PHOENIX, Feb. 10, 2020 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported first quarter fiscal 2020 financial and operating results.

Highlights

  • Net income of $10.8 million or $0.31 per diluted share

  • Controllable completion factor of 99.8% compared to 99.5% in Q1 2019

  • Block hours increased 0.5% compared to Q1 2019

Mesa’s Q1 2020 results reflect net income of $10.8 million, or $0.31 per diluted share, compared to net income of $19.1 million, or $0.54 per diluted share for Q1 2019.  Mesa’s Q1 2020 pre-tax income was $14.3 million, compared to $25.0 million for Q1 2019.  In addition, Mesa’s EBITDA1 for Q1 2020 was $47.4 million, compared to $58.2 million in Q1 2019 and EBITDAR1 was $58.8 million, compared to $72.3 million in Q1 2019. The primary variance in pre-tax income from Q1 2019 to Q1 2020 was the anticipated increase in airframe and engine heavy maintenance of $10.7 million.

Operationally, the company ran a 99.8% controllable completion factor compared to 99.5% in Q1 2019. At United, the company operated at a 99.98% controllable completion factor in the quarter, taking only 6 cancels out of 33,876 scheduled flights compared to a 99.6% controllable completion factor in Q1 2019. At American, the company operated at a 99.5% controllable completion factor compared to a 99.2% controllable completion factor in Q1 2019. The company ran a 98.7% total completion factor, which includes weather and other uncontrollable cancellations, compared to 98.0% in Q1 2019. Mesa operated 115,562 block hours during Q1 2020, an increase of 0.5% from Q1 2019 of 115,000.

“We are pleased to see our operational performance continue to improve and we are on target to take delivery of 20 new E175s which begin in May 2020,” said Jonathan Ornstein, Chairman and Chief Executive Officer. “I would like to thank all of our employees for their hard work and dedication every day.”

“We continue to work closely with our partners to provide the highest level of customer service, reliability and on time performance,” said Brad Rich, Executive Vice President and Chief Operating Officer. “Since having access to the full complement of aircraft in our American Eagle operation, our performance has increased with November and December at a 99.7% controllable completion factor, January at 99.9% and February at 100% month-to-date.”

______________________________
1 See Reconciliation of non-GAAP financial measures

Outlook

The company is providing the following guidance for Fiscal Year 2020 and 2021:

Block Hours, Scheduled Heavy Engine and Airframe Maintenance, Pass-through Maintenance Expense – Actual and Forecast (unaudited)

Block Hours 
  Q1  Q2  Q3  Q4  Total 
FY 2020 Actual / Guidance                    
Low  115,562   109,000   112,000   115,500   452,062 
High  115,562   111,000   114,000   118,000   458,562 
                     
Scheduled Heavy Engine and Airframe Maintenance 
  Q1  Q2  Q3  Q4  Total 
FY 2020 Actual / Guidance                    
Low $14.8  $20.0  $7.0  $7.0  $48.8 
High $14.8  $23.0  $10.0  $10.0  $57.8 
                     
Pass-through Maintenance Expense 
  Q1  Q2  Q3  Q4  Total 
FY 2020 Actual / Guidance $7.4  $10.5  $9.4  $9.4  $36.7 


Fleet Count 
                       
   FY '20 Q1  FY '20 Q2  FY '20 Q3  FY '20 Q4   FY '21 
   Qtr Ended  Qtr Ended  Qtr Ended  Qtr Ended   FY Ended 
   Dec '19  Mar '20  Jun '20  Sep '20   Sep '21 
Fleet CountPartner (Actual)  (Forecast)  (Forecast)  (Forecast)   (Forecast) 
  E-175United  60   60   62   68    80 
  CRJ-900American  60   59   59   59    59 
  CRJ-700United  20   20   18   12    — 
Total CPA   140   139   139   139    139 
Non-CPA                      
  CRJ-700Leased  —   —   2   8    20 
  CRJ-900Unassigned  4   5   5   5    5 
  CRJ-200Unassigned  1   1   1   1    1 
Total Fleet   145   145   147   153    165 
                       

Reconciliation of non-GAAP financial measures

Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa’s ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three months ended December 31, 2019 and the three months ended December 31, 2018. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company’s net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies.

Reconciliation of GAAP versus Non-GAAP Disclosures (unaudited)
(In thousands, except for per diluted share)

   Three months ended December 31, 2019 
  Income Before
Taxes		  Income Tax
(Expense)/Benefit		  Net
Income		  Net Income
per
Diluted Share		 
GAAP Income  14,320   (3,535)  10,785  $0.31 
                 
Interest Expense  12,628             
Interest Income  (58)            
Depreciation and Amortization  20,552             
EBITDA  47,442             
                 
Aircraft Rent  11,329             
EBITDAR  58,771             


   Three months ended December 31, 2018 
  Income Before
Taxes		  Income Tax
(Expense)/Benefit		  Net
Income		  Net Income
per
Diluted Share		 
GAAP Income  25,030   (5,949)  19,081  $0.54 
                 
Interest Expense  14,842             
Interest Income  (156)            
Depreciation and Amortization  18,491             
EBITDA  58,207             
                 
Aircraft Rent  14,119             
EBITDAR  72,326             
                 

Mesa Air Group will host a conference call with analysts on Monday, February 10 at 4:30pm ET/1:30pm PT. The conference call number is 888-469-2054 (Passcode: Phoenix). The conference call can also be accessed live via the web by visiting https://edge.media-server.com/mmc/p/q4mi3ymq. A recorded version will be available on Mesa’s website approximately two hours after the call for approximately 14 days.

About Mesa Air Group, Inc.

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 147 cities in 47 states, the District of Columbia, Canada, Mexico, Cuba and the Bahamas. As of January 31st, 2020, Mesa operated a fleet of 145 aircraft with an average of approximately 702 daily departures and 3,600 employees. Mesa operates all of its flights as either American Eagle or United Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc. and United Airlines, Inc.

Forward-Looking Statements

This news release contains forward looking statements, including, but not limited to, (i) the block hours, scheduled heavy engine and airframe maintenance, and pass-through maintenance expense forecast of Mesa for the second, third and fourth quarters of fiscal 2020, (ii) the fleet forecast for the second, third and fourth quarters of fiscal 2020 and year ended fiscal 2021, and (iii) delivery dates of the 20 E175s scheduled to begin in May 2020. These forward-looking statements are based on Mesa’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond Mesa’s control. Any forward-looking statement in this release speaks only as of the date of this release. Mesa undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.


MESA AIR GROUP, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts) (Unaudited)

   Three Months Ended
December 31,		 
  2019  2018 
Operating revenues:        
Contract revenue $171,800  $170,449 
Pass-through and other  12,236   7,707 
Total operating revenues  184,036   178,156 
         
Operating expenses:        
Flight operations  52,644   53,245 
Fuel  169   121 
Maintenance  58,095   39,802 
Aircraft rent  11,329   14,119 
Aircraft and traffic servicing  1,064   934 
General and administrative  12,996   12,214 
Depreciation and amortization  20,552   18,491 
Total operating expenses  156,849   138,926 
Operating income  27,187   39,230 
         
Other (expenses) income, net:        
Interest expense  (12,628)  (14,842)
Interest income  58   156 
Other (expense) income, net  (297)  486 
Total other (expense), net  (12,867)  (14,200)
         
Income before taxes  14,320   25,030 
Income tax expense  3,535   5,949 
Net income $10,785  $19,081 
         
Net income per share attributable to common shareholders        
Basic $0.31  $0.55 
Diluted $0.31  $0.54 
         
Weighted-average common shares outstanding        
Basic  35,023   34,518 
Diluted  35,182   35,113 
         


MESA AIR GROUP, INC.
Condensed Consolidated Balance Sheets
(In thousands, except shares) (Unaudited)

   December 31,
2019		  September 30,
2019		 
ASSETS       
         
CURRENT ASSETS:        
Cash and cash equivalents $57,763  $68,855 
Restricted cash  3,448   3,646 
Receivables, net  24,121   23,080 
Expendable parts and supplies, net  22,400   21,337 
Prepaid expenses and other current assets  4,502   40,923 
Total current assets  112,234   157,841 
         
Property and equipment, net  1,261,267   1,273,585 
Intangibles, net  9,157   9,532 
Lease and equipment deposits  4,872   2,167 
Operating Lease right-of-use assets  146,071   — 
Other Assets  8,400   8,792 
TOTAL ASSETS  1,542,001   1,451,917 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY       
         
CURRENT LIABILITIES:        
Current portion of long-term debt and financing leases $166,089  $165,900 
Current maturities of operating leases  37,674   — 
Accounts payable  47,750   49,930 
Accrued compensation  10,048   11,988 
Other accrued expenses  34,350   28,888 
Total current liabilities  295,911   256,706 
         
NONCURRENT LIABILITIES:        
Long-term debt and financing leases - excluding current portion  641,017   677,423 
Noncurrent operating lease liabilities  95,992   — 
Deferred credits  11,032   12,134 
Deferred income taxes  58,506   55,303 
Other noncurrent liabilities  1,352   24,483 
Total noncurrent liabilities  807,899   769,343 
Total liabilities  1,103,810   1,026,049 
         
STOCKHOLDERS' EQUITY:        
Preferred stock of no par value, 5,000,000 shares authorized; no shares issued and outstanding  —   — 
Common stock of no par value and additional paid-in capital, 125,000,000 shares authorized; 33,039,126 (2020) and 31,413,287 (2019) shares issued and outstanding, and 1,988,472 (2020) and 3,600,953 (2019) warrants issued and outstanding  239,783   238,504 
Retained earnings  198,408   187,364 
Total stockholders' equity  438,191   425,868 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,542,001  $1,451,917 
         


Operating Highlights (unaudited)

   Three months ended 
  December 31 
  2019  2018  Change 
Available Seat Miles (thousands)  2,735,386   2,708,899   1.0%
Block Hours  115,562   115,000   0.5%
Departures  62,725   61,534   1.9%
Average Stage Length (miles)  573   578   -0.9%
Passengers  3,697,138   3,620,115   2.1%
             

Source: Mesa Air Group, Inc.

Mesa Air Group, Inc.
Investor Relations
Brian Gillman
Investor.Relations@mesa-air.com
(602) 685-4010

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