Allegiant Travel Company Fourth Quarter and Full Year 2012 Financial Results
40th Consecutive Profitable Quarter
Fourth Quarter Fully Diluted Earnings per Share of $.76
Full Year Fully Diluted Earnings per Share of $4.06
LAS VEGAS. January 30, 2013 -Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for both the fourth quarter and full year 2012, as well as comparisons to prior year equivalents:
Unaudited 4Q12 4Q11 Change 2012 2011 Change Total operating revenue (millions) $222.8 $193.9 14.9% $908.7 $779.1 16.6% Operating income (millions) $25.4 $20.2 25.8% $132.3 $85.4 54.8% Operating margin 11.4% 10.4% 1.0pp 14.6% 11.0% 3.6pp EBITDA (millions) $42.2 $31.3 34.7% $190.1 $127.4 49.2% EBITDA margin 18.9% 16.2% 2.7pp 20.9% 16.4% 4.5pp Net income (millions) $14.8 $10.8 36.6% $78.6 $49.4 59.1% Diluted earnings per share $0.76 $0.56 35.7% $4.06 $2.57 58.0%
"We are very proud to report our 40th consecutive profitable quarter," stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. "40 consecutive profitable quarters is an outstanding achievement in this industry and we could not do it without the great efforts and contributions of our Team Members. In 2012, we recorded the highest system fuel cost per gallon we have ever paid for a full year. In spite of that, we were able to grow full year earnings per share over 58 percent to the highest ever."
Notable company quarterly highlights
- Signed purchase agreements to acquire nine Airbus A320 aircraft previously operated by Iberia
- Successfully converted 100 percent of our customer web traffic to our new booking engine in November
- Returned over $38 million to shareholders through a special dividend of $2 per share in December
- Repurchased approximately 55,000 shares for $4 million during the fourth quarter
- As of January 30, 2013, we have converted 47 of an expected 51 MD-80s to 166 seat aircraft
- Began operating 21 new routes during the quarter
- Announced eight new routes starting in the first quarter
- Ranked 14th on the Forbes' 100 Best Small Companies. We have been listed four years in a row
Revenue performance
- Fourth quarter 2012 total average fare was up 4.4 percent versus 2011 and was the highest in the company's history
- 12th consecutive quarter of year over year increases in total average fare
- Ancillary air-related revenue per passenger has grown sequentially every month since April 2012
4Q12 4Q11 Change 2012 2011 Change Scheduled Service: Average fare - scheduled service $88.59 $91.66 (3.3)% $88.90 $89.15 (0.3)% Average fare - ancillary air-related charges $39.89 $31.51 26.6% $35.72 $31.17 14.6% Average fare - ancillary third party products $5.19 $4.88 6.4% $5.48 $5.18 5.8% Average fare - total $133.67 $128.05 4.4% $130.10 $125.51 3.7% Scheduled service passenger revenue per ASM (PRASM) (cents) 7.99 8.91 (10.3)% 8.43 8.88 (5.1)% Total scheduled service revenue* per ASM (TRASM) (cents) 12.06 12.45 (3.1)% 12.33 12.50 (1.4)% Load factor 86.5% 89.6% (3.1)pp 89.4% 91.7% (2.3)pp Passengers (millions) 1.6 1.4 13.3% 6.6 5.8 14.1% Average passengers per departure 141 134 5.2% 140 136 2.9% Average scheduled service stage length (miles) 930 904 2.9% 918 901 1.9%
* Total scheduled service revenue includes scheduled service, ancillary air-related, and ancillary third party revenue.
Cost performance
- Full year 2012 cost per ASM excluding fuel decreased 6.7 percent to 5.3 cents in spite of a five percent decrease in aircraft utilization for the same time period
- Full year 2012 ASMs per gallon increased 6.6 percent to 63.0 versus last year, and improved sequentially 3.6 percent in the fourth quarter 2012 versus the third quarter 2012
- Full year 2012 salaries and benefits expense per passenger decreased 1.7 percent despite a 14.2 percent increase in full time equivalent employees
- Full year 2012 maintenance and repairs expense per passenger decreased 19.6 percent due primarily to a 60 percent decline in engine overhaul expenses. Maintenance expense per aircraft per month was $102,277 in 2012 versus $129,558 in 2011
- Full year 2012 sales and marketing expense per passenger decreased 14.6 percent versus last year, primarily due to the implementation of a discount for customers paying with less expensive forms of payment beginning in the third quarter 2012
4Q12 4Q11 Change 2012 2011 Change Total System*: Operating expense per passenger $118.49 $116.08 2.1% $111.12 $112.32 (1.1)% Operating expense per passenger, excluding fuel $63.50 $62.04 2.4% $56.99 $58.78 (3.0)% Operating expense per ASM (CASM) (cents) 10.50 11.03 (4.8)% 10.37 10.90 (4.9)% Operating expense, excluding fuel per ASM (CASM ex fuel) (cents) 5.63 5.89 (4.4)% 5.32 5.70 (6.7)% Average block hours per aircraft per day 5.3 5.6 (5.4)% 5.7 6.0 (5.0)%
* Total system includes scheduled service, fixed-fee contract and non-revenue flying.
Third party products performance
- For the fourth quarter 2012, ancillary revenue - third party products per passenger increased 6.4 percent versus last year. This has been our eleventh consecutive quarter of year over year increases.
- For the full year 2012, net revenue from hotels increased about five percent while net revenue from rental cars increased about 33 percent versus 2011
Supplemental Ancillary Revenue Information 4Q12 4Q11 Change 2012 2011 Change Unaudited (millions) Gross ancillary revenue - third party products $24.9 $23.0 8.6% $119.0 $106.4 11.9% Cost of goods sold ($16.2) ($15.2) 6.1% ($79.0) ($72.0) 9.7% Transaction costs* ($.6) ($.9) (35.9)% ($3.9) ($4.5) (12.1)% Ancillary revenue - third party products $8.2 $6.8 20.5% $36.1 $29.9 20.8% As percent of gross 32.8% 29.6% 3.2pp 30.3% 28.1% 2.2pp As percent of income before taxes 34.9% 36.9% (2.0)pp 29.0% 37.6% (8.6)pp Ancillary revenue - third party products/scheduled passenger $5.19 $4.88 6.4% $5.48 $5.18 5.8% Hotel room nights (thousands) 137.5 142.6 (3.5)% 690.1 647.7 6.5% Rental car days (thousands) 169.1 113.8 48.6% 763.4 577.7 32.1%
* Includes payment expenses and travel agency commissions.
Balance sheet highlights
- We currently have $41 million in share repurchase authority
Unaudited (millions) 12/31/12 12/31/11 Change Unrestricted cash* $352.7 $319.5 10.4% Total debt $150.9 $146.1 3.3% Total Allegiant Travel Company stockholders' equity $400.5 $351.5 14.0% Year ended December 31, Unaudited (millions) 2012 2011 Change Capital expenditures $105.1 $86.6 21.4%
* 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 Revenue guidance January 2013 1Q13 Estimated PRASM year-over-year change (13) to (11)% (8) to (6)% Fixed fee and other revenue guidance 1Q13 Fixed fee and other revenue (millions) $4 to $6 Capacity guidance System 1Q13 2Q13 Departure year-over-year growth (8) to (4)% (7) to (3)% ASM year-over-year growth +12 to 16% +14 to 18% Scheduled Departure year-over-year growth (2) to 2% 0 to 4% ASM year-over-year growth +15 to 19% +19 to 23% Cost guidance 1Q13 CASM ex fuel - year-over-year change +1 to 3% CAPEX guidance FY13 Capital expenditures (millions) $150 to $160
CASM ex fuel - cost per available seat mile excluding fuel expense
* Number of aircraft expected to be completed by end of the quarter
2013 aircraft fleet plan by end of quarter
Aircraft 1Q13 2Q13 3Q13 4Q13 MD-80 (166*) 51 51 51 51 MD-80 (non 166*) 6 5 1 1 757 6 6 6 6 A319 0 2 2 2 A320 0 0 2 7 Total 63 64 62 67
* 166 refers to MD-80s that are expected to be converted to 166 seat aircraft, non 166 refers to those aircraft that will not be converted
Aircraft listed in table above are considered in service aircraft
Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. EST today, January 30, 2013 to discuss its fourth quarter and full year 2012 financial results. A live broadcast of the conference call will be available via the Company's Investor Relations website homepage at http://ir.allegiant.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
Media Inquiries: Brian Davis
mediarelations@allegiantair.com
Investor Inquiries: Chris Allen
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 aircraft to be modified and number of contracted aircraft to be placed in service by quarter, 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 the economic downturn on leisure travel, debt covenants, terrorist attacks, risks inherent to airlines, our planned introduction of an additional aircraft type, demand for air services to our leisure destinations from the markets served by us, our dependence on our leisure destination markets, our competitive environment, problems with our aircraft, our reliance on our automated systems, 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 December 31, 2012 and 2011
(in thousands, except per share amounts)
(Unaudited)
Three months ended Dec. 31, Percent
2012 2011 change
OPERATING REVENUE:
Scheduled service revenue $139,668 $127,597 9.5
Ancillary revenue:
Air-related charges 62,899 43,866 43.4
Third party products 8,184 6,794 20.5
Total ancillary revenue 71,083 50,660 40.3
Fixed fee contract revenue 11,375 12,522 (9.2)
Other revenue 712 3,158 (77.5)
Total operating revenue 222,838 193,937 14.9
OPERATING EXPENSES:
Aircraft fuel 91,638 80,898 13.3
Salary and benefits 33,933 29,590 14.7
Station operations 20,655 16,529 25.0
Maintenance and repairs 19,029 23,806 (20.1)
Sales and marketing 4,081 4,329 (5.7)
Aircraft lease rentals - 153 (100.0)
Depreciation and amortization 16,667 11,253 48.1
Other 11,458 7,205 59.0
Total operating expenses 197,461 173,763 13.6
OPERATING INCOME 25,377 20,174 25.8
As a percent of total operating revenue 11.4% 10.4%
OTHER (INCOME) EXPENSE:
(Earnings) loss from unconsolidated affiliates, net (43) 83 (151.8)
Interest income (242) (236) 2.5
Interest expense 2,210 1,889 17.0
Total other (income) expense 1,925 1,736 10.8
INCOME BEFORE INCOME TAXES 23,452 18,438 27.2
As a percent of total operating revenue 10.5% 9.5%
PROVISION FOR INCOME TAXES 8,810 7,628 15.5
NET INCOME $14,642 $10,810 35.4
Net loss attributable to noncontrolling interest (124) - (100)
NET INCOME ATTRIBUTABLE TO ALLEGIANT TRAVEL COMPANY $14,766 $10,810 36.6
Earnings per share to common stockholders (1):
Basic $0.78 $0.57 38.6
Diluted $0.76 $0.56 35.7
Weighted average shares outstanding used in computing earnings per share to common
stockholders (1):
Basic 19,154 18,959 1.0
Diluted 19,371 19,207 0.9
(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 December 31, 2012 and 2011
(Unaudited)
Three months ended Dec. 31, Percent
2012 2011 change*
OPERATING STATISTICS
Total system statistics
Passengers 1,666,501 1,496,923 11.3
Revenue passenger miles (RPMs) (thousands) 1,578,841 1,363,855 15.8
Available seat miles (ASMs) (thousands) 1,879,791 1,575,899 19.3
Load factor 84.0% 86.5% (2.5)
Operating revenue per ASM (RASM) (cents) 11.85 12.31 (3.7)
Operating expense per ASM (CASM) (cents) 10.50 11.03 (4.8)
Fuel expense per ASM (cents) 4.87 5.13 (5.1)
Operating CASM, excluding fuel (cents) 5.63 5.89 (4.4)
Operating expense per passenger $118.49 $116.08 2.1
Fuel expense per passenger $54.99 $54.04 1.8
Operating expense per passenger, excluding fuel $63.50 $62.04 2.4
ASMs per gallon of fuel 65.6 60.1 9.2
Departures 12,802 12,166 5.2
Block hours 30,223 27,998 7.9
Average stage length (miles) 882 853 3.4
Average number of operating aircraft during period 62.1 54.6 13.7
Average block hours per aircraft per day 5.3 5.6 (5.4)
Full-time equivalent employees at period end 1,821 1,595 14.2
Fuel gallons consumed (thousands) 28,668 26,230 9.3
Average fuel cost per gallon $3.20 $3.08 3.9
Scheduled service statistics
Passengers 1,576,641 1,392,092 13.3
Revenue passenger miles (RPMs) (thousands) 1,512,063 1,283,218 17.8
Available seat miles (ASMs) (thousands) 1,747,920 1,431,430 22.1
Load factor 86.5% 89.6% (3.1)
Departures 11,192 10,360 8.0
Average passengers per departure 141 134 5.2
Scheduled service seats per departure 165.4 152.2 8.7
Block hours 27,527 24,961 10.3
Yield (cents) 9.24 9.94 (7.0)
Scheduled service revenue per ASM (PRASM) (cents) 7.99 8.91 (10.3)
Total ancillary revenue per ASM (cents) 4.07 3.54 15.0
Total scheduled service revenue per ASM (TRASM) (cents) 12.06 12.45 (3.1)
Average fare - scheduled service $88.59 $91.66 (3.3)
Average fare - ancillary air-related charges $39.89 $31.51 26.6
Average fare - ancillary third party products $5.19 $4.88 6.4
Average fare - total $133.67 $128.05 4.4
Average stage length (miles) 930 904 2.9
Fuel gallons consumed (thousands) 26,368 23,517 12.1
Average fuel cost per gallon $3.37 $3.29 2.4
Percent of sales through website during period 91.7% 89.1% 2.6
* Except load factor and percent of sales through website, which is percentage point change.
Allegiant Travel Company
Consolidated Statements of Income
Years Ended December 31, 2012 and 2011
(in thousands, except per share amounts)
(Unaudited)
Years ended Dec. 31, Percent
2012 2011 change
OPERATING REVENUE:
Scheduled service revenue $586,036 $514,984 13.8
Ancillary revenue:
Air-related charges 235,436 180,078 30.7
Third party products 36,124 29,916 20.8
Total ancillary revenue 271,560 209,994 29.3
Fixed fee contract revenue 42,905 43,690 (1.8)
Other revenue 8,218 10,449 (21.4)
Total operating revenue 908,719 779,117 16.6
OPERATING EXPENSES:
Aircraft fuel 378,195 330,657 14.4
Salary and benefits 133,295 119,856 11.2
Station operations 78,357 66,709 17.5
Maintenance and repairs 73,897 81,228 (9.0)
Sales and marketing 19,222 19,905 (3.4)
Aircraft lease rentals - 1,101 (100.0)
Depreciation and amortization 57,503 41,975 37.0
Other 35,946 32,242 11.5
Total operating expenses 776,415 693,673 11.9
OPERATING INCOME 132,304 85,444 54.8
As a percent of total operating revenue 14.6% 11.0%
OTHER (INCOME) EXPENSE:
(Earnings) loss from unconsolidated affiliates, net (99) (9) NM
Interest income (983) (1,236) (20.5)
Interest expense 8,739 7,175 21.8
Total other (income) expense 7,657 5,930 29.1
INCOME BEFORE INCOME TAXES 124,647 79,514 56.8
As a percent of total operating revenue 13.7% 10.2%
PROVISION FOR INCOME TAXES 46,233 30,116 53.5
NET INCOME $78,414 49,398 58.7
Net loss attributable to noncontrolling interest (183) - NM
NET INCOME ATTRIBUTABLE TO ALLEGIANT TRAVEL COMPANY 78,597 $49,398 59.1
Earnings per share to common stockholders (1):
Basic $4.10 $2.59 58.3
Diluted $4.06 $2.57 58.0
Weighted average shares outstanding used in computing earnings per share to common
stockholders (1):
Basic 19,079 18,935 0.8
Diluted 19,276 19,125 0.8
(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
Years Ended December 31, 2012 and 2011
(Unaudited)
Years ended Dec. 31, Percent
2012 2011 change*
OPERATING STATISTICS
Total system statistics
Passengers 6,987,324 6,175,808 13.1
Revenue passenger miles (RPMs) (thousands) 6,514,056 5,640,577 15.5
Available seat miles (ASMs) (thousands) 7,487,276 6,364,243 17.6
Load factor 87.0% 88.6% (1.6)
Operating revenue per ASM (RASM) (cents) 12.14 12.24 (0.8)
Operating expense per ASM (CASM) (cents) 10.37 10.90 (4.9)
Fuel expense per ASM (cents) 5.05 5.20 (2.9)
Operating CASM, excluding fuel (cents) 5.32 5.70 (6.7)
Operating expense per passenger $111.12 $112.32 (1.1)
Fuel expense per passenger $54.13 $53.54 1.1
Operating expense per passenger, excluding fuel $56.99 $58.78 (3.0)
ASMs per gallon of fuel 63.0 59.1 6.6
Departures 53,615 49,360 8.6
Block hours 124,610 113,691 9.6
Average stage length (miles) 872 858 1.6
Average number of operating aircraft during period 60.2 52.2 15.3
Average block hours per aircraft per day 5.7 6.0 (5.0)
Fuel gallons consumed (thousands) 118,839 107,616 10.4
Average fuel cost per gallon $3.18 $3.07 3.6
Scheduled service statistics
Passengers 6,591,707 5,776,462 14.1
Revenue passenger miles (RPMs) (thousands) 6,220,320 5,314,976 17.0
Available seat miles (ASMs) (thousands) 6,954,408 5,797,753 20.0
Load factor 89.4% 91.7% (2.3)
Departures 46,995 42,586 10.4
Average passengers per departure 140 136 2.9
Scheduled service seats per departure 159.7 150.8 5.9
Block hours 113,671 101,980 11.5
Yield (cents) 9.42 9.69 (2.8)
Scheduled service revenue per ASM (PRASM) (cents) 8.43 8.88 (5.1)
Total ancillary revenue per ASM (cents) 3.90 3.62 7.7
Total scheduled service revenue per ASM (TRASM) (cents) 12.33 12.50 (1.4)
Average fare - scheduled service $88.90 $89.15 (0.3)
Average fare - ancillary air-related charges $35.72 $31.18 14.6
Average fare - ancillary third party products $5.48 $5.18 5.8
Average fare - total $130.10 $125.51 3.7
Average stage length (miles) 918 901 1.9
Fuel gallons consumed (thousands) 109,257 96,999 12.6
Average fuel cost per gallon $3.37 $3.30 2.1
Percent of sales through website during period 90.1% 88.8% 1.3
* Except load factor and percent of sales through website, which is percentage point change.
Allegiant Travel Company
Non-GAAP Presentations
Three Months and Years Ended December 31, 2012 and 2011
(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 indicators 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 its calculation generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, 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 the non-GAAP financial measure EBITDA 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, and a reconciliation of the non-GAAP measure to the most comparable GAAP measure. Our utilization of a 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 it may not be comparable to similarly titled measures employed by other companies in the airline and travel industry. The reconciliations to GAAP net income follow.
Three months ended Dec. 31, Percent (in thousands) 2012 2011 change Net income attributable to Allegiant Travel Company $14,766 $10,810 36.6 Plus (minus) Interest income (242) (236) 2.5 Interest expense 2,210 1,889 17.0 Provision for income taxes 8,810 7,628 15.5 Depreciation and amortization 16,667 11,253 48.1 EBITDA $42,211 $31,344 34.7 Total revenue $222,838 $193,937 14.9 EBITDA margin 18.9% 16.2%
Years ended Dec. 31, Percent (in thousands) 2012 2011 change Net income attributable to Allegiant Travel Company $78,597 $49,398 59.1 Plus (minus) Interest income (983) (1,236) (20.5) Interest expense 8,739 7,175 21.8 Provision for income taxes 46,233 30,116 53.5 Depreciation and amortization 57,503 41,975 37.0 EBITDA $190,089 $127,428 49.2 Total revenue $908,719 $779,117 16.6 EBITDA margin 20.9% 16.4%
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Source: Allegiant Travel Company via Thomson Reuters ONE
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