest income   (542 )       (234     131.6 %
Interest expense   7,017         3,591       95.4 %
Provision for income taxes   31,997         19,764       61.9 %
Depreciation and amortization   24,904         19,750       26.1 %
EBITDA $ 117,715       $ 76,370       54.1 %
           
Total revenue $ 322,102       $ 290,541       10.9 %
EBITDA margin   36.5       26.3 %     10.2 pp


  Six Months Ended June 30,   Percent
(in thousands) 2015   2014   change
Net income attributable to Allegiant Travel Company $ 119,205       $ 67,720       76.0 %
Plus (minus)          
Interest income   (647       (439     47.4 %
Interest expense   13,843         6,720       106.0 %
Provision for income taxes   68,548         40,034       71.2 %
Depreciation and amortization   49,251         38,181       29.0 %
EBITDA $ 250,200       $ 152,216       64.4 %
           
Total revenue $ 651,341       $ 593,066       9.8 %
EBITDA margin   38.4 %       25.7     12.7 pp




Appendix A
Additional Financial Information
(Unaudited)
 
  Twelve Months Ended June 30,
Return on capital calculation (millions) 2015   2014
Net income attributable to Allegiant Travel Company $ 138.1       $ 102.3    
Income tax   79.3         61.1    
Interest expense   28.3         11.7    
Less interest income   (1.0       (1.0  
    244.7         174.1    
       
Interest income   1.0         1.0    
Tax rate   36.5 %       37.4  
Numerator   156.0         109.6    
       
Total assets as of prior June 30   1,317.3         862.6    
Less current liabilities as of prior June 30   315.4         247.5    
Plus short term debt as of prior June 30   51.5         12.0    
Denominator   1,053.4         627.1    
Return on capital employed   14.8       17.5  

To provide more transparency into operating expenses for the quarter, the company experienced the following non-cash expense items in the second quarters of 2015 and 2014.

Non-cash items (millions)   2Q15       2Q14
Stock based compensation $ 1.2       $ 2.3    
(Gain) loss - disposed assets   (1.2 )       1.4    
Total of selected non-cash items $       $ 3.7    

 

Media Inquiries: Jessica Wheeler
mediarelations@allegiantair.com

Investor Inquiries: Chris Allen
ir@allegiantair.com

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