EX-99 2 a05-3438_1ex99.htm EX-99

Exhibit 99

 

FOR IMMEDIATE RELEASE 

February 14, 2005

 

MAIR HOLDINGS, INC. REPORTS FISCAL 2005 THIRD QUARTER RESULTS

 

Minneapolis/St. Paul – (February 14, 2005) – MAIR Holdings, Inc. (NASDAQ: MAIR) today reported net income of $1.5 million for the fiscal 2005 third quarter ended December 31, 2004 compared to net income of $0.7 million in the comparable fiscal 2004 period.  On a per diluted share basis, the fiscal 2005 third quarter income resulted in $0.07 per diluted share compared with $0.03 per diluted share in the comparable fiscal 2004 period.

 

“While the fiscal third quarter results improved modestly year-over-year, the quarter was negatively impacted by the operational challenges of the last two weeks of December.  Poor weather in each of the hub operations affected both of our aircraft operations and Mesaba’s ground handling business,” said Paul Foley, MAIR Holdings’ president and chief executive officer.  “Especially in this difficult environment, we appreciate the people at both Mesaba Aviation and Big Sky who continued to provide the best customer service possible,” Foley continued.

 

Operating income increased 208% to $1.8 million in the third quarter of fiscal 2005 compared to $0.6 million reported in the third quarter of fiscal 2004.  Operating revenue for the third quarter increased 0.2% to $115.5 million compared with $115.3 million during the same quarter a year ago.  Operating expenses for the third quarter decreased 0.9% to $113.7 million compared with $114.7 million during the same quarter a year ago.  Operating expenses in the prior period included a one-time $2.7 million retroactive pilot pay expense resulting from the new pilot contract.  Mesaba Aviation is insulated from higher fuel prices as a result of its operating contracts with Northwest Airlines.

 

During the fourth quarter of fiscal 2005, the Company determined that it had incorrectly accounted for certain aircraft leases that contained reduced rent obligations over a portion of the lease terms.  This resulted in an understatement of aircraft rents, other assets, net and other noncurrent liabilities and an overstatement of net income, retained earnings and shareholders’ equity, none of which were material to previously issued financial statements.  The Company has restated its financial statements to record aircraft rents on a straight-line basis over the lease terms.  For the three and nine months ended December 31, 2003, this restatement reduced net income less than $0.1 million and $0.1 million, respectively, and reduced diluted earnings per share by $0.01 in each period.  The Company reduced its retained earnings by $0.7 million at March 31, 2004 to reflect the cumulative after-tax effect for additional aircraft rents that should have been recorded in previous periods.

 

The Company intends to include restated consolidated financial statements for fiscal 2004 and 2003 in its Annual Report on Form 10-K for the year ending March 31, 2005, and to include restated consolidated financial statements for the fiscal 2005 interim periods in its future Quarterly Reports on Form 10-Q.

 

QUARTERLY CONFERENCE CALL

 

MAIR Holdings will conduct a live webcast to discuss its fiscal 2005 third quarter earnings today at 1:00 PM (CST).  The webcast will be available through the MAIR Holdings’ web site at www.mairholdings.com under the “Investor” link or at www.actioncast.acttel.com, Event ID: 27393.

 


 

ABOUT THE COMPANY

 

MAIR Holdings’ primary business units are its regional airline subsidiary Mesaba Aviation, Inc., d/b/a Mesaba Airlines, and its regional airline subsidiary Big Sky Transportation Co., d/b/a Big Sky Airlines.  MAIR Holdings, Inc. is traded under the symbol MAIR on the NASDAQ National Market.  More information about MAIR Holdings is available on the Internet at www.mairholdings.com.

 

Mesaba Aviation operates as a Northwest Jet Airlink and Airlink partner under service agreements with Northwest Airlines.  Currently, the airline serves 111 cities in 32 states and Canada from Northwest’s and Mesaba Aviation’s three major hubs: Detroit, Minneapolis/St. Paul and Memphis.  Mesaba Aviation operates an advanced fleet of regional jet and jet-prop aircraft, consisting of the 69 passenger Avro RJ85 and the 30-34 passenger Saab SF340.  Mesaba Aviation maintains a web site at www.mesaba.com.

 

Big Sky currently serves 18 cities in Montana, North Dakota, Washington and Idaho using nine Fairchild Metro III/23, 19 seat aircraft.  Big Sky is based in Billings, Montana and has codeshare agreements with Northwest Airlines, Alaska Airlines and America West Airlines.  Big Sky is a provider of air service under the Essential Air Service program administered by the Department of Transportation.  Big Sky maintains a web site at www.bigskyair.com.

 

FORWARD-LOOKING STATEMENTS

 

This news release contains forward-looking statements that are based on the best information currently available to management.  These forward-looking statements are intended to be subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995.  There can be no assurance that actual developments will be those anticipated by MAIR Holdings, Inc.  Actual results could differ materially from those projected because of a number of factors, some of which MAIR Holdings, Inc. cannot predict or control.  For a discussion of some of these factors, please see the ‘Cautionary Note Regarding Forward-Looking Statements’ and ‘Risk Factors Relating to the Company and the Airline Industry’ in the company’s Annual Report on Form 10-K for the year ended March 31, 2004 and Form 10-Q for the quarter ended September 30, 2004.

 

Note to editors: Summary financial and operating information follows.

 

###

 

Media Contact:

 

Jon Austin, 612-337-0354

Investor Contact:

 

Bob Weil - 612-333-0021

 


 

MAIR Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited - in thousands, except per share information)

 

 

 

Quarter Ended
December 31

 

Nine Months Ended
December 31

 

 

 

2004

 

2003

 

Favorable
(Unfavorable)

 

2004  (1)

 

2003

 

Favorable
(Unfavorable)

 

 

 

As restated (1)

 

As restated (1)

 

Operating revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Passenger

 

$

104,267

 

$

107,161

 

 

 

$

312,971

 

$

323,606

 

 

 

Freight and other

 

11,245

 

8,166

 

 

 

30,353

 

23,216

 

 

 

Total revenues

 

115,512

 

115,327

 

0.2

%

343,324

 

346,822

 

-1.0

%

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Wages and benefits

 

37,608

 

37,660

 

 

 

109,445

 

109,443

 

 

 

Aircraft fuel

 

5,474

 

5,707

 

 

 

16,005

 

17,183

 

 

 

Aircraft maintenance

 

21,963

 

21,399

 

 

 

63,704

 

60,354

 

 

 

Aircraft rents

 

25,814

 

26,591

 

 

 

76,716

 

80,281

 

 

 

Landing fees

 

1,541

 

1,867

 

 

 

5,120

 

5,437

 

 

 

Insurance and taxes

 

1,703

 

2,261

 

 

 

6,107

 

7,759

 

 

 

Depreciation and amortization

 

4,134

 

4,186

 

 

 

11,242

 

13,019

 

 

 

Administrative and other

 

15,429

 

15,057

 

 

 

43,113

 

41,876

 

 

 

Total operating expenses

 

113,666

 

114,728

 

0.9

%

331,452

 

335,352

 

1.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,846

 

599

 

208.2

%

11,872

 

11,470

 

3.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income, net

 

803

 

486

 

 

 

1,702

 

3,825

 

 

 

Income before income taxes

 

2,649

 

1,085

 

144.1

%

13,574

 

15,295

 

-11.3

%

Provision for income taxes

 

1,156

 

370

 

 

 

4,481

 

7,228

 

 

 

Net income

 

$

1,493

 

$

715

 

108.8

%

$

9,093

 

$

8,067

 

12.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - basic

 

$

0.07

 

$

0.04

 

 

 

$

0.44

 

$

0.40

 

 

 

Earnings per common share - diluted

 

$

0.07

 

$

0.03

 

 

 

$

0.43

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares - basic

 

20,524

 

20,333

 

 

 

20,483

 

20,325

 

 

 

Weighted average shares - diluted

 

21,123

 

20,522

 

 

 

20,996

 

20,451

 

 

 

 

(1)                                  During the fourth quarter of fiscal 2005, the Company determined that it had incorrectly accounted for certain aircraft leases that contained reduced rent obligations over a portion of the lease terms.  The Company has restated its consolidated financial statements to record aircraft rents on a straight-line basis over the lease terms.  For the three and nine months ended December 31, 2003, this restatement reduced net income $44 and $132, respectively, and reduced diluted earnings per share by $0.01 in each period.  The results of operations for the nine months ended December 31, 2004 give effect to this restatement by reducing previously reported net income for the six months ended September 30, 2004 by $88, reducing basic and diluted earnings per share by $0.01.

 


 

MAIR Holdings, Inc

Condensed Consolidated Balance Sheets

(Unaudited - in thousands)

 

 

 

December 31
2004

 

March 31
2004

 

 

 

 

 

As restated (2)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

75,260

 

$

54,561

 

Short term investments

 

49,849

 

67,285

 

Other current assets

 

59,985

 

53,947

 

Net property and equipment

 

37,357

 

39,722

 

Long term investments

 

42,596

 

38,084

 

Other assets, net

 

12,500

 

14,167

 

Total assets

 

$

277,547

 

$

267,766

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities

 

$

76,399

 

$

76,057

 

Other noncurrent liabilities

 

6,486

 

7,448

 

Shareholders’ equity

 

194,662

 

184,261

 

Total liabilities and shareholders’ equity

 

$

277,547

 

$

267,766

 

 

(2)                                  During the fourth quarter of fiscal 2005, the Company determined that it had incorrectly accounted for certain aircraft leases that contained reduced rent obligations over a portion of the lease terms.  The Company has restated its consolidated financial statements to record aircraft rents on a straight-line basis over the lease terms.  The Company reduced its retained earnings by $668 at March 31, 2004 to reflect the cumulative after-tax effect for additional aircraft rents that should have been recorded in previous periods.

 

 

MAIR Holdings, Inc

Selected Operating Statistics By Operating Entity

(Unaudited)

 

 

 

Quarter Ended
December 31

 

Nine Months Ended
December 31

 

 

 

2004

 

2003

 

Favorable
(Unfavorable)

 

2004

 

2003

 

Favorable
(Unfavorable)

 

Mesaba Aviation, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

Passengers

 

1,412,966

 

1,469,604

 

-3.9

%

4,290,221

 

4,457,906

 

-3.8

%

Available seat miles (000s)

 

793,269

 

760,478

 

4.3

%

2,307,486

 

2,251,391

 

2.5

%

Revenue seat miles (000s)

 

511,531

 

466,544

 

9.6

%

1,528,490

 

1,399,811

 

9.2

%

Load Factor

 

64.5

%

61.3

%

3.2

pts

66.2

%

62.2

%

4.0

pts

Departures

 

52,423

 

56,239

 

-6.7

%

156,383

 

170,305

 

-8.2

%

Revenue per ASM (cents)

 

14.1

 

14.6

 

-3.6

%

14.4

 

14.8

 

-3.0

%

Cost per ASM (cents)

 

13.6

 

14.4

 

5.0

%

13.7

 

14.2

 

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Big Sky Transportation Co.

 

 

 

 

 

 

 

 

 

 

 

 

 

Passengers

 

22,350

 

25,755

 

-13.2

%

65,712

 

83,687

 

-21.5

%

Available seat miles (000s)

 

14,101

 

17,394

 

-18.9

%

45,441

 

59,401

 

-23.5

%

Revenue seat miles (000s)

 

5,563

 

6,519

 

-14.7

%

16,656

 

21,442

 

-22.3

%

Load Factor

 

39.5

%

37.5

%

2.0

pts

36.7

%

36.1

%

0.6

pts

Departures

 

4,813

 

5,325

 

-9.6

%

14,928

 

18,423

 

-19.0

%

Revenue per ASM (cents)

 

26.4

 

23.6

 

11.9

%

24.8

 

21.5

 

13.2

%

Cost per ASM (cents)

 

30.3

 

29.4

 

-3.1

%

30.0

 

25.2

 

-9.9

%