LAS VEGAS, Jan. 30 /PRNewswire-FirstCall/ -- Allegiant Travel Company , parent company of Allegiant Air and Allegiant Vacations, today reported the following fourth quarter and full year 2006 results, and comparisons to prior year equivalents:
Unaudited 4Q06 4Q05 Change 2006 2005 Change
Total operating revenues
(millions) $63.1 $40.1 57.6% $243.3 $132.5 83.7%
Operating income (millions) $7.4 $2.0 264.4% $22.6 $8.5 165.3%
GAAP:
Net income (loss)
(millions) ($1.5) ($0.4) 282.7% $8.7 $7.3 19.9%
Diluted earnings per
share ($0.17)($0.06) 183.3% $0.52 $0.56 (7.1)%
Net of one-time tax accrual:
Net income (loss)
(millions) $4.9 ($0.4) N/M $15.2 $7.3 108.0%
Diluted earnings per
share $0.28 ($0.06) N/M $0.89 $0.56 58.9%
Scheduled Service:
Ancillary revenue per
passenger $18.84 $13.99 34.7% $16.11 $11.55 39.5%
Total revenue per ASM
(cents) 8.68 7.65 13.5% 8.47 7.87 7.6%
Total System:
Operating expense per ASM
(cents) 7.59 7.34 3.4% 7.69 7.41 3.8%
Operating expense per ASM,
excluding fuel (cents) 4.34 3.87 12.1% 4.15 4.27 (2.8)%
"Our excellent fourth quarter operating results added to our already strong performance through September 2006," said Maurice J. Gallagher, Chairman, CEO and President of Allegiant Travel Company. "Through our continued focus on 'being different' our team members have produced results of which we all can be proud. Customer response to our leisure service offerings continues to be encouraging, including to our new 'world-class leisure destination' of Tampa Bay/St. Petersburg."
Gallagher continued, "We are very pleased with our 11.7% operating margin in the fourth quarter. Our December initial public offering substantially improved our balance sheet, making it one of the best in the industry. In particular, 2006 year-end cash and short-term investments were a substantial $136 million. We believe we have built a strong base from which to face the future."
Linda Marvin, Allegiant CFO, commented, "Net income in our fourth quarter and full year 2006 was impacted by a one-time $6.4 million charge to recognize deferred tax liabilities due to the tax reorganization carried out in conjunction with our initial public offering. Further clarification of this point can be found on page 38 of our final prospectus dated December 7, 2006."
Significant Company events in the fourth quarter of 2006 included:
* We completed an initial public offering of 5.75 million shares
(including fully-exercised over-allotment option), resulting in net
proceeds (after expenses) to the Company of approximately
$94.5 million.
* Our subsidiary Allegiant Air established service to its third
"world-class leisure destination" of Tampa Bay/St. Petersburg in
November.
* Allegiant Air initiated service to seven new small cities and on 18 new
routes.
* Allegiant Air took delivery of two additional MD-80 aircraft on
short-term leases. These aircraft were placed into service early this
month.
The current status of Allegiant Air's fuel hedging program is summarized below:
1Q07 2Q07 3Q07 4Q07
Expected scheduled service jet
fuel consumption hedged 47% 17% 3% 0%
All-in cost per gallon of
hedged jet fuel* $2.26 $2.10 $2.08 N/M
* includes approximately $0.24 per gallon in expenses above the raw cost
of jet fuel
We may yet enter into further fuel hedge transactions for March 2007 fuel consumption.
The following tables summarize year-over-year and recent changes in Allegiant Air's scheduled network and fleet:
January 31, 2007 Year End 2006 Year End 2005
Network Summary*
"World-class leisure
destinations" 3 3 2
Small cities served 46 47 29
Total cities served 49 50 31
Routes to Las Vegas 34 34 25
Routes to Orlando 20 21 13
Routes to Tampa Bay/St.
Petersburg 11 12 0
Other routes 1 0 0
Total routes 66 67 38
* includes cities served seasonally
January 31, 2007 Year End 2006 Year End 2005
MD-80 Aircraft in Service
Owned (including
capital leases) 24* 22 9
Leased 2 2 8
Total 26 24 17
* includes purchases expected to close by January 31, 2007 of two
previously-leased aircraft
Announced future service includes eight new routes and two new small cities to be initiated by the end of the first quarter of 2007. We expect to make further new city and route announcements in the near future.
At this time, Allegiant Travel Company provides the following guidance to investors:
* Allegiant Air expects first quarter 2007 ASM growth of 25-27% and
departure growth of 42-44% over first quarter 2006.
* Reviewing First Call earnings per share estimates, we are comfortable
with the current range of $0.35-0.38 for first quarter 2007 and with
the range of $1.20-1.30 for the full year, assuming our internal
initial expectation for 2007 average scheduled service all-in jet fuel
cost/gallon of $2.23. However, through the first 29 days of January,
the average price the Company paid for jet fuel was approximately
$2.00/gallon.
* We are also comfortable with the range of analyst revenue estimates for
the first quarter 2007 of $79.1-83.9 million.
* By the end of the year, Allegiant Air expects to operate at least
29 MD-80 aircraft. Our opinion is the availability of high-quality
MD-80 aircraft will not constrain Allegiant Air growth in the
foreseeable future.
Allegiant Travel Company will host a conference call with analysts at 10 am EST tomorrow, January 31, 2007, to discuss our fourth quarter and full year financial results. A live broadcast of the conference call will be available via the Company's Investor Relations website homepage at http://ir.allegiantair.com/. The webcast will also be archived in the "Events & Presentations" section of the website.
About the Company
Las Vegas-based Allegiant Travel Company , is focused on linking travelers in small cities to world-class leisure destinations such as Las Vegas, Nev., Orlando, Fla. and Tampa/St. Petersburg, Fla. Through its subsidiary, Allegiant Air, LLC the Company operates a low-cost, high-efficiency, all-jet passenger airline offering air travel both on a stand-alone basis and bundled with hotel rooms, rental cars and other travel related services. ALGT/G
Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in this press release that are not historical facts are forward-looking statements. These forward-looking statements are only estimates or predictions based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include our statements regarding future revenues, future earnings per share, ASM growth, departure growth, fleet growth and expected fuel consumption and expense, as well as information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports and registration statements filed with the Securities and Exchange Commission at http://www.sec.gov/. These risk factors include, without limitation, increases in fuel prices, terrorist attacks, risks inherent to airlines, demand for air services to Las Vegas, Orlando and Tampa/St. Petersburg from the markets served by us, our ability to implement our growth strategy, our fixed obligations, our dependence on the Las Vegas, Orlando and Tampa/St. Petersburg markets, our ability to add, renew or replace gate leases, our competitive environment, problems with our aircraft, dependence on fixed fee customers, economic and other conditions in markets in which we operate, governmental regulation, increases in maintenance costs and insurance premiums and cyclical and seasonal fluctuations in our operating results.
Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.
Detailed financial information follows:
Allegiant Travel Company
Consolidated Statements of Operations
Quarters Ended December 31, 2006 and 2005
(in thousands, except for per share amounts)
(Unaudited)
Three months ended December 31, Percent
2006 2005 change
OPERATING REVENUE:
Scheduled service revenues $46,620 $29,661 57.2
Fixed fee contract revenues 6,497 5,868 10.7
Ancillary revenues 10,018 4,525 121.4
Total operating revenues 63,135 40,054 57.6
OPERATING EXPENSES:
Aircraft fuel 23,900 17,969 33.0
Salary and benefits 9,990 6,425 55.5
Station operations 6,251 3,828 63.3
Maintenance and repairs 5,248 1,968 166.7
Sales and marketing 2,338 1,702 37.4
Aircraft lease rentals 825 1,601 (48.5)
Depreciation and amortization 2,985 1,510 97.7
Other 4,229 3,029 39.6
Total operating expense 55,766 38,032 46.6
OPERATING INCOME 7,369 2,022 264.4
As a percent of total operating
revenue 11.7% 5.0%
OTHER (INCOME) EXPENSE:
Loss on fuel derivatives, net 1,266 1,963 (35.5)
Interest income (930) (578) 60.9
Interest expense 1,546 1,041 48.5
Total other (income) expense 1,882 2,426 (22.4)
INCOME (LOSS) BEFORE INCOME TAXES 5,487 (404) N/M
As a percent of total operating
revenue 8.7% (1.0)%
PROVISION FOR INCOME TAXES:
Recognition of net deferred tax
liabilities upon C-corporation
conversion 6,425 -- N/M
Tax provision, current year 608 -- N/M
Total income tax provision 7,033 -- N/M
NET LOSS ($1,546) ($404) 282.7
As a percent of total operating
revenue (2.5)% (1.0)%
Earnings per Share
Basic ($0.17) ($0.06) 183.3
Diluted ($0.17) ($0.06) 183.3
Weighted Average Shares
Outstanding
Basic 9,028 6,433 40.3
Diluted 9,028 6,433 40.3
Unaudited pro forma data (reflecting
change in tax status)(1)
Income (loss) before income taxes $5,487 ($404) N/M
Pro-forma provision for income
taxes 1,975 -- N/M
Pro-forma net income (loss) $3,512 ($404) N/M
Unaudited net income per share data
(reflecting change in tax status)
Basic pro-forma net income (loss)
per share $0.39 ($0.06) N/M
Diluted pro-forma net income
(loss) per share $0.20 ($0.06) N/M
(1) Prior to its December 2006 initial public offering the Company was
organized as a limited liability company (LLC) and as such was
generally not subject to income taxes, except in certain state and
local jurisdictions. The pro-forma tax provision reflects income
taxes as if the company were organized as a corporation effective
January 1, 2006 and 2005 respectively.
Allegiant Travel Company
Operating Statistics
Quarters Ended December 31, 2006 and 2005
(Unaudited)
Three months ended December 31, Percent
2006 2005 change*
OPERATING STATISTICS
Total system statistics
Passengers 579,516 371,356 56.1
Revenue passenger miles (RPMs)
(thousands) 560,738 400,720 39.9
Available seat miles (ASMs)
(thousands) 734,761 518,206 41.8
Load factor 76.3% 77.3% (1.0)
Operating revenue per ASM (cents) 8.59 7.73 11.1
Operating expense per ASM (cents) 7.59 7.34 3.4
Operating expense per ASM, excl fuel
(cents) 4.34 3.87 12.1
Departures 5,442 3,504 55.3
Block hours 13,131 9,083 44.6
Average stage length (miles) 912 1,001 (8.9)
Avg # of operating aircraft during
period 21.9 15.6 40.4
Total aircraft in service end of
period 24 17 41.2
Full-time equivalent employees at
period end 846 596 41.9
Fuel gallons consumed (thousands) 12,325 8,637 42.7
Average fuel cost per gallon $1.94 $2.08 (6.7)
Scheduled service statistics
Passengers 531,718 323,405 64.4
Revenue passenger miles (RPMs)
(thousands) 512,657 349,668 46.6
Available seat miles (ASMs)
(thousands) 652,469 446,680 46.1
Load factor 78.6% 78.3% 0.3
Departures 4,667 2,835 64.6
Block hours 11,615 7,779 49.3
Yield (cents) 9.09 8.48 7.2
Scheduled service revenue per ASM
(cents) 7.15 6.64 7.7
Ancillary revenue per ASM (cents) 1.54 1.01 52.5
Total revenue per ASM (cents) 8.68 7.65 13.5
Average fare - scheduled service $87.68 $91.71 (4.4)
Average fare - ancillary 18.84 13.99 34.7
Average fare - total $106.52 $105.70 0.8
Average stage length (miles) 945 1,068 (11.5)
* except load factor, which is percentage point change
Allegiant Travel Company
Non-GAAP Presentations
Quarters Ended December 31, 2006 and 2005
(in thousands, except per share and per ASM amounts)
(Unaudited)
Derivation of adjusted net income (net of one-time tax accrual) from GAAP net income:
(in thousands, except per
share amounts) Three months ended December 31, Percent
2006 2005 change
Net loss ($1,546) ($404) 282.7
Recognition of net deferred tax
liabilities upon C-corporation
conversion 6,425 -- N/M
Net of recognition of net
deferred tax liabilities upon
C-corporation conversion:
Adjusted net income (loss) $4,879 ($404) N/M
Adjusted earnings per share:
Basic $0.54 ($0.06) N/M
Diluted $0.28 ($0.06) N/M
Derivation of adjusted net income (net of one-time tax accrual but excluding non-cash mark-to-market (gain)/loss on fuel derivatives) from adjusted net income (net of one-time tax accrual) (as derived in the table above):
(in thousands, except per
share amounts) Three months ended December 31, Percent
2006 2005 change
Adjusted net income (loss) net of
recognition of net deferred tax
liabilities upon C-corporation
conversion $4,879 ($404) N/M
Mark-to-market non-cash
(gain)/loss on fuel derivatives (959) 1,615 N/M
Tax impact of mark-to-market
non-cash gain/(loss) on fuel
derivatives 341 (575) N/M
Net of recognition of net deferred
tax liabilities upon C-corporation
conversion and mark-to-market
non-cash gain/(loss) on fuel
derivatives:
Adjusted net income $4,261 $636 570.0
Adjusted earnings per share:
Basic $0.47 $0.10 370.0
Diluted $0.24 $0.04 500.0
Derivation of operating cost per ASM, excluding fuel, from total operating expense per ASM:
Three months ended December 31, Percent
(in cents) 2006 2005 change
Total operating expense per ASM 7.59 7.34 3.4
Fuel cost per ASM 3.25 3.47 (6.3)
Operating cost per ASM, excluding
fuel 4.34 3.87 12.1
Derivation of operating cost per ASM including cash gain/loss on fuel derivatives from total operating expense per ASM:
Three months ended December 31, Percent
(in cents) 2006 2005 change
Total operating expense per ASM 7.59 7.34 3.4
Cash loss on fuel derivatives per ASM 0.30 0.07 328.6
Operating cost per ASM including
cash loss on fuel derivatives 7.89 7.41 6.5
Split of gain/loss on fuel derivatives, net into the cash-settled portion and the mark-to-market non-cash portion:
Three months ended December 31, Percent
(in thousands) 2006 2005 change
Mark-to-market non-cash
(gain)/loss on fuel derivatives ($959) $1,615 N/M
Cash loss on fuel derivatives 2,225 348 539.4
Loss on fuel derivatives, net $1,266 $1,963 (35.5)
Note: the Company believes the non-GAAP measures above assist investors in understanding the underlying economic performance of the Company as follows:
* The Company believes that adjusted net income net of one-time tax
accrual assists investors in understanding the Company's underlying
performance without regard to transitory effects of changing from an
LLC to a C-corporation.
* The Company believes that operating expenses per available seat mile,
excluding the cost of fuel, assists investors in understanding the
impact of fuel expense on the Company's operations and the Company's
performance with respect to expenses other than fuel.
* The Company does not qualify for fuel hedge accounting treatment under
FAS 133. Management regards the adjusted net income measure shown above
as representative of the net income the Company would have shown if it
did qualify for fuel hedge accounting treatment under FAS 133.
Likewise, management regards operating cost per ASM including cash gain
or loss on fuel derivatives as representative of the total operating
expense per ASM the Company would have shown if it did qualify for fuel
hedge accounting treatment under FAS 133.
Allegiant Travel Company
Consolidated Statements of Income
Years Ended December 31, 2006 and 2005
(in thousands, except for per share amounts)
(Unaudited)
Year ended December 31, Percent
2006 2005 change
OPERATING REVENUE:
Scheduled service revenues $178,349 $90,664 96.7
Fixed fee contract revenues 33,743 30,642 10.1
Ancillary revenues 31,257 11,194 179.2
Total operating revenues 243,349 132,500 83.7
OPERATING EXPENSES:
Aircraft fuel 101,561 52,568 93.2
Salary and benefits 34,835 21,718 60.4
Station operations 24,981 14,090 77.3
Maintenance and repairs 19,482 9,022 115.9
Sales and marketing 9,293 5,625 65.2
Aircraft lease rentals 5,102 4,987 2.3
Depreciation and amortization 10,584 5,088 108.0
Other 14,959 10,901 37.2
Total operating expense 220,797 123,999 78.1
OPERATING INCOME 22,552 8,501 165.3
As a percent of total operating
revenue 9.3% 6.4%
OTHER (INCOME) EXPENSE:
(Gain)/loss on fuel derivatives, net 4,193 (612) N/M
Interest income (2,973) (1,225) 142.7
Interest expense 5,516 3,009 83.3
Total other expense 6,736 1,172 474.7
INCOME BEFORE INCOME TAXES 15,816 7,329 115.8
As a percent of total operating
revenue 6.5% 5.5%
PROVISION FOR INCOME TAXES:
Recognition of net deferred tax
liabilities upon C-corporation
conversion 6,425 -- N/M
Tax provision, current year 651 37 1,659.5
Total income tax provision 7,076 37 19,024.3
NET INCOME $8,740 $7,292 19.9
As a percent of total operating
revenue 3.6% 5.5%
Earnings per Share
Basic $1.23 $1.11 10.8
Diluted $0.52 $0.56 (7.1)
Weighted Average Shares Outstanding
Basic 7,087 6,557 8.1
Diluted 16,956 13,111 29.3
Unaudited pro forma data (reflecting
change in tax status)(1)
Income before income taxes $15,816 $7,329 115.8
Pro-forma provision for income
taxes 5,694 2,730 108.6
Pro-forma net income $10,122 $4,599 120.1
Unaudited net income per share data
(reflecting change in tax status)
Basic pro-forma net income per
share $1.43 $0.70 104.3
Diluted pro-forma net income per
share $0.60 $0.35 71.4
(1) Prior to its December 2006 initial public offering the Company was
organized as a limited liability company (LLC) and as such was
generally not subject to income taxes, except in certain state and
local jurisdictions. The pro-forma tax provision reflects income
taxes as if the company were organized as a corporation effective
January 1, 2006 and 2005 respectively.
Allegiant Travel Company
Operating Statistics
Years Ended December 31, 2006 and 2005
(Unaudited)
Year ended December 31, Percent
2006 2005 change*
OPERATING STATISTICS
Total system statistics
Passengers 2,179,367 1,199,574 81.7
Revenue passenger miles (RPMs)
(thousands) 2,251,341 1,295,633 73.8
Available seat miles (ASMs)
(thousands) 2,871,071 1,674,376 71.5
Load factor 78.4% 77.4% 1.0
Operating revenue per ASM (cents) 8.48 7.91 7.2
Operating expense per ASM (cents) 7.69 7.41 3.8
Operating expense per ASM, excl fuel
(cents) 4.15 4.27 (2.8)
Departures 20,074 11,646 72.4
Block hours 50,584 29,472 71.6
Average stage length (miles) 966 977 (1.1)
Avg # of operating aircraft during
period 20.8 13.3 56.4
Total aircraft in service end of
period 24 17 41.2
Full-time equivalent employees at
period end 846 596 41.9
Fuel gallons consumed (thousands) 47,984 28,172 70.3
Average fuel cost per gallon $2.12 $1.87 13.4
Scheduled service statistics
Passengers 1,940,456 969,393 100.2
Revenue passenger miles (RPMs)
(thousands) 1,996,559 1,029,625 93.9
Available seat miles (ASMs)
(thousands) 2,474,285 1,294,064 91.2
Load factor 80.7% 79.6% 1.1
Departures 16,634 8,388 98.3
Block hours 43,391 22,465 93.1
Yield (cents) 8.93 8.81 1.4
Scheduled service revenue per ASM
(cents) 7.21 7.01 2.9
Ancillary revenue per ASM (cents) 1.26 0.87 44.8
Total revenue per ASM (cents) 8.47 7.87 7.6
Average fare - scheduled service $91.91 $93.53 (1.7)
Average fare - ancillary 16.11 11.55 39.5
Average fare - total $108.02 $105.08 2.8
Average stage length (miles) 1,006 1,045 (3.7)
* except load factor, which is percentage point change
Allegiant Travel Company
Non-GAAP Presentations
Years Ended December 31, 2006 and 2005
(in thousands, except per share and per ASM amounts)
(Unaudited)
Derivation of adjusted net income (net of one-time tax accrual) from GAAP net income:
Year ended December 31, Percent
(in thousands, except per share 2006 2005 change
amounts)
Net income $8,740 $7,292 19.9
Recognition of net deferred tax
liabilities upon C-corporation
conversion 6,425 -- N/M
Net of recognition of net
deferred tax liabilities upon
C-corporation conversion:
Adjusted net income $15,165 $7,292 108.0
Adjusted earnings per share:
Basic $2.14 $1.11 92.8
Diluted $0.89 $0.56 58.9
Derivation of adjusted net income (net of one-time tax accrual but excluding non-cash mark-to-market loss on fuel derivatives) from adjusted net income (net of one-time tax accrual) (as derived in the table above):
(in thousands, except per share Year ended December 31, Percent
amounts) 2006 2005 change
Adjusted net income net of
recognition of net deferred tax
liabilities upon C-corporation
conversion $15,165 $7,292 108.0
Mark-to-market non-cash loss on
fuel derivatives 1,641 2,432 (32.5)
Tax impact of mark-to-market
non-cash loss on fuel derivatives (584) (866) (32.6)
Net of recognition of net deferred
tax liabilities upon C-corporation
conversion and mark-to-market
non-cash gain/(loss) on fuel
derivatives:
Adjusted net income $16,222 $8,858 83.1
Adjusted earnings per share:
Basic $2.29 $1.35 69.6
Diluted $0.96 $0.68 41.2
Derivation of operating cost per ASM, excluding fuel, from total operating expense per ASM:
Year ended December 31, Percent
(in cents) 2006 2005 change
Total operating expense per ASM 7.69 7.41 3.8
Fuel cost per ASM 3.54 3.14 12.7
Operating cost per ASM, excluding
fuel 4.15 4.27 (2.8)
Derivation of operating cost per ASM including cash gain/loss on fuel derivatives from total operating expense per ASM:
Year ended December 31, Percent
(in cents) 2006 2005 change
Total operating expense per ASM 7.69 7.41 3.8
Cash (gain)/loss on fuel derivatives
per ASM 0.09 (0.18) N/M
Operating cost per ASM including
cash gain/loss on fuel derivatives 7.78 7.23 7.6
Split of gain/loss on fuel derivatives, net into the cash-settled portion and the mark-to-market non-cash portion:
Year ended December 31, Percent
(in thousands) 2006 2005 change
Mark-to-market non-cash loss on fuel
derivatives $1,641 $2,432 (32.5)
Cash (gain)/loss on fuel derivatives 2,552 (3,044) N/M
(Gain)/loss on fuel derivatives, net $4,193 ($612) N/M
Note: the Company believes the non-GAAP measures above assist investors in understanding the underlying economic performance of the Company as follows:
* The Company believes that adjusted net income net of one-time tax
accrual assists investors in understanding the Company's underlying
performance without regard to transitory effects of changing from an
LLC to a C-corporation.
* The Company believes that operating expenses per available seat mile,
excluding the cost of fuel, assists investors in understanding the
impact of fuel expense on the Company's operations and the Company's
performance with respect to expenses other than fuel.
* The Company does not qualify for fuel hedge accounting treatment under
FAS 133. Management regards the adjusted net income measure shown above
as representative of the net income the Company would have shown if it
did qualify for fuel hedge accounting treatment under FAS 133.
Likewise, management regards operating cost per ASM including cash gain
or loss on fuel derivatives as representative of the total operating
expense per ASM the Company would have shown if it did qualify for fuel
hedge accounting treatment under FAS 133.
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