chperplt
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LAS VEGAS, May 1 /PRNewswire-FirstCall/ -- Allegiant Travel Company (Nasdaq: ALGT), parent company of Allegiant Air and Allegiant Vacations, today reported the following first quarter 2007 results, and comparisons to prior year equivalents:
Unaudited------------------------ 1Q07 1Q06 Change
Total operating revenues (millions) -$84.3 $59.6 41.4%
Operating income (millions) --------$14.3 $7.4 92.8%
Operating margin ------------------17.0% 12.4% 4.6pp
Net income (millions) --------------$9.7 $6.8 42.6%
Diluted earnings per share ---------$0.48 $0.41 17.1%
Scheduled Service:
Ancillary revenue per passenger -----$18.98 $12.47 52.2%
Total revenue per ASM (cents) -------9.13 7.96 14.7%
Total System*:
Operating expense per ASM (cents) --7.51 7.09 5.9%
Operating expenseper ASM, excluding
fuel (cents) -------------------------4.17 3.78 10.3%
* Total system includes scheduled service, fixed fee contract and
non-revenue flying.
"We are pleased to kick off 2007 with a strong set of first quarter results," said Maurice J. Gallagher, Chairman, CEO and President of Allegiant Travel Company. "Demand for our unique leisure product continues to be impressive. Despite a 49% increase in departures and a 28% ASM growth, load factor was up year-over-year. Further, total scheduled fare per passenger (including ancillary) was down only 1% despite a nearly 14% decrease in scheduled stage length. Our strong results -- a 93% increase in our operating margin -- are once again a tribute to our dedicated team-members. On the cost side, significantly shorter system stage length (down 11%) and exceptionally low prior-year maintenance costs contributed to a 10% year-over-year increase in non-fuel CASM."
Gallagher continued, "Our 17% first quarter operating margin was excellent even for what is historically our best quarter of the year. Both Las Vegas and Orlando were significantly stronger year-over-year, but the improvement in Orlando was striking, with Orlando's operating margin noticeably outpacing Las Vegas. Our new 'world class destination' of Tampa Bay/St. Petersburg was also strongly profitable. Looking at the second quarter, revenue strength is very encouraging to date. Last but not least, we continued to build our balance sheet, which maintained its status as one of the best in the industry. March 31, 2007 cash and short-term investments were a substantial $175 million."
Linda Marvin, Allegiant Travel Company CFO, stated, "Due to a non-recurring tax provision adjustment, our effective tax rate for the first quarter was 40.2%, significantly above our fourth quarter tax provision rate of 35.6%. The first quarter income tax provision reflects a one percentage point increase in federal income tax rate due to increased profitability as well as an increase in the state portion of our tax provision based upon changes in the geographic mix of our flying. The higher tax rate applies to first quarter earnings as well as our previously existing deferred tax balances resulting in a non-recurring income tax adjustment of $0.4 million or $0.02 per share. Excluding the non-recurring income tax adjustment, our tax provision rate for the first quarter was 37.9% which we expect to be the approximate rate for the balance of 2007."
During the first quarter, Allegiant Air initiated service to three new small cities and on nine new routes. Allegiant Air also purchased, for cash, two MD-80 aircraft that were previously leased.
We expect to place one additional owned, unencumbered MD-87 into service around June 1, increasing our operating fleet to 27 aircraft. We have also signed two letters of intent for a total of three aircraft (of which two would be operating-leased with a purchase option and one would be purchased for cash) for delivery this summer to support planned fourth quarter growth. This would increase our operating fleet to 30 aircraft before year end, consistent with our prior guidance of at least 29.
Announced future service includes ten new routes and six new small cities to be initiated by the end of the second quarter of 2007. We expect to make further new city and route announcements in the near future.
Unaudited------------------------ 1Q07 1Q06 Change
Total operating revenues (millions) -$84.3 $59.6 41.4%
Operating income (millions) --------$14.3 $7.4 92.8%
Operating margin ------------------17.0% 12.4% 4.6pp
Net income (millions) --------------$9.7 $6.8 42.6%
Diluted earnings per share ---------$0.48 $0.41 17.1%
Scheduled Service:
Ancillary revenue per passenger -----$18.98 $12.47 52.2%
Total revenue per ASM (cents) -------9.13 7.96 14.7%
Total System*:
Operating expense per ASM (cents) --7.51 7.09 5.9%
Operating expenseper ASM, excluding
fuel (cents) -------------------------4.17 3.78 10.3%
* Total system includes scheduled service, fixed fee contract and
non-revenue flying.
"We are pleased to kick off 2007 with a strong set of first quarter results," said Maurice J. Gallagher, Chairman, CEO and President of Allegiant Travel Company. "Demand for our unique leisure product continues to be impressive. Despite a 49% increase in departures and a 28% ASM growth, load factor was up year-over-year. Further, total scheduled fare per passenger (including ancillary) was down only 1% despite a nearly 14% decrease in scheduled stage length. Our strong results -- a 93% increase in our operating margin -- are once again a tribute to our dedicated team-members. On the cost side, significantly shorter system stage length (down 11%) and exceptionally low prior-year maintenance costs contributed to a 10% year-over-year increase in non-fuel CASM."
Gallagher continued, "Our 17% first quarter operating margin was excellent even for what is historically our best quarter of the year. Both Las Vegas and Orlando were significantly stronger year-over-year, but the improvement in Orlando was striking, with Orlando's operating margin noticeably outpacing Las Vegas. Our new 'world class destination' of Tampa Bay/St. Petersburg was also strongly profitable. Looking at the second quarter, revenue strength is very encouraging to date. Last but not least, we continued to build our balance sheet, which maintained its status as one of the best in the industry. March 31, 2007 cash and short-term investments were a substantial $175 million."
Linda Marvin, Allegiant Travel Company CFO, stated, "Due to a non-recurring tax provision adjustment, our effective tax rate for the first quarter was 40.2%, significantly above our fourth quarter tax provision rate of 35.6%. The first quarter income tax provision reflects a one percentage point increase in federal income tax rate due to increased profitability as well as an increase in the state portion of our tax provision based upon changes in the geographic mix of our flying. The higher tax rate applies to first quarter earnings as well as our previously existing deferred tax balances resulting in a non-recurring income tax adjustment of $0.4 million or $0.02 per share. Excluding the non-recurring income tax adjustment, our tax provision rate for the first quarter was 37.9% which we expect to be the approximate rate for the balance of 2007."
During the first quarter, Allegiant Air initiated service to three new small cities and on nine new routes. Allegiant Air also purchased, for cash, two MD-80 aircraft that were previously leased.
We expect to place one additional owned, unencumbered MD-87 into service around June 1, increasing our operating fleet to 27 aircraft. We have also signed two letters of intent for a total of three aircraft (of which two would be operating-leased with a purchase option and one would be purchased for cash) for delivery this summer to support planned fourth quarter growth. This would increase our operating fleet to 30 aircraft before year end, consistent with our prior guidance of at least 29.
Announced future service includes ten new routes and six new small cities to be initiated by the end of the second quarter of 2007. We expect to make further new city and route announcements in the near future.
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