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): August 9, 2021

Mesa Air Group, Inc.
(Exact name of registrant as specified in its charter)

Nevada	001-38626	85-0302351
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

410 North 44th Street, Suite 700	85008
Phoenix, Arizona	(Zip Code)
(Address of principal executive offices)

(602) 685-4000

(Registrant's telephone number, including area code)

Not Applicable

(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange of Which Registered
Common Stock, no par value	MESA	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

Item 2.02 Results of Operations and Financial Condition.

On August 9, 2021, Mesa Air Group, Inc. issued a press release announcing its financial and operating results for its third fiscal quarter ended June 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, 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 liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits.

Exhibit Number	Description
99.1	Press Release, dated August 9, 2021, issued by Mesa Air Group, Inc.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

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.

Dated: August 10, 2021	MESA AIR GROUP, INC.
	By:	/s/ Brian S. Gillman
	Name:	Brian S. Gillman
	Title:	Executive Vice President and General Counsel

EX-99.1

Exhibit 99.1

Mesa Air Group Reports Third Quarter Fiscal 2021 Results

August 9^th, 2021

PHOENIX, August 9^th, 2021 -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported third quarter fiscal 2021 financial and operating results.

Highlights for the quarter (3-months ended June 30, 2021):

• Pre-tax income of $5.8 million, net income of $4.3 million or $0.11 per diluted share¹

• Took delivery of the last four E175LLs for a total of 80 E175s with United

• 85,162 block hours, up 169.3% year-over-year and 15.2% above last quarter

• Leased 6 additional, 12 total CRJ-700s to GoJet with 8 scheduled for future delivery

• Subsequent to quarter-end, invested in second electric aircraft company, Heart Aerospace (“Heart”)

Mesa's Q3 2021 results reflect net income of $4.3 million, or $0.11 per diluted share, compared to net income of $3.4 million, or $0.10 per diluted share for Q3 2020.

Mesa's Q3 2021 pre-tax income was $5.8 million, compared to $4.9 million for Q3 2020. Mesa’s Q3 2021 results include, per GAAP, the deferral of $1.9 million of revenue, all of which was billed and paid by American and United during the quarter and will be recognized over the remaining terms of the contracts.

Mesa's Adjusted EBITDA¹ for Q3 2021 was $35.3 million, compared to $35.9 million in Q3 2020, and Adjusted EBITDAR¹ for Q3 2021 was $44.9 million, compared to $51.5 million in Q3 2020.

¹ See Reconciliation of non-GAAP financial measures

Jonathan Ornstein, Chairman and CEO, said, “We had a strong quarter as a result of the rebound in air traffic that led to a sharp increase in block hours compared to the prior year period, as well as last quarter. This time last year we faced a more difficult environment due to the pandemic that led to a significant reduction in air travel. I am proud of our team’s ability to work through these challenges, as evidenced by our fiscal third quarter results. While travel demand remains below pre-pandemic levels and supply chain disruptions have compounded the challenges we face in the current environment, we continue to press forward.” He continued, “We are also committed to ushering in the next generation of sustainable air travel. This is already beginning with new ventures such as our recent one with Heart Aerospace.”

Brad Rich, Mesa’s Chief Operating Officer, added, “During the quarter, we saw a 15.2% sequential increase in block hours. Daily aircraft utilization for the month of June increased 67.4% to 8.7 hours versus 5.2 hours a year ago. We remain focused on operational performance and continuing to provide flexibility to our partners. We are also committed to maintaining a safe and healthy environment for our employees and passengers.”

June quarter financial results:

Total operating revenue increased by $52.1 million, or 71.2%, to $125.2 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020. Contract Revenue increased by $38.0 million, or 53.0%, to $109.7 million primarily as a result of the increased block hours due to the ongoing industry recovery from COVID-19. Pass-through and other revenue increased during the three months ended June 30, 2021 by $14.1 million to $15.5 million primarily due to increased pass-through maintenance on the E175 fleet.

Total operating expense increased by $52.9 million, or 91.4%, to $110.8 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020. The increase is primarily due to a substantial increase in block hours compared to the prior year period, which was impacted by the COVID-19 pandemic and associated lockdowns, as well as increased maintenance costs. Specifically, flight operations expense increased

in the three months ended June 30, 2021 due to additional crew costs associated with more flying and training, and maintenance expense increased primarily due to additional C-checks in preparation for the anticipated increase in summer flying.

Fleet:

Substantially all of the Company’s operating revenue in the three months ended June 30, 2021 was derived from operations associated with American and United Capacity Purchase Agreements and DHL Flight Services Agreement. For the three months ended June 30, 2021, 51% of the Company’s total revenue was derived from United, 45% from American, and 4% from DHL and other sources.

Below is Mesa’s current and future fleet plan by partner and fleet type:

	Fiscal Year 2021								Fiscal Year 2022
Fleet Plan	Q1 (Dec '20)		Q2 (Mar '21)		Q3 (Jun '21)		Q4 (Sep '21)		Q1 (Dec '21)		Q2 (Mar '22)
	Actual		Actual		Actual		Forecast		Forecast		Forecast
E-175 - UA		72		76		80		80		80		80
CRJ-700 - UA		8		-		-		-		-		-
CRJ-900 AA		54		45		45		45		44		42
737-400F - DHL		2		2		2		2		2		2
Sub-total		136		123		127		127		126		124
Leased / Spares Support
CRJ-700 Leased		-		5		12		16		20		20
CRJ-700 to be Leased to Third    Party		12		15		8		4		-		-
CRJ-900 Spares/Storage/For    Sale		10		19		19		19		20		22
737-400F Spares Support		-		-		-		1		1		1
CRJ-200 Storage		1		1		1		1		1		1
Total Fleet		159		163		167		168		168		168

Liquidity and Capital Resources:

Mesa ended the quarter at $180.4 million in unrestricted cash and equivalents. As of June 30, 2021, the Company had $713.7 million in total debt secured primarily with aircraft and engines.  

Forward Guidance:

($ amounts in millions)	Fiscal Year 2021									Fiscal Year 2022
	Q1 (Dec '20)		Q2 (Mar '21)		Q3 (Jun '21)		Q4 (Sep '21)			Q1 (Dec '21)			Q2 (Mar '22)
	Actual		Actual		Actual		Forecast			Forecast			Forecast
Block Hours		69,247		73,942		85,162		89,000			89,000			89,000
Pass Through Maintenance	$	19.9	$	11.4	$	12.6	$	9.0		$	6.0		$	5.0
Non-Pass Through Engine and C    Check	$	7.7	$	13.2	$	9.9	$	16.0		$	13.0		$	12.5
Deferred Revenue	$	5.2	$	4.9	$	1.9	$	(1.0	)	$	(2.0	)	$	(1.0	)

Mesa Air Group will host a conference call with analysts on Monday, August 9^th at 4:30 pm ET/1:30 pm PT. The conference call number is 888-469-2054 (Passcode: Phoenix (7463649). The conference call can also be

accessed live via the web by visiting https://edge.media-server.com/mmc/p/dhowcoqx. A recorded version will be available on Mesa's website approximately two hours after the call for approximately 14 days.

¹Reconciliation of non-GAAP financial measures:

Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa's ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three months and nine months ended June 30, 2021 and the three months and nine months ended June 30, 2020. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company's net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies.

¹Reconciliation of GAAP versus Non-GAAP Disclosures

(In thousands, except for per diluted share) (Unaudited)

	Three months ended June 30, 2021
	Income Before Taxes			Income Tax (Expense)/Benefit			Net Income		Net Income per Diluted Share
GAAP Income	$	5,801		$	(1,525	)	$	4,276	$	0.11
Interest Expense		8,627
Interest Income		(82	)
Depreciation and Amortization		20,933
Adjusted EBITDA		35,279
Aircraft Rent		9,648
Adjusted EBITDAR		44,927

	Three months ended June 30, 2020
	Income Before Taxes			Income Tax (Expense)/Benefit			Net Income		Net Income per Diluted Share
GAAP Income	$	4,936		$	(1,517	)	$	3,419	$	0.10
Interest Expense		10,368
Interest Income		(1	)
Depreciation and Amortization		20,635
Adjusted EBITDA		35,938
Aircraft Rent		15,582
Adjusted EBITDAR		51,520

	Nine months ended June 30, 2021
	Income Before Taxes			Income Tax (Expense)/Benefit			Net income		Net Income per Diluted Share
GAAP Income	$	32,319		$	(8,236	)	$	24,083	$	0.62
Adjustments (1)(2)		3,558			(900	)		2,658	$	0.07
Adjusted Income		35,877			(9,136	)		26,741	$	0.69
Interest Expense		26,464
Interest Income		(287	)
Depreciation and Amortization		62,108
Adjusted EBITDA		124,162
Aircraft Rent		29,688
Adjusted EBITDAR		153,850
(1)Includes lease termination expense of $4.5 million for the nine months ended June 30, 2021 related to purchase of CRJ-900 aircraft, which were previously leased from Bombardier Capital.
(2)Includes adjustment for gain on extinguishment of debt of $1.0 million related to repayment of the Company’s aircraft debts during our nine months ended June 30, 2021.

	Nine months ended June 30, 2020
	Income Before Taxes			Income Tax (Expense)/Benefit			Net income		Net Income per Diluted Share
GAAP Income/(Loss)	$	22,448		$	(6,359	)	$	16,089	$	0.46
Interest Expense		34,668
Interest Income		(95	)
Depreciation and Amortization		61,656
Adjusted EBITDA		118,677
Aircraft Rent		39,196
Adjusted EBITDAR		157,873

About Mesa Air Group, Inc.

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. ("Mesa" or the "Company") is the holding company of Mesa Airlines, Inc. ("Mesa Airlines"), a regional air carrier providing scheduled flight service to 116 cities in 36 states, the District of Columbia, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As of June 30, 2021, Mesa operated a fleet of 167 aircraft with approximately 470 daily departures and 3,191 employees. Mesa operates all of its flights on behalf of major partners as either American Eagle, United Express, or DHL Express flights pursuant to the terms of the Capacity Purchase Agreements (“CPAs”) entered into with American Airlines, Inc. (“American”) and United Airlines, Inc. (“United”) and Flight Services Agreement (“FSA”) with DHL Network Operations (USA), Inc. (“DHL”).

Forward-Looking Statements

Certain statements contained in this press release that are not historical facts contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to the “safe harbor” created by those sections. Forward-looking statements can be identified by the use of words such as “estimate,” “anticipate,”

“expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximate” or “plan,” or the negative of these words and phrases or similar words or phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. For more information on risk factors for Mesa Air Group, Inc.’s business, please refer to the periodic reports the Company files with the Securities and Exchange Commission from time to time. Many of the risks identified in the periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from the COVID-19 pandemic. These forward-looking statements herein speak only as of the date of this press release and should not be relied upon as predictions of future events. Mesa Air Group, Inc. expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein, to reflect any change in Mesa Air Group, Inc.’s expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except as required by law.

MESA AIR GROUP, INC.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts) (Unaudited)

	Three Months Ended June 30,						Nine Months Ended June 30,
	2021			2020			2021			2020
Operating revenues:
Contract revenue	$	109,654		$	71,648		$	318,524		$	409,228
Pass-through and other revenue		15,503			1,451			54,284			27,802
Total operating revenues		125,157			73,099			372,808			437,030
Operating expenses:
Flight operations		41,314			29,664			115,681			135,199
Fuel		234			146			822			504
Maintenance		51,986			22,591			156,623			145,021
Aircraft rent		9,648			15,582			29,688			39,196
Aircraft and traffic servicing		682			538			2,326			2,938
General and administrative		12,087			11,737			36,324			39,233
Depreciation and amortization		20,933			20,635			62,108			61,656
Lease termination		—			—			4,508			—
Government grant recognition		(26,101	)		(43,018	)		(93,379	)		(43,018	)
Total operating expenses		110,783			57,875			314,701			380,729
Operating income		14,374			15,224			58,107			56,301
Other (expense) income, net:
Interest expense		(8,627	)		(10,368	)		(26,464	)		(34,668	)
Interest income		82			1			287			95
Other (expense) income, net		(28	)		79			389			720
Total other (expense), net		(8,573	)		(10,288	)		(25,788	)		(33,853	)
Income before taxes		5,801			4,936			32,319			22,448
Income tax expense		1,525			1,517			8,236			6,359
Net income	$	4,276		$	3,419		$	24,083		$	16,089
Net income per share attributable to common    shareholders
Basic	$	0.12		$	0.10		$	0.68		$	0.46
Diluted	$	0.11		$	0.10		$	0.62		$	0.46
Weighted-average common shares outstanding
Basic		35,769			35,299			35,642			35,154
Diluted		39,513			35,299			38,811			35,248

MESA AIR GROUP, INC.

Condensed Consolidated Balance Sheets

(In thousands, except shares) (Unaudited)

	June 30, 2021		September 30, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	180,398	$	99,395
Restricted cash		3,352		3,446
Receivables, net		4,947		13,712
Expendable parts and supplies, net		24,707		22,971
Prepaid expenses and other current assets		8,956		16,067
Total current assets		222,360		155,591
Property and equipment, net		1,164,193		1,212,415
Intangible assets, net		7,102		8,032
Lease and equipment deposits		8,149		1,899
Operating lease right-of-use assets		97,894		123,251
Other assets		25,315		742
TOTAL ASSETS	$	1,525,013	$	1,501,930
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and finance leases	$	107,728	$	189,268
Current portion of deferred revenue		6,486		9,389
Current maturities of operating leases		37,058		43,932
Accounts payable		52,835		53,229
Accrued compensation		12,432		12,030
Other accrued expenses		59,452		45,478
Total current liabilities		275,991		353,326
NONCURRENT LIABILITIES:
Long-term debt and finance leases, excluding current portion		585,761		542,456
Noncurrent operating lease liabilities		35,007		62,531
Deferred credits		4,147		5,705
Deferred income taxes		72,305		64,275
Deferred revenue, net of current portion		29,265		14,369
Other noncurrent liabilities		27,870		1,409
Total noncurrent liabilities		754,355		690,745
Total liabilities		1,030,346		1,044,071
STOCKHOLDERS' EQUITY:
Preferred stock of no par value, 5,000,000 shares authorized; no shares issued    and outstanding		—		—
Common stock of no par value and additional paid-in capital, 125,000,000    shares authorized; 35,891,029 (2021) and 35,526,918 (2020) shares issued    and outstanding, and 4,899,497 (2021) and 0 (2020) warrants    issued and outstanding		255,497		242,772
Retained earnings		239,170		215,087
Total stockholders' equity		494,667		457,859
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,525,013	$	1,501,930

MESA AIR GROUP, INC.

Operating Highlights (unaudited)

	Three months ended
	June 30
	2021			2020			Change
Available Seat Miles (thousands)		2,056,905			783,702			162.5	%
Block Hours		85,162			31,622			169.3	%
Average Stage Length (miles)		651			567			14.8	%
Departures		42,390			18,092			134.3	%
Passengers		2,572,303			548,705			368.8	%
Controllable Completion Factor*
American		99.42	%		100.00	%		-0.6	%
United		99.98	%		100.00	%		-0.02	%
Total Completion Factor**
American		97.57	%		78.50	%		24.3	%
United		99.21	%		84.77	%		17.0	%
*Controllable Completion Factor excludes cancellations due to weather and air traffic control
**Total Completion Factor includes all cancellations

Source: Mesa Air Group, Inc.

Mesa Air Group, Inc.

Investor Relations

Susan M. Donofrio

Investor.Relations@mesa-air.com

XML

Document and Entity Information	Aug. 09, 2021
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 09, 2021
Entity Registrant Name	Mesa Air Group, Inc.
Entity Central Index Key	0000810332
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity File Number	001-38626
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	85-0302351
Entity Address, Address Line One	410 North 44th Street
Entity Address, Address Line Two	Suite 700
Entity Address, City or Town	Phoenix
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85008
City Area Code	602
Local Phone Number	685-4000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	MESA
Security Exchange Name	NASDAQ