EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1 PRESS RELEASE OF REPUBLIC AIRWAYS RELATED TO 3RD QUARTER EARNINGS exhibit99_1.htm
 
 
For Immediate release:
Contact: Warren R. Wilkinson
Republic Airways Holdings
Tel. (317) 484- 6042
                                                                                                                                                                                                                                                                        


Republic Airways Holdings Announces Third Quarter 2007 Results

Indianapolis, Indiana, (October 23, 2007) – Republic Airways Holdings Inc. (“the Company”) (NASDAQ/NM: RJET) today reported operating revenues of $330.1 million for the quarter ended September 30, 2007, a 7.8% increase, compared to $306.1 million for the same period last year.  The Company reported net income of $20.2 million for the quarter ended September 30, 2007, an 8.0% decrease from the $21.9 million reported in the prior year’s third quarter.  The Company also reported earnings per diluted share of $0.49 for the quarter compared to $0.50 per diluted share for the same period last year. 

The primary items of significance affecting the third quarter of 2007 are outlined below.

Third Quarter Highlights
Excluding reimbursement for fuel expense, which is a pass-through cost to our partners, passenger revenues increased 20.2% for the third quarter of 2007.  This increase was primarily as a result of a 22.6% increase in available seat miles (ASMs) to 3.0 billion ASMs, up from 2.5 billion ASMs, and an 18.3% increase in block hours.  These increases reflect the addition of 21 E170/175 regional jet aircraft placed into fixed-fee service since September 30, 2006 and 24 CRJ-200 regional jet aircraft placed into fixed-fee service during the first nine months of 2007.

Total operating expenses for the third quarter of 2007, including interest expense but excluding fuel charges (which are reimbursable by the Company’s partners), of $227.9 million, increased 24.7% from $182.8 million for the same quarter of 2006.  Operating cost per ASM (CASM), including interest expense but excluding fuel, increased 1.8% to 7.50¢ compared to the prior year’s 7.37¢.

The impact on pre-tax earnings for transition expenses, which include unreimbursed aircraft costs, increased pilot training expenses, and forgone profits on the Company’s reduced scheduled operations during the 3rd quarter, was approximately $7 million for the quarter, which was consistent with the guidance provided by the Company during its second quarter update.

During the quarter the Company took delivery of six new 86-seat E175 aircraft and entered into long-term, fixed rate debt financing arrangements for all six aircraft.  The Company also took delivery of two 50-seat CRJ-200 regional jet aircraft on short-term leases which were placed into service with Continental. The Company removed one E145 from its charter operation and subleased the aircraft offshore.  At September 30, 2007, the Company’s fleet consisted of 211 regional jets including 94 E145 family aircraft, 93 E170/175 aircraft and 24 CRJ-200 aircraft.  In addition to 41 regional jets added to the Company’s operations in the first nine months of 2007, the Company has also completed the transition of 20 E145s and 7 E170s from existing partners to Continental Airlines and Frontier Airlines, respectively.

On August 22, 2007, the Company amended its Jet Services Agreement with Delta Air Lines, Inc. to provide for the replacement of sixteen, 70-seat E170 aircraft with sixteen, 76-seat E175 aircraft.  The new aircraft are expected to be placed into service during the second half of 2008 and the first quarter of 2009.
 
On August 22, 2007, the Company amended its Jet Services Agreement with United Air Lines, Inc. to provide for the operation of ten additional 70-seat E170 aircraft.  The aircraft are expected to be placed into service during the fourth quarter of 2008 and the first quarter of 2009.

On August 28, 2007, the Company announced an authorization to purchase up to $100 million of its common stock.  As of September 30, the Company had repurchased approximately 3.3 million shares for $64.3 million.

Future Commitments
The Company expects to take delivery of 7 new E175s in the fourth quarter of 2007 and 27 new E175s during 2008. Additionally, 3 new E175s are scheduled for delivery in the first quarter of 2009. The Company has firm financing commitments in place for 28 of its 37 remaining firm aircraft at competitive interest rates.  The Company expects to obtain competitive financing commitments on its remaining firm aircraft.

The Company also maintains options for up to 74 E170/190 aircraft for delivery beginning in March 2009.

Balance Sheet Information
At September 30, 2007 the Company had $183.1 million in cash and cash equivalents compared to $195.5 million as of December 31, 2006.  The Company has an aircraft deposit balance of $62.1 million as of September 30, 2007 for future aircraft deliveries and option positions.  The Company’s long-term debt increased to $1.68 billion as of September 30, 2007, compared to $1.48 billion at December 31, 2006. All of the Company’s long-term debt carries fixed interest rates, and is secured by the aircraft. The Company also has significant long-term operating lease obligations.  At a 7% discount factor, the present value of these lease obligations was approximately $793 million as of September 30, 2007.

 
 
 
Corporate Information
Republic Airways Holdings, based in Indianapolis, Indiana is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines offer scheduled passenger service on over 1,200 flights daily to 118 cities in 37 states, Canada, Mexico and Jamaica through airline services agreements with six U.S. airlines. All of the airlines' flights are operated under their airline partner brand, such as AmericanConnection, Continental Express, Delta Connection, Frontier Airlines, United Express and US Airways Express. As of September 30, 2007, the airlines employed approximately 4,500 aviation professionals and operated 211 regional jets.

The Company will conduct a telephone briefing to discuss its third quarter results tomorrow, October 24th at 10:30 a.m. EDT. For those wishing to participate please call 800-798-2864 and for international calls please dial 617-614-6206; the pass code is 86274649.  A live Web cast of this briefing will also be available online at www.rjet.com - investor relations.

Additional Information
In addition to historical information, this release contains forward-looking statements.  Republic Airways may, from time-to-time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements encompass Republic Airways’ beliefs, expectations, hopes or intentions regarding future events.  Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements.  All forward-looking statements included in this release are made as of the date hereof and are based on information available to Republic Airways as of such date.  Republic Airways assumes no obligation to update any forward-looking statement.  Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this release by reference.
 
 
 
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and Shares in Thousands, Except per Share Amounts)
(Unaudited)
               
               
Financial Highlights
Three Months Ended September 30,
  
Nine Months Ended September 30,
 
2007
2006
Change
  
2007
2006
Change
OPERATING REVENUES
              
   Passenger
 $        325,974
 $        301,314
8.2%
  
 $        926,861
 $        828,920
11.8%
   Other
                4,108
                4,818
-14.7%
  
              13,977
              18,869
-25.9%
        Total operating revenues
            330,082
            306,132
7.8%
  
            940,838
            847,789
11.0%
               
OPERATING EXPENSES
              
   Wages and benefits
              58,187
              46,415
25.4%
  
            163,685
            130,155
25.8%
   Aircraft fuel
              71,682
              89,766
-20.1%
  
            216,815
            248,426
-12.7%
   Landing fees
              14,140
              11,382
24.2%
  
              39,376
              30,468
29.2%
   Aircraft and engine rent
              33,706
              25,130
34.1%
  
              91,037
              69,876
30.3%
   Maintenance and repair
              36,115
              28,953
24.7%
  
              95,601
              75,856
26.0%
   Insurance and taxes
                5,567
                4,710
18.2%
  
              14,216
              13,980
1.7%
   Depreciation and amortization
              27,061
              23,824
13.6%
  
              77,729
              67,322
15.5%
   Other
              26,197
              19,398
35.1%
  
              75,577
              54,675
38.2%
        Total operating expenses
            272,655
            249,578
9.2%
  
            774,036
            690,758
12.1%
OPERATING INCOME
              57,427
              56,554
1.5%
  
            166,802
            157,031
6.2%
               
OTHER INCOME (EXPENSE)
              
   Interest expense
            (26,903)
            (22,942)
17.3%
  
            (78,435)
            (66,772)
17.5%
   Other income
                3,108
                2,633
18.0%
  
                9,030
                7,247
24.6%
        Total other income (expense)
            (23,795)
            (20,309)
17.2%
  
            (69,405)
            (59,525)
16.6%
               
INCOME BEFORE INCOME TAXES
              33,632
              36,245
-7.2%
  
              97,397
              97,506
-0.1%
               
INCOME TAX EXPENSE
13,462
              14,313
-5.9%
  
38,906
              38,419
1.3%
               
NET INCOME
20,170
              21,932
-8.0%
  
58,491
              59,087
-1.0%
PER SHARE, BASIC
 $               0.50
 $               0.52
-3.8%
  
 $               1.41
 $               1.41
0.0%
PER SHARE, DILUTED
 $               0.49
 $               0.50
-2.0%
  
 $               1.38
 $               1.36
1.5%
Weighted Average Common Shares
              
   Basic
              40,583
              42,205
-3.8%
  
              41,502
              41,996
-1.2%
   Diluted
              40,868
              43,539
-6.1%
  
              42,315
              43,297
-2.3%
 
 
 
 
 
CONSOLIDATED STATEMENTS OF INCOME
  
(Dollars and Shares in Thousands, Except per Share Amounts)
  
(Unaudited)
  
                                     
                                     
Financial Highlights
  
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2007
    
2006
    
Change
    
2007
    
2006
    
Change
  
OPERATING REVENUES
                                    
   Passenger
   $
325,974
     $
301,314
       8.2 %   $
926,861
     $
828,920
       11.8 %
   Other
    
4,108
      
4,818
       -14.7 %    
13,977
      
18,869
       -25.9 %
        Total operating revenues
    
330,082
      
306,132
       7.8 %    
940,838
      
847,789
       11.0 %
                                                 
OPERATING EXPENSES
                                                
   Wages and benefits
    
58,187
      
46,415
       25.4 %    
163,685
      
130,155
       25.8 %
   Aircraft fuel
    
71,682
      
89,766
       -20.1 %    
216,815
      
248,426
       -12.7 %
   Landing fees
    
14,140
      
11,382
       24.2 %    
39,376
      
30,468
       29.2 %
   Aircraft and engine rent
    
33,706
      
25,130
       34.1 %    
91,037
      
69,876
       30.3 %
   Maintenance and repair
    
36,115
      
28,953
       24.7 %    
95,601
      
75,856
       26.0 %
   Insurance and taxes
    
5,567
      
4,710
       18.2 %    
14,216
      
13,980
       1.7 %
   Depreciation and amortization
    
27,061
      
23,824
       13.6 %    
77,729
      
67,322
       15.5 %
   Other
    
26,197
      
19,398
       35.1 %    
75,577
      
54,675
       38.2 %
        Total operating expenses
    
272,655
      
249,578
       9.2 %    
774,036
      
690,758
       12.1 %
OPERATING INCOME
    
57,427
      
56,554
       1.5 %    
166,802
      
157,031
       6.2 %
                                                 
OTHER INCOME (EXPENSE)
                                                
   Interest expense
     (26,903 )     (22,942 )     17.3 %     (78,435 )     (66,772 )     17.5 %
   Other income
    
3,108
      
2,633
       18.0 %    
9,030
      
7,247
       24.6 %
        Total other income (expense)
     (23,795 )     (20,309 )     17.2 %     (69,405 )     (59,525 )     16.6 %
                                                 
INCOME BEFORE INCOME TAXES
    
33,632
      
36,245
       -7.2 %    
97,397
      
97,506
       -0.1 %
                                                 
INCOME TAX EXPENSE
    
13,462
      
14,313
       -5.9 %    
38,906
      
38,419
       1.3 %
                                                 
NET INCOME
    
20,170
      
21,932
       -8.0 %    
58,491
      
59,087
       -1.0 %
PER SHARE, BASIC
   $
0.50
     $
0.52
       -3.8 %   $
1.41
     $
1.41
       0.0 %
PER SHARE, DILUTED
   $
0.49
     $
0.50
       -2.0 %   $
1.38
     $
1.36
       1.5 %
Weighted Average Common Shares
                                                
   Basic
    
40,583
      
42,205
       -3.8 %    
41,502
      
41,996
       -1.2 %
   Diluted
    
40,868
      
43,539
       -6.1 %    
42,315
      
43,297
       -2.3 %
 
   



 

Unaudited Operating Highlights
                                
 
  
 
                                
 
  
Operating Highlights
  
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2007
    
2006
    
Change
    
2007
    
2006
    
Change
  
Passenger Revenues, excluding fuel (000)
    
254,292
      
211,548
       20.2 %    
710,046
      
580,494
       22.3 %
Passengers carried
    
4,435,108
      
3,456,979
       28.3 %    
11,820,385
      
9,340,356
       26.6 %
Revenue passenger miles (000)
    
2,343,771
      
1,808,115
       29.6 %    
6,248,072
      
4,918,383
       27.0 %
Available seat miles (000)
    
3,039,510
      
2,479,659
       22.6 %    
8,293,452
      
6,702,458
       23.7 %
Passenger load factor
     77.1 %     72.9 %  
4.2 pts
       75.3 %     73.4 %  
1.9 pts
  
Cost per available seat mile, including interest expense (cents)
    
9.86
      
10.99
       -10.3 %    
10.27
      
11.30
       -9.1 %
Fuel cost per available seat mile (cents)
    
2.36
      
3.62
       -34.8 %    
2.61
      
3.71
       -29.6 %
Cost per available seat mile, excluding fuel expense (cents)
    
7.50
      
7.37
       1.8 %    
7.66
      
7.60
       0.8 %
Operating Aircraft at period end:
                                                
37-50 seat regional jets
    
118
      
95
       24.2 %    
118
      
95
       24.2 %
70+ seat regional jets
    
93
      
75
       24.0 %    
93
      
75
       24.0 %
Block hours
    
176,623
      
149,288
       18.3 %    
492,241
      
407,540
       20.8 %
Departures
    
100,168
      
86,093
       16.3 %    
276,532
      
234,123
       18.1 %
Average daily aircraft utilization (hours)
    
10.3
      
10.5
       -1.9 %    
10.3
      
10.3
       0.0 %
Average aircraft stage length
    
523
      
512
       2.1 %    
522
      
517
       1.0 %