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LAS VEGAS, Aug 06, 2007 /PRNewswire-FirstCall via COMTEX News Network/ --
Allegiant Travel Company (Nasdaq: ALGT), parent company of Allegiant Air and Allegiant Vacations, today reported the following second quarter 2007 results, and comparisons to prior year equivalents:
Unaudited 2Q07 2Q06 Change
Total operating revenue (millions) $88.9 $59.7 49.1 %
Operating income (millions) $14.2 $4.9 190.5 %
Operating margin 15.9% 8.2%
Net income (millions) $10.0 $4.7 112.2 %
Diluted earnings per share $0.49 $0.28 75.0 %
Scheduled Service:
Ancillary revenue per passenger $20.94 $14.63 43.1 %
Total revenue per ASM (cents) 9.76 8.48 15.1 %
Average stage length (miles) 921 1,035 (10.9)%
Total System*:
Operating expense per ASM (cents) 8.05 7.79 3.3 %
Operating expense per ASM, excluding
fuel (cents) 4.24 4.02 5.5 %
Average stage length (miles) 901 983 (8.3)%
* Total system includes scheduled service, fixed fee contract and
non-revenue flying.
(Logo: http://www.newscom.com/cgi-bin/prnh/20060516/LATU102LOGO)
"Our results in the second quarter continue to be in line with our expectations," said Maurice J. Gallagher, Jr., Chairman, CEO and President of Allegiant Travel Company. "Year-over-year scheduled service passengers increased 58%, while scheduled service departures and ASMs were up 53% and 37%, respectively. Our superb team members delivered an operating margin almost on par with that of the first quarter despite significantly higher fuel prices in the second quarter. Further, our average scheduled fare per passenger at $108 was virtually the same as last year despite a nearly 11% decrease in scheduled stage length. This was driven primarily by our ancillary revenue component, which increased by over $6, year-over-year, to almost $21 per passenger."
Gallagher continued, "Both Las Vegas and Orlando were substantially stronger year-over-year, with Orlando's improvement significantly outpacing that of Las Vegas. Our new destination of Tampa/St. Petersburg continued to be strong during its initial second quarter. However, our third quarter, historically the most challenging, will be even more so if high fuel prices persist. In light of high fuel prices, we are more focused than ever on other costs: in the second quarter, CASM ex-fuel increased only 5.5% over the prior year, despite an 8.3% reduction in system stage length. Given current high fuel prices and recent weaknesses in credit markets, we are pleased our balance sheet remains one of the best in the industry."
Linda Marvin, Allegiant Travel Company CFO, stated, "As of June 30, 2007 cash and short-term investments were $186 million. This balance includes $22 million of net proceeds generated through a secondary stock offering which we completed during the second quarter. With the completion of this secondary offering, more than 50% of Allegiant's stock is now publicly held."
During the second quarter, Allegiant Air initiated service to seven new small cities and on eleven new routes. We recently announced that in the fourth quarter we will add Phoenix-Mesa, Arizona and Ft. Lauderdale, Florida, to our network as our fourth and fifth "world class leisure destinations", basing two aircraft at each city by year-end. These aircraft will serve a total of 25 new routes by December 31, all but one of which will be to an existing small city in the Allegiant Air network.
We have separately announced six other new routes and four other new small
cities to be initiated by year-end 2007. We expect to make further new service
announcements in the near future. The following table summarizes
year-over-year and recent changes in Allegiant Air's scheduled service
network:
July 31, June 30, June 30,
Network Summary* 2007 2007 2006
"World-class leisure
destinations" 3 3 2
Small cities served 48 50 40
Total cities served 51 53 42
Routes to Las Vegas 38 39 33
Routes to Orlando 24 25 16
Routes to Tampa
Bay/St. Petersburg 14 14 0
Other routes 2 2 0
Total routes 78 80 49
* includes cities served seasonally
Allegiant also leased two additional MD-80 aircraft during the second quarter, one of which was placed in service by quarter end. The other leased MD-80 was placed into service in July, along with an owned MD-80, bringing our current operating fleet to 29 MD-80 aircraft. Additionally, in July we bought eight spare engines, currently leased to another operator, which are scheduled to be returned to us in October. We may continue to lease some of these engines to other operators until such time as we need them.
We also have committed to purchase a total of eight MD-80 aircraft for delivery to us through the first quarter of 2008. Of these eight aircraft, six would come with seller-financing. The following table summarizes year-over-year and recent changes in Allegiant Air's fleet:
MD-80 Aircraft in July 31, June 30, June 30,
Service 2007 2007 2006
Owned (including
capital leases) 25 24 15
Leased 4 3 6
Total 29 27 21
At this time, Allegiant Travel Company provides the following guidance to investors, which are subject to revision:
-- We expect third quarter Allegiant Air year-over-year ASM growth of at
least 29% and departure growth of at least 32%.
-- We expect fourth quarter 2007 year-over-year ASM growth of at least 40%
and departure growth of at least 35%.
-- We expect full-year 2008 year-over-year ASM growth of at least 30% and
departure growth of at least 25%.
-- By the end of the year, Allegiant Air expects to operate at least 32
MD-80 aircraft. There currently appear to be sufficient high-quality
MD-80 aircraft available on the market to support Allegiant Air growth.
The current status of Allegiant Air's fuel hedging program is summarized
below:
3Q07 4Q07 1Q08 2Q08
Expected scheduled
service jet fuel
consumption hedged 38% 10% N/M 0%
All-in cost per gallon
of hedged jet fuel* $2.27 $2.34 N/M --
* includes approximately $0.24 per gallon in expenses above the raw cost
of jet fuel
We may yet enter into further fuel hedge transactions for September 2007 fuel consumption.
Allegiant Travel Company will host a conference call with analysts at 1 pm EDT tomorrow, August 7, 2007, to discuss our second quarter 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.
About the Company
Las Vegas-based Allegiant Travel Company (Nasdaq: ALGT), is focused on linking travelers in small cities to world-class leisure destinations such as Las Vegas, Nev., Orlando, Fla. and Tampa/St. Petersburg, Fla. Through its subsidiary, Allegiant Air, LLC the Company operates a low-cost, high-efficiency, all-jet passenger airline offering air travel both on a stand-alone basis and bundled with hotel rooms, rental cars and other travel related services. 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 revenues, future earnings per share, ASM growth, departure growth, fleet growth and expected fuel consumption and expense, as well as 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," "anticipate," "intend," "plan," "estimate" 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 and registration statements filed with the Securities and Exchange Commission at http://www.sec.gov. These risk factors include, without limitation, increases in fuel prices, terrorist attacks, risks inherent to airlines, demand for air services to Las Vegas, Orlando, Tampa/St. Petersburg, Phoenix and Ft. Lauderdale from the markets served by us, our ability to implement our growth strategy, our fixed obligations, our dependence on the Las Vegas, Orlando, Tampa/St. Petersburg, Phoenix and Ft. Lauderdale markets, our ability to add, renew or replace gate leases, our competitive environment, problems with our aircraft, dependence on fixed fee customers, economic and other conditions in markets in which we operate, governmental regulation, increases in maintenance costs and insurance premiums 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
Quarters Ended June 30, 2007 and 2006
(in thousands, except per share amounts)
(Unaudited)
Three months ended June 30, Percent
2007 2006 change
OPERATING REVENUE:
Scheduled service revenues $65,622 $44,816 46.4
Fixed fee contract revenues 7,533 7,887 (4.5)
Ancillary revenues 15,786 6,966 126.6
Total operating revenue 88,941 59,669 49.1
OPERATING EXPENSES:
Aircraft fuel 35,458 26,515 33.7
Salary and benefits 12,046 8,375 43.8
Station operations 8,198 6,169 32.9
Maintenance and repairs 5,692 3,776 50.7
Sales and marketing 3,033 2,324 30.5
Aircraft lease rentals 657 1,545 (57.5)
Depreciation and amortization 3,715 2,519 47.5
Other 5,984 3,573 67.5
Total operating expenses 74,783 54,796 36.5
OPERATING INCOME 14,158 4,873 190.5
As a percent of
total operating revenue 15.9% 8.2%
OTHER (INCOME) EXPENSE:
Gain on fuel derivatives, net (380) (310) 22.6
Earnings from joint
venture, net (195) -- N/M
Interest income (2,409) (757) 218.2
Interest expense 1,361 1,196 13.8
Total other (income) expense (1,623) 129 N/M
INCOME BEFORE INCOME TAXES 15,781 4,744 232.7
As a percent of total
operating revenue 17.7% 8.0%
PROVISION FOR INCOME TAXES 5,805 42 N/M
NET INCOME $9,976 $4,702 112.2
As a percent of total
operating revenue 11.2% 7.9%
Earnings per share
Basic $0.50 $0.73 (31.5)
Diluted $0.49 $0.28 75.0
Weighted Average Shares Outstanding
Basic 19,988 6,433 210.7
Diluted 20,433 16,684 22.5
Unaudited pro forma data (reflecting change in tax status)(1)
Income before income taxes $15,781 $4,744 232.7
Pro-forma provision
for income taxes 5,805 1,755 230.8
Pro-forma net income $9,976 $2,989 233.8
Unaudited net income per share data (reflecting change in tax status)
Basic pro-forma net
income per share $0.50 $0.47 6.4
Diluted pro-forma net
income per share $0.49 $0.18 172.2
(1) Prior to its December 2006 initial public offering, the Company was
organized as a limited liability company (LLC) and as such was
generally not subject to income taxes, except in certain state and
local jurisdictions. The pro-forma tax provision reflects income
taxes as if the company were organized as a corporation effective
January 1, 2006.
Allegiant Travel Company
Operating Statistics
Quarters Ended June 30, 2007 and 2006
(Unaudited)
Three months ended June 30, Percent
2007 2006 change*
OPERATING STATISTICS
Total system statistics
Passengers 810,555 535,499 51.4
Revenue passenger miles
(RPMs) (thousands) 774,828 563,236 37.6
Available seat miles
(ASMs) (thousands) 928,177 703,336 32.0
Load factor 83.5% 80.1% 3.4
Operating revenue
per ASM (cents) 9.58 8.48 13.0
Operating expense
per ASM (cents) 8.05 7.79 3.3
Operating expense
per ASM, excl fuel (cents) 4.24 4.02 5.5
Departures 6,962 4,844 43.7
Block hours 16,370 12,360 32.4
Average stage length (miles) 901 983 (8.3)
Avg number of operating
aircraft during period 26.2 21.0 24.8
Total aircraft in service
end of period 27 21 28.6
Full-time equivalent
employees at end of period 951 739 28.7
Fuel gallons consumed
(thousands) 15,864 11,671 35.9
Average fuel cost per gallon $2.23 $2.27 (1.8)
Scheduled service statistics
Passengers 753,716 476,174 58.3
Revenue passenger miles
(RPMs) (thousands) 708,616 504,635 40.4
Available seat miles
(ASMs) (thousands) 833,475 610,294 36.6
Load factor 85.0% 82.7% 2.3
Departures 6,121 4,000 53.0
Block hours 14,680 10,663 37.7
Yield (cents) 9.26 8.88 4.3
Scheduled service
revenue per ASM (cents) 7.87 7.34 7.2
Ancillary revenue
per ASM (cents) 1.89 1.14 65.8
Total revenue per
ASM (cents) 9.76 8.48 15.1
Average fare -
scheduled service $87.07 $94.12 (7.5)
Average fare - ancillary 20.94 14.63 43.1
Average fare - total $108.01 $108.75 (0.7)
Average stage length (miles) 921 1,035 (10.9)
Percent of sales through
website during period 86.8% 84.7% 2.1
* except load factor and percent of sales through website, which is
percentage point change
Allegiant Travel Company
Non-GAAP Presentations
Quarters Ended June 30, 2007 and 2006
(in thousands, except per share and per ASM amounts)
(Unaudited)
Derivation of adjusted net income (excluding non-cash mark-to-market loss
on fuel derivatives) from net income:
(in thousands, except per Three months ended June 30, Percent
share amounts) 2007 2006 change
Net income $9,976 $4,702 112.2
Mark-to-market non-cash
loss on fuel derivatives 680 102 566.7
Tax impact of mark-to-
market non-cash gain on
fuel derivatives (258) -- N/M
Net of mark-to-market non-
cash loss on fuel
derivatives:
Adjusted net income $10,398 $4,804 116.4
Adjusted earnings per
share:
Basic $0.52 $0.75 (30.7)
Diluted $0.51 $0.29 75.9
Derivation of operating cost per ASM including cash gain on fuel
derivatives from total operating expense per ASM:
Three months ended June 30, Percent
(in cents) 2007 2006 change
Total operating expense
per ASM 8.05 7.79 3.3
Cash gain on fuel
derivatives per ASM (0.11) (0.06) 83.3
Operating cost per ASM
including cash gain on
fuel derivatives 7.94 7.73 2.7
Split into cash-settled portion and mark-to-market non-cash portion of
gain on fuel derivatives, net:
Three months ended June 30, Percent
(in thousands) 2007 2006 change
Mark-to-market non-cash
gain on fuel derivatives $680 102 566.7
Cash gain on fuel
derivatives ($1,060) (412) 157.3
Gain on fuel derivatives,
net ($380) ($310) 22.6
Note: the Company believes the non-GAAP measures above assist investors in
understanding the underlying economic performance of the Company as
follows:
-- The Company does not qualify for fuel hedge accounting treatment
under FAS 133. Management regards the adjusted net income measure
shown above as representative of the net income the Company would
have shown if it did qualify for fuel hedge accounting treatment
under FAS 133. Likewise, management regards operating cost per
ASM including cash gain or loss on fuel derivatives as
representative of the total operating expense per ASM the Company
would have shown if it did qualify for fuel hedge accounting
treatment under FAS 133.
Allegiant Travel Company
Consolidated Statements of Income
Six Months Ended June 30, 2007 and 2006
(in thousands, except per share amounts)
(Unaudited)
Six months ended June 30, Percent
2007 2006 change
OPERATING REVENUE:
Scheduled service
revenues $123,853 $87,509 41.5
Fixed fee contract
revenues 20,881 19,173 8.9
Ancillary revenues 28,556 12,621 126.3
Total operating revenues 173,290 119,303 45.3
OPERATING EXPENSES:
Aircraft fuel 66,637 50,882 31.0
Salary and benefits 23,370 16,028 45.8
Station operations 16,833 12,349 36.3
Maintenance and repairs 12,219 7,477 63.4
Sales and marketing 6,065 4,753 27.6
Aircraft lease rentals 1,308 3,173 (58.8)
Depreciation and
amortization 7,375 4,745 55.4
Other 11,024 7,604 45.0
Total operating expenses 144,831 107,011 35.3
OPERATING INCOME 28,459 12,292 131.5
As a percent of total
operating revenue 16.4% 10.3%
OTHER (INCOME) EXPENSE:
Gain on fuel derivatives,
net (1,904) (578) 229.4
Earnings from joint
venture, net (262) -- N/M
Other expense 63 -- N/M
Interest income (4,293) (1,309) 228.0
Interest expense 2,769 2,601 6.5
Total other expense (3,627) 714 N/M
INCOME BEFORE INCOME
TAXES 32,086 11,578 177.1
As a percent of total
operating revenue 18.5% 9.7%
PROVISION FOR INCOME
TAXES: 12,363 42 N/M
NET INCOME $19,723 $11,536 71.0
As a percent of total
operating revenue 11.4% 9.7%
Earnings per share
Basic $0.99 $1.79 (44.7)
Diluted $0.97 $0.69 40.6
Weighted Average
Shares Outstanding
Basic 19,843 6,433 208.5
Diluted 20,323 16,676 21.9
Unaudited pro forma
data (reflecting change
in tax status)(1)
Income before income taxes $32,086 $11,578 177.1
Pro-forma provision
for income taxes 12,363 4,264 189.9
Pro-forma net income $19,723 $7,314 169.7
Unaudited net income
per share data (reflecting
change in tax status)
Basic pro-forma net
income per share $0.99 $1.14 (13.2)
Diluted pro-forma
net income per share $0.97 $0.44 120.5
(1) Prior to its December 2006 initial public offering, the Company was
organized as a limited liability company (LLC) and as such was
generally not subject to income taxes, except in certain state and
local jurisdictions. The pro-forma tax provision reflects income
taxes as if the company were organized as a corporation effective
January 1, 2006.
Allegiant Travel Company
Operating Statistics
Six Months Ended June 30, 2007 and 2006
(Unaudited)
Six months ended June 30, Percent
2007 2006 change*
OPERATING STATISTICS
Total system statistics
Passengers 1,563,794 1,056,823 48.0
Revenue passenger miles
(RPMs) (thousands) 1,524,065 1,146,761 32.9
Available seat miles (ASMs)
(thousands) 1,860,706 1,439,964 29.2
Load factor 81.9% 79.6% 2.3
Operating revenue per ASM
(cents) 9.31 8.29 12.3
Operating expense per ASM
(cents) 7.78 7.43 4.7
Operating expense per ASM,
excl fuel (cents) 4.20 3.90 7.7
Departures 13,729 9,584 43.2
Block hours 32,930 25,223 30.6
Average stage length (miles) 915 1,015 (9.8)
Avg # of operating aircraft
during period 26.0 20.2 28.7
Total aircraft in service end
of period 27 21 28.6
Full-time equivalent
employees at period end 951 739 28.7
Fuel gallons consumed
(thousands) 31,711 23,953 32.4
Average fuel cost per gallon $2.10 $2.12 (0.9)
Scheduled service statistics
Passengers 1,426,556 929,653 53.5
Revenue passenger miles
(RPMs) (thousands) 1,350,095 1,000,708 34.9
Available seat miles (ASMs)
(thousands) 1,610,616 1,217,847 32.3
Load factor 83.8% 82.2% 1.6
Departures 11,795 7,814 50.9
Block hours 28,527 21,246 34.3
Yield (cents) 9.17 8.74 4.9
Scheduled service revenue per
ASM (cents) 7.69 7.19 7.0
Ancillary revenue per ASM
(cents) 1.77 1.03 71.8
Total revenue per ASM (cents) 9.46 8.22 15.1
Average fare - scheduled
service $86.82 $94.13 (7.8)
Average fare - ancillary 20.02 13.58 47.4
Average fare - total $106.84 $107.71 (0.8)
Average stage length (miles) 924 1,054 (12.4)
Percent of sales through
website during period 87.2% 84.7% 2.5
* except load factor and percent of sales through website, which is
percentage point change
Allegiant Travel Company
Non-GAAP Presentations
Six Months Ended June 30, 2007 and 2006
(in thousands, except per share and per ASM amounts)
(Unaudited)
Derivation of adjusted net income (excluding non-cash mark-to-market loss
on fuel derivatives) from net income:
(in thousands, except per Six months ended June 30, Percent
share amounts) 2007 2006 change
Net income $19,723 $11,536 71.0
Mark-to-market non-cash
loss on fuel derivatives (2,437) (111) 2,095.5
Tax impact of mark-to-
market non-cash gain on
fuel derivatives 938 -- N/M
Net of mark-to-market non-
cash loss on fuel
derivatives:
Adjusted net income $18,224 $11,425 59.5
Adjusted earnings per
share:
Basic $0.92 $1.78 (48.3)
Diluted $0.90 $0.69 30.4
Derivation of operating cost per ASM including cash gain/loss on fuel
derivatives from total operating expense per ASM:
Six months ended June 30, Percent
(in cents) 2007 2006 change
Total operating expense
per ASM 7.78 7.43 4.7
Cash (gain)/loss on fuel
derivatives per ASM 0.03 (0.03) N/M
Operating cost per ASM
including cash gain/loss
on fuel derivatives 7.81 7.40 5.5
Split into cash-settled portion and mark-to-market non-cash portion of
gain on fuel derivatives, net:
Six months ended June 30, Percent
(in thousands) 2007 2006 change
Mark-to-market non-cash
gain on fuel derivatives ($2,437) (111) 2,095.5
Cash (gain)/loss on fuel
derivatives 533 (467) N/M
Gain on fuel derivatives,
net ($1,904) ($578) 229.4
Note: the Company believes the non-GAAP measures above assist investors in
understanding the underlying economic performance of the Company as
follows:
-- The Company does not qualify for fuel hedge accounting treatment
under FAS 133. Management regards the adjusted net income measure
shown above as representative of the net income the Company would
have shown if it did qualify for fuel hedge accounting treatment
under FAS 133. Likewise, management regards operating cost per
ASM including cash gain or loss on fuel derivatives as
representative of the total operating expense per ASM the Company
would have shown if it did qualify for fuel hedge accounting
treatment under FAS 133.
SOURCE Allegiant Travel Company
media inquiries, Tyri Squyres, +1-702-851-7370, mediarelations@allegiantair.com, or investor inquiries, Robert Ashcroft, +1-702-430-3275, ir@allegiantair.com, both of Allegiant Travel Company
http://www.allegiantair.com
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