First Quarter 2016 Fully Diluted Earnings per Share of
Authorized
Increased the Quarterly Dividend to
Three Months Ended March 31, |
|||||||||||
Unaudited | 2016 | 2015 | Change | ||||||||
Total operating revenue (millions) | $ | 348.6 | $ | 329.2 | 5.9 | % | |||||
Operating income (millions) | $ | 121.1 | $ | 108.1 | 12.1 | % | |||||
Net income (millions) | $ | 72.0 | $ | 64.9 | 11.0 | % | |||||
Diluted earnings per share | $ | 4.29 | $ | 3.74 | 14.7 | % | |||||
Return on capital employed (LTM)* | 25.3 | % | 21.3 | % | |||||||
* - see appendix for calculation | |||||||||||
“Thanks to all of our hard working team members, we had another strong first quarter, which is traditionally our best quarter of the year,” stated
Notable first quarter 2016 company highlights
- Purchase of additional Airbus aircraft - Executed two separate agreements for a total of eleven additional A320 series aircraft which will deliver between
December 2017 andFebruary 2020 - Airbus aircraft added to the fleet in the quarter - One A319 and two A320s
- Network growth - As of
March 31, 2016 the company is operating 298 routes versus 247 during the same period last year
Percent change vs Q1 2015 | |||
ASMs* | 18 | % | |
Cities | 4 | % | |
Routes | 21 | % | |
* - ASMs are available seat miles | |||
- New routes - Announced 41 new second quarter routes
- New cities - Announced service to six new cities
- Two new destinations:
Washington D.C. throughBaltimore Washington International airport andDestin, Florida - Four new origination cities:
Albuquerque, New Mexico ,El Paso, Texas ,Sonoma, California , andEvansville, Indiana
- Two new destinations:
- Share repurchase first quarter - Approximately
$54 million or 314,849 shares - Share repurchase authorization - The Board of Directors increased the authorization to
$100 million under our share repurchase program - Dividend - Paid a special dividend of
$1.65 per share inJanuary 2016 and a recurring dividend of$0.30 per share inMarch 2016 - Increase in Dividend - The Board of Directors authorized an increase in the quarterly dividend to
$0.70 per share
First quarter 2016 network trends
- Airbus network - Airbus aircraft flew over 45 percent of the first quarter ASMs versus 27 percent a year ago
- Aircraft utilization - Airbus A320 series aircraft averaged 8.3 block hours per day versus an average of 4.9 hours per day on the MD-80
- Aircraft bases - Six of our twelve bases are Airbus only bases versus zero a year ago
First quarter 2016 revenue performance
- Average fare-total - Decreased by nine percent versus last year
- Off peak flying was 26 percent of ASMs for the first quarter versus 23 percent a year ago
- New markets (markets operating less than one year) were twelve percent of ASMs for the first quarter versus nine percent a year ago
- Same store TRASM - TRASM in markets flown in the first quarter last year declined approximately six percent
Second quarter 2016 revenue trends
- TRASM guidance - Second quarter TRASM is expected to decrease between ten and eight percent versus the second quarter last year
- Off peak flying is expected to be 25 percent of ASMs for the second quarter versus 23 percent last year
- New markets (markets operating less than one year) are expected to be 14 percent of ASMs for the second quarter which is similar to what it was last year
- The shift of Easter from the second quarter in 2015 to the first quarter of 2016 is expected to have a negative two point impact on second quarter year-over-year TRASM
First quarter 2016 cost performance
- CASM - Declined 13 percent - ASMs per gallon improved by three percent versus last year to 72.3 while fuel cost per gallon declined 33 percent
- Station operations - Station expense per departure increased nine percent, primarily on higher ground handling fees versus last year
- Maintenance and repairs - Maintenance and repairs expense rose 24 percent due to six planned MD-80 engine overhauls versus one in the first quarter last year
Second quarter and full year 2016 cost trends
- Second quarter 2016 CASM ex fuel - CASM ex fuel is expected to increase between four and six percent versus the same period last year - The increase is primarily driven by planned MD-80 airframe maintenance events
- Full year CASM ex fuel - No change from previous guidance - expected to be between zero and an increase of four percent
- Maintenance and repairs expense - No change from previous guidance - expected to be between
$115 and $125 thousand per in service aircraft per month for full year 2016 - Total ownership expense per aircraft per month - No change from previous guidance - full year 2016 total depreciation expense and aircraft lease rental expense per in service aircraft per month is expected to be between
$100 and $110 thousand
Balance sheet highlights
- 2016 Capital expenditures - Expect
CAPEX to be$210 million , increased from$188 million due to advantageous Airbus engine purchases - Aircraft financing - In
January 2016 , the Company raised$28 million in debt secured by two A319 aircraft - Shareholder returns -
$86.8 million of cash was returned to shareholders during the first quarter 2016$27.7 million was returned through the special dividend declared inDecember 2015 and paid inJanuary 2016 $5.1 million was returned through the recurring dividend declared and paid in the March 2016- The Company intends to pay a second quarter dividend of
$0.70 per share onJune 3, 2016 to all shareholders of record as ofMay 20, 2016
- The Company intends to pay a second quarter dividend of
$54.0 million returned through share repurchases$100 million in share repurchase authority from the Board of Directors as ofApril 26, 2016
Unaudited (millions) | 3/31/2016 | 12/31/2015 | Change | |||||
Unrestricted cash* | $ | 411.2 | $ | 397.4 | 3.5 | % | ||
Total debt | $ | 651.0 | $ | 641.7 | 1.4 | % | ||
Total Allegiant Travel Company shareholders’ equity | $ | 362.5 | $ | 350.0 | 3.6 | % | ||
* - Unrestricted cash includes investments in marketable securities. | ||||||||
Three Months Ended March 31, |
||||||||
Unaudited (millions) | 2016 | 2015 | Change | |||||
Capital expenditures | $ | 71.7 | $ | 64.1 | 11.9 | % | ||
At this time,
Guidance, subject to revision | ||||||||
April 2016 | 2Q16 | |||||||
Estimated TRASM year-over-year change | (14) to (12)% | (10) to (8)% | ||||||
Fixed fee and other revenue guidance | 2Q16 | |||||||
Fixed fee and other revenue (millions) | $12 to $14 | |||||||
Capacity guidance | ||||||||
System | 2Q16 | 3Q16 | FY16 | |||||
Departure year-over-year growth | 14 to 18% | 18 to 22% | ||||||
ASM year-over-year growth | 13 to 17% | 15 to 19% | 12 to 16% | |||||
Scheduled | ||||||||
Departure year-over-year growth | 14 to 18% | 18 to 22% | ||||||
ASM year-over-year growth | 13 to 17% | 15 to 19% | 12 to 16% | |||||
Cost guidance | 2Q16 | FY16 | ||||||
CASM ex fuel – year-over-year change | 4 to 6% | 0 to 4% | ||||||
CAPEX guidance | FY16 | |||||||
Capital expenditures (millions) | $ | 210 |
||||||
CASM ex fuel – cost per available seat mile excluding fuel expense | ||||||||
Aircraft fleet plan by end of period | |||||||
Aircraft - (seats per AC) | 1Q16 | 2Q16 | YE16 | ||||
MD-80 (166 seats) | 50 | 49 | 47 | ||||
757 (215 seats) | 5 | 5 | 5 | ||||
A319 (156 seats) | 11 | 15 | 17 | ||||
A320 (177 seats) | 16 | 16 | 16 | ||||
Total | 82 | 85 | 85 | ||||
Aircraft listed in table above include only in service aircraft, planned retirements and future aircraft under contract (subject to change) | |||||||
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 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, timing of aircraft retirements, 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
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 | ||||||||||||||
2016 | 2015 | change | |||||||||||||
OPERATING REVENUE: | |||||||||||||||
Scheduled service revenue | $ | 201,606 | $ | 200,529 | 0.5 | ||||||||||
Ancillary revenue: | |||||||||||||||
Air-related charges | 120,929 | 105,069 | 15.1 | ||||||||||||
Third party products | 11,258 | 10,797 | 4.3 | ||||||||||||
Total ancillary revenue | 132,187 | 115,866 | 14.1 | ||||||||||||
Fixed fee contract revenue | 6,800 | 4,368 | 55.7 | ||||||||||||
Other revenue | 8,022 | 8,478 | (5.4 | ) | |||||||||||
Total operating revenue | 348,615 | 329,241 | 5.9 | ||||||||||||
OPERATING EXPENSES: | |||||||||||||||
Aircraft fuel | 53,659 | 69,626 | (22.9 | ) | |||||||||||
Salary and benefits | 69,208 | 58,553 | 18.2 | ||||||||||||
Station operations | 30,734 | 23,852 | 28.9 | ||||||||||||
Maintenance and repairs | 26,492 | 21,392 | 23.8 | ||||||||||||
Depreciation and amortization | 24,685 | 24,347 | 1.4 | ||||||||||||
Sales and marketing | 5,808 | 7,101 | (18.2 | ) | |||||||||||
Other | 16,903 | 16,271 | 3.9 | ||||||||||||
Total operating expense | 227,489 | 221,142 | 2.9 | ||||||||||||
OPERATING INCOME | 121,126 | 108,099 | 12.1 | ||||||||||||
OTHER (INCOME) EXPENSE: | |||||||||||||||
Interest income | (966 | ) | (105 | ) | NM* | ||||||||||
Interest expense | 7,239 | 6,826 | 6.1 | ||||||||||||
Other, net | (9 | ) | 4 | NM* | |||||||||||
Total other (income) expense | 6,264 | 6,725 | (6.9 | ) | |||||||||||
INCOME BEFORE INCOME TAXES | 114,862 | 101,374 | 13.3 | ||||||||||||
PROVISION FOR INCOME TAXES | 42,882 | 36,551 | 17.3 | ||||||||||||
NET INCOME | 71,980 | 64,823 | 11.0 | ||||||||||||
Net loss attributable to noncontrolling interest | — | (44 | ) | NM* | |||||||||||
NET INCOME ATTRIBUTABLE TO ALLEGIANT TRAVEL COMPANY | $ | 71,980 | $ | 64,867 | 11.0 | ||||||||||
Earnings per share to common shareholders (1): | |||||||||||||||
Basic | $ | 4.29 | $ | 3.75 | 14.4 | ||||||||||
Diluted | $ | 4.29 | $ | 3.74 | 14.7 | ||||||||||
Weighted average shares outstanding used in computing earnings per share to common shareholders (1): | |||||||||||||||
Basic | 16,678 | 17,197 | (3.0 | ) | |||||||||||
Diluted | 16,699 | 17,237 | (3.1 | ) | |||||||||||
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 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 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 | |||||||||
2016 | 2015 | change* | ||||||||
OPERATING STATISTICS | ||||||||||
Total system statistics: | ||||||||||
Passengers | 2,592,907 | 2,256,235 | 14.9 | |||||||
Revenue passenger miles (RPMs) (thousands) | 2,520,149 | 2,191,468 | 15.0 | |||||||
Available seat miles (ASMs) (thousands) | 3,001,384 | 2,526,031 | 18.8 | |||||||
Load factor | 84.0 | % | 86.8 | % | (2.8 | ) | ||||
Operating expense per ASM (CASM) (cents) | 7.58 | 8.76 | (13.5 | ) | ||||||
Fuel expense per ASM (cents) | 1.79 | 2.76 | (35.1 | ) | ||||||
Operating CASM, excluding fuel (cents) | 5.79 | 6.00 | (3.5 | ) | ||||||
ASMs per gallon of fuel | 72.3 | 70.2 | 3.0 | |||||||
Departures | 18,918 | 15,987 | 18.3 | |||||||
Block hours | 46,270 | 38,733 | 19.5 | |||||||
Average stage length (miles) | 935 | 929 | 0.6 | |||||||
Average number of operating aircraft during period | 82.2 | 71.6 | 14.8 | |||||||
Average block hours per aircraft per day | 6.2 | 6.0 | 3.3 | |||||||
Full-time equivalent employees at end of period | 3,029 | 2,448 | 23.7 | |||||||
Fuel gallons consumed (thousands) | 41,523 | 36,002 | 15.3 | |||||||
Average fuel cost per gallon | $ | 1.29 | $ | 1.93 | (33.2 | ) | ||||
Scheduled service statistics: | ||||||||||
Passengers | 2,567,309 | 2,223,703 | 15.5 | |||||||
Revenue passenger miles (RPMs) (thousands) | 2,483,553 | 2,163,618 | 14.8 | |||||||
Available seat miles (ASMs) (thousands) | 2,897,951 | 2,457,705 | 17.9 | |||||||
Load factor | 85.7 | % | 88.0 | % | (2.3 | ) | ||||
Departures | 18,175 | 15,321 | 18.6 | |||||||
Block hours | 44,563 | 37,546 | 18.7 | |||||||
Total scheduled service revenue per ASM (TRASM)** (cents) | 11.52 | 12.87 | (10.5 | ) | ||||||
Average fare - scheduled service | $ | 78.53 | $ | 90.18 | (12.9 | ) | ||||
Average fare - ancillary air-related charges | $ | 47.10 | $ | 47.25 | (0.3 | ) | ||||
Average fare - ancillary third party products | $ | 4.39 | $ | 4.86 | (9.7 | ) | ||||
Average fare - total | $ | 130.02 | $ | 142.29 | (8.6 | ) | ||||
Average stage length (miles) | 940 | 943 | (0.3 | ) | ||||||
Fuel gallons consumed (thousands) | 40,154 | 35,000 | 14.7 | |||||||
Average fuel cost per gallon | $ | 1.29 | $ | 1.96 | (34.2 | ) | ||||
Percent of sales through website during period | 94.3 | % | 95.4 | % | (1.1 | ) | ||||
* Except load factor and percent of sales through website, which is percentage point change. | ||||||||||
** 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. | ||||||||||
Appendix A | ||||||||
Additional Financial Information | ||||||||
(Unaudited) | ||||||||
Twelve Months Ended March 31, | ||||||||
Return on capital calculation (millions) | 2016 | 2015 | ||||||
Net income attributable to Allegiant Travel Company | $ | 227.5 | $ | 117.3 | ||||
Income tax | 132.7 | 67.1 | ||||||
Interest expense | 26.9 | 24.9 | ||||||
Less interest income | (2.3 | ) | (0.7 | ) | ||||
384.8 | 208.6 | |||||||
Interest income | 2.3 | 0.7 | ||||||
Tax rate | 36.8 | % | 36.6 | % | ||||
Numerator | 244.6 | 132.7 | ||||||
Total assets as of prior March 31 | 1,299.0 | 904.2 | ||||||
Less current liabilities as of prior March 31 | 394.0 | 303.0 | ||||||
Plus short term debt as of prior March 31 | 60.8 | 20.4 | ||||||
Denominator | 965.8 | 621.6 | ||||||
Return on capital employed | 25.3 | % | 21.3 | % | ||||