Mesa Air Group Reports First Quarter 2007 Revenues and Earnings
PHOENIX, Jan. 25 /PRNewswire-FirstCall/ — Mesa Air Group, Inc. today announced 1st quarter after tax earnings of $8.0 million on operating revenues of $347.6 million. Total operating revenues for the first quarter of 2007 increased $24.0 million, or 7.4%, primarily the result of year-over-year increased cost reimbursements under our revenue guarantee contracts. Net income and earnings per share for the 1st quarter were $8.0 million and $0.20 per share on a diluted basis (all amounts reported herein are after tax and all per share amounts reported hereafter are on a diluted basis) respectively, as compared to net income of $13.0 million and $0.31 per share for the same period of fiscal 2006. Pro forma net income for the quarter was $8.1 million, or $0.20 per share. Pro forma net income excluded losses on an equity investment of $0.1 million. This compares to pro forma earnings of $13.8 million, or $0.32 per share for the comparable period of fiscal 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990210/LAW065)
Total Available Seat Miles (ASMs) for the first quarter of 2007 increased 1.8% from the first quarter of 2006. Although we added additional aircraft since last year, there was only a slight year-over-year increase in available seat miles due to changes in our fleet utilization as a result of flying shorter stage lengths and a reduction in active aircraft due to the repainting of our aircraft under contract with US Airways in US Airways’ new livery.
As of December 31, 2006, the Company’s cash, marketable securities and debt investments were approximately $256.3 million, which includes $12.0 million of restricted cash.
Events during the first quarter:
Mesa Air Group Inc. signed a Joint Venture agreement with Shenzhen Airlines to create a Chinese regional airline, the name of which is yet to be determined. The new airline is expected to commence scheduled services within 12 months, initially operating 50-seat regional jets on domestic routes within the People’s Republic of China. Focus cities for the new services will include Shenzhen, Beijing, Chongqing, Xiamen, Nanjing, Kunming, Dalian, Shenyang, Xian, Zhengzhou and Nanning.
Freedom Airlines, a wholly owned subsidiary of Mesa Air Group, added the final two Dash 8s under our Delta Connection agreement and placed three CRJ-700 aircraft into service with United as part of our obligation to transition 15 50-seat aircraft with larger 70-seat regional jets. Freedom also placed an additional four ERJ-145 regional jets into operation with Delta.
go!, the interisland Hawaii division of Mesa, launched go! Vacations and is now selling holiday packages through its website http://www.iflygo.com/.
Air Midwest, a wholly owned subsidiary of Mesa Air Group, added five Essential Air Service markets and one guaranteed minimum revenue market.
“Despite the challenges this quarter’s weather presented Mesa’s operations, we are satisfied with these results and particularly pleased with our results of go!, whose reliability, as measured by the DOT, was the best of the Hawaiian carriers,” said Jonathan Ornstein, Mesa Air Group’s Chairman and Chief Executive Officer. “We are also delighted and honored to be the first US passenger airline to form a strategic alliance to create a new airline to operate in The People’s Republic of China and look forward to making a positive contribution to the development of the regional airline industry in China and to forging a strong, long-term relationship with our friends at Shenzhen Airlines. We would like to thank all of our 5,000 hard working employees for their continued support.”
Mesa’s operating statistics for the three months ended December 31, 2006 2005 Change Passengers 3,981,291 3,489,416 14.1% Available Seat Miles (000s) 2,350,688 2,308,084 1.8% Revenue Passenger Miles (000s) 1,712,664 1,655,501 3.5% Load Factor % 72.9 71.7 1.2 pts. Yield (cents) 20.3 19.5 4.1% Revenue per ASM (cents) 14.8 14.0 5.7% Operating Cost per ASM (cents) * 14.0 12.8 9.4% Operating Cost per ASM, excluding fuel expense (cents) * 9.0 8.2 9.8% Block Hours (000s) 157 142 10.6% Average Stage Length (miles) 369 407 -9.3% * Excluding one-time items MESA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) Three Months Ended December 31, December 31, 2006 2005 Operating revenues: Passenger $338,974 $315,415 Freight and other 8,639 8,202 Total operating revenues 347,613 323,617 Operating expenses: Flight operations 96,722 89,864 Fuel 117,798 104,849 Maintenance 63,404 55,539 Aircraft and traffic servicing 21,375 16,210 Promotion and sales 1,573 772 General and administrative 17,462 18,391 Depreciation and amortization 10,710 9,182 Bankruptcy Settlement (620) — Total operating expenses 328,424 294,807 Operating income 19,189 28,810 Other income (expense): Interest expense (10,670) (9,585) Interest income 4,545 2,997 Loss from equity method investment (70) — Other income (expense) 205 (1,098) Total other income (expense) (5,990) (7,686) Income before income taxes 13,199 21,124 Income taxes 5,187 8,133 Net income $8,012 $12,991 Income per common share: Basic $0.24 $0.45 Diluted $0.20 $0.31 Weighted average shares — basic 33,633 28,677 Weighted average shares — diluted 44,930 47,182 Dilutive interest on convertible debentures included in interest expense (after tax) $909 $1,516 Three Months Ended December 31, December 31, 2006 2005 PRO FORMA (After tax): Net income $8,012 $12,991 Debt conversion costs — 583 Loss from equity method investment 70 — Investment (income) loss — 178 Pro forma net income $8,082 $13,752 Pro forma income per common share Basic $0.24 $0.48 Diluted $0.20 $0.32 Weighted average shares — basic 33,633 28,677 Weighted average shares — diluted 44,930 47,182 Dilutive interest on convertible debentures included in interest expense (after tax) $909 $1,516 To supplement our consolidated financial statements presented in accordance with GAAP, the Company uses non-GAAP measures of pro forma net income and pro forma earnings per share, which are adjusted from our GAAP results as shown above. These non-GAAP adjustments are provided to enhance the user’s overall understanding of our current financial performance. We believe the non-GAAP results provide useful information to both management and investors by excluding certain charges and other amounts that we believe are not indicative of our core operating results. These non-GAAP measures are included to provide investors and management with an alternative method for assessing the Company’s operating results in a manner that is focused on the performance of the Company’s ongoing operations and to provide a more consistent basis for comparison between quarters. In addition, since we have historically reported pro forma results to the investment community, we believe the inclusion of non-GAAP numbers provides consistency in our financial reporting. These measures are not in accordance with or an alternative for GAAP and may be different from pro forma measures used by other companies.
Mesa’s first quarter results will be discussed in more detail on January 25, 2007 at 8:30 AM MST (Mountain Standard Time) via teleconference. The live audio webcast of the call will be available on Mesa’s Web site at http://www.mesa-air.com/. There will also be a replay of the call available beginning approximately one hour after its conclusion at the same Web address.
Mesa currently operates 201 aircraft with over 1,200 daily system departures to 170 cities, 46 states, the District of Columbia, Canada, and Mexico. Mesa operates as US Airways Express, Delta Connection, and United Express under contractual agreement with US Airways, Delta Air Lines, and United Airlines, respectively, and independently as Mesa Airlines and go! On June 9, 2006, Mesa launched inter-island Hawaiian service as go! (http://www.iflygo.com/). This new operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 5,000 employees and generates revenue in excess of $1 billion annually. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. The Company was named 2005 Regional Airline of the Year by Air Transport World Magazine.
This press release contains various forward-looking statements that are based on management’s beliefs, as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, projected or expected. The Company does not intend to update these forward-looking statements prior to its next filing with the Securities and Exchange Commission.
Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/19990210/LAW065PRN Photo Desk, photodesk@prnewswire.com
Mesa Air Group, Inc.
CONTACT: Peter Murnane of Mesa Air Group, Inc., +1-602-685-4010,Peter.Murnane@mesa-air.com
Web site: http://www.mesa-air.com/