Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||
Unaudited | 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||
Total operating revenue (millions) | $ | 436.8 | $ | 401.8 | 8.7% | $ | 862.2 | $ | 781.9 | 10.3% | |||||||
Operating income (millions) | 74.2 | 85.8 | (13.5) | 154.2 | 159.5 | (3.3) | |||||||||||
Net income (millions) | 50.0 | 49.0 | 2.0 | 105.2 | 91.4 | 15.1 | |||||||||||
Diluted earnings per share | $ | 3.10 | $ | 2.97 | 4.4 | $ | 6.52 | $ | 5.51 | 18.3 |
"We are proud to announce our 62nd consecutive profitable quarter," stated
"We are continuing our transition to an all-Airbus fleet. We have done an excellent job year-to-date but this summer was the critical period in this transition, including the timely delivery and induction of fifteen Airbus aircraft, and retirement of six MD-80s. Today we are on our schedule as planned, though some delayed deliveries in late May impacted our peak June period, in terms of top line and operations reliability. Looking forward, we should complete our transition at the end of November as scheduled.
"Our CASM-ex fuel results came in nicely. Our improved operational results as well as efficiencies from the Airbus fleet are beginning to pay dividends, and we are pleased with where the cost trend line is headed. Additionally, fuel efficiency continues to improve with the transition, with 76 vs. 72 ASMs per gallon this year compared to the same period last year.
“The Sunseeker resort project continues to move ahead. We are closing in on a financing plan and hope to announce the specifics in the next 60 to 90 days. We continue to be impressed with the many synergies and business alignments between Sunseeker and our air service presence on the west coast of
Shareholder returns
- 2018 shareholder returns - over
$22 million in the first half of the year through dividends- Will pay dividends of
$0.70 per share onAugust 31, 2018 to shareholders of record as ofAugust 17, 2018 - Current share repurchase authority of
$100 million as ofJuly 25, 2018
- Will pay dividends of
2018 outlook
- Third quarter scheduled and system ASMs are expected to grow between thirteen and fifteen percent vs last year
- 2018 full year ASM growth is expected to be between nine and eleven percent due to slower than expected aircraft deliveries
- 2018 fuel cost is expected to be
$2.35 per gallon using the forward curve as ofJuly 24, 2018 - 2018 EPS is expected to be between
$9 and $10 per share due to the expected higher fuel cost- Fuel expense is expected to increase approximately
$35 million from when guided inNovember 2017
- Fuel expense is expected to increase approximately
Guidance, subject to revision | ||
Full year 2018 guidance | Previous* | Current |
Fuel cost per gallon | $2.20 | $2.35 |
Available seat miles (ASMs) / gallon | 77.5 to 79.5 | 77.5 to 78.5 |
Interest expense (millions) | $50 to $60 | $50 to $60 |
Tax rate | 21 to 22% | 21 to 22% |
Share count (millions) | 15.9 | 15.9 |
Earnings per share | $10 to $12 | $9 to $10 |
System ASMs - year over year change | 11 to 15% | 9 to 11% |
Scheduled service ASMs - year over year change | 11 to 15% | 9 to 11% |
Depreciation expense / aircraft / month (thousands) | $120 to $130 | $115 to $120 |
Maintenance expense / aircraft / month (thousands) | $95 to $105 | $80 to $85 |
Full year 2018 CAPEX guidance | ||
Capital expenditures (millions) ** | $300 | $300 |
Capitalized Airbus deferred heavy maintenance (millions) *** | $45 | $45 |
* - Previous guidance as of April 25, 2018 | ||
** - Excludes Sunseeker Resorts | ||
*** - Not included in capital expenditure total |
Aircraft fleet plan by end of period | ||||
Aircraft - (seats per AC) | 1Q18 | 2Q18 | 3Q18 | YE18 |
MD-80 (166 seats) | 32 | 27 | 19 | — |
A319 (156 seats) | 26 | 31 | 31 | 32 |
A320 (177/186 seats) | 30 | 35 | 44 | 45 |
Total | 88 | 93 | 94 | 77 |
Aircraft listed in table above include only in-service aircraft, planned retirements and future aircraft under contract (subject to change) |
Allegiant.®
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 expenses, ASM growth, 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 June 30, | Percent | |||||||||||
2018 |
2017 |
change | ||||||||||
OPERATING REVENUE: | ||||||||||||
Passenger revenue (1) | $ | 405,572 | $ | 367,250 | 10.4 | |||||||
Third party products | 17,799 | 14,304 | 24.4 | |||||||||
Fixed fee contract revenue | 7,653 | 11,029 | (30.6 | ) | ||||||||
Other revenue | 5,756 | 9,261 | (37.8 | ) | ||||||||
Total operating revenue | 436,780 | 401,844 | 8.7 | |||||||||
OPERATING EXPENSES: | ||||||||||||
Aircraft fuel | 122,454 | 85,387 | 43.4 | |||||||||
Salary and benefits | 101,645 | 92,221 | 10.2 | |||||||||
Station operations | 41,553 | 38,998 | 6.6 | |||||||||
Maintenance and repairs | 24,611 | 28,645 | (14.1 | ) | ||||||||
Depreciation and amortization | 29,833 | 30,129 | (1.0 | ) | ||||||||
Sales and marketing | 18,348 | 13,492 | 36.0 | |||||||||
Aircraft lease rentals | 75 | 2,400 | (96.9 | ) | ||||||||
Other | 24,039 | 24,777 | (3.0 | ) | ||||||||
Total operating expense | 362,558 | 316,049 | 14.7 | |||||||||
OPERATING INCOME | 74,222 | 85,795 | (13.5 | ) | ||||||||
OTHER (INCOME) EXPENSE: | ||||||||||||
Interest expense | 13,156 | 8,889 | 48.0 | |||||||||
Interest income | (1,927 | ) | (1,475 | ) | 30.6 | |||||||
Other, net | (50 | ) | (493 | ) | (89.9 | ) | ||||||
Total other expense | 11,179 | 6,921 | 61.5 | |||||||||
INCOME BEFORE INCOME TAXES | 63,043 | 78,874 | (20.1 | ) | ||||||||
PROVISION FOR INCOME TAXES | 13,027 | 29,836 | (56.3 | ) | ||||||||
NET INCOME | $ | 50,016 | $ | 49,038 | 2.0 | |||||||
Earnings per share to common shareholders (2): | ||||||||||||
Basic | $3.10 | $2.98 | 4.0 | |||||||||
Diluted | $3.10 | $2.97 | 4.4 | |||||||||
Weighted average shares outstanding used in computing earnings per share to common shareholders (2): | ||||||||||||
Basic | 15,939 | 16,198 | (1.6 | ) | ||||||||
Diluted | 15,945 | 16,220 | (1.7 | ) |
(1) Passenger revenue previously reported as Scheduled service revenue and Ancillary air-related revenue.
(2) 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 calculations for the periods presented reflect the two-class method mandated by ASC Topic 260, "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 June 30, | Percent | |||||||||
2018 | 2017 | change (1) | ||||||||
OPERATING STATISTICS | ||||||||||
Total system statistics: | ||||||||||
Passengers | 3,704,113 | 3,306,193 | 12.0 | |||||||
Revenue passenger miles (RPMs) (thousands) | 3,276,599 | 2,958,808 | 10.7 | |||||||
Available seat miles (ASMs) (thousands) | 3,922,294 | 3,584,209 | 9.4 | |||||||
Load factor | 83.5 | % | 82.6 | % | 0.9 | |||||
Operating expense per ASM (CASM) (cents) | 9.24 | 8.82 | 4.8 | |||||||
Fuel expense per ASM (cents) | 3.12 | 2.38 | 31.1 | |||||||
Operating CASM, excluding fuel (cents) | 6.12 | 6.44 | (5.0 | ) | ||||||
ASMs per gallon of fuel | 76.1 | 71.9 | 5.8 | |||||||
Departures | 27,063 | 24,721 | 9.5 | |||||||
Block hours | 60,707 | 56,056 | 8.3 | |||||||
Average stage length (miles) | 858 | 866 | (0.9 | ) | ||||||
Average number of operating aircraft during period | 92.0 | 85.3 | 7.9 | |||||||
Average block hours per aircraft per day | 7.3 | 7.2 | 1.4 | |||||||
Full-time equivalent employees at end of period | 3,840 | 3,628 | 5.8 | |||||||
Fuel gallons consumed (thousands) | 51,516 | 49,858 | 3.3 | |||||||
Average fuel cost per gallon | $ | 2.38 | $ | 1.71 | 39.2 | |||||
Scheduled service statistics: | ||||||||||
Passengers | 3,681,944 | 3,266,789 | 12.7 | |||||||
Revenue passenger miles (RPMs) (thousands) | 3,245,774 | 2,903,257 | 11.8 | |||||||
Available seat miles (ASMs) (thousands) | 3,795,815 | 3,436,872 | 10.4 | |||||||
Load factor | 85.5 | % | 84.5 | % | 1.0 | |||||
Departures | 25,992 | 23,609 | 10.1 | |||||||
Block hours | 58,536 | 53,632 | 9.1 | |||||||
Total passenger revenue per ASM (TRASM) (cents) (2) | 11.15 | 11.10 | 0.5 | |||||||
Average fare - scheduled service (3) | $ | 64.62 | $ | 67.76 | (4.6 | ) | ||||
Average fare - air-related charges (3) | $ | 45.53 | $ | 44.66 | 1.9 | |||||
Average fare - third party products | $ | 4.84 | $ | 4.38 | 10.5 | |||||
Average fare - total | $ | 114.99 | $ | 116.80 | (1.5 | ) | ||||
Average stage length (miles) | 864 | 869 | (0.6 | ) | ||||||
Fuel gallons consumed (thousands) | 49,671 | 47,821 | 3.9 | |||||||
Average fuel cost per gallon | $ | 2.37 | $ | 1.70 | 39.4 | |||||
Percent of sales through website during period | 93.9 | % | 95.1 | % | (1.2 | ) |
(1) Except load factor and percent of sales through website, which is percentage point change.
(2) 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. The 2017 figure reflected has been adjusted from previously reported as a result of recast of revenue in accordance with revenue recognition accounting rules adopted by us as of
(3) Reflects division of passenger revenue between scheduled service and air-related charges in Company's booking path.
Allegiant Travel Company Consolidated Statements of Income (in thousands, except per share amounts) (Unaudited) |
||||||||||||
Six Months Ended June 30, | Percent | |||||||||||
2018 |
2017 |
change | ||||||||||
OPERATING REVENUE: | ||||||||||||
Passenger Revenue (1) | $ | 802,343 | $ | 715,086 | 12.2 | |||||||
Third party products | 28,124 | 27,046 | 4.0 | |||||||||
Fixed fee contract revenue | 18,209 | 22,289 | (18.3 | ) | ||||||||
Other revenue | 13,548 | 17,434 | (22.3 | ) | ||||||||
Total operating revenue | 862,224 | 781,855 | 10.3 | |||||||||
OPERATING EXPENSES: | ||||||||||||
Aircraft fuel | 228,481 | 170,049 | 34.4 | |||||||||
Salary and benefits | 214,608 | 188,519 | 13.8 | |||||||||
Station operations | 79,137 | 70,830 | 11.7 | |||||||||
Maintenance and repairs | 43,881 | 58,740 | (25.3 | ) | ||||||||
Depreciation and amortization | 57,983 | 60,678 | (4.4 | ) | ||||||||
Sales and marketing | 37,426 | 26,822 | 39.5 | |||||||||
Aircraft lease rentals | 96 | 2,564 | (96.3 | ) | ||||||||
Other | 46,422 | 44,129 | 5.2 | |||||||||
Total operating expense | 708,034 | 622,331 | 13.8 | |||||||||
OPERATING INCOME | 154,190 | 159,524 | (3.3 | ) | ||||||||
OTHER (INCOME) EXPENSE: | ||||||||||||
Interest expense | 25,880 | 17,291 | 49.7 | |||||||||
Interest income | (3,834 | ) | (2,739 | ) | 40.0 | |||||||
Other, net | (290 | ) | (854 | ) | (66.0 | ) | ||||||
Total other expense | 21,756 | 13,698 | 58.8 | |||||||||
INCOME BEFORE INCOME TAXES | 132,434 | 145,826 | (9.2 | ) | ||||||||
PROVISION FOR INCOME TAXES | 27,225 | 54,437 | (50.0 | ) | ||||||||
NET INCOME | 105,209 | 91,389 | 15.1 | |||||||||
Earnings per share to common shareholders (2): | ||||||||||||
Basic | $6.53 | $5.52 | 18.3 | |||||||||
Diluted | $6.52 | $5.51 | 18.3 | |||||||||
Weighted average shares outstanding used in computing earnings per share to common shareholders (2): | ||||||||||||
Basic | 15,898 | 16,290 | (2.4 | ) | ||||||||
Diluted | 15,914 | 16,317 | (2.5 | ) |
(1) Passenger revenue previously reported as Scheduled service revenue and Ancillary air-related revenue.
(2) 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 calculations for the periods presented reflect the two-class method mandated by ASC Topic 260, "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) |
||||||||||
Six Months Ended June 30, | Percent | |||||||||
2018 | 2017 | change (1) | ||||||||
OPERATING STATISTICS | ||||||||||
Total system statistics: | ||||||||||
Passengers | 7,007,064 | 6,187,441 | 13.2 | |||||||
Revenue passenger miles (RPMs) (thousands) | 6,371,403 | 5,667,306 | 12.4 | |||||||
Available seat miles (ASMs) (thousands) | 7,650,857 | 6,961,046 | 9.9 | |||||||
Load factor | 83.3 | % | 81.4 | % | 1.9 | |||||
Operating expense per ASM (CASM) (cents) | 9.25 | 8.94 | 3.5 | |||||||
Fuel expense per ASM (cents) | 2.99 | 2.44 | 22.5 | |||||||
Operating CASM, excluding fuel (cents) | 6.26 | 6.50 | (3.7 | ) | ||||||
ASMs per gallon of fuel | 76.4 | 72.0 | 6.1 | |||||||
Departures | 51,311 | 47,016 | 9.1 | |||||||
Block hours | 118,510 | 109,249 | 8.5 | |||||||
Average stage length (miles) | 883 | 883 | — | |||||||
Average number of operating aircraft during period | 90.8 | 85.0 | 6.8 | |||||||
Average block hours per aircraft per day | 7.2 | 7.1 | 1.4 | |||||||
Full-time equivalent employees at end of period | 3,840 | 3,628 | 5.8 | |||||||
Fuel gallons consumed (thousands) | 100,156 | 96,708 | 3.6 | |||||||
Average fuel cost per gallon | $ | 2.28 | $ | 1.76 | 29.5 | |||||
Scheduled service statistics: | ||||||||||
Passengers | 6,961,312 | 6,112,269 | 13.9 | |||||||
Revenue passenger miles (RPMs) (thousands) | 6,310,393 | 5,565,191 | 13.4 | |||||||
Available seat miles (ASMs) (thousands) | 7,397,830 | 6,674,035 | 10.8 | |||||||
Load factor | 85.3 | % | 83.4 | % | 1.9 | |||||
Departures | 49,256 | 44,857 | 9.8 | |||||||
Block hours | 114,224 | 104,507 | 9.3 | |||||||
Total scheduled service revenue per ASM (TRASM) (cents) (2) | 11.23 | 11.12 | 1.0 | |||||||
Average fare - scheduled service (3) | $ | 68.95 | $ | 71.33 | (3.3 | ) | ||||
Average fare - air-related charges (3) | $ | 46.31 | $ | 45.67 | 1.4 | |||||
Average fare - third party products | $ | 4.04 | $ | 4.42 | (8.6 | ) | ||||
Average fare - total | $ | 119.30 | $ | 121.42 | (1.7 | ) | ||||
Average stage length (miles) | 889 | 887 | 0.2 | |||||||
Fuel gallons consumed (thousands) | 96,542 | 92,713 | 4.1 | |||||||
Average fuel cost per gallon | $ | 2.27 | $ | 1.75 | 29.7 | |||||
Percent of sales through website during period | 93.9 | % | 94.2 | % | (0.3 | ) |
(1) Except load factor and percent of sales through website, which is percentage point change.
(2) 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. The 2017 figure reflected has been adjusted from previously reported as a result of recast of revenue in accordance with revenue recognition accounting rules adopted by us as of
(3) Reflects division of passenger revenue between scheduled service and air-related charges in Company's booking path.
Summary Balance Sheet | ||||||||||
(millions) | 6/30/2018 | 12/31/2017 | Change | |||||||
(unaudited) | ||||||||||
Unrestricted cash | ||||||||||
Cash and cash equivalents | $ | 29.0 | $ | 59.4 | (51.2) | % | ||||
Short-term investments | 343.2 | 352.7 | (2.7) | |||||||
Long-term investments | 56.4 | 78.6 | (28.2) | |||||||
Total unrestricted cash and investments | 428.6 | 490.7 | (12.7) | |||||||
Debt | ||||||||||
Current maturities of long-term debt and capital lease obligations, net of related costs | 144.4 | 214.8 | (32.8) | |||||||
Long-term debt and capital lease obligations, net of current maturities and related costs | 992.3 | 950.1 | 4.4 | |||||||
Total debt | 1,136.7 | 1,164.9 | (2.4) | |||||||
Total Allegiant Travel Company shareholders’ equity | $ | 644.7 | $ | 553.3 | 16.5 | % |
Summary Cash Flow | ||||||||||
Six Months Ended June 30, | ||||||||||
Unaudited (millions) | 2018 | 2017 | Change | |||||||
Cash provided by operating activities | $ | 283.2 | $ | 262.9 | 7.7 | % | ||||
Purchase of property and equipment, including capitalized interest* | 187.5 | 182.3 | 2.9 | |||||||
Repurchase of common stock | 3.0 | 84.9 | (96.5 | ) | ||||||
Cash dividends paid to shareholders | 22.6 | 23.2 | (2.6 | ) | ||||||
Proceeds from the issuance of long-term debt | 10.8 | 134.5 | (92.0 | ) | ||||||
Principal payments on long-term debt & capital lease obligations | $ | 142.4 | $ | 64.9 | 119.4 | % | ||||
* Includes aircraft pre-delivery deposits. | ||||||||||
EPS Calculation
The following table sets forth the computation of net income per share, on a basic and diluted basis, for the periods indicated (share count and dollar amounts other than per-share amounts in table are in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Basic: | |||||||||||||||
Net income | $ | 50,016 | $ | 49,038 | $ | 105,209 | $ | 91,389 | |||||||
Less net income allocated to participating securities | (659 | ) | (789 | ) | (1,427 | ) | (1,482 | ) | |||||||
Net income attributable to common stock | $ | 49,357 | $ | 48,249 | $ | 103,782 | $ | 89,907 | |||||||
Earnings per share, basic | $ | 3.10 | $ | 2.98 | $ | 6.53 | $ | 5.52 | |||||||
Weighted-average shares outstanding | 15,939 | 16,198 | 15,898 | 16,290 | |||||||||||
Diluted: | |||||||||||||||
Net income | $ | 50,016 | $ | 49,038 | $ | 105,209 | $ | 91,389 | |||||||
Less net income allocated to participating securities | (658 | ) | (789 | ) | (1,425 | ) | (1,480 | ) | |||||||
Net income attributable to common stock | $ | 49,358 | $ | 48,249 | $ | 103,784 | $ | 89,909 | |||||||
Earnings per share, diluted | $ | 3.10 | $ | 2.97 | $ | 6.52 | $ | 5.51 | |||||||
Weighted-average shares outstanding | 15,939 | 16,198 | 15,898 | 16,290 | |||||||||||
Dilutive effect of stock options and restricted stock | 44 | 71 | 63 | 92 | |||||||||||
Adjusted weighted-average shares outstanding under treasury stock method | 15,983 | 16,269 | 15,961 | 16,382 | |||||||||||
Participating securities excluded under two-class method | (38 | ) | (49 | ) | (47 | ) | (65 | ) | |||||||
Adjusted weighted-average shares outstanding under two-class method | 15,945 | 16,220 | 15,914 | 16,317 |