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 30, 2015
SKYWEST, INC.
(Exact name of registrant as specified in its charter)
Utah |
|
0-14719 |
|
87-0292166 |
(State or other jurisdiction of |
|
(Commission |
|
(I.R.S. Employer |
incorporation or organization) |
|
File Number) |
|
Identification No.) |
444 South River Road St. George, Utah |
|
|
(Address of principal executive offices) |
|
(Zip Code) |
(435) 634-3000
(Registrants telephone number, including area code)
N/A
(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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On April 30, 2015, SkyWest, Inc. (SkyWest) issued a press release announcing its financial results for the three months ended March 31, 2015. The full text of SkyWests press release, together with related unaudited financial and operating highlights, is furnished herewith as Exhibit 99.1.
The information in this Current Report on Form 8-K (including the exhibit) is furnished pursuant to General Instruction B.2. of Form 8-K and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS
The following is filed as an exhibit to this report:
Exhibit |
|
Title of Document |
|
Location |
99.1 |
|
Press release dated April 30, 2015 |
|
Attached |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
SKYWEST, INC. | |
|
| |
|
| |
Date: April 30, 2015 |
By |
/s/ Eric J. Woodward |
|
Eric J. Woodward, Chief Accounting Officer |
Exhibit 99.1
NEWS RELEASE
For Further Information Contact:
Investor Relations
Telephone: (435) 634-3203
Fax: (435) 634-3205
FOR IMMEDIATE RELEASE: April 30, 2015
SKYWEST, INC. ANNOUNCES FIRST QUARTER 2015 EARNINGS
St. George, UtahSkyWest, Inc. (SkyWest) (NASDAQ: SKYW) today reported financial and operating results for the quarter ended March 31, 2015.
SkyWest generated $9.6 million of net income, or $0.18 per diluted share, for Q1 2015. This represents an after-tax improvement of $32.5 million from Q1 2014, which had a net loss of $(22.9) million, or $(0.44) per diluted share.
Q1 2015 Financial Highlights
· Pre-tax income increased $59 million from Q1 2014 primarily due to improved operating performance, additional flying contracts and improved recovery from weather disruptions.
· SkyWest generated $100 million in EBITDA in Q1 2015, compared to $35 million in Q1 2014.
· Revenue included improvements of $21 million from higher flight completion rates and $33 million from the additional E175 operations, improved contract rates from renewals and extensions and improved contract performance incentives. These improvements provided a significant offset to the anticipated revenue decrease from a reduced fleet size and production.
· Operating expenses were down by $74 million compared to Q1 2014, primarily driven by improved operating efficiencies and a net decrease in production.
Q1 2015 Operational Update
· ExpressJets adjusted completion rate significantly improved to 99.6% in Q1 2015 from 98.0% in Q1 2014. SkyWest Airlines adjusted completion rate also improved to 99.3% in Q1 2015 from 99.0% in Q1 2014.
· ExpressJet reduced its number of total cancelled flights, including weather cancellations, to 7,300 flights, or 4.5% of scheduled flights, in Q1 2015, from approximately 20,400, or 10.6% of scheduled flights, in Q1 2014. Additionally, SkyWest Airlines reduced its number of total cancelled flights, including weather cancellations, to 3,500 flights, or 2.3% of scheduled flights, in Q1 2015, from 6,400 flights, or 4.1% of scheduled flights, in Q1 2014.
· SkyWest was named one of Americas Best Employers 2015 by Forbes ®. SkyWest is the only regional airline company included on the 2015 list.
· The reduction in ExpressJets ERJ145 operations was the primary driver in SkyWests 6.4% reduction in departures and a 5.5% reduction in block hours compared to Q1 2014.
· Total aircraft in service went to 693 at March 31, 2015 from 717 December 31, 2014, summarized as follows:
· Added nine new E175 aircraft with United
· Added five used 50-seat aircraft with Delta and six used 50-seat aircraft with American
· Removed 15 EMB120 aircraft from service
· Removed 29 50-seat aircraft from service previously operated with United
· Under a previously announced agreement with Alaska Airlines, SkyWest Airlines is scheduled to take delivery of seven new E175 aircraft between Q2 2015 and the Q1 2016.
Commenting on the results, Chip Childs, SkyWest, Inc. President said, Our first quarter results reflect strong progress on our long-term objectives to improve operating performance and reduce the number of aircraft operating in unprofitable flying contracts. During the quarter we continued execution of our fleet transition plan and we expect this transition to continue through 2016. First quarters positive results demonstrate solid execution of these long-term strategic objectives to improve profitability.
Q1 2015 Capital and liquidity update
· SkyWest had $480 million in cash and marketable securities at March 31, 2015. Cash and marketable securities decreased $79 million during Q1 2015, primarily due to $46 million in scheduled semi-annual aircraft lease pre-payments and SkyWests investment of $36 million to acquire E175 aircraft and $10 million to acquire E175 spare parts and engines.
· Long-term debt increased $164 million from December 31, 2014 to March 31, 2015. The increase was primarily due to the issuance of $203 million of long-term debt for nine E175 aircraft delivered during Q1 2015, partially offset by principal payments made on total outstanding debt.
About SkyWest
SkyWest is the holding company for two scheduled passenger airline operations and an aircraft leasing company, and is headquartered in St. George, Utah. SkyWests scheduled passenger airline operations consist of SkyWest Airlines, Inc. (SkyWest Airlines), also based in St. George, Utah, and ExpressJet Airlines, Inc. (ExpressJet Airlines), based in Atlanta, Georgia. SkyWest Airlines operates as United Express, Delta Connection, American Eagle and US Airways Express under contractual agreements with United, Delta, American and US Airways, Inc., respectively. SkyWest Airlines also operates flights for Alaska Airlines under a contractual agreement. ExpressJet operates as United Express, Delta Connection, and American Eagle under contractual agreements with United, Delta and American, respectively. System-wide, SkyWest serves markets in the United States, Canada, Mexico and the Caribbean with approximately 3,400 daily departures and a fleet of approximately 754 regional aircraft. This press release and additional information regarding SkyWest can be accessed at www.skywest.com.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this release contains forward-looking statements. SkyWest may, from time to time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass SkyWests beliefs, expectations, hopes or intentions regarding future events. Words such as forecasts, expects, intends, believes, anticipates, estimates, should, likely and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statement. Readers should note that many factors could affect the future operating and financial results of SkyWest, SkyWest Airlines or ExpressJet, and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this release. These factors include, but are not limited to, the prospects of entering into agreements with other carriers to fly new aircraft, ongoing negotiations between SkyWest, SkyWest Airlines and ExpressJet and their major partners regarding their contractual obligations, uncertainties regarding operation of new aircraft, the impact of regulatory issues such as pilot rest rules and qualification requirements, and the ability to obtain aircraft financing.
Actual operational and financial results of SkyWest, SkyWest Airlines and ExpressJet will likely also vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of other reasons, including, in addition to those identified above: the ability of ExpressJet to realize potential synergies and other anticipated financial impacts of the consolidation of its operations, the possibility that future financial and operating results of ExpressJet may not meet SkyWests forecasts and the timing of ongoing consolidation of the operations of ExpressJet, if achieved; the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel; the financial stability of SkyWests major partners and any potential impact of their financial condition on the operations of SkyWest, SkyWest Airlines, or ExpressJet; fluctuations in flight schedules, which are determined by the major partners for whom SkyWests operating airlines conduct flight operations; variations in market and economic conditions; labor relationships; the impact of global instability; rapidly fluctuating fuel costs; the degree and nature of competition; potential fuel shortages; the impact of weather-related or other natural disasters on air travel and airline costs; aircraft deliveries; the ability to attract and retain qualified pilots and other unanticipated factors. Risk factors, cautionary statements and other conditions which could cause SkyWests actual results to differ from managements current expectations are contained in SkyWests filings with the Securities and Exchange Commission; including the section of SkyWests Annual Report on Form 10-K for the year ended December 31, 2014, entitled Risk Factors.
(more)
SKYWEST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Dollars and Shares in Thousands, Except per Share Amounts)
(Unaudited)
|
|
Three Months Ended |
| ||||
|
|
2015 |
|
2014 |
| ||
OPERATING REVENUES: |
|
|
|
|
| ||
Passenger |
|
$ |
742,498 |
|
$ |
755,639 |
|
Ground handling and other |
|
17,900 |
|
16,747 |
| ||
Total operating revenues |
|
760,398 |
|
772,386 |
| ||
|
|
|
|
|
| ||
OPERATING EXPENSES: |
|
|
|
|
| ||
Salaries, wages and benefits |
|
302,845 |
|
317,642 |
| ||
Aircraft maintenance, materials and repairs |
|
158,257 |
|
178,262 |
| ||
Aircraft rentals |
|
70,412 |
|
80,335 |
| ||
Depreciation and amortization |
|
65,691 |
|
62,316 |
| ||
Aircraft fuel |
|
27,300 |
|
47,225 |
| ||
Ground handling services |
|
23,973 |
|
37,018 |
| ||
Other operating expenses |
|
77,845 |
|
77,362 |
| ||
Total operating expenses |
|
726,323 |
|
800,160 |
| ||
OPERATING INCOME (LOSS) |
|
34,075 |
|
(27,774 |
) | ||
|
|
|
|
|
| ||
OTHER INCOME (EXPENSE): |
|
|
|
|
| ||
Interest income |
|
640 |
|
548 |
| ||
Interest expense |
|
(18,465 |
) |
(15,676 |
) | ||
Other, net |
|
|
|
(273 |
) | ||
Total other expense, net |
|
(17,825 |
) |
(15,401 |
) | ||
|
|
|
|
|
| ||
INCOME (LOSS) BEFORE INCOME TAXES |
|
16,250 |
|
(43,175 |
) | ||
PROVISION (BENEFIT) FOR INCOME TAXES |
|
6,630 |
|
(20,288 |
) | ||
NET INCOME (LOSS) |
|
$ |
9,620 |
|
$ |
(22,887 |
) |
|
|
|
|
|
| ||
BASIC EARNINGS (LOSS) PER SHARE |
|
$ |
0.19 |
|
$ |
(0.44 |
) |
DILUTED EARNINGS (LOSS) PER SHARE |
|
$ |
0.18 |
|
$ |
(0.44 |
) |
|
|
|
|
|
| ||
Weighted average common shares: |
|
|
|
|
| ||
Basic |
|
51,457 |
|
51,467 |
| ||
Diluted |
|
52,392 |
|
51,467 |
|
(more)
SKYWEST, INC.
SUMMARY OF CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
|
|
March 31, |
|
December 31, |
| ||
Cash, restricted cash, and marketable securities |
|
$ |
480,335 |
|
$ |
559,130 |
|
Other current assets |
|
804,340 |
|
731,873 |
| ||
Total current assets |
|
$ |
1,284,675 |
|
$ |
1,291,003 |
|
|
|
|
|
|
| ||
Property and equipment, net |
|
3,179,400 |
|
2,981,188 |
| ||
Deposit on aircraft |
|
40,000 |
|
40,000 |
| ||
Other long term assets |
|
109,433 |
|
97,737 |
| ||
Total assets |
|
$ |
4,613,508 |
|
$ |
4,409,928 |
|
|
|
|
|
|
| ||
Current liabilities |
|
$ |
697,065 |
|
$ |
684,355 |
|
Long-term liabilities |
|
2,505,889 |
|
2,325,227 |
| ||
Stockholders equity |
|
1,410,554 |
|
1,400,346 |
| ||
Total liabilities and stockholders equity |
|
$ |
4,613,508 |
|
$ |
4,409,928 |
|
Unaudited Operating Highlights
|
|
Three Months Ended |
| ||||||
|
|
2015 |
|
2014 |
|
% Change |
| ||
Operating Highlights |
|
|
|
|
|
|
| ||
Passengers carried |
|
13,190,537 |
|
13,633,415 |
|
(3.2 |
)% | ||
Revenue passenger miles (000) |
|
6,967,911 |
|
7,275,600 |
|
(4.2 |
)% | ||
Available seat miles (000) |
|
8,692,116 |
|
8,992,949 |
|
(3.3 |
)% | ||
Block hours |
|
516,774 |
|
546,813 |
|
(5.5 |
)% | ||
Departures |
|
304,599 |
|
325,324 |
|
(6.4 |
)% | ||
Passenger load factor |
|
80.2 |
% |
80.9 |
% |
(0.7 |
)pts | ||
Passenger breakeven load factor |
|
78.6 |
% |
85.5 |
% |
(6.9 |
)pts | ||
Yield per revenue passenger mile |
|
$ |
0.107 |
|
$ |
0.104 |
|
2.9 |
% |
Revenue per available seat mile |
|
$ |
0.087 |
|
$ |
0.086 |
|
1.2 |
% |
Cost per available seat mile |
|
$ |
0.086 |
|
$ |
0.091 |
|
(5.5 |
)% |
Fuel cost per available seat mile |
|
$ |
0.003 |
|
$ |
0.005 |
|
(40.0 |
)% |
Average passenger trip length |
|
528 |
|
534 |
|
(1.1 |
)% |
2015 Quarterly Fleet, Block Hour and ASM Production
|
|
As of |
|
As of |
|
As of |
|
As of |
|
|
|
(Actual) |
|
(Estimate) |
|
(Estimate) |
|
(Estimate) |
|
Fleet Summary |
|
|
|
|
|
|
|
|
|
Regional Jets: |
|
|
|
|
|
|
|
|
|
50 seats |
|
449 |
|
424 |
|
406 |
|
386 |
|
65-76 seats |
|
232 |
|
236 |
|
246 |
|
247 |
|
|
|
681 |
|
660 |
|
652 |
|
633 |
|
Turbo props: |
|
|
|
|
|
|
|
|
|
30 seats |
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals |
|
693 |
|
660 |
|
652 |
|
633 |
|
|
|
Q1 15 |
|
Q2 15 |
|
Q3 15 |
|
Q4 15 |
|
Totals |
|
|
|
(Actual) |
|
(Estimate) |
|
(Estimate) |
|
(Estimate) |
|
(Estimate) |
|
Block hour production |
|
516,774 |
|
523,973 |
|
523,794 |
|
491,093 |
|
2,055,633 |
|
ASM production |
|
8.7 |
b |
9.1 |
b |
9.2 |
b |
8.5 |
b |
35.6 |
b |
Aircraft in schedule
|
|
50 seats |
|
65-76 seats |
|
Turbo prop |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Aircraft in schedule - December 31, 2014 |
|
467 |
|
223 |
|
27 |
|
717 |
|
65-76 seat additions (United) |
|
|
|
9 |
|
|
|
9 |
|
50 seat additions (Delta and American) |
|
11 |
|
|
|
|
|
11 |
|
50 seat reductions (United) |
|
(29 |
) |
|
|
|
|
(29 |
) |
Turbo prop reductions (Delta and United) |
|
|
|
|
|
(15 |
) |
(15 |
) |
Aircraft in schedule March 31, 2015 |
|
449 |
|
232 |
|
12 |
|
693 |
|
Fleet counts above exclude aircraft removed from scheduled service.