Title: | Executive Vice President and Chief Financial Officer |
99.1 | Press Release of Republic Airways Holdings Inc. issued on April 30, 2014, relating to its first quarter 2014 results. |
• | Republic's pre-tax income from continuing operations was $22.8 million, or $0.42 per diluted share, an 18.1% increase over the March 2013 quarter. As of Dec. 31, 2013, Republic had a significant amount of federal net operating loss carryforwards and does not anticipate paying significant federal taxes for the next several years. |
• | Republic's net income for the March 2014 quarter was $14.0 million, or $0.26 per diluted share. This is a $13.7 million increase from the prior year. The March 2013 quarter was negatively impacted by $11.1 million of losses from discontinued operations at Frontier Airlines. |
• | Republic canceled more than 12,400 flights during the first quarter of 2014, primarily because of severe weather in January and February of 2014. That was a 145% increase from the number of canceled flights compared to the first quarter of 2013. These cancellations negatively impacted the pre-tax financial results by about $7.0 million during the first quarter of 2014. |
• | On Feb. 11, 2014, Republic announced the early termination of its 44 to 50 seat fixed-fee agreements with United Airlines and American Airlines, which were scheduled to terminate in 2014. These agreements wind-down beginning in March 2014 through August 2014 and will result in the indefinite grounding of 27 small jet aircraft. |
• | In the first quarter of 2014, Republic recorded an impairment of its owned E140 aircraft of $19.9 million and an $18.4 million gain on its Chautauqua restructuring asset. The Company also sold one E145 aircraft for a book gain of $1.8 million during the quarter. The net of these three items improved pre-tax earnings by $0.3 million. |
• | On April 4, 2014, Republic announced that members of the International Brotherhood of Teamsters (IBT) Local 357 failed to ratify a proposed four-year pilot labor agreement. The agreement would have significantly improved pay and work rules for our pilots. |
• | On April 7, 2014, Republic's Board of Directors authorized management to utilize up to $75 million of unrestricted cash to buy back common shares and/or early retire convertible debt during the next 12 months. Under the $75 million authorization, Republic may repurchase up to $50 million of common shares and early retire up to $50 million of convertible notes, or any combination thereof. |
• | On April 7, 2014, Republic redeemed a $22.3 million convertible note, leaving $52.7 million remaining on the share repurchase and convertible debt retirement authorization. This will reduce the Company's dilutive share count by about 2.2 million shares going forward. |
Three Months ended March 31, | ||||||||||
(Unaudited) | 2014 | 2013 | Increase / (Decrease) | |||||||
($ in millions, except as noted) | ||||||||||
Operating revenues | $ | 337.5 | $ | 324.7 | 3.9 | % | ||||
Pre-tax margin | 6.8 | % | 5.9 | % | 0.9 pts | |||||
Pre-tax income from continuing operations | $ | 22.8 | $ | 19.3 | 18.1 | % | ||||
Diluted earnings per share from continuing operations (dollars) | $ | 0.26 | $ | 0.22 | 18.2 | % | ||||
EBITDA from continuing operations | $ | 93.9 | $ | 84.8 | 10.7 | % | ||||
EBITDA margin continuing operations | 27.8 | % | 26.1 | % | 1.7 pts | |||||
Available seat miles (ASMs in millions) | 3,366 | 3,168 | 6.3 | % | ||||||
Block Hours | 185,613 | 177,579 | 4.5 | % | ||||||
Departures | 103,349 | 102,624 | 0.7 | % |
(in millions, except per share amounts) | New | Old | ||||||||||||||
Guidance | Low | High | Low | High | ||||||||||||
Revenues | $ | 1,350 | $ | 1,400 | $ | 1,350 | $ | 1,400 | ||||||||
Pre-tax margin | 7.5 | % | 8.5 | % | 6.0 | % | 7.5 | % | ||||||||
Fully diluted EPS | $ | 1.20 | $ | 1.40 | $ | 0.90 | $ | 1.20 | ||||||||
Year-end unrestricted cash | $ | 195 | $ | 205 | $ | 215 | $ | 220 |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In millions, except per share amounts) (Unaudited) | ||||||||||
Three Months Ended March 31, | ||||||||||
2014 | 2013 | % Increase / (Decrease) | ||||||||
OPERATING REVENUES | ||||||||||
Fixed-fee service | $ | 328.4 | $ | 304.0 | 8.0 | % | ||||
Passenger service | — | 15.2 | (100.0 | )% | ||||||
Charter and other | 9.1 | 5.5 | 65.5 | % | ||||||
Total operating revenues | 337.5 | 324.7 | 3.9 | % | ||||||
OPERATING EXPENSES | ||||||||||
Wages and benefits | 89.2 | 85.0 | 4.9 | % | ||||||
Aircraft fuel | 7.3 | 13.6 | (46.3 | )% | ||||||
Landing fees and airport rents | 7.2 | 16.0 | (55.0 | )% | ||||||
Aircraft and engine rent | 31.1 | 28.8 | 8.0 | % | ||||||
Maintenance and repair | 64.3 | 54.7 | 17.6 | % | ||||||
Insurance and taxes | 6.5 | 6.1 | 6.6 | % | ||||||
Depreciation and amortization | 41.3 | 37.4 | 10.4 | % | ||||||
Other impairment charges | 19.9 | — | 100.0 | % | ||||||
Other | 36.5 | 35.8 | 2.0 | % | ||||||
Total operating expenses | 303.3 | 277.4 | 9.3 | % | ||||||
OPERATING INCOME | 34.2 | 47.3 | (27.7 | )% | ||||||
OTHER INCOME (EXPENSE) | ||||||||||
Interest expense | (29.8 | ) | (28.1 | ) | 6.0 | % | ||||
Fair value gain - Restructuring Asset | 18.4 | — | 100.0 | % | ||||||
Other - net | — | 0.1 | (100.0 | )% | ||||||
Total other expense | (11.4 | ) | (28.0 | ) | (59.3 | )% | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 22.8 | 19.3 | 18.1 | % | ||||||
INCOME TAX EXPENSE | 8.8 | 7.9 | 11.4 | % | ||||||
INCOME FROM CONTINUING OPERATIONS | 14.0 | 11.4 | 22.8 | % | ||||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX | — | (11.1 | ) | (100.0 | )% | |||||
NET INCOME | $ | 14.0 | $ | 0.3 | 4,566.7 | % | ||||
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE - BASIC | $ | 0.28 | $ | 0.23 | 21.7 | % | ||||
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE - DILUTED | $ | 0.26 | $ | 0.22 | 18.2 | % | ||||
NET INCOME PER COMMON SHARE - BASIC | $ | 0.28 | $ | 0.01 | 2,700.0 | % | ||||
NET INCOME PER COMMON SHARE - DILUTED | $ | 0.26 | $ | 0.01 | 2,500.0 | % | ||||
Weighted average common shares: | ||||||||||
Basic | 49.6 | 48.7 | 1.8 | % | ||||||
Diluted | 54.9 | 54.0 | 1.7 | % |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except share and per share amounts) (Unaudited) | |||||||
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 276.2 | $ | 276.7 | |||
Restricted cash | 27.1 | 24.0 | |||||
Receivables - net of allowance for doubtful accounts of $1.5 and $1.5, respectively | 35.0 | 48.3 | |||||
Inventories | 65.8 | 71.9 | |||||
Prepaid expenses and other current assets | 28.2 | 17.7 | |||||
Deferred income taxes | 15.7 | 15.7 | |||||
Total current assets | 448.0 | 454.3 | |||||
Aircraft and other equipment - net | 2,622.3 | 2,563.6 | |||||
Maintenance deposits | 40.1 | 36.6 | |||||
Other assets | 227.7 | 216.8 | |||||
Total assets | $ | 3,338.1 | $ | 3,271.3 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities: | |||||||
Current portion of long-term debt | $ | 303.9 | $ | 276.2 | |||
Accounts payable | 18.3 | 28.9 | |||||
Accrued liabilities | 162.1 | 163.8 | |||||
Total current liabilities | 484.3 | 468.9 | |||||
Long-term debt - less current portion | 1,920.4 | 1,890.6 | |||||
Deferred credits and other non-current liabilities | 97.6 | 100.7 | |||||
Deferred income taxes | 269.6 | 260.4 | |||||
Total liabilities | 2,771.9 | 2,720.6 | |||||
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; 59,791,008 and 59,704,943 shares issued and 49,779,097 and 49,525,594 shares outstanding, respectively | — | — | |||||
Additional paid-in-capital | 421.7 | 420.2 | |||||
Treasury stock, 9,333,266 shares at cost | (181.8 | ) | (181.8 | ) | |||
Accumulated other comprehensive loss | (2.6 | ) | (2.6 | ) | |||
Accumulated earnings | 328.9 | 314.9 | |||||
Total stockholders' equity | 566.2 | 550.7 | |||||
Total liabilities and stockholders' equity | $ | 3,338.1 | $ | 3,271.3 |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) | |||||||
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
NET CASH FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS | $ | 68.7 | $ | 63.5 | |||
INVESTING ACTIVITIES: | |||||||
Purchase of aircraft and other equipment | (130.6 | ) | (5.5 | ) | |||
Proceeds from sale of other assets | 7.0 | 39.9 | |||||
Other, net | (3.1 | ) | (7.4 | ) | |||
NET CASH FROM INVESTING ACTIVITIES OF CONTINUING OPERATIONS | (126.7 | ) | 27.0 | ||||
FINANCING ACTIVITIES: | |||||||
Payments on debt | (58.1 | ) | (45.7 | ) | |||
Proceeds from debt issuance | 116.2 | 1.2 | |||||
Payments on early extinguishment of debt and refinancing | — | (34.6 | ) | ||||
Proceeds from exercise of stock options | 0.4 | 2.3 | |||||
Other, net | (1.0 | ) | (0.5 | ) | |||
NET CASH FROM FINANCING ACTIVITIES OF CONTINUING OPERATIONS | 57.5 | (77.3 | ) | ||||
DISCONTINUED OPERATIONS | |||||||
Cash from operating activities | — | (9.7 | ) | ||||
Cash from investing activities | — | (1.5 | ) | ||||
Cash from financing activities | — | (2.6 | ) | ||||
LESS: NET CASH FROM DISCONTINUED OPERATIONS | — | (13.8 | ) | ||||
— | — | ||||||
NET CHANGES IN CASH AND CASH EQUIVALENTS | (0.5 | ) | 13.2 | ||||
CASH AND CASH EQUIVALENTS—Beginning of period | 276.7 | 210.8 | |||||
CASH AND CASH EQUIVALENTS—End of period | $ | 276.2 | $ | 224.0 |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES UNAUDITED OPERATING HIGHLIGHTS | |||||||||||
Three Months Ended March 31, | |||||||||||
2014 | 2013 | Change | |||||||||
Operating Highlights | |||||||||||
Operating aircraft at period end: | |||||||||||
44-50 seats | 68 | 70 | (2.9 | )% | |||||||
69-99 seats | 179 | 157 | 14.0 | % | |||||||
Block hours5 | 185,613 | 177,579 | 4.5 | % | |||||||
Departures | 103,349 | 102,624 | 0.7 | % | |||||||
Passengers carried | 5,138,720 | 4,780,141 | 7.5 | % | |||||||
Revenue passenger miles ("RPM") (millions)1 | 2,566 | 2,294 | 11.9 | % | |||||||
Available seat miles ("ASM") (millions)2 | 3,366 | 3,168 | 6.3 | % | |||||||
Passenger load factor3 | 76.2 | % | 72.4 | % | 3.8 pts | ||||||
Total cost per ASM, including interest expense (cents)4 | 9.35 | 9.64 | (3.0 | )% | |||||||
Cost per ASM, including interest expense and excluding fuel expense (cents) | 9.13 | 9.21 | (0.9 | )% | |||||||
Gallons consumed | 1,856,914 | 3,524,032 | (47.3 | )% | |||||||
Average cost per gallon | $ | 3.93 | $ | 3.86 | 1.8 | % | |||||
Average daily utilization of each aircraft (hours)6 | 9.0 | 9.5 | (5.3 | )% | |||||||
Average stage length (miles) | 485 | 468 | 3.6 | % | |||||||
Average seat density | 67 | 66 | 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, including interest expense and fair value gain, 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). |
Non-GAAP Reconciliation of Income from Continuing Operations to EBITDA from Continuing Operations | ||||||||||
Three Months ended March 31, | ||||||||||
($ in millions) | 2014 | 2013 | % Increase / (Decrease) | |||||||
Income from continuing operations | $ | 14.0 | $ | 11.4 | 22.8 | % | ||||
Adjust: | ||||||||||
Interest expense | 29.8 | 28.1 | 6.0 | % | ||||||
Income tax expense | 8.8 | 7.9 | 11.4 | % | ||||||
Depreciation and amortization | 41.3 | 37.4 | 10.4 | % | ||||||
EBITDA from continuing operations | $ | 93.9 | $ | 84.8 | 10.7 | % | ||||
Total operating revenues | $ | 337.5 | $ | 324.7 | 3.9 | % | ||||
EBITDA from continuing operations | $ | 93.9 | $ | 84.8 | 10.7 | % | ||||
EBITDA margin from continuing operations | 27.8 | % | 26.1 | % | 1.7 pts |