001-35186 (Commission File Number) | 38-1747023 (IRS Employer Identification Number) |
[] | 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)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | Description | |
99.1 | Press Release regarding second quarter 2012 financial results. |
Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events. When used in this release, the words “expects,” “estimates,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company's objectives, plans or goals, or actions the Company may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company's intentions and expectations regarding the management of future maintenance costs related to the Company's seat maintenance program, the delivery schedule of aircraft on order and announced new service routes and customer savings programs. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to a number of factors that could cause the Company's actual results to differ materially from the Company's expectations, including the competitive environment in the airline industry; the Company's ability to keep costs low; changes in fuel costs; the impact of worldwide economic conditions on customer travel behavior; the Company's ability to generate non-ticket revenues; and government regulation. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K for the year ended December 31, 2011. |
Date: July 24, 2012 | SPIRIT AIRLINES, INC. |
Exhibit No. | Description | |
99.1 | Press Release regarding second quarter 2012 financial results. |
• | Net income, excluding special items, for the second quarter 2012 increased 35.4 percent to $35.3 million, or $0.49 per diluted share, as compared to pro forma second quarter 2011 net income.1 GAAP net income for second quarter 2012 was $34.6 million, or $0.48 per diluted share. |
• | For the second quarter of 2012, the Company grew its operating margin, excluding special items, by 1.5 points to 16.3 percent as compared to second quarter 2011.1 Operating margin on a GAAP basis was 15.9 percent for the second quarter of 2012. |
• | Adjusted EBITDAR margin for the second quarter 2012 was 27.6 percent, up 1.7 points year-over-year. |
• | Spirit ended the second quarter 2012 with $415.0 million in unrestricted cash. |
- Denver and Chicago (5/3/12) | - Dallas/Fort Worth and Houston (9/20/12) |
- Denver and Dallas/Fort Worth (5/3/12) | - Chicago and Tampa (11/8/12)* |
- Denver and Fort Lauderdale (5/3/12) | - Chicago and Phoenix/Mesa (11/8/12)* |
- Denver and Las Vegas (5/3/12) | - Minneapolis/St. Paul and Fort Lauderdale (11/8/12)* |
- Dallas/Fort Worth and Myrtle Beach (5/3/12) | - Minneapolis/St. Paul and Fort Myers (11/8/12)* |
- Dallas/Fort Worth and Tampa (5/3/12) | - Dallas/Fort Worth and Fort Myers (11/8/12)* |
- Atlantic City and Atlanta (5/17/12)* | - Boston and Fort Myers (11/8/12)* |
- Latrobe/Pittsburgh and Orlando (5/17/12) | - Dallas/Fort Worth and New Orleans (1/24/13) |
- Minneapolis/St. Paul and Chicago (5/31/12) | - Dallas/Fort Worth and Oakland (4/25/13) |
- Minneapolis/St. Paul and Las Vegas (5/31/12) | - Dallas/Fort Worth and Los Angeles (4/25/13) |
- Dallas/Fort Worth and Toluca/Mexico City (6/21/12) | - Dallas/Fort Worth and Minneapolis/St. Paul (4/26/13) |
- Dallas/Fort Worth and Detroit (6/21/12) | - Dallas/Fort Worth and Philadelphia (4/26/13) |
- Dallas/Fort Worth and San Diego (6/21/12) | - Dallas/Fort Worth and Latrobe/Pittsburgh (6/14/13) |
- Dallas/Fort Worth and Portland, Oregon (6/21/12) | - Dallas/Fort Worth and Los Cabos, Mexico** |
- Dallas/Fort Worth and Baltimore/Washington (9/6/12) | - Dallas/Fort Worth and Cancun, Mexico** |
- Fort Lauderdale and Baltimore/Washington (9/6/12) | - San Diego and Los Cabos, Mexico** |
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | Percent | June 30, | Percent | ||||||||||||||||||
2012 | 2011 | Change | 2012 | 2011 | Change | ||||||||||||||||
Operating revenues: | |||||||||||||||||||||
Passenger | $ | 211,812 | $ | 180,418 | 17.4 | $ | 391,890 | $ | 333,698 | 17.4 | |||||||||||
Non-ticket | 134,496 | 95,473 | 40.9 | 255,913 | 174,855 | 46.4 | |||||||||||||||
Total operating revenue | 346,308 | 275,891 | 25.5 | 647,803 | 508,553 | 27.4 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||
Aircraft fuel | 120,233 | 107,322 | 12.0 | 228,958 | 188,234 | 21.6 | |||||||||||||||
Salaries, wages and benefits | 53,489 | 45,173 | 18.4 | 106,143 | 88,366 | 20.1 | |||||||||||||||
Aircraft rent | 36,060 | 29,081 | 24.0 | 68,933 | 56,789 | 21.4 | |||||||||||||||
Landing fees and other rents | 17,066 | 13,007 | 31.2 | 32,180 | 24,662 | 30.5 | |||||||||||||||
Distribution | 14,738 | 13,037 | 13.0 | 28,939 | 24,969 | 15.9 | |||||||||||||||
Maintenance, materials and repairs | 13,558 | 7,480 | 81.3 | 23,972 | 15,538 | 54.3 | |||||||||||||||
Depreciation and amortization | 3,327 | 1,691 | 96.7 | 6,197 | 3,237 | 91.4 | |||||||||||||||
Other operating | 32,657 | 21,826 | 49.6 | 59,680 | 42,559 | 40.2 | |||||||||||||||
Loss on disposal of assets | 33 | 35 | na | 482 | 35 | na | |||||||||||||||
Special charges (1) | 15 | 2,280 | na | (57 | ) | 2,361 | na | ||||||||||||||
Total operating expenses | 291,176 | 240,932 | 20.9 | 555,427 | 446,750 | 24.3 | |||||||||||||||
Operating income | 55,132 | 34,959 | 57.7 | 92,376 | 61,803 | 49.5 | |||||||||||||||
Other (income) expense: | |||||||||||||||||||||
Interest expense | 794 | 9,678 | na | 1,334 | 23,964 | na | |||||||||||||||
Capitalized interest | (794 | ) | (1,039 | ) | na | (1,334 | ) | (2,076 | ) | na | |||||||||||
Interest income | (180 | ) | (71 | ) | na | (595 | ) | (157 | ) | na | |||||||||||
Other expense | 84 | 76 | na | 127 | 124 | na | |||||||||||||||
Total other (income) expense | (96 | ) | 8,644 | na | (468 | ) | 21,855 | na | |||||||||||||
Income before income taxes | 55,228 | 26,315 | 109.9 | 92,844 | 39,948 | 132.4 | |||||||||||||||
Provision for income taxes | 20,637 | 9,398 | 119.6 | 34,834 | 15,148 | 130.0 | |||||||||||||||
Net income | $ | 34,591 | $ | 16,917 | 104.5 | $ | 58,010 | $ | 24,800 | 133.9 | |||||||||||
Net income per share, basic | $ | 0.48 | $ | 0.41 | 17.1 | $ | 0.80 | $ | 0.73 | 9.6 | |||||||||||
Net income per share, diluted | $ | 0.48 | $ | 0.41 | 17.1 | $ | 0.80 | $ | 0.72 | 11.1 | |||||||||||
Weighted average shares, basic | 72,379 | 41,493 | 74.4 | 72,336 | 33,962 | 113.0 | |||||||||||||||
Weighted average shares, diluted | 72,584 | 41,769 | 73.8 | 72,542 | 34,270 | 111.7 |
June 30, | December 31, | ||||||
2012 | 2011 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 414,977 | $ | 343,328 | |||
Accounts receivable, net | 24,936 | 15,425 | |||||
Deferred income taxes | 17,982 | 20,738 | |||||
Other current assets | 81,668 | 63,217 | |||||
Total current assets | 539,563 | 442,708 | |||||
Property and equipment: | |||||||
Flight equipment | 10,698 | 4,182 | |||||
Ground and other equipment | 51,365 | 46,608 | |||||
Less accumulated depreciation | (30,127 | ) | (27,580 | ) | |||
31,936 | 23,210 | ||||||
Deposits on flight equipment purchase contracts | 84,291 | 91,450 | |||||
Prepaid aircraft maintenance to lessors | 117,560 | 120,615 | |||||
Security deposits and other long-term assets | 96,175 | 67,830 | |||||
Total assets | $ | 869,525 | $ | 745,813 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 28,599 | $ | 15,928 | |||
Air traffic liability | 145,085 | 112,280 | |||||
Other current liabilities | 117,479 | 98,856 | |||||
Total current liabilities | 291,163 | 227,064 | |||||
Long-term deferred income taxes | 22,191 | 12,108 | |||||
Deferred credits and other long-term liabilities | 28,848 | 39,935 | |||||
Shareholders’ equity: | |||||||
Common stock | 7 | 7 | |||||
Additional paid-in-capital | 499,599 | 496,136 | |||||
Treasury stock | (985 | ) | (129 | ) | |||
Retained earnings (deficit) | 28,702 | (29,308 | ) | ||||
Total shareholders’ equity | 527,323 | 466,706 | |||||
Total liabilities and shareholders’ equity | $ | 869,525 | $ | 745,813 |
Six Months Ended June 30, | |||||||
2012 | 2011 | ||||||
Net cash provided by operating activities | $ | 97,420 | $ | 37,902 | |||
Investing activities: | |||||||
Proceeds from sale of property and equipment | 9,074 | 5,537 | |||||
Pre-delivery deposits for flight equipment, net of refunds | 4,738 | (20,091 | ) | ||||
Purchase of property and equipment, net | (19,218 | ) | (7,305 | ) | |||
Net cash used in investing activities | (5,406 | ) | (21,859 | ) | |||
Financing activities: | |||||||
Proceeds from issuance of common stock | 303 | 171,014 | |||||
Payments on debt | — | (20,564 | ) | ||||
Proceeds from sale leaseback transactions | 5,627 | — | |||||
Payments on tax receivable agreement | (26,905 | ) | — | ||||
Excess tax benefits from share-based compensation | 1,466 | — | |||||
Repurchase of restricted common stock | (856 | ) | (757 | ) | |||
Debt issuance costs | — | 8 | |||||
Net cash provided by (used in) financing activities | (20,365 | ) | 149,701 | ||||
Net increase in cash and cash equivalents | 71,649 | 165,744 | |||||
Cash and cash equivalents at beginning of period | 343,328 | 82,714 | |||||
Cash and cash equivalents at end of period | $ | 414,977 | $ | 248,458 | |||
Supplemental disclosures | |||||||
Cash payments for: | |||||||
Interest paid | $ | 287 | $ | 2,615 | |||
Taxes paid | $ | 21,819 | $ | 187 | |||
Non-cash transactions | |||||||
Exchange of Notes due to related parties for common stock | $ | — | $ | 279,206 | |||
Exchange of mandatorily redeemable preferred stock for common stock | $ | — | $ | 81,747 | |||
Liability and offsetting reduction to equity recorded related to tax receivable agreement | $ | — | $ | 35,889 |
Three Months Ended June 30, | ||||||||
Operating Statistics | 2012 | 2011 | Change | |||||
Available seat miles (ASMs) (thousands) | 2,826,916 | 2,425,642 | 16.5 | % | ||||
Revenue passenger miles (RPMs) (thousands) | 2,397,663 | 2,083,804 | 15.1 | % | ||||
Load factor (%) | 84.8 | 85.9 | (1.1 | ) pts | ||||
Passenger flight segments (thousands) | 2,613 | 2,200 | 18.8 | % | ||||
Block hours | 48,147 | 41,815 | 15.1 | % | ||||
Operating revenue per ASM (RASM) (cents) | 12.25 | 11.37 | 7.7 | % | ||||
Average yield (cents) | 14.44 | 13.24 | 9.1 | % | ||||
Average ticket revenue per passenger flight segment ($) | 81.06 | 82.00 | (1.1 | )% | ||||
Average non-ticket revenue per passenger flight segment ($) | 51.47 | 43.39 | 18.6 | % | ||||
Total revenue per passenger flight segment ($) | 132.53 | 125.39 | 5.7 | % | ||||
CASM (cents) | 10.30 | 9.93 | 3.7 | % | ||||
Adjusted CASM (cents) (1) | 10.26 | 9.70 | 5.8 | % | ||||
Adjusted CASM ex-fuel (cents) (2) | 6.05 | 5.41 | 11.8 | % | ||||
Fuel gallons consumed (thousands) | 35,829 | 31,264 | 14.6 | % | ||||
Average economic fuel cost per gallon ($) | 3.32 | 3.32 | — | |||||
Aircraft at end of period (3) | 42 | 35 | 20.0 | % | ||||
Average daily Aircraft utilization (hours) | 12.9 | 13.1 | (1.5 | )% | ||||
Average stage length (miles) | 902 | 932 | (3.2 | )% | ||||
Airports served at end of period | 51 | 45 | 13.3 | % |
Six Months Ended June 30, | ||||||||
Operating Statistics | 2012 | 2011 | Change | |||||
Available seat miles (ASMs) (thousands) | 5,415,930 | 4,625,739 | 17.1 | % | ||||
Revenue passenger miles (RPMs) (thousands) | 4,592,013 | 3,931,084 | 16.8 | % | ||||
Load factor (%) | 84.8 | 85.0 | (0.2 | ) pts | ||||
Passenger flight segments (thousands) | 4,962 | 4,063 | 22.1 | % | ||||
Block hours | 92,620 | 79,965 | 15.8 | % | ||||
Operating revenue per ASM (RASM) (cents) | 11.96 | 10.99 | 8.8 | % | ||||
Average yield (cents) | 14.11 | 12.94 | 9.0 | % | ||||
Average ticket revenue per passenger flight segment ($) | 78.97 | 82.14 | (3.9 | )% | ||||
Average non-ticket revenue per passenger flight segment ($) | 51.57 | 43.04 | 19.8 | % | ||||
Total revenue per passenger flight segment ($) | 130.54 | 125.18 | 4.3 | % | ||||
CASM (cents) | 10.26 | 9.66 | 6.2 | % | ||||
Adjusted CASM (cents) (1) | 10.22 | 9.54 | 7.1 | % | ||||
Adjusted CASM ex-fuel (cents) (2) | 6.02 | 5.54 | 8.7 | % | ||||
Fuel gallons consumed (thousands) | 68,559 | 59,436 | 15.3 | % | ||||
Average economic fuel cost per gallon ($) | 3.32 | 3.12 | 6.4 | % | ||||
Average daily Aircraft utilization (hours) | 12.9 | 12.9 | — |
(1) | Excludes unrealized mark-to-market (gains) and losses and special items as described in the “Reconciliation of Adjusted Operating Income to GAAP Operating Income” table below. |
(2) | Excludes all components of fuel expense, including realized and unrealized mark-to-market hedge losses, and special items as described in the “Reconciliation of Adjusted Operating Income to GAAP Operating Income” table below. |
(3) | Count excludes one aircraft temporarily leased from a third-party provider. The temporary lease began June 11, 2012 and is expected to continue through August 11, 2012. |
Three Months Ended | |||||||
June 30, | |||||||
Pro forma | |||||||
(in thousands, except per share data) | 2012 | 2011 (1) | |||||
Net income, as reported | $ | 34,591 | $ | 16,917 | |||
Add: Provision for income taxes | 20,637 | 9,398 | |||||
Income before income taxes, as reported | 55,228 | 26,315 | |||||
Add: Unrealized mark-to-market losses | 1,123 | 3,457 | |||||
Add special items: | |||||||
Loss on disposal of assets | 33 | 35 | |||||
Special charges | 15 | 2,280 | |||||
Income before income taxes, non-GAAP (2) | 56,399 | 32,087 | |||||
Add: Interest expense | — | 9,678 | |||||
Income before income taxes, non-GAAP (2) | 56,399 | 41,765 | |||||
Provision for income taxes (3) | 21,075 | 15,685 | |||||
Adjusted net income, non-GAAP (2) | $ | 35,324 | $ | 26,080 | |||
Weighted average shares, basic | 72,379 | 72,114 | |||||
Weighted average shares, diluted (3) | 72,584 | 72,390 | |||||
Adjusted net income per share, basic | $ | 0.49 | $ | 0.36 | |||
Adjusted net income per share, diluted | $ | 0.49 | $ | 0.36 |
(1) | Pro forma earnings for second quarter 2011 is presented to give effect to the following as if the IPO and related recapitalization occurred as of January 1, 2010: (i) the elimination of all of Spirit's outstanding indebtedness and preferred stock, and the termination of any outstanding letter of credit facility supporting collateral obligations due to Spirit's credit card processors through (x) the application of a portion of the IPO net proceeds, (y) the exchange of any notes not repaid with IPO net proceeds for shares of common stock and (z) the exchange of any shares of preferred stock not redeemed with IPO net proceeds for shares of common stock; (ii) adding back to net income the interest expense recorded in Spirit's statement of operations related to the indebtedness and preferred stock retired; (iii) the issuance of shares of common stock by Spirit in the IPO and the related recapitalization; and (iv) the estimated tax impact resulting from the above transactions. |
(2) | Excludes unrealized mark-to-market losses and special items as described in the “Reconciliation of Adjusted Operating Income to GAAP Operating Income” table below. |
(3) | Assumes same marginal tax rate as is applicable to GAAP net income. Second quarter 2011 adjusted to conform to full-year pro forma presentation. |
Three Months Ended | |||||||
June 30, | |||||||
(in thousands, except CASM data in cents) | 2012 | 2011 | |||||
Total operating expenses, as reported | $ | 291,176 | $ | 240,932 | |||
Less: Unrealized mark-to-market losses (1) | 1,123 | 3,457 | |||||
Less special items (2): | |||||||
Loss on disposal of assets | 33 | 35 | |||||
Special charges (3) | 15 | 2,280 | |||||
Operating expenses, non-GAAP (4) | 290,005 | 235,160 | |||||
Less: Economic fuel expense, non-GAAP | 119,110 | 103,865 | |||||
Operating expenses excluding fuel, non-GAAP (5) | $ | 170,895 | $ | 131,295 | |||
Available seat miles | 2,826,916 | 2,425,642 | |||||
CASM (cents) | 10.30 | 9.93 | |||||
Adjusted CASM (cents) (4) | 10.26 | 9.70 | |||||
Adjusted CASM ex-fuel (cents) (5) | 6.05 | 5.41 |
Three Months Ended | |||||||
June 30, | |||||||
(in thousands) | 2012 | 2011 | |||||
Operating income, as reported | $ | 55,132 | $ | 34,959 | |||
Operating margin, GAAP | 15.9 | % | 12.7 | % | |||
Add: Unrealized mark-to-market losses (1) | 1,123 | 3,457 | |||||
Add special items (2): | |||||||
Loss on disposal of assets | 33 | 35 | |||||
Special charges (3) | 15 | 2,280 | |||||
Operating income, non-GAAP | $ | 56,303 | $ | 40,731 | |||
Operating margin (4) | 16.3 | % | 14.8 | % |
(1) | Unrealized mark-to-market (gains) and losses are comprised of non-cash adjustments to aircraft fuel expenses. |
(2) | Special items include loss on disposal of assets and special charges. |
(3) | Special charges for 2011 include amounts relating to exit facility costs associated with moving our Detroit, Michigan maintenance operations to Fort Lauderdale, Florida, and termination costs in connection with the IPO during the three months ended June 30, 2011 comprised of amounts paid to Indigo Partners, LLC to terminate its professional service agreement with Spirit and fees paid to three individual, unaffiliated holders of the Company's subordinated notes. |
(4) | Excludes unrealized fuel hedge losses and special items. |
(5) | Excludes all components of fuel expense, including realized and unrealized fuel hedge losses, and special items. |
Three Months Ended | |||||||
June 30, | |||||||
(in thousands, except per gallon data) | 2012 | 2011 | |||||
Fuel Expense | |||||||
Aircraft fuel, as reported | $ | 120,233 | $ | 107,322 | |||
Less: Unrealized mark-to-market losses | 1,123 | 3,457 | |||||
Economic fuel expense, non-GAAP | $ | 119,110 | $ | 103,865 | |||
Fuel gallons consumed | 35,829 | 31,264 | |||||
Economic fuel cost per gallon, non-GAAP | $ | 3.32 | $ | 3.32 |
Three Months Ended | |||||||
June 30, | |||||||
(in thousands) | 2012 | 2011 | |||||
Net income, as reported | $ | 34,591 | $ | 16,917 | |||
Add: Provision for income taxes | 20,637 | 9,398 | |||||
Income before income taxes, as reported | 55,228 | 26,315 | |||||
Add: | |||||||
Interest expense | 794 | 9,678 | |||||
Capitalized interest | (794 | ) | (1,039 | ) | |||
Interest income | (180 | ) | (71 | ) | |||
Depreciation and amortization | 3,327 | 1,691 | |||||
EBITDA | 58,375 | 36,574 | |||||
Other expense | 84 | 76 | |||||
Unrealized mark-to-market losses | 1,123 | 3,457 | |||||
Loss on disposal of assets | 33 | 35 | |||||
Special charges | 15 | 2,280 | |||||
Adjusted EBITDA | 59,630 | 42,422 | |||||
Aircraft rent | 36,060 | 29,081 | |||||
Adjusted EBITDAR (1) | $ | 95,690 | $ | 71,503 | |||
Adjusted EBITDAR margin (1) | 27.6% | 25.9% |
(1) | Excludes unrealized mark-to-market fuel hedge losses and special items as described in the "Reconciliation of Adjusted Operating Income to GAAP Operating Income" table above. |
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