o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Title: | Senior Vice President and Chief Financial Officer |
Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||||||||
(Unaudited) | 2013 | 2012 | % Increase / (Decrease) | 2013 | 2012 | % Increase / (Decrease) | |||||||||||||||
(in millions, except as noted) | |||||||||||||||||||||
Operating revenues | $ | 338.6 | $ | 337.4 | 0.4 | % | $ | 1,000.0 | $ | 1,050.0 | (4.8 | )% | |||||||||
Available seat miles (ASMs) | 3,470 | 3,424 | 1.3 | % | 9,975 | 10,143 | (1.7 | )% | |||||||||||||
Adjusted Income from continuing operations | $ | 17.3 | $ | 6.3 | 174.6 | % | $ | 44.8 | $ | 22.5 | 99.1 | % | |||||||||
Adjusted Diluted earnings per share from continuing operations (dollars) | $ | 0.34 | $ | 0.13 | 161.5 | % | $ | 0.84 | $ | 0.46 | 82.6 | % | |||||||||
Adjusted EBITDAR from continuing operations | $ | 123.0 | $ | 108.3 | 13.6 | % | $ | 358.0 | $ | 309.4 | 15.7 | % |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In millions, except per share amounts) (Unaudited) | |||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2013 | 2012 | % Increase / (Decrease) | 2013 | 2012 | % Increase / (Decrease) | ||||||||||||||||
OPERATING REVENUES | |||||||||||||||||||||
Fixed-fee service | $ | 320.3 | $ | 268.7 | 19.2 | % | $ | 941.2 | $ | 828.7 | 13.6 | % | |||||||||
Passenger service | 12.6 | 63.1 | (80.0 | )% | 41.6 | 200.4 | (79.2 | )% | |||||||||||||
Charter and other | 5.7 | 5.6 | 1.8 | % | 17.2 | 20.9 | (17.7 | )% | |||||||||||||
Total operating revenues | 338.6 | 337.4 | 0.4 | % | 1,000.0 | 1,050.0 | (4.8 | )% | |||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||
Wages and benefits | 87.1 | 79.0 | 10.3 | % | 256.6 | 227.6 | 12.7 | % | |||||||||||||
Aircraft fuel | 11.3 | 25.4 | (55.5 | )% | 37.1 | 139.6 | (73.4 | )% | |||||||||||||
Landing fees and airport rents | 7.9 | 14.5 | (45.5 | )% | 38.3 | 46.9 | (18.3 | )% | |||||||||||||
Aircraft and engine rent | 32.0 | 29.0 | 10.3 | % | 91.6 | 86.1 | 6.4 | % | |||||||||||||
Maintenance and repair | 67.3 | 66.6 | 1.1 | % | 184.0 | 178.1 | 3.3 | % | |||||||||||||
Insurance and taxes | 6.5 | 5.8 | 12.1 | % | 18.5 | 18.6 | (0.5 | )% | |||||||||||||
Depreciation and amortization | 37.0 | 39.9 | (7.3 | )% | 110.5 | 119.7 | (7.7 | )% | |||||||||||||
Promotion and sales | 0.6 | 3.3 | (81.8 | )% | 2.1 | 10.2 | (79.4 | )% | |||||||||||||
Other impairment charges | 21.2 | — | 100.0 | % | 21.2 | — | 100.0 | % | |||||||||||||
Other | 34.9 | 34.5 | 1.2 | % | 105.4 | 97.1 | 8.5 | % | |||||||||||||
Total operating expenses | 305.8 | 298.0 | 2.6 | % | 865.3 | 923.9 | (6.3 | )% | |||||||||||||
OPERATING INCOME | 32.8 | 39.4 | (16.8 | )% | 134.7 | 126.1 | 6.8 | % | |||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||||||
Interest expense | (27.4 | ) | (28.9 | ) | (5.2 | )% | (83.1 | ) | (88.7 | ) | (6.3 | )% | |||||||||
Other - net | — | 0.1 | — | % | 0.1 | 0.1 | — | % | |||||||||||||
Total other expense | (27.4 | ) | (28.8 | ) | (4.9 | )% | (83.0 | ) | (88.6 | ) | (6.3 | )% | |||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 5.4 | 10.6 | (49.1 | )% | 51.7 | 37.5 | 37.9 | % | |||||||||||||
INCOME TAX EXPENSE | 1.1 | 4.3 | (74.4 | )% | 19.9 | 15.0 | 32.7 | % | |||||||||||||
INCOME FROM CONTINUING OPERATIONS | $ | 4.3 | $ | 6.3 | (31.7 | )% | $ | 31.8 | $ | 22.5 | 41.3 | % | |||||||||
INCOME FROM DISCONTINUED OPERATIONS: | |||||||||||||||||||||
Income from discontinued operations, net of tax | $ | 29.8 | $ | 19.5 | 52.8 | % | $ | 27.2 | $ | 16.2 | 67.9 | % | |||||||||
Loss from disposal of discontinued operations, net of tax | $ | (47.9 | ) | $ | — | 100.0 | % | $ | (47.9 | ) | $ | — | 100.0 | % | |||||||
(Loss) income from discontinued operations, net of tax | (18.1 | ) | 19.5 | — | (20.7 | ) | 16.2 | — | |||||||||||||
NET (LOSS) INCOME | (13.8 | ) | 25.8 | (153.5 | )% | 11.1 | 38.7 | (71.3 | )% | ||||||||||||
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In millions, except per share amounts) (Unaudited) | |||||||||||||||||||||
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE - BASIC | 0.09 | 0.13 | (30.8 | )% | 0.64 | 0.46 | 39.1 | % | |||||||||||||
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE - DILUTED | 0.09 | 0.13 | (30.8 | )% | 0.60 | 0.46 | 30.4 | % | |||||||||||||
NET INCOME (LOSS) PER COMMON SHARE - BASIC | (0.28 | ) | 0.53 | (152.8 | )% | 0.22 | 0.80 | (72.5 | )% | ||||||||||||
NET INCOME (LOSS) PER COMMON SHARE - DILUTED | (0.26 | ) | 0.51 | (151.0 | )% | 0.23 | 0.79 | (70.9 | )% | ||||||||||||
Weighted average common shares | |||||||||||||||||||||
Basic | 49.4 | 48.5 | 1.9 | % | 49.8 | 48.5 | 2.7 | % | |||||||||||||
Diluted | 52.5 | 50.8 | 3.3 | % | 55.1 | 50.3 | 9.5 | % |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except per share amounts) (Unaudited) | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 191.9 | $ | 210.8 | |||
Restricted cash | 32.2 | 19.6 | |||||
Receivables, net of allowance for doubtful accounts of $1.5 and $1.3, respectively | 31.0 | 40.2 | |||||
Inventories | 72.7 | 72.8 | |||||
Prepaid expenses and other current assets | 13.9 | 12.2 | |||||
Assets held for sale | 594.8 | 756.7 | |||||
Deferred income taxes | 48.3 | 31.3 | |||||
Total current assets | 984.8 | 1,143.6 | |||||
Aircraft and other equipment, net | 2,354.5 | 2,311.2 | |||||
Maintenance deposits | 33.0 | 28.1 | |||||
Other intangible assets, net | 9.0 | 9.0 | |||||
Other assets | 239.8 | 163.4 | |||||
Total assets | $ | 3,621.1 | $ | 3,655.3 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities: | |||||||
Current portion of long-term debt | $ | 234.8 | $ | 220.7 | |||
Accounts payable | 21.7 | 22.9 | |||||
Air traffic liability | — | — | |||||
Deferred frequent flyer revenue | — | — | |||||
Accrued liabilities | 163.6 | 148.4 | |||||
Liabilities held for sale | 517.8 | 522.2 | |||||
Total current liabilities | 937.9 | 914.2 | |||||
Long-term debt, less current portion | 1,760.9 | 1,752.0 | |||||
Deferred frequent flyer revenue, less current portion | — | — | |||||
Deferred credits and other non-current liabilities | 104.5 | 91.0 | |||||
Deferred income taxes | 286.3 | 384.6 | |||||
Total liabilities | 3,089.6 | 3,141.8 | |||||
Commitments and Contingencies | — | — | |||||
Stockholders' Equity: | |||||||
Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding | — | — | |||||
Common stock, $.001 par value; one vote per share;150,000,000 shares authorized; 59,252,442 and 58,529,449 shares issued and 49,302,926 and 48,558,312 shares outstanding, respectively | — | — | |||||
Additional paid-in-capital | 418.9 | 412.1 | |||||
Treasury stock, 9,333,266 shares at cost | (181.8 | ) | (181.8 | ) | |||
Accumulated other comprehensive loss | (4.9 | ) | (5.0 | ) | |||
Accumulated earnings | 299.3 | 288.2 | |||||
Total stockholders' equity | 531.5 | 513.5 | |||||
Total liabilities and stockholders' equity | $ | 3,621.1 | $ | 3,655.3 |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) | |||||||
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
OPERATING ACTIVITIES: | |||||||
Cash from operating activities - continuing operations | $ | 170.0 | $ | 172.2 | |||
Cash from operating activities - discontinued operations | 66.4 | 10.6 | |||||
NET CASH FROM OPERATING ACTIVITIES | 236.4 | 182.8 | |||||
INVESTING ACTIVITIES: | |||||||
Purchase of aircraft and other equipment | (233.4 | ) | (15.2 | ) | |||
Proceeds from sale of other assets | 40.1 | 23.1 | |||||
Aircraft deposits | (25.0 | ) | — | ||||
Other, net | (2.4 | ) | (4.4 | ) | |||
Cash from investing activities - continuing operations | (220.7 | ) | 3.5 | ||||
Cash from investing activities - discontinued operations | (8.0 | ) | (19.9 | ) | |||
NET CASH FROM INVESTING ACTIVITIES | (228.7 | ) | (16.4 | ) | |||
FINANCING ACTIVITIES: | |||||||
Payments on debt | (147.9 | ) | (144.1 | ) | |||
Proceeds from debt issuance and refinancing | 236.8 | — | |||||
Payments on early extinguishment of debt and refinancing | (58.7 | ) | — | ||||
Proceeds from exercise of stock options | 3.9 | — | |||||
Other, net | (2.3 | ) | (0.2 | ) | |||
Cash from financing activities - continuing operations | 31.8 | (144.3 | ) | ||||
Cash from financing activities - discontinued operations | (31.0 | ) | (14.2 | ) | |||
NET CASH FROM FINANCING ACTIVITIES | 0.8 | (158.5 | ) | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 8.5 | 7.9 | |||||
CASH AND CASH EQUIVALENTS—Beginning of period | $ | 247.2 | $ | 219.3 | |||
CASH AND CASH EQUIVALENTS—End of period | 255.7 | 227.2 | |||||
Less cash and equivalents of discontinued operations at end of year | (63.8 | ) | (21.2 | ) | |||
Cash and equivalents of continuing operations at end of year | $ | 191.9 | $ | 206.0 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||||
CASH PAID FOR INTEREST AND INCOME TAXES: | |||||||
Interest paid | $ | 86.4 | $ | 95.2 | |||
Income taxes paid | 0.6 | 0.3 | |||||
NON-CASH INVESTING & FINANCING TRANSACTIONS: | |||||||
Aircraft parts financed | $ | 42.8 | $ | — | |||
Chautauqua restructuring asset | 12.0 | — | |||||
Engine received and not yet paid | 5.8 | — |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES UNAUDITED OPERATING HIGHLIGHTS | |||||||||||
Three Months Ended September 30, | |||||||||||
2013 | 2012 | Change | |||||||||
Operating Highlights – Republic | |||||||||||
Fixed-fee service | $ | 320.3 | $ | 268.7 | 19.2 | % | |||||
Passenger service | 12.6 | 63.1 | (80.0 | )% | |||||||
Charter and other | 5.7 | 5.6 | 1.8 | % | |||||||
Total revenues (millions) | $ | 338.6 | $ | 337.4 | 0.4 | % | |||||
Total fuel expense (millions) | $ | 11.3 | $ | 25.4 | (55.5 | )% | |||||
Operating aircraft at period end: | |||||||||||
44-50 seats7 | 68 | 64 | 6.3 | % | |||||||
69-99 seats | 167 | 148 | 12.8 | % | |||||||
Block hours5 | 190,589 | 178,251 | 6.9 | % | |||||||
Departures | 114,037 | 104,660 | 9.0 | % | |||||||
Passengers carried | 5,624,693 | 5,333,769 | 5.5 | % | |||||||
Revenue passenger miles ("RPM") (millions)1 | 2,688 | 2,691 | (0.1 | )% | |||||||
Available seat miles ("ASM") (millions)2 | 3,470 | 3,424 | 1.3 | % | |||||||
Passenger load factor3 | 77.5 | % | 78.6 | % | (1.1 pts) | ||||||
Total cost per ASM, including interest expense (cents)4 | 9.60 | 9.49 | 1.2 | % | |||||||
Cost per ASM, including interest expense and excluding fuel expense (cents) | 9.28 | 8.74 | 6.2 | % | |||||||
Gallons consumed | 3,178,707 | 7,923,584 | (59.9 | )% | |||||||
Average cost per gallon | $ | 3.55 | $ | 3.21 | 10.6 | % | |||||
Average daily utilization of each aircraft (hours)6 | 9.7 | 10.1 | (4.0 | )% | |||||||
Average stage length (miles) | 460 | 489 | (5.9 | )% | |||||||
Average seat density | 66 | 67 | (1.5 | )% | |||||||
1. | Revenue passenger miles are the number of scheduled miles flown by revenue passengers. |
2. | Available seat miles are the number of seats available for passengers multiplied by the number of scheduled miles those seats are flown. |
3. | Passenger load factor is revenue passenger miles divided by available seat miles. |
4. | Total operating costs divided by available seat miles. |
5. | Hours from takeoff to landing, including taxi time. |
6. | Average number of hours per day that an aircraft flown in revenue service is operated (from gate departure to gate arrival). |
7. | Excludes seven aircraft as of September 30, 2012 that were temporarily idled. |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES UNAUDITED OPERATING HIGHLIGHTS | |||||||||||
Nine Months Ended September 30, | |||||||||||
2013 | 2012 | Change | |||||||||
Operating Highlights – Republic | |||||||||||
Fixed-fee service | $ | 941.2 | $ | 828.7 | 13.6 | % | |||||
Passenger service | 41.6 | 200.4 | (79.2 | )% | |||||||
Charter and other | 17.2 | 20.9 | (17.7 | )% | |||||||
Total revenues (millions) | $ | 1,000.0 | $ | 1,050.0 | (4.8 | )% | |||||
Total fuel expense (millions)1 | $ | 37.1 | $ | 139.6 | (73.4 | )% | |||||
Operating aircraft at period end: | |||||||||||
44-50 seats8 | 68 | 64 | 6.3 | % | |||||||
69-99 seats | 167 | 148 | 12.8 | % | |||||||
Block hours6 | 555,255 | 524,961 | 5.8 | % | |||||||
Departures | 327,060 | 306,396 | 6.7 | % | |||||||
Passengers carried | 15,910,016 | 14,949,272 | 6.4 | % | |||||||
Revenue passenger miles ("RPM") (millions)2 | 7,601 | 7,560 | 0.5 | % | |||||||
Available seat miles ("ASM") (millions)3 | 9,975 | 10,143 | (1.7 | )% | |||||||
Passenger load factor4 | 76.2 | % | 74.5 | % | 1.7 pts | ||||||
Total cost per ASM, including interest expense (cents)5 | 9.51 | 9.93 | (100.0 | )% | |||||||
Cost per ASM, including interest expense and excluding fuel expense (cents) | 9.13 | 8.56 | 6.7 | % | |||||||
Gallons consumed1 | 10,328,831 | 42,569,841 | (75.7 | )% | |||||||
Average cost per gallon | $ | 3.59 | $ | 3.28 | 9.5 | % | |||||
Average daily utilization of each aircraft (hours)7 | 9.7 | 10.0 | (3.0 | )% | |||||||
Average stage length (miles) | 464 | 492 | (5.7 | )% | |||||||
Average seat density | 66 | 67 | (1.5 | )% | |||||||
1. | Includes $49.6 million of fuel expense reimbursement for the nine months ended September 30, 2012 Effective July 1, 2012, United agreed to supply fuel directly to our flights under its code-share agreements and the Company will no longer recognize the cost of fuel and related revenue for fuel used under the United Code-Share Agreement. Only fuel for pro-rate and fixed-fee charter flying is included in the fuel amount for the nine months ended September 30, 2013. |
2. | Revenue passenger miles are the number of scheduled miles flown by revenue passengers. |
3. | Available seat miles are the number of seats available for passengers multiplied by the number of scheduled miles those seats are flown. |
4. | Passenger load factor is revenue passenger miles divided by available seat miles. |
5. | Total operating costs divided by available seat miles. |
6. | Hours from takeoff to landing, including taxi time. |
7. | Average number of hours per day that an aircraft flown in revenue service is operated (from gate departure to gate arrival). |
8. | Excludes seven aircraft as of September 30, 2012 that were temporarily idled. |
Three months ended September 30, 2013 | Nine months ended September 30, 2013 | |||||||||||||||||||||||
(in millions, except per share amounts) | Pre-tax | After-Tax | Dilutive EPS | Pre-tax | After-Tax | Dilutive EPS | ||||||||||||||||||
Income from continuing operations | $ | 5.4 | $ | 4.3 | $ | 0.09 | $ | 51.7 | $ | 31.8 | $ | 0.60 | ||||||||||||
Adjustments: | ||||||||||||||||||||||||
Non-recurring impairment | 21.2 | 13.0 | 0.25 | 21.2 | 13.0 | 0.24 | ||||||||||||||||||
Adjusted income from continuing operations | $ | 26.6 | $ | 17.3 | $ | 0.34 | $ | 72.9 | $ | 44.8 | $ | 0.84 |
Non-GAAP Reconciliation of Income from Continuing Operations to EBITDAR from Continuing Operations | |||||||||||||||||||||
Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||||||||
($ in millions) | 2013 | 2012 | % Increase / (Decrease) | 2013 | 2012 | % Increase / (Decrease) | |||||||||||||||
Income from continuing operations | $ | 4.3 | $ | 6.3 | (31.7 | )% | $ | 31.8 | $ | 22.5 | 41.3 | % | |||||||||
Adjust: | |||||||||||||||||||||
Interest and other expense | 27.4 | 28.8 | (4.9 | )% | 83.0 | 88.6 | (6.3 | )% | |||||||||||||
Income tax expense | 1.1 | 4.3 | (74.4 | )% | 19.9 | 15.0 | 32.7 | % | |||||||||||||
Depreciation and amortization | 37.0 | 39.9 | (7.3 | )% | 110.5 | 119.7 | (7.7 | )% | |||||||||||||
Aircraft and engine rents | 32.0 | 29.0 | 10.3 | % | 91.6 | 86.1 | 6.4 | % | |||||||||||||
EBITDAR | $ | 101.8 | $ | 108.3 | (6.0 | )% | $ | 336.8 | $ | 309.4 | 8.9 | % | |||||||||
Non-recurring impairment | $ | 21.2 | $ | — | 100.0 | % | $ | 21.2 | $ | — | 100.0 | % | |||||||||
Adjusted EBITDAR from continuing operations | 123.0 | 108.3 | 13.6 | % | 358.0 | 309.4 | 15.7 | % |