Title: | Executive Vice President and Chief Financial Officer |
99.1 | Press Release of Republic Airways Holdings Inc. issued on October 28, 2014, relating to its third quarter 2014 results. |
• | Republic's pre-tax income from continuing operations for the third quarter of 2014 was $30.5 million compared to $5.4 million for the prior year's third quarter. In the third quarter of 2013, the Company incurred an impairment charge of $21.2 million. Absent this impairment, Republic's pre-tax income from continuing operations increased $3.9 million, or 14.7%. Republic's net income for the third quarter of 2014 was $18.5 million, or $0.35 per diluted share. |
• | Republic's pre-tax income from continuing operations for the nine months ended Sept. 30, 2014 was $86.6 million compared to $51.7 million for the same period of 2013. Absent impairment charges in both years and a fair value gain recorded in 2014, Republic's pre-tax income from continuing operations increased from $72.9 million to $88.1 million, or 20.9%. Republic's net income for the nine months ended Sept. 30, 2014 was $52.6 million, or $1.01 per diluted share. |
• | During the quarter, the Company announced it would add 50 new E175 aircraft to its Capacity Purchase Agreement with United. The aircraft, which each have a term of 12 years, are expected to be delivered between mid-2015 and mid-2017. The Company and United also agreed to an early wind-down schedule for the Company’s 31 Q400 aircraft currently in operation between early 2015 and late 2016. Republic has entered into a sublease with Flybe Limited, a UK airline, for 24 Q400 aircraft, with deliveries to Flybe coordinated with the removal of the aircraft from United service. The remaining Q400 aircraft will be sold, leased or returned to the lessor after removing them from United service. |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (In millions, except per share amounts) | |||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2014 | 2013 | % Increase / (Decrease) | 2014 | 2013 | % Increase / (Decrease) | ||||||||||||||||
OPERATING REVENUES: | |||||||||||||||||||||
Fixed-fee service | $ | 343.7 | $ | 320.3 | 7.3 | % | $ | 1,009.2 | $ | 941.2 | 7.2 | % | |||||||||
Passenger service | — | 12.6 | (100.0 | )% | — | 41.6 | (100.0 | )% | |||||||||||||
Charter and other | 6.0 | 5.7 | 5.3 | % | 21.0 | 17.2 | 22.1 | % | |||||||||||||
Total operating revenues | 349.7 | 338.6 | 3.3 | % | 1,030.2 | 1,000.0 | 3.0 | % | |||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||
Wages and benefits | 93.8 | 87.1 | 7.7 | % | 274.8 | 256.6 | 7.1 | % | |||||||||||||
Aircraft fuel | 5.1 | 11.3 | (54.9 | )% | 18.0 | 37.1 | (51.5 | )% | |||||||||||||
Landing fees and airport rents | 7.0 | 7.9 | (11.4 | )% | 20.8 | 38.3 | (45.7 | )% | |||||||||||||
Aircraft and engine rent | 31.9 | 32.0 | (0.3 | )% | 94.3 | 91.6 | 2.9 | % | |||||||||||||
Maintenance and repair | 65.9 | 67.3 | (2.1 | )% | 191.9 | 184.0 | 4.3 | % | |||||||||||||
Insurance and taxes | 5.0 | 6.5 | (23.1 | )% | 15.9 | 18.5 | (14.1 | )% | |||||||||||||
Depreciation and amortization | 43.7 | 37.0 | 18.1 | % | 127.2 | 110.5 | 15.1 | % | |||||||||||||
Other impairment charges | — | 21.2 | (100.0 | )% | 19.9 | 21.2 | (6.1 | )% | |||||||||||||
Other | 36.5 | 35.5 | 2.8 | % | 109.4 | 107.5 | 1.8 | % | |||||||||||||
Total operating expenses | 288.9 | 305.8 | (5.5 | )% | 872.2 | 865.3 | 0.8 | % | |||||||||||||
OPERATING INCOME | 60.8 | 32.8 | 85.4 | % | 158.0 | 134.7 | 17.3 | % | |||||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||||||||
Interest expense | (30.4 | ) | (27.4 | ) | 10.9 | % | (90.0 | ) | (83.1 | ) | 8.3 | % | |||||||||
Fair value gain - restructuring asset | — | — | — | % | 18.4 | — | 100.0 | % | |||||||||||||
Other, net | 0.1 | — | 100.0 | % | 0.2 | 0.1 | 100.0 | % | |||||||||||||
Total other expense | (30.3 | ) | (27.4 | ) | 10.6 | % | (71.4 | ) | (83.0 | ) | (14.0 | )% | |||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 30.5 | 5.4 | 464.8 | % | 86.6 | 51.7 | 67.5 | % | |||||||||||||
INCOME TAX EXPENSE | 12.0 | 1.1 | 990.9 | % | 34.0 | 19.9 | 70.9 | % | |||||||||||||
INCOME FROM CONTINUING OPERATIONS | 18.5 | 4.3 | 330.2 | % | 52.6 | 31.8 | 65.4 | % | |||||||||||||
INCOME FROM DISCONTINUED OPERATIONS: | |||||||||||||||||||||
Income from discontinued operations, net of tax | — | 29.8 | (100.0 | )% | — | 27.2 | (100.0 | )% | |||||||||||||
Loss from disposal of discontinued operations, net of tax | — | (47.9 | ) | (100.0 | )% | — | (47.9 | ) | (100.0 | )% | |||||||||||
Loss from discontinued operations, net of tax | — | (18.1 | ) | (100.0 | )% | — | (20.7 | ) | (100.0 | )% | |||||||||||
NET INCOME (LOSS) | $ | 18.5 | $ | (13.8 | ) | 234.1 | % | $ | 52.6 | $ | 11.1 | 373.9 | % | ||||||||
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE - BASIC | $ | 0.37 | $ | 0.09 | 311.1 | % | 1.06 | 0.64 | 65.6 | % | |||||||||||
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE - DILUTED | $ | 0.35 | $ | 0.09 | 288.9 | % | 1.01 | 0.60 | 68.3 | % | |||||||||||
NET INCOME (LOSS) PER COMMON SHARE - BASIC | $ | 0.37 | $ | (0.28 | ) | 232.1 | % | 1.06 | 0.22 | 381.8 | % | ||||||||||
NET INCOME (LOSS) PER COMMON SHARE - DILUTED | $ | 0.35 | $ | (0.26 | ) | 234.6 | % | 1.01 | 0.23 | 339.1 | % | ||||||||||
Weighted average common shares: | |||||||||||||||||||||
Basic | 49.9 | 49.4 | 1.0 | % | 49.8 | 49.8 | — | % | |||||||||||||
Diluted | 53.0 | 52.5 | 1.0 | % | 53.0 | 55.1 | (3.8 | )% |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In millions, except share and per share amounts) | |||||||
September 30, | December 31, | ||||||
2014 | 2013 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 257.7 | $ | 276.7 | |||
Restricted cash | 25.8 | 24.0 | |||||
Receivables - net of allowance for doubtful accounts of $2.8 and $1.5, respectively | 18.3 | 48.3 | |||||
Inventories | 64.6 | 71.9 | |||||
Prepaid expenses and other current assets | 15.9 | 17.7 | |||||
Deferred income taxes | 16.3 | 15.7 | |||||
Total current assets | 398.6 | 454.3 | |||||
Aircraft and other equipment, net | 2,841.4 | 2,563.6 | |||||
Maintenance deposits | 51.0 | 36.6 | |||||
Other assets | 228.1 | 216.8 | |||||
Total assets | $ | 3,519.1 | $ | 3,271.3 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities: | |||||||
Current portion of long-term debt | $ | 313.5 | $ | 276.2 | |||
Accounts payable | 18.1 | 28.9 | |||||
Accrued liabilities | 161.5 | 163.8 | |||||
Total current liabilities | 493.1 | 468.9 | |||||
Long-term debt - less current portion | 2,032.3 | 1,890.6 | |||||
Deferred credits and other non-current liabilities | 92.1 | 100.7 | |||||
Deferred income taxes | 295.5 | 260.4 | |||||
Total liabilities | 2,913.0 | 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; 59,584,332 and 59,704,943 shares issued and 49,786,619 and 49,525,594 shares outstanding, respectively | — | — | |||||
Additional paid-in-capital | 425.0 | 420.2 | |||||
Treasury stock, 9,546,147 and 9,333,266 shares at cost, respectively | (184.0 | ) | (181.8 | ) | |||
Accumulated other comprehensive loss | (2.4 | ) | (2.6 | ) | |||
Accumulated earnings | 367.5 | 314.9 | |||||
Total stockholders' equity | 606.1 | 550.7 | |||||
Total liabilities and stockholders' equity | $ | 3,519.1 | $ | 3,271.3 |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In millions) | |||||||
Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
NET CASH FROM OPERATING ACTIVITIES OF CONTINUING OPERATIONS | $ | 259.4 | $ | 170.0 | |||
INVESTING ACTIVITIES: | |||||||
Purchase of aircraft and other equipment | (445.6 | ) | (233.4 | ) | |||
Proceeds from sale of other assets | 8.6 | 40.1 | |||||
Aircraft deposits | (20.0 | ) | (25.0 | ) | |||
Change in restricted cash | (1.8 | ) | (2.4 | ) | |||
NET CASH USED IN INVESTING ACTIVITIES OF CONTINUING OPERATIONS | (458.8 | ) | (220.7 | ) | |||
FINANCING ACTIVITIES: | |||||||
Payments on debt | (213.2 | ) | (147.9 | ) | |||
Proceeds from debt issuance and refinancing | 397.1 | 236.8 | |||||
Payments on early extinguishment of debt and refinancing | — | (58.7 | ) | ||||
Proceeds from exercise of stock options | 1.3 | 3.9 | |||||
Purchase of treasury stock | (2.1 | ) | — | ||||
Other, net | (2.7 | ) | (2.3 | ) | |||
NET CASH FROM FINANCING ACTIVITIES OF CONTINUING OPERATIONS | 180.4 | 31.8 | |||||
DISCONTINUED OPERATIONS | |||||||
Cash from operating activities | — | 66.4 | |||||
Cash from investing activities | — | (8.0 | ) | ||||
Cash from financing activities | — | (31.0 | ) | ||||
LESS: NET CASH FROM DISCONTINUED OPERATIONS | — | 27.4 | |||||
— | — | ||||||
NET CHANGES IN CASH AND CASH EQUIVALENTS | (19.0 | ) | (18.9 | ) | |||
CASH AND CASH EQUIVALENTS—Beginning of period | 276.7 | 210.8 | |||||
CASH AND CASH EQUIVALENTS—End of period | $ | 257.7 | $ | 191.9 |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES UNAUDITED OPERATING HIGHLIGHTS | |||||||||||
Operating Highlights | Three Months Ended September 30, | ||||||||||
2014 | 2013 | Change | |||||||||
Operating aircraft at period end: | |||||||||||
44-50 seats7 | 42 | 68 | (38.2 | )% | |||||||
69-99 seats8 | 198 | 167 | 18.6 | % | |||||||
Block hours5 | 194,716 | 190,589 | 2.2 | % | |||||||
Departures | 110,272 | 114,037 | (3.3 | )% | |||||||
Passengers carried | 5,946,742 | 5,624,693 | 5.7 | % | |||||||
Revenue passenger miles ("RPM") (millions)1 | 3,011 | 2,688 | 12.0 | % | |||||||
Available seat miles ("ASM") (millions)2 | 3,818 | 3,470 | 10.0 | % | |||||||
Passenger load factor3 | 78.9 | % | 77.5 | % | 1.4 pts | ||||||
Cost per ASM, including interest expense (cents)4 | 8.36 | 9.60 | (12.9 | )% | |||||||
Cost per ASM, including interest expense and excluding fuel expense (cents) | 8.23 | 9.28 | (11.3 | )% | |||||||
Gallons consumed | 1,369,716 | 3,178,707 | (56.9 | )% | |||||||
Average cost per gallon | $ | 3.72 | $ | 3.55 | 4.8 | % | |||||
Average daily utilization of each aircraft (hours)6 | 9.8 | 9.7 | 1.0 | % | |||||||
Average length of aircraft flights (miles) | 496 | 460 | 7.8 | % | |||||||
Average seat density | 70 | 66 | 6.1 | % |
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, 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 11 owned and four leased E140 aircraft that were permanently parked, one owned and 11 leased E145 aircraft that were parked, and one owned E135 aircraft and 11 owned E145 aircraft that are subleased, as of September 30, 2014. |
8. | Excludes two parked E190 aircraft, three owned E190 aircraft and three owned E170 aircraft that are subleased, as of September 30, 2014. |
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES UNAUDITED OPERATING HIGHLIGHTS | |||||||||||
Operating Highlights | Nine Months Ended September 30, | ||||||||||
2014 | 2013 | Change | |||||||||
Operating aircraft at period end: | |||||||||||
44-50 seats7 | 42 | 68 | (38.2 | )% | |||||||
69-99 seats8 | 198 | 167 | 18.6 | % | |||||||
Block hours5 | 572,077 | 555,255 | 3.0 | % | |||||||
Departures | 320,120 | 327,060 | (2.1 | )% | |||||||
Passengers carried | 16,985,158 | 15,910,016 | 6.8 | % | |||||||
Revenue passenger miles ("RPM") (millions)1 | 8,612 | 7,601 | 13.3 | % | |||||||
Available seat miles ("ASM") (millions)2 | 10,899 | 9,975 | 9.3 | % | |||||||
Passenger load factor3 | 79.0 | % | 76.2 | % | 2.8 pts | ||||||
Cost per ASM, including interest expense (cents)4 | 8.66 | 9.51 | (8.9 | )% | |||||||
Cost per ASM, including interest expense and excluding fuel expense (cents) | 8.49 | 9.13 | (7.0 | )% | |||||||
Gallons consumed | 4,764,891 | 10,328,831 | (53.9 | )% | |||||||
Average cost per gallon | $ | 3.78 | $ | 3.59 | 5.2 | % | |||||
Average daily utilization of each aircraft (hours)6 | 9.5 | 9.7 | (2.1 | )% | |||||||
Average length of aircraft flights (miles) | 495 | 464 | 6.7 | % | |||||||
Average seat density | 69 | 66 | 4.5 | % |
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). |
7. | Excludes 11 owned and four leased E140 aircraft that were permanently parked, one owned and 11 leased E145 aircraft that were parked, and one owned E135 aircraft and 11 owned E145 aircraft that are subleased, as of September 30, 2014. |
8. | Excludes two parked E190 aircraft, three owned E190 aircraft and three owned E170 aircraft that are subleased, as of September 30, 2014. |
Reconciliation of Pre-tax Income from Continuing Operations to Adjusted Pre-tax Income from Continuing Operations | |||||||||||||||||||||
Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||||||||
($ in millions) | 2014 | 2013 | % Increase / (Decrease) | 2014 | 2013 | % Increase / (Decrease) | |||||||||||||||
Pre-tax income from continuing operations | $ | 30.5 | $ | 5.4 | 464.8 | % | $ | 86.6 | $ | 51.7 | 67.5 | % | |||||||||
Adjust: | |||||||||||||||||||||
Other impairment charge | — | 21.2 | (100.0 | )% | 19.9 | 21.2 | (6.1 | )% | |||||||||||||
Fair value gain - restructuring asset | — | — | — | % | (18.4 | ) | — | (100.0 | )% | ||||||||||||
Adjusted pre-tax income from continuing operations | $ | 30.5 | $ | 26.6 | 14.7 | % | $ | 88.1 | $ | 72.9 | 20.9 | % |