Allegiant Travel Company Reports First Quarter 2009 Financial Results
--NET INCOME INCREASES 191%, OPERATING MARGIN EXCEEDS 31%
LAS VEGAS, April 19, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Allegiant Travel Company (Nasdaq: ALGT), parent company of Allegiant Air and Allegiant Vacations, today reported the following financial results for the first quarter 2009 and comparisons to prior year equivalents:
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Unaudited 1Q09 1Q08 Change
Total operating revenue (millions) $142.1 $133.1 6.7 %
Operating income (millions) $44.5 $14.4 209.6 %
Operating margin 31.3% 10.8% 20.5pp
Net income (millions) $28.2 $9.7 191.2 %
Diluted earnings per share $1.37 $0.47 191.5 %
Scheduled Service:
Average fare - scheduled service $74.52 $87.00 (14.3)%
Average fare - ancillary 34.14 25.75 32.6 %
Average fare - total $108.66 $112.75 (3.6)%
Total revenue per ASM (cents) 10.83 10.61 2.1 %
Average passengers per departure 132 127 3.9 %
Load factor 90.8% 86.9% 3.9pp
Average stage length (miles) 887 907 (2.2)%
Total System*:
Operating expense per passenger $75.42 $102.86 (26.7)%
Operating expense per passenger, excluding
fuel $49.62 $47.87 3.7 %
Average departures per aircraft per day 3.00 3.19 (6.0)%
Average stage length (miles) 843 854 (1.3)%
* Total system includes scheduled service, fixed fee contract and
non-revenue flying
Allegiant Travel Company also reported the following balance sheet information:
Unaudited ($millions) March 31, December 31, Dollar
2009 2008 Change
Unrestricted cash (including
short-term investments) 236.4 174.8 61.6
Unrestricted cash net of air
traffic liability 132.9 105.8 27.1
Total debt, including capital
leases 59.3 64.7 (5.4)
"The first quarter was superb, with an all-time high 31.3% operating margin," stated Maurice J. Gallagher, Jr., CEO and President of Allegiant Travel Company. "This quarter marked a return to capacity growth after last year's pullback, with modest growth in departures amplified by increases in passengers per departure and load factor. At over $108 per passenger, we slightly exceeded the range of total scheduled fare per passenger we guided for the quarter. Also consistent with guidance, we increased year-over-year total scheduled RASM by 2.1%. Costs were down substantially, driven by a nearly 50% drop in the per-gallon cost of fuel. The result was a near-tripling of operating margins and record EPS for the company.
"Looking forward, we expect second quarter costs to be substantially lower than the prior year, both because of significantly lower fuel costs and increased utilization. Fuel cost per passenger for the first half of April was slightly more than $26, substantially below the $62.48 we paid in the second quarter of 2008. Increased utilization should drive non-fuel cost per passenger below the prior year's $47.52 per passenger. On the revenue side, travelers continue to book much closer to the time of travel, making projections difficult. For this reason, we will not give revenue guidance at this time. Given current soft fare conditions, total scheduled RASM will decline year-over-year. It will be difficult to improve materially over our 90.5% scheduled load factor in the second quarter of 2008. However, we are confident unit cost savings will thoroughly overwhelm any unit revenue softness, resulting in another strong quarter.
"In some respects, the most important event of the first quarter was our acquisition of key assets from our long-time IT provider, CMS Solutions, as previously disclosed in a SEC filing. CMS has provided the software that runs much of Allegiant, including our reservation system, and the flexibility of our reservation system has been critical to our successful ancillary revenue strategy. We now have a permanent exclusive license for all CMS airline applications and have brought in-house all related development and programming, under the leadership of our new Vice President of Information Systems, Rob Wilson, formerly of CMS. Our CMS relationship has been a cornerstone of our success and we are very pleased this function is now part of the Company."
Andrew C. Levy, CFO & Managing Director - Planning, stated, "We are very pleased with our first quarter financial performance. We held our own in a challenging revenue environment, more than offsetting fare weakness with increased load factors. At the right price we continue to find strong demand for our product. Should fuel prices remain at current levels, earnings and free cash flow will once again be exceptional.
"Our balance sheet metrics continue to lead the industry. We ended the quarter with unrestricted cash and short-term investments of $236.4 million, up from $174.8 million at the end of the prior quarter. Excluding air traffic liability, cash increased from $105.8 million to $132.9 million sequentially. Either measure is substantially in excess of quarter-end total debt of $59.3 million, down from $64.7 million at year end 2008.
"During the quarter, we had $11.5 million in capital expenditures for three aircraft (one already in service with the other two to enter service this quarter), three aircraft for part-out, and miscellaneous other purchases. We expect to continue to be opportunistic in purchasing aircraft for future service growth and part-outs to support our spare engine and rotable parts inventory.
"Lastly, since our previous earnings announcement, we spent $7.1 million in open market transactions to acquire 210,175 shares of the Company's common stock at an average of $33.59 per share under the share re-purchase program our Board of Directors approved in January 2009. Including open market transactions in both 2008 and 2009, the Company has repurchased a total of 763,875 shares at an average price of $29.94 returning a total of $22.9 million to our shareholders."
