0001362468-14-000018.txt : 20140423 0001362468-14-000018.hdr.sgml : 20140423 20140423161615 ACCESSION NUMBER: 0001362468-14-000018 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20140423 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140423 DATE AS OF CHANGE: 20140423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Allegiant Travel CO CENTRAL INDEX KEY: 0001362468 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 204745737 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33166 FILM NUMBER: 14778937 BUSINESS ADDRESS: STREET 1: 8360 SOUTH DURANGO DRIVE CITY: LAS VEGAS STATE: NV ZIP: 89113 BUSINESS PHONE: 702-851-7300 MAIL ADDRESS: STREET 1: 8360 SOUTH DURANGO DRIVE CITY: LAS VEGAS STATE: NV ZIP: 89113 8-K 1 earningsreleaseq120148-k.htm FORM 8-K Earnings Release Q1 2014 8-K


UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington D.C. 20549
 
_____________________________________________

 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): April 23, 2014
 
Allegiant Travel Company
 
(Exact name of registrant as specified in its charter)
 
Nevada
001-33166
20-4745737
 
 
 
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
 
 
 
8360 S. Durango Drive, Las
Vegas, NV
 
89113
 
 
 
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code:              (702) 851-7300
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Section 2                       Financial Information

Item 2.02                      Results of Operations and Financial Condition.

On April 23, 2014, Allegiant Travel Company (the “Company”) issued the press release attached as Exhibit 99.1 to this Form 8-K concerning our results of operations for the quarter ended March 31, 2014.

This information is being furnished under Item 2.02 of Form 8-K. This report and Exhibit 99.1 are deemed to be furnished and are not considered “filed” with the Securities and Exchange Commission. As such, this information shall not be incorporated by reference into any of our reports or other filings made with the Securities and Exchange Commission.
 
Forward-Looking Statements: Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in the 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 unit revenue, future operating expense, ASM growth, departure growth, fixed-fee and other revenues, expected capital expenditures, number of contracted aircraft to be placed in service in the future, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. 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 and registration statements filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, volatility of fuel costs, labor issues, the effect of the economic downturn on leisure travel, terrorist attacks, risks inherent to airlines, our introduction of an additional aircraft type, demand for air services to our leisure destinations from the markets served by us, our dependence on our leisure destination markets, our competitive environment, problems with our aircraft, our reliance on our automated systems, economic and other conditions in markets in which we operate, aging aircraft and other governmental regulation, increases in maintenance costs and cyclical and seasonal fluctuations in our operating results.
 
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.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

At a Board meeting held on April 22, 2014, the Board of Directors of Allegiant Travel Company (the “Company”) selected John Redmond to fill a vacancy on the Board and designated him to serve on the Company’s Audit and Compensation Committees.

John Redmond was originally elected to our board in October 2007 and served until June 2013, when he resigned to assume a full-time commitment in Australia. His commitment in Australia is now completed and he was once again designated to serve on the Board in April 2014. From January 2013 until April 2014, Mr. Redmond served as managing director and chief executive officer of Echo Entertainment Group, Ltd., a gaming and hospitality company. From 2007 until January 2013, Mr. Redmond devoted his time to his private investments. Mr. Redmond served as president and chief executive officer of MGM Grand Resorts, LLC and a director of its parent company, MGM Mirage, from 2001 until August 2007. Prior to that, he served as co-chief executive officer and a director of MGM Grand, Inc. from December 1999 to March 2001. He was president and chief operating officer of Primm Valley Resorts from March 1999 to December 1999 and senior vice president of MGM Grand Development, Inc. from August 1996 to February 1999. He served as vice-chairman of MGM Grand Detroit, LLC from 1998 to 2000 and chairman from 2000 until August 2007. Prior to 1996, Mr. Redmond was senior vice president and chief financial officer of Caesars Palace and Sheraton Desert Inn, having served in various other senior operational and development positions with Caesars World, Inc. Mr. Redmond has served as a director of Vail Resorts, Inc. since March 2008, served as a director of Tropicana Las Vegas Hotel and Casino, Inc. from July 2009 until June 2013 and served as a director of Echo Entertainment Group Limited from September 2011 until April 2014.

The buildings in which we maintain our headquarters are under lease agreements with an entity owned by a limited partnership in which Mr. Redmond owns an interest as a limited partner. During 2013, we paid approximately $4,811,000 to the

2



landlord under these leases.  Rental payments in future years will exceed the amount paid in 2013 as a result of cost of living increases and common area maintenance charges.  The leases continue until 2018 unless we elect to terminate one of the leases in 2015 which would also require us to pay for certain unamortized costs upon early termination.  

Section 9                      Financial Statements and Exhibits
 
Item 9.01                      Financial Statements and Exhibits.
 
(a)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Exhibits

Exhibit No.
Description of Document
 
 
99.1
Press Release issued by Allegiant Travel Company on April 23, 2014.
 
 
 
 

3



SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, Allegiant Travel Company has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Date:  April 23, 2014
ALLEGIANT TRAVEL COMPANY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Scott Sheldon
 
 
Name:
Scott Sheldon
 
 
Title:
Chief Financial Officer
 


4



EXHIBIT INDEX
 

Exhibit No.
Description of Document
99.1
Press Release issued by Allegiant Travel Company on April 23, 2014.


5
EX-99.1 2 a2014q18-kex991.htm EXHIBIT 99.1 2014 Q1 8-K Ex 99.1

Exhibit 99.1
 
  
ALLEGIANT TRAVEL COMPANY FIRST QUARTER 2014
FINANCIAL RESULTS
45th Consecutive Profitable Quarter
First Quarter Fully Diluted Earnings per Share of $1.86

 LAS VEGAS. April 23, 2014 —Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the first quarter 2014, as well as comparisons to prior year equivalents:
 
Unaudited
 
Three months ended March 31,

 
 
2014
2013
Change

Total operating revenue (millions)
 

$302.5


$273.0

10.8
 %
Operating income (millions)
 

$57.3


$52.4

9.4
 %
Operating margin
 
18.9
%
19.2
%
(0.3)pp

EBITDA (millions)
 

$75.8


$69.4

9.2
 %
EBITDA margin
 
25.1
%
25.4
%
(0.3)pp

EBITDAR (millions)
 

$85.3


$69.7

22.4
 %
EBITDAR margin
 
28.2
%
25.5
%
2.7pp

Net income (millions)
 

$34.2


$31.9

7.2
 %
Diluted earnings per share
 

$1.86


$1.65

12.7
 %
Return on capital employed *
 
16.5
%
16.9
%
(0.4)pp

* - see appendix for calculation

“We are very proud to report our 45th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “We are pleased to produce another profitable quarter despite significant operational challenges and unusually high one-time costs that impacted our overall financial performance. This was a very difficult operational quarter as we navigated through significant flight crew availability issues stemming from external factors that occurred last year. I am happy to report that our Team Members overcame this adversity and pulled together another solidly profitable quarter."

Notable company highlights

Integrated A320 aircraft into scheduled operations. Ended the quarter operating three A319 and seven A320 aircraft
A319 and A320 fleet accounted for 17.9 percent of total ASM production during the quarter
Integrated two MD-80 aircraft configured with 166 seats to the fleet in March. Ended the quarter operating 53 166 seat MD-80 aircraft


Allegiant Q1 2014 Earnings
Page 2

Completed the reconfiguration of the 757 fleet from 223 seats to 215 seats and added six Giant Seats per aircraft
Announced a seasonal base in Myrtle Beach, SC which will support two aircraft, beginning in late May
Announced 12 new routes to begin operation in the second quarter
Returned $114 million to shareholders through share repurchases and a special dividend paid in January
In April, prepaid $121.3 million term loan facility using unrestricted cash and proceeds from a new $45.3 million loan through Wells Fargo Bank, collateralized by 53 MD-80 aircraft
Re-elected John Redmond to the Board of Directors in April. Mr. Redmond previously served on the board from Oct 2007 to June 2013

First quarter 2014 revenue performance
 
Achieved all-time highs in average fare, ancillary air related charges, and total fare on a per passenger basis
Same store routes, those operated in both the first quarter 2014 and 2013, generated a two percent increase in TRASM
 
 
 
1Q14
1Q13
Change

Scheduled Service:
 
 
 
 
Average fare - scheduled service
 

$99.52


$97.54

2.0
 %
Average fare - ancillary air-related charges
 

$41.79


$41.64

0.4
 %
Average fare - ancillary third party products
 

$5.20


$5.81

(10.5
)%
Average fare - total
 

$146.51


$144.99

1.0
 %
Scheduled service passenger revenue per ASM (PRASM) (cents)
 
8.74

8.60

1.6
 %
Total scheduled service revenue per ASM (TRASM) (cents)
 
12.87

12.79

0.6
 %
Load factor
 
88.5
%
89.8
%
-1.3pp

Passengers (millions)
 
2.0

1.8

10.9
 %
Average passengers per departure
 
147

148

(0.7
)%
Average scheduled service stage length (miles)
 
977

978

(0.1
)%
 ASMs = available seat miles
PRASM = scheduled passenger revenue per scheduled available seat mile
TRASM = (scheduled passenger revenue + ancillary air revenue + ancillary third party revenue) per scheduled available seat mile

Third party products performance
 
Car rental days, primarily driven by growth in our Florida and Phoenix destinations, increased 12.5 percent on a 10.9 percent increase in scheduled passengers. Car rental production drove a net revenue increase of 12.0 percent versus the prior year
Hotel rooms nights sold outside Las Vegas increased 10.1 percent, while Las Vegas hotel room nights decreased 12.1 percent from the prior year. The company’s previous pre-purchase agreement for discounted rooms in Las Vegas concluded in the third quarter of 2013. The company entered into a new pre-purchase room agreement with the same gaming company late in the fourth quarter with current market rates which are not as attractive as the prior deal due to the improved Las Vegas hotel market


Allegiant Q1 2014 Earnings
Page 3

Supplemental Ancillary Revenue Information
Unaudited (millions)
1Q14
1Q13
Change

Gross ancillary revenue - third party products

$35.7


$34.3

4.1
 %
Cost of goods sold

($24.7
)

($23.0
)
7.4
 %
Transaction costs*

($0.5
)

($0.6
)
(16.7
)%
Ancillary revenue - third party products

$10.6


$10.7

(0.8
)%
As percent of gross
29.7
%
31.2
%
(1.5)pp

  As percent of income before taxes
19.6
%
21.2
%
(1.6)pp

Ancillary revenue - third party products/scheduled passenger

$5.20


$5.81

(10.5
)%
 
 
 
 
Hotel room nights (thousands)
143.8

156.5

(8.1
)%
Rental car days (thousands)
281.3

250.1

12.5
 %
* - Includes payment expenses and travel agency commissions.


First quarter 2014 cost performance
 
Total operating expense per ASM (CASM) increased one percent
CASM ex fuel was substantially impacted by nonrecurring expenses related to training and crew availability delays. These delays drove an additional $12.0 million in incremental expense in the form of labor inefficiencies, aircraft sub-service, crew training and displacement costs
Fuel expense per ASM declined 8.8 percent due to a four percent increase in ASMs per gallon, and a five percent decrease in average cost per gallon
Salaries and benefits expense increased 12.8 percent versus last year primarily due to a 13.1 percent increase in the number of full time equivalent employees. Headcount growth was mostly attributable to flight crews to support a 7.3 percent increase in average number of aircraft in service year over year and flight operations and maintenance staff to support increasing Airbus operations
Station operations expense increased approximately 14.9 percent on a 9.4 percent increase in departures, due primarily to an increase in airport fees at one of the company's primary leisure destinations
Maintenance and repairs expense increased 13.6 percent due to a 7.3 percent increase in fleet size and a larger number of heavy maintenance events versus a year ago
Sales and marketing expense increased approximately two million dollars or 34.6 percent from the prior year due to a combination of increased credit card interchange fees and increased advertising to launch 12 new routes in the second quarter

 
 
1Q14
1Q13
Change
Total System*:
 
 
 
 
Operating expense per passenger
 

$118.32


$117.31

0.9%
Operating expense per passenger, excluding fuel
 

$65.76


$59.62

10.3%
Operating expense per ASM (CASM) (cents)
 
10.30

10.20

1.0%
Operating expense, excluding fuel per ASM (CASM ex fuel) (cents)
 
5.72

5.18

10.4%
Average block hours per aircraft per day
 
5.8

5.9

(1.7)%
Average system stage length (miles)
 
960

956

0.4%
* - Total system includes scheduled service, fixed-fee contract and non-revenue flying.

Second quarter 2014 cost trends
 
CASM is expected to increase between three and five percent. This guidance assumes first quarter's average cost per gallon of $3.20
CASM ex fuel is expected to increase between five and seven percent
Increase in salaries and wages to support growth, higher maintenance expenses due to more aircraft heavy checks, and higher aircraft lease rental expense due to sub-service arrangements
On a full year basis the company continues to expect monthly maintenance and repairs expense per aircraft between $100 and $110 thousand


Allegiant Q1 2014 Earnings
Page 4


Balance sheet highlights

Returned $42 million to shareholders through a special dividend of $2.25 per share
Repurchased 730,162 shares of common stock for $72 million in the first quarter. The company has $68 million in repurchase authority remaining
$302 million in unrestricted cash and $149 million in total debt as of April 22, 2014
Unaudited (millions)
3/31/2014

 
12/31/2013

 
Change

Unrestricted cash*

$365.8

 

$387.1

 
(5.5
)%
Total debt

$229.3

 

$234.3

 
(2.1
)%
Total Allegiant Travel Company stockholders’ equity

$341.4

 

$375.7

 
(9.1
)%

 
Three Months Ended March 31,
 
 
Unaudited (millions)
2014
 
2013
 
Change

Capital expenditures
$11.1
 
$13.1
 
(15.3
)%
* - Unrestricted cash includes investments in marketable securities.
 
At this time, Allegiant Travel Company provides the following guidance to investors, subject to revision.


Guidance, subject to revision
 
 
 
 
 
Revenue guidance
April 2014
2Q14
 
Estimated PRASM year-over-year change
9 to 10%
2 to 4%
 
Estimated TRASM year-over-year change
6 to 7%
0.5 to 2.5%
 
 
 
 
 
Fixed fee and other revenue guidance
 
2Q14
 
Fixed fee and other revenue (millions)
 
$1 to $3
 
 
 
 
 
Capacity guidance
 
 
 
System
2Q14
3Q14
FY14
   Departure year-over-year growth
10 to 12%
10 to 14%
 
   ASM year-over-year growth
7 to 9%
9 to 13%
9 to 13%
Scheduled
 
 
 
   Departure year-over-year growth
10 to 12%
10 to 14%
 
   ASM year-over-year growth
7 to 9%
9 to 13%
9 to 13%
 
 
 
 
Cost guidance
2Q14
 
FY14
CASM ex fuel – year-over-year change
5 to 7%
 
4 to 7%
CASM - year over year change
3 to 5%
 
 
 
 
 
 
CAPEX guidance
 
 
FY14
Capital expenditures (millions)
 
 
$75 to $85
 CASM ex fuel – cost per available seat mile excluding fuel expense



Allegiant Q1 2014 Earnings
Page 5

Aircraft fleet plan by end of period
 
 
 
 
 
 
 
 
 
 
 
Aircraft - (seats per AC)
 
2Q14

 
YE14

YE15

MD-80 (166 seats)
 
53

 
53

53

757 (215 seats)
 
6

 
6

6

A319 (156 seats)
 
3

 
4

10

A320 (177 seats)
 
7

 
7

9

Total
 
69

 
70

78

Aircraft listed in table above include only in service aircraft

 
Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. ET Wednesday, April 23, 2014 to discuss its first quarter 2014 financial results. A live broadcast of the conference call will be available via the Company’s Investor Relations website homepage at http://ir.allegiant.com. The webcast will also be archived in the “Events & Presentations” section of the website.




Allegiant Q1 2014 Earnings
Page 6


Allegiant, Travel is our deal.®
Las Vegas-based Allegiant Travel Company® (NASDAQ: ALGT) is focused on linking travelers in small cities to world-class leisure destinations. Through its subsidiary, Allegiant Air, the company operates a low-cost, high-efficiency, all-jet passenger airline, and offers other travel-related products such as hotel rooms, rental cars, and attraction tickets through its website, allegiant.com. The company has been named one of America’s 100 Best Small Companies by Forbes Magazine for four consecutive years.  ALGT/G
 
Media Inquiries: Jessica Wheeler
mediarelations@allegiantair.com
 
Investor Inquiries: Chris Allen
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 unit revenue, future operating expense, ASM growth, departure growth, fixed-fee and other revenues, expected capital expenditures, number of contracted aircraft to be placed in service in the future, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. 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 Securities and Exchange Commission at www.sec.gov . These risk factors include, without limitation, volatility of fuel costs, labor issues, the effect of the economic downturn on leisure travel, terrorist attacks, risks inherent to airlines, our introduction of an additional aircraft type, demand for air services to our leisure destinations from the markets served by us, our dependence on our leisure destination markets, our competitive environment, problems with our aircraft, our reliance on our automated systems, economic and other conditions in markets in which we operate, aging aircraft and other governmental regulation, increases in maintenance costs and cyclical and seasonal fluctuations in our operating results.
 
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
Three months ended March 31, 2014 and 2013
(in thousands, except per share amounts)
(Unaudited)
 
 
Three months ended March 31,
 
Percent
 
2014
 
2013
 
change
OPERATING REVENUE:
 
 
 
 
 
Scheduled service revenue

$203,521

 

$179,933

 
13.1

Ancillary revenue:


 


 
 

Air-related charges
85,454

 
76,813

 
11.2

Third party products
10,629

 
10,717

 
(0.8
)
Total ancillary revenue
96,083

 
87,530

 
9.8

Fixed fee contract revenue
2,646

 
5,187

 
(49.0
)
Other revenue
274

 
309

 
(11.3
)
Total operating revenue
302,524

 
272,959

 
10.8

OPERATING EXPENSES:
 
 
 
 
 

Aircraft fuel
108,949

 
108,491

 
0.4

Salary and benefits
46,439

 
41,162

 
12.8

Station operations
22,233

 
19,345

 
14.9

Maintenance and repairs
20,600

 
18,128

 
13.6

Sales and marketing
7,818

 
5,808

 
34.6

Aircraft lease rentals
9,429

 
303

 
NM*

Depreciation and amortization
18,431

 
16,892

 
9.1

Other
11,354

 
10,463

 
8.5

Total operating expenses
245,253

 
220,592

 
11.2

OPERATING INCOME
57,271

 
52,367

 
9.4

As a percent of total operating revenue
18.9
%
 
19.2
%
 
 

OTHER (INCOME) EXPENSE:
 
 
 
 
 

Earnings from unconsolidated affiliates, net
3

 
(38
)
 
NM*

Interest income
(205
)
 
(262
)
 
(21.8
)
Interest expense
3,128

 
2,188

 
43.0

Total other (income) expense
2,926

 
1,888

 
55.0

INCOME BEFORE INCOME TAXES
54,345

 
50,479

 
7.7

As a percent of total operating revenue
18.0
%
 
18.5
%
 
 

PROVISION FOR INCOME TAXES
20,270

 
18,648

 
8.7

NET INCOME
34,075

 
31,831

 
7.0

Net loss attributable to noncontrolling interest
(147
)
 
(101
)
 
45.5

NET INCOME ATTRIBUTABLE TO ALLEGIANT TRAVEL COMPANY
34,222

 
31,932

 
7.2

Earnings per share to common stockholders (1):
 
 
 
 
 

Basic

$1.87

 

$1.66

 
12.7

Diluted

$1.86

 

$1.65

 
12.7

Weighted average shares outstanding used in computing earnings per share to common stockholders (1):
 
 
 
 
 

Basic
18,166

 
19,081

 
(4.8
)
Diluted
18,248

 
19,207

 
(5.0
)
 * - not meaningful

(1) 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 for the periods presented reflect the two-class method mandated by accounting guidance for the calculation of earnings per share. The two-class method adjusts both the net income and 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
Three months ended March 31, 2014 and 2013
(Unaudited) 
 
Three months ended March 31,
 
Percent
 
2014
 
2013
 
change*
OPERATING STATISTICS
 
 
 
 
 
Total system statistics
 
 
 
 
 
Passengers
2,072,720

 
1,880,341

 
10.2

Revenue passenger miles (RPMs) (thousands)
2,081,501

 
1,908,075

 
9.1

Available seat miles (ASMs) (thousands)
2,381,139

 
2,163,145

 
10.1

Load factor
87.4
%
 
88.2
%
 
(0.8
)
Operating revenue per ASM (RASM) (cents)
12.71

 
12.62

 
0.7

Operating expense per ASM (CASM) (cents)
10.30

 
10.20

 
1.0

Fuel expense per ASM (cents)
4.58

 
5.02

 
(8.8
)
Operating CASM, excluding fuel (cents)
5.72

 
5.18

 
10.4

Operating expense per passenger

$118.32

 

$117.31

 
0.9

Fuel expense per passenger

$52.56

 

$57.70

 
(8.9
)
Operating expense per passenger, excluding fuel

$65.76

 

$59.62

 
10.3

ASMs per gallon of fuel
70.0

 
67.3

 
4.0

Departures
14,501

 
13,254

 
9.4

Block hours
36,348

 
33,784

 
7.6

Average stage length (miles)
960

 
956

 
0.4

Average number of operating aircraft during period
67.9

 
63.3

 
7.3

Average block hours per aircraft per day
5.8

 
5.9

 
(1.7
)
Full-time equivalent employees at period end
2,130

 
1,884

 
13.1

Fuel gallons consumed (thousands)
34,002

 
32,160

 
5.7

Average fuel cost per gallon

$3.20

 

$3.37

 
(5.0
)
Scheduled service statistics
 
 
 
 
 
Passengers
2,045,028

 
1,844,658

 
10.9

Revenue passenger miles (RPMs) (thousands)
2,059,188

 
1,879,027

 
9.6

Available seat miles (ASMs) (thousands)
2,327,935

 
2,091,451

 
11.3

Load factor
88.5
%
 
89.8
%
 
(1.3
)
Departures
13,935

 
12,498

 
11.5

Average passengers per departure
147

 
148

 
(0.7
)
Scheduled service seats per departure
168.5

 
167.7

 
0.5

Block hours
35,385

 
32,399

 
9.2

Yield (cents)
9.88

 
9.58

 
3.1

Scheduled service revenue per ASM (PRASM) (cents)
8.74

 
8.60

 
1.6

Total ancillary revenue per ASM (cents)
4.13

 
4.19

 
(1.4
)
Total scheduled service revenue per ASM (TRASM) (cents)
12.87

 
12.79

 
0.6

Average fare - scheduled service

$99.52

 

$97.54

 
2.0

Average fare - ancillary air-related charges

$41.79

 

$41.64

 
0.4

Average fare - ancillary third party products

$5.20

 

$5.81

 
(10.5
)
Average fare - total

$146.51

 

$144.99

 
1.0

Average stage length (miles)
977

 
978

 
(0.1
)
Fuel gallons consumed (thousands)
33,207

 
31,025

 
7.0

Average fuel cost per gallon

$3.23

 

$3.41

 
(5.3
)
Percent of sales through website during period
94.3
%
 
94.1
%
 
0.2

 
* Except load factor and percent of sales through website, which is percentage point change.






Allegiant Travel Company
Non-GAAP Presentations
Three Months Ended March 31, 2014 and 2013
(Unaudited)
 
"EBITDA" represents earnings before interest expense, income taxes, depreciation and amortization. EBITDAR is EBITDA less aircraft lease rentals expense. Neither EBITDA nor EBITDAR is a calculation based on generally accepted accounting principles and should not be considered as an alternative to net income or operating income as indicators of our financial performance or to cash flow as a measure of liquidity. EBITDA and EBITDAR are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Further, both EBITDA and EBITDAR are well-recognized performance measurements that are frequently used by securities analysts, investors and other interested parties in comparing the operating performance of companies. We believe EBITDA and EBITDAR are useful in evaluating our operating performance compared to our competitors because their calculation generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions and lease versus purchase decisions, which items may vary between periods and for different companies for reasons unrelated to overall operating performance. The following represents the reconciliation of EBITDA and EBITDAR to net income for the periods indicated below.
 
The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of the non-GAAP financial measures EBITDA and EBITDAR to supplement our consolidated financial statements presented on a GAAP basis, Regulation G requires us to include in this press release a presentation of the most directly comparable GAAP measure, which is net income, and a reconciliation of the non-GAAP measures to the most comparable GAAP measure.  Our utilization of non-GAAP measurements is not meant to be considered in isolation or as a substitute for net income or other measures of financial performance prepared in accordance with GAAP. Neither EBITDA nor EBITDAR is a GAAP measurement and our use of these measures may not be comparable to similarly titled measures employed by other companies in the airline and travel industry. The reconciliations to GAAP net income follow.
 
 
 
Three months ended March 31,
 
Percent
(in thousands)
 
2014
 
2013
 
change
Net income attributable to Allegiant Travel Company
 
34,222

 
31,932

 
7.2
 %
Plus (minus)
 
 
 
 
 
 
Interest income
 
(205
)
 
(262
)
 
(21.8
)%
Interest expense
 
3,128

 
2,188

 
43.0
 %
Provision for income taxes
 
20,270

 
18,648

 
8.7
 %
Depreciation and amortization
 
18,431

 
16,892

 
9.1
 %
EBITDA
 

$75,846

 

$69,398

 
9.3
 %
Aircraft lease rentals
 
9,429

 
303

 
NM*

EBITDAR
 

$85,275

 

$69,701

 
22.3
 %
 
 
 
 
 
 
 
Total revenue
 

$302,524

 

$272,959

 
10.8
 %
EBITDA margin
 
25.1
%
 
25.4
%
 
(0.3) pp

EBITDAR margin
 
28.2
%
 
25.5
%
 
2.7 pp

* - not meaningful




Appendix A
Additional Financial Information
(Unaudited)
 
Twelve Months Ended March 31,
Return on capital calculation (millions)
2014
 
2013
Net income
$94.6
 
$88.8
Income tax
56.5

 
52.1

Interest expense
10.4

 
8.9

Less interest income
(1.0
)
 
(1.0
)
 
160.5

 
148.8

 
 
 
 
Interest income
1.0

 
1.0

Tax rate
37.4
%
 
37.0
%
Numerator
101.1

 
94.4

 
 
 
 
Total assets as of prior March 31
859.3

 
793.2

Less current liabilities as of prior March 31
260.0

 
243.8

Plus short term debt as of prior March 31
11.9

 
8.1

Denominator
611.2

 
557.5

Return on capital employed
16.5
%
 
16.9
%

To provide more transparency into operating expenses for the quarter, the company experienced the following non-cash expense items in the first quarter of 2014.

Non-cash items (millions)
1Q14

   Stock based compensation

$2.2

   Loss - disposed assets
1.4

   Lease maintenance accrual
0.5

Total of selected non-cash items

$4.1



###

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