ALLEGIANT TRAVEL COMPANY 
By LAS VEGAS, Jan. 25 /PRNewswire-FirstCall/ -- Allegiant Travel Company (Nasdaq: ALGT), parent company of Allegiant Air and Allegiant Vacations, today reported the following financial results for the fourth quarter and full year 2009 and comparisons to prior year equivalents:
Unaudited 4Q09 4Q08 Change
--------- ---- ---- ------
Total operating revenue
(millions) $134.7 $122.4 10.0 %
Operating income (millions) $18.1 $28.7 (37.1)%
Operating margin 13.4% 23.4% -10.0pp
Net income (millions) $10.5 $18.2 (42.1)%
Diluted earnings per share $0.52 $0.88 (40.9)%
Scheduled Service:
Average fare -scheduled
service $75.81 $83.03 (8.7)%
Average fare -ancillary
total 32.78 32.83 (0.2)%
----- -----
Average fare - total $108.59 $115.86 (6.3)%
Total revenue per ASM (cents) 10.46 11.60 (9.8)%
Average passengers per
departure 133 131 1.5 %
Load factor 90.2% 89.7% 0.5pp
Average stage length (miles) 919 878 4.7 %
Total System*:
Operating expense per
passenger $95.62 $92.27 3.6 %
Operating expense per
passenger, excluding fuel $57.93 $55.57 4.2 %
Average departures per
aircraft per day 2.45 2.46 (0.4)%
Average stage length (miles) 859 831 3.4 %
---------------------------- --- --- ----
Unaudited 2009 2008 Change
--------- ---- ---- ------
Total operating revenue
(millions) $557.9 $504.0 10.7 %
Operating income (millions) $122.3 $55.8 118.9 %
Operating margin 21.9% 11.1% 10.8pp
Net income (millions) $76.3 $35.4 115.6 %
Diluted earnings per share $3.76 $1.73 117.3 %
Scheduled Service:
Average fare -scheduled
service $70.38 $84.98 (17.2)%
Average fare -ancillary
total 33.07 29.42 12.4 %
----- -----
Average fare - total $103.45 $114.40 (9.6)%
Total revenue per ASM (cents) 10.28 11.46 (10.3)%
Average passengers per
departure 133 132 0.8 %
Load factor 90.4% 89.9% 0.5pp
Average stage length (miles) 891 882 1.0 %
Total System*:
Operating expense per
passenger $81.77 $104.25 (21.6)%
Operating expense per
passenger, excluding fuel $50.80 $50.83 (0.1)%
Average departures per
aircraft per day 2.81 2.69 4.5 %
Average stage length (miles) 836 836 0.0 %
---------------------------- --- --- ----
*Total system includes scheduled service, fixed-fee contract and
non-revenue flying
Allegiant Travel Company also reported the following balance sheet information:
Change
Unaudited ($millions) 12/31/09 09/30/09 ($mm)
--------------------- -------- -------- ------
Unrestricted cash
(including short-term
investments) 231.5 222.4 9.1
Unrestricted cash net of
air traffic liability 140.9 138.1 2.8
Total debt, including
capital leases 45.8 54.8 (9.0)
--------------------- ---- ---- ----
Change
Unaudited ($millions) 12/31/09 12/31/08 ($mm)
--------------------- -------- -------- ------
Unrestricted cash
(including short-term
investments) 231.5 174.8 56.7
Unrestricted cash net of
air traffic liability 140.9 105.8 35.1
Total debt, including
capital leases 45.8 64.7 (18.9)
--------------------- ---- ---- -----
"We are pleased to announce a record annual profit of $76 million or $3.76 per share with an operating margin of 21.9% for 2009," stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. "Our fourth quarter results represent our 28th consecutive quarter of profitability. Given the difficult economic environment of the past year we are proud of our performance. We accomplished these excellent results while growing significantly (a 22% increase in departures versus the prior year) and despite a 17% decline in scheduled air fare (what I call our "selling fare") to $70 from $85. However, during these difficult times, our 2009 total ancillary revenue per scheduled passenger grew 12% to approximately $33.
"We are particularly pleased with the trend in revenue growth during this past quarter. Our selling fare increased from $67 in October to $83 in December, the highest average fare for any month of 2009 and only slightly below the selling fare in December 2008 - the best year over year comparison for any month of 2009. Additionally, the total scheduled service average fare for December 2009 exceeded that of December 2008, although TRASM was down 2% in the same periods. Lastly, we achieved a $31 operating profit per passenger in December, our third best monthly result of the year in spite of fuel up over 40% from those earlier months.
"I couldn't be more pleased with the evolution of our model," Gallagher continued. "We achieved a 26.5% return on equity during the year. Further, on a per aircraft basis, our 2009 combined operating income and depreciation and amortization was roughly $3.5 million, approximating the amount we currently spend to add an aircraft to our operating fleet. The great efforts of our terrific team members were again critical to achieving our successful results in 2009.
"Looking forward, we currently see an improving pricing environment. While the economy is in the early stages of a recovery, our segment appears to be returning to revenue norms of past years. Our recently announced contract for additional aircraft should add 13 aircraft to our operating fleet and support our growth through 2011.
"A major initiative in 2010 will be an upgrade to our IT systems including our database and hardware infrastructure. These upgrades will provide us with the necessary capacity to continue our growth as well as enhance our ability to offer industry leading web based products. Our control of our automation provides us the ability to develop our own, unique products and this is a substantial differentiator for us in the travel industry," concluded Gallagher.
Andrew C. Levy, President and CFO, stated, "This quarter was difficult from a cost perspective, with the $2.07 per gallon fuel price the highest since 4Q08, and non-fuel expenses unusually high in the 'Maintenance and Repairs' and 'Other' expense areas. As we noted at our investor day in mid-November, we experienced a large quantity of very expensive airframe heavy maintenance events during the quarter. We expect maintenance expenses to return to more normal levels in 2010, to a range of $95,000 to $105,000 per aircraft per month.
"We also discussed our expectation that our 'Other' expense line would be high during fourth quarter 2009. This increase was driven by an approximate $1.5 million non-recurring write down of the value of engine parts we own for sale to others and an unusually large loss on the disposal of engines which had to be taken off wing prematurely and will be parted out. The loss on disposed items averaged just under $600,000 per quarter in the preceding seven quarters, but it was approximately $1.5 million during 4Q09. However, we believe the unusually high cost per passenger of $57.93 was driven by events unique to this quarter and our non-fuel expenses will revert to the more normal levels of approximately $50 per passenger starting in this first quarter of 2010.
"Our balance sheet continues to strengthen. We ended the quarter with unrestricted cash and short-term investments of $231.5 million, up from $222.4 million at the end of the prior quarter and $174.8 million at the end of the prior year. Excluding air traffic liability, cash increased to $140.9 million at December 31, 2009 from $138.1 million at the end of the prior quarter and $105.8 million at the end of the prior year. Total debt outstanding declined to $45.8 million from $54.8 million and $64.7 million over the same periods. Capital expenditures were $6.0 million during the fourth quarter and $31.7 million for the year.
"As previously announced, on February 1 we start service to our new base of Orlando International Airport. By March we will be flying to Orlando International from 10 of the 31 small city markets from which we currently fly to Orlando-Sanford International Airport. We undertook this initiative to improve our competitiveness in the Orlando market. The strength of these 10 markets has far exceeded our expectations and we see very positive trends continuing for our Orlando International service," concluded Levy.
We purchased no shares in the fourth quarter of 2009 under the share repurchase program our Board of Directors approved in January 2009 and amended in July. In the first three quarters of 2009 the Company spent $24.4 million in open market transactions repurchasing a total of 637,902 shares at an average price of $38.26 per share. We currently have a total of $10.6 million in unused stock repurchase authority remaining under our current Common Stock repurchase plan.
Please note our 2009 Consolidated Statements of Income reflect certain presentation changes and reclassifications within operating revenue. We are now separately presenting two categories of ancillary revenue, breaking them into third-party products and air-related charges, which we think will provide investors with useful insight into this important revenue line. We have applied these presentation changes and reclassifications to our 2008 Consolidated Statements of Income to conform to the 2009 classifications. These changes have no effect on previously-reported Net Income. We will be separately filing an 8-K to provide historical perspective on this new way of viewing our revenues.
We are also now providing more detail into our third-party products business as presented in the table below, "Supplemental Ancillary Revenue Information." Third party products consist of revenue from the sale of hotel rooms, ground transportation (rental cars and hotel shuttle products), attraction and show tickets, and fees we receive from other merchants selling products through our website. Ancillary revenue - third party products is gross revenues, minus cost of goods sold and transaction costs, which include both travel agent commissions (if applicable) and credit-card discount fees.
Supplemental Ancillary
Revenue Information
(unaudited) (thousands) 4Q09 4Q08 Change
------------------------ ---- ---- ------
Gross ancillary revenue -
third party products $16,478 $17,131 (3.8)%
Cost of goods sold ($11,249) ($11,722) 4.2 %
Transaction costs (a) ($743) ($771) 3.8 %
----- -----
Ancillary revenue -third
party products $4,486 $4,638 (3.3)%
As percent of gross 27.2% 27.1% 0.1pp
------------------- ---- ---- -----
Supplemental Ancillary
Revenue Information
(unaudited) (thousands) 2009 2008 Change
------------------------ ---- ---- ------
Gross ancillary revenue -
third party products $73,188 $72,982 4.5 %
Cost of goods sold ($50,014) ($50,143) 0.3 %
Transaction costs (a) ($3,459) ($3,733) 7.9 %
------- -------
Ancillary revenue -third
party products $19,715 $19,106 3.2 %
As percent of gross 26.9% 26.2% 0.7pp
------------------- ---- ---- -----
(a) includes credit card fees and travel agency commissions
During the fourth quarter of 2009 we placed two owned aircraft in service, the final two deliveries to Allegiant of six MD-80s we acquired in 2008 that were on lease with a third party. As previously announced, we expect to place two more owned MD-80s in operation in the first quarter of 2010. At the start of the second quarter, we expect to permanently withdraw from service one of our four owned 130-seat MD-87 aircraft (which operate almost solely for our fixed-fee programs).
December 31, December 31,
MD-80 Aircraft in Service 2009 2008
------------------------- ------------- -------------
Owned (including capital leases) 42 36
Leased 4 2
--- ---
Total 46 38
----- --- ---
Allegiant Air started nine new routes in the fourth quarter, including five routes to Phoenix-Mesa, two to Orlando, and one each to Tampa Bay/St. Petersburg and Ft. Lauderdale. We expect to announce additional new service in the near future. In particular we expect to build on our successful Summer 2009 Myrtle Beach program and we will shortly announce an aircraft and crew base that is not a major leisure destination, similar to the successful base we operate in Bellingham, WA.
December 31, December 31,
Network Summary* 2009 2008
---------------- ------------- -------------
Major leisure destinations 6 5
Other leisure destinations 5 4
Small cities served 58 52
--- ---
Total cities served 69 61
Routes to Las Vegas 40 39
Routes to Orlando 31 29
Routes to Tampa Bay/St. Petersburg 20 20
Routes to Phoenix-Mesa 20 15
Routes to Southern California (Los
Angeles) 11 0
Routes to Ft. Lauderdale 5 6
Other routes 9 4
--- ---
Total routes 136 113
------------ --- ---
* includes cities served seasonally
At this time, Allegiant Travel Company provides the following guidance to investors. All items are subject to revision. Allegiant Air expects:
-- First quarter 2010 year-over-year total system departure growth of
approximately 7% and ASM growth of approximately 15%.
-- First quarter 2010 year-over-year scheduled departure growth of
approximately 8% and scheduled ASM growth of approximately 17%.
-- First quarter fixed fee revenues expected to be flat relative to first
quarter 2009.
-- Utilization of approximately 2.7 departures and 6.6 block hours per
aircraft per day in the first quarter of 2010.
-- First quarter 2010 operating expense per passenger, excluding fuel to be
approximately $50.
-- An operating fleet of 48 aircraft by the end of first quarter 2010 and
an operating fleet of at least 52 aircraft by the end of 2010, including
the scheduled retirement of one MD-87 at the end of the first quarter of
2010.
-- 2010 capital expenditures of approximately $80 million.
At this time we have no fuel hedges in place.
Allegiant Travel Company will host a conference call with analysts at noon East Coast time tomorrow, January 26, 2010, to discuss its fourth quarter and full-year 2009 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 (Nasdaq: ALGT) is focused on linking travelers in small cities to major leisure destinations such as Las Vegas, Orlando, Fla., Tampa/St. Petersburg, Fla., Phoenix-Mesa, Los Angeles and Fort Lauderdale, Fla. Through its subsidiary, Allegiant Air, 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 the air travel price environment, industry prospects, future operating expense, maintenance expense per aircraft, ASM growth, departure growth, fleet growth and expected capital expenditures, as well as other 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", "project", "hope" 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 filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, the effect of the economic downturn on leisure travel, increases in fuel prices, terrorist attacks, risks inherent to airlines, demand for air services to our leisure destinations from the markets served by us, our ability to implement our growth strategy, possible unionization efforts, our dependence on our leisure destination markets, our ability to add, renew or replace gate leases, our competitive environment, problems with our aircraft, dependence on fixed fee customers, our reliance on our automated systems, economic and other conditions in markets in which we operate, governmental regulation, increases in maintenance costs 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 Income
Three Months Ended December 31, 2009 and 2008
(in thousands, except per share amounts)
(Unaudited)
Three months ended December
31, Percent
----------------------------
2009 2008 change
---- ---- ------
OPERATING REVENUE:
Scheduled service revenue $85,240 $77,794 9.6
Ancillary revenue:
Air-related charges 32,372 26,116 24.0
Third party products 4,486 4,638 (3.3)
----- -----
Total ancillary revenue 36,858 30,754 19.8
Fixed fee contract revenue 12,297 11,442 7.5
Other revenue 334 2,438 (86.3)
--- -----
Total operating revenue 134,729 122,428 10.0
------- -------
OPERATING EXPENSES:
Aircraft fuel 45,988 37,283 23.3
Salary and benefits 20,661 20,449 1.0
Station operations 13,119 10,655 23.1
Maintenance and repairs 16,056 9,551 68.1
Sales and marketing 3,690 3,258 13.3
Aircraft lease rentals 507 354 43.2
Depreciation and amortization 7,872 6,299 25.0
Other 8,785 5,887 49.2
----- -----
Total operating expenses 116,678 93,736 24.5
------- ------
OPERATING INCOME 18,051 28,692 (37.1)
------ ------
As a percent of total operating
revenue 13.4% 23.4%
OTHER EXPENSE (INCOME):
Loss (earnings) from
unconsolidated affiliates, net 146 (126) N/M
Interest income (500) (1,092) (54.2)
Interest expense 921 1,205 (23.6)
--- -----
Total other expense (income) 567 (13) N/M
--- ---
INCOME BEFORE INCOME TAXES 17,484 28,705 (39.1)
------ ------
As a percent of total operating
revenue 13.0% 23.4%
PROVISION FOR INCOME TAXES 6,943 10,506 (33.9)
----- ------
NET INCOME $10,541 $18,199 (42.1)
======= =======
As a percent of total operating
revenue 7.8% 14.9%
Earnings per share:
Basic $0.53 $0.90 (41.1)
Diluted $0.52 $0.88 (40.9)
Weighted average shares
outstanding:
Basic 19,796 20,279 (2.4)
Diluted 20,123 20,579 (2.2)
Allegiant Travel Company
Operating Statistics
Three Months Ended December 31, 2009 and 2008
(Unaudited)
Three months ended December
31, Percent
----------------------------
2009 2008 change*
---- ---- -------
OPERATING STATISTICS
Total system statistics
Passengers 1,220,275 1,015,938 20.1
Revenue passenger miles
(RPMs) (thousands) 1,124,642 905,582 24.2
Available seat miles
(ASMs) (thousands) 1,297,333 1,046,749 23.9
Load factor 86.7% 86.5% 0.2
Operating revenue per ASM
(cents) 10.39 11.70 (11.2)
Operating expense per ASM
(CASM) (cents) 8.99 8.95 0.4
Fuel expense per ASM
(cents) 3.54 3.56 (0.6)
CASM, excluding fuel
(cents) 5.45 5.39 1.1
Operating expense per
passenger $95.62 $92.27 3.6
Fuel expense per passenger $37.69 $36.70 2.7
Operating expense per
passenger, excluding fuel $57.93 $55.57 4.2
Departures 10,129 8,478 19.5
Block hours 23,452 19,307 21.5
Average stage length
(miles) 859 831 3.4
Average number of
operating aircraft during
period 45.0 37.4 20.3
Total aircraft in service
end of period 46 38 21.1
Average departures per
aircraft per day 2.45 2.46 (0.4)
Average block hours per
aircraft per day 5.7 5.6 1.8
Full-time equivalent
employees at end of
period 1,569 1,348 16.4
Fuel gallons consumed
(thousands) 22,199 17,977 23.5
Average fuel cost per
gallon $2.07 $2.07 -
Scheduled service
statistics
Passengers 1,124,449 936,867 20.0
Revenue passenger miles
(RPMs) (thousands) 1,053,077 839,597 25.4
Available seat miles
(ASMs) (thousands) 1,167,214 935,661 24.7
Load factor 90.2% 89.7% 0.5
Departures 8,470 7,135 18.7
Average passengers per
departure 133 131 1.5
Block hours 20,706 17,017 21.7
Yield (cents) 8.09 9.27 (12.7)
Scheduled service revenue
per ASM (cents) 7.30 8.31 (12.2)
Total ancillary revenue
per ASM (cents) 3.16 3.29 (4.0)
---- ----
Total revenue per ASM
(TRASM) (cents) 10.46 11.60 (9.8)
Average fare -scheduled
service $75.81 $83.03 (8.7)
Average fare -ancillary
total 32.78 32.83 (0.2)
----- -----
Average fare - total $108.59 $115.86 (6.3)
Average stage length
(miles) 919 878 4.7
Fuel gallons consumed
(thousands) 19,493 15,826 23.2
Average fuel cost per
gallon $2.22 $2.18 1.8
Percent of sales through
website during period 86.5% 85.4% 1.1
* except load factor and percent of sales through website, which is
percentage point change
Allegiant Travel Company
Consolidated Statements of Income
Years Ended December 31, 2009 and 2008
(in thousands, except per share amounts)
(Unaudited)
Years ended December 31, Percent
------------------------
2009 2008 change
---- ---- ------
OPERATING REVENUE:
Scheduled service revenue $346,222 $330,969 4.6
Ancillary revenue:
Air-related charges 143,001 95,490 49.8
Third party products 19,715 19,106 3.2
------ ------
Total ancillary revenue 162,716 114,596 42.0
Fixed fee contract revenue 43,162 52,499 (17.8)
Other revenue 5,840 5,948 (1.8)
----- -----
Total operating revenue 557,940 504,012 10.7
------- -------
OPERATING EXPENSES:
Aircraft fuel 165,000 229,640 (28.1)
Salary and benefits 90,006 72,007 25.0
Station operations 53,993 43,476 24.2
Maintenance and repairs 52,938 41,465 27.7
Sales and marketing 16,458 14,361 14.6
Aircraft lease rentals 1,926 2,815 (31.6)
Depreciation and amortization 29,638 23,489 26.2
Other 25,728 20,911 23.0
------ ------
Total operating expenses 435,687 448,164 (2.8)
------- -------
OPERATING INCOME 122,253 55,848 118.9
------- ------
As a percent of total operating
revenue 21.9% 11.1%
OTHER EXPENSE:
Loss on fuel derivatives, net - 11 N/M
Loss (earnings) from
unconsolidated affiliates, net 84 (96) N/M
Interest income (2,474) (4,730) (47.7)
Interest expense 4,079 5,411 (24.6)
----- -----
Total other expense 1,689 596 183.4
----- ---
INCOME BEFORE INCOME TAXES 120,564 55,252 118.2
------- ------
As a percent of total operating
revenue 21.6% 11.0%
PROVISION FOR INCOME TAXES 44,233 19,845 122.9
------ ------
NET INCOME $76,331 $35,407 115.6
======= =======
As a percent of total operating
revenue 13.7% 7.0%
Earnings per share:
Basic $3.82 $1.75 118.3
Diluted $3.76 $1.73 117.3
Weighted average shares
outstanding:
Basic 19,982 20,289 (1.5)
Diluted 20,278 20,500 (1.1)
Allegiant Travel Company
Operating Statistics
Years Ended December 31, 2009 and 2008
(Unaudited)
Years ended December 31, Percent
------------------------
2009 2008 change*
---- ---- -------
OPERATING STATISTICS
Total system statistics
Passengers 5,328,436 4,298,748 24.0
Revenue passenger miles
(RPMs) (thousands) 4,762,410 3,863,497 23.3
Available seat miles (ASMs)
(thousands) 5,449,363 4,442,463 22.7
Load factor 87.4% 87.0% 0.4
Operating revenue per ASM
(cents) 10.24 11.35 (9.8)
Operating expense per ASM
(CASM) (cents) 8.00 10.09 (20.7)
Fuel expense per ASM (cents) 3.03 5.17 (41.4)
CASM, excluding fuel (cents) 4.97 4.92 1.0
Operating expense per
passenger $81.77 $104.25 (21.6)
Fuel expense per passenger $30.97 $53.42 (42.0)
Operating expense per
passenger, excluding fuel $50.80 $50.83 (0.1)
Departures 43,795 35,839 22.2
Block hours 98,760 81,390 21.3
Average stage length (miles) 836 836 -
Average number of operating
aircraft during period 42.7 36.4 17.3
Total aircraft in service
end of period 46 38 21.1
Average departures per
aircraft per day 2.81 2.69 4.5
Average block hours per
aircraft per day 6.3 6.1 3.3
Full-time equivalent
employees at end of period 1,569 1,348 16.4
Fuel gallons consumed
(thousands) 93,521 76,972 21.5
Average fuel cost per gallon $1.76 $2.98 (40.9)
Scheduled service statistics
Passengers 4,919,826 3,894,968 26.3
Revenue passenger miles
(RPMs) (thousands) 4,477,119 3,495,956 28.1
Available seat miles (ASMs)
(thousands) 4,950,954 3,886,696 27.4
Load factor 90.4% 89.9% 0.5
Departures 37,115 29,548 25.6
Average passengers per
departure 133 132 0.8
Block hours 87,939 70,239 25.2
Yield (cents) 7.73 9.47 (18.4)
Scheduled service revenue
per ASM (cents) 6.99 8.51 (17.9)
Total ancillary revenue per
ASM (cents) 3.29 2.95 11.5
---- ----
Total revenue per ASM
(TRASM) (cents) 10.28 11.46 (10.3)
Average fare -scheduled
service $70.38 $84.98 (17.2)
Average fare -ancillary
total 33.07 29.42 12.4
----- -----
Average fare - total $103.45 $114.40 (9.6)
Average stage length (miles) 891 882 1.0
Fuel gallons consumed
(thousands) 83,047 66,291 25.3
Average fuel cost per gallon $1.90 $3.22 (41.0)
Percent of sales through
website during period 86.3% 86.4% (0.1)
* except load factor and percent of sales through website, which is
percentage point change
(Logo: http://www.newscom.com/cgi-bin/prnh/20060516/LATU102LOGO)
SOURCE Allegiant Travel Company
