Allegiant Travel : Press Release issued by Allegiant Travel Company on July 28, 2021 (Form 8-K)
July 28, 2021 at 04:24 pm EDT
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ALLEGIANT TRAVEL COMPANY SECOND QUARTER 2021
FINANCIAL RESULTS
Second quarter 2021 GAAP fully diluted earnings per share of $5.49
Second quarter 2021 consolidated fully diluted earnings per share, excluding COVID related special charges and net benefit from the payroll support programs of $3.46(1)(2)
LAS VEGAS. July 28, 2021 - Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the second quarter 2021, as well as comparisons to the prior years:
Consolidated
Three Months Ended June 30,
Percent Change
(unaudited) (in millions, except per share amounts)
2021
2020
2019
YoY
Yo2Y
Total operating revenue
$
472.4
$
133.3
$
491.8
254.3
(3.9)
Total operating expense
333.6
246.6
383.7
35.3
(13.1)
Operating income (loss)
138.9
(113.3)
108.1
222.6
28.4
Income (loss) before income taxes
122.6
(146.4)
91.8
183.7
33.5
Net income (loss)
95.0
(93.1)
70.5
202.1
34.7
Diluted earnings (loss) per share
$
5.49
$
(5.85)
$
4.33
193.8
26.8
Six Months Ended June 30,
Percent Change
(unaudited) (in millions, except per share amounts)
2021
2020
2019
YoY
Yo2Y
Total operating revenue
$
751.6
$
542.5
$
943.4
38.5
(20.3)
Total operating expense
588.1
766.8
744.2
(23.3)
(21.0)
Operating income (loss)
163.5
(224.3)
199.2
172.9
(17.9)
Income (loss) before income taxes
131.2
(277.1)
165.7
147.4
(20.8)
Net income (loss)
101.9
(126.1)
127.7
180.8
(20.2)
Diluted earnings (loss) per share
$
6.04
$
(7.93)
$
7.84
176.2
(23.0)
Consolidated - adjusted
Three Months Ended June 30,
Percent Change
(unaudited) (in millions, except per share amounts)
2021
2020
2019
YoY
Yo2Y
Adjusted operating expense (1) (2)
$
378.6
$
239.9
$
383.7
57.8
(1.3)
Adjusted operating income (loss) (1) (2)
93.9
(106.6)
108.1
188.1
(13.1)
Adjusted income (loss) before income taxes (1) (2)
77.6
(119.9)
91.8
164.7
(15.5)
Adjusted net income (loss) (1) (2)
60.0
(94.7)
70.5
163.4
(14.9)
Adjusted diluted earnings (loss) per share (1) (2)
$
3.46
$
(5.96)
$
4.33
158.1
(20.1)
Six Months Ended June 30,
Percent Change
(unaudited) (in millions, except per share amounts)
2021
2020
2019
YoY
Yo2Y
Adjusted operating expense (1) (2)
$
716.7
$
594.0
$
744.2
20.7
(3.7)
Adjusted operating income (loss) (1) (2)
34.9
(51.5)
199.2
167.8
(82.5)
Adjusted income (loss) before income taxes (1) (2)
2.6
(77.7)
165.7
103.3
(98.4)
Adjusted net income (loss) (1) (2)
2.0
(61.4)
127.7
103.3
(98.4)
Adjusted diluted earnings (loss) per share (1) (2)
$
0.12
$
(3.87)
$
7.84
103.1
(98.5)
(1) Adjusted numbers exclude COVID related special charges, the net benefit from the payroll support programs (PSPs), and profit sharing bonus accruals since the operating margin threshold to accrue these bonuses would not have been met for the six months ended June 30, 2021 without the benefits of the PSPs
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information
'The second quarter marked the return of leisure demand to pre-pandemic levels,' stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. 'Earnings per share came in at $5.49 on a year over two-year revenue decline of just 3.9 percent, with total revenue in June exceeding 2019 levels. We made significant progress towards achieving pre-pandemic unit revenues withTRASM of 10.36 cents (on a load factor of 70.8 percent), up 50 percent from the first quarter. The revenue team did an outstanding job optimizing loads and unit revenues during the quarter. This strong revenue performance, coupled with continued cost discipline as evidenced by our adjusted CASM, excluding fuel (3), of 5.86 cents, led to our adjusted operating margin(1) of 20 percent for the quarter.
'These results suggest we are close if not back to 'normal', where we were in the early days of 2020. We were the first domestic carrier to grow capacity from 2019 levels. Given the reduced operations of the past year, this ramp up came with challenges - delays in infrastructure preparedness at some of our airports, labor constraints, and severe weather. Our operations team has done a great job reacting and adapting to these headwinds. During the third quarter we will continue our growth - capacity will increase nearly 20 percent, year over two-year.
'Last year at this time I stressed the importance of strengthening our liquidity to both weather the storm and position us favorably for growth post-pandemic. The team has done just that. We currently have $1.2 billion of cash on hand, up 79 percent from a year ago. Our total net debt continues to improve at under $400 million, a 52 percent reduction from a year ago. This strong liquidity leaves us well positioned for future growth. The fleet team has executed agreements to acquire 21 additional aircraft since the beginning of the year. These airplanes will all be placed into service by the end of 2022, thus supporting the remainder of this year as well as most of next year's growth plan.
'The next year will be an exciting one for the company. We are preparing the launch of our new loyalty program in the coming months, Allways Rewards. This program will enable us to further enhance the customer experience. We also recently announced a new partnership with Live Nation venues, Ticketmaster and music festivals - kicking off a multi-year, strategic relationship with the world's premier live entertainment company. This partnership will ultimately unlock another layer of leisure offerings, further enhancing a one-stop shop for our customer. Finally, we will continue to grow and expand our network, connecting more customers to world-class vacation destinations.
'I cannot thank our 4,000 team members enough for their continued efforts in supporting growth while prioritizing customer safety. Ramping up the operation the past few months has been a challenge, but our team members continue to work hard to support the operation. I could not be more proud of their efforts.'
Second Quarter 2021 Results
•GAAP earnings per share of $5.49
•Adjusted earnings per share(1) (2) (3)of $3.46
•Consolidated EBITDA(2) (3) of $183.3 million yielding an EBITDA margin of 38.8 percent
•Adjusted EBITDA(1) (2) (3) of $138.3 million yielding an adjusted EBITDA margin of 29.3 percent
•Total June revenue exceeded June of 2019
•Total operating revenue was $472.4 million, up 69.3 percent from the first quarter and down 3.9 percent when compared to the second quarter of 2019
•Sustained yield strength throughout the quarter with yield up 7.8 percent year over two-year on scheduled service capacity increases of 4.5 percent
•Total average fare of $126.82, up 10.8 percent year over two-year
•Total ancillary average fare $64.25, up 14.6 percent from 2019 driven primarily by bundled air ancillary offerings, rental car rate strength, and increased cobrand activity
•TRASM of 10.36 cents, down 5.6 percent year over two-year, and up 50.3 percent from the first quarter 2021
•Load factor of 70.8%, up nearly 16 percentage points from the first quarter
•Record-breaking quarter for co-brand activity with June new cardholder acquisitions becoming the highest month in the program's history and the highest month for cardholder spend, beating the prior monthly spend record by more than 40 percent
•May marked the third highest acquisition of new cardholders in program history
•Adjusted operating expense(1) (2) (3) of $378.6 million, down 1.3 percent from second quarter 2019 on total system capacity increase of 3.3 percent
•Adjusted Operating CASM, excluding fuel (3)of 5.86 cents, flat when compared to the second quarter of 2019
•Adjusted operating margin(1) of 19.9 percent
•Expanded the network by adding 29 new routes with four new cities and complementary service in Phoenix with the addition of Phoenix Sky Harbor International Airport, bringing total routes served to 596 and 134 cities
•Ranked number two among US airlines within the 2021 Airline Quality Ranking
(1) Adjusted numbers exclude COVID related special charges, the net benefit from the payroll support programs, and profit sharing bonus accruals since the operating margin threshold to accrue these bonuses would not have been met for the six months ended June 30, 2021 without the benefits of the PSPs
(2) Denotes a non-GAAP financial measure.
(3) Refer to the Non-GAAP Presentation section within this document for further information
Balance Sheet, Cash and Liquidity
•Total cash and investments at June 30, 2021 were $1.2 billion, up from $728 million at March 31, 2021
•Cash from operations of $237 million, including the benefit from the payroll support program and federal income tax refund of $12 million related to prior period tax net operating losses
•Adjusted cash from operations of $176 million, which excludes the $49.2 million net benefit from the PSPs, and $12 million federal tax refund
•Debt principal payments of $48 millionduring the quarter
•Includes prepayment of debt secured by five aircraft
•$65 million used for cash capital expenditures
•Raised $335 million from issuance of 1.6 million shares at a price of $219 per share during the second quarter
•Second quarter interest expense of $17 million, down 20 percent year over two-year
•Expect to receive $136 million in federal tax refunds during the second half of the year related to 2020 net operating losses
•Air traffic liability at June 30, 2021 was $437 million
•Balance related to future scheduled flights is $305 million
•Balance related to travel vouchers issued for future use is $132 million, a 26 percent reduction from March 31, 2021
Capital Expenditures
•Second quarter capital expenditures related to aircraft, engines and induction costs were $46 million and $19 million in other airline capital expenditures
•Second quarter capital expenditures related to deferred heavy maintenance were $23 million
•Executed agreements to acquire 21 incremental aircraft year-to-date
Guidance, subject to revision
Previous
Current
Third Quarter 2021 guidance
System ASMs - year over two-year change(1)
16.0 to 20.0%
Scheduled Service ASMs - year over two-year change(1)
16.0 to 20.0%
Total operating revenue - year over two-year change (1)
Up 3.5% to 7.5%
Fuel cost per gallon
$
2.11
Full year 2021 guidance
CAPEX
Aircraft, engines and induction costs (millions)
$115 to $125
$115 to $125
Capitalized Airbus deferred heavy maintenance (millions)
$50 to $60
$50 to $60
Other capital expenditures (millions)
$40 to $50
$40 to $50
Interest expense
$65 to $70
$65 to $70
Recurring principal payments(2)
$170 to $180
$170 to $180
(1) Year over two-year percentage changes compare 2021 to 2019
(2) Excludes $111 million of principal repayments related to the maturity of our revolving credit facility and the refinancing of three A320 aircraft during the first quarter 2021
Aircraft Fleet Plan by End of Period
Aircraft - (seats per AC)
2Q21
3Q21
YE21
A319 (156 seats)
35
35
35
A320 (177 seats)
23
23
22
A320 (186 seats)
45
49
51
Total
103
107
108
The table above is provided based on the company's current plans and is subject to change
Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. ET Wednesday, July 28 to discuss its second quarter 2021 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.
Allegiant Travel Company
Las Vegas-based Allegiant (NASDAQ: ALGT) is an integrated travel company with an airline at its heart, focused on connecting customers with the people, places and experiences that matter most. Since 1999, Allegiant Air has linked travelers in small-to-medium cities to world-class vacation destinations with all-nonstop flights and industry-low average fares. Today, Allegiant's all-Airbus fleet serves communities across the nation, with base airfares less than half the cost of the average domestic roundtrip ticket. For more information, visit us at Allegiant.com. Media information, including photos, is available at http://gofly.us/iiFa303wrtF
Media Inquiries: mediarelations@allegiantair.com
Investor Inquiries: ir@allegiantair.com
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 airline operations, revenue and expenses, available seat mile growth, expected capital expenditures, the timing of aircraft acquisitions and retirements, the number of contracted aircraft to be placed in service in the future, as well as other information concerning future results of operations, business strategies, financing plans, industry environment and potential growth opportunities. 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,' 'guidance,' '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 impact and duration of the COVID-19 pandemic on airline travel and the economy, liquidity issues resulting from the effect of the COVID-19 pandemic on our business, restrictions imposed on us as a result of accepting grants and loans under the payroll support programs, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on third parties to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed , the effect of economic conditions on leisure travel, debt covenants and balances, the ability to finance aircraft to be acquired, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the possible loss of key personnel, economic and other conditions in markets in which we operate, the ability to successfully develop and finance a resort in Southwest Florida, 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
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended June 30,
Percent Change
2021
2020
2019
YoY
Yo2Y
OPERATING REVENUES:
Passenger
$
443,747
$
116,520
$
454,779
280.8
(2.4)
Third party products
23,001
8,443
18,208
172.4
26.3
Fixed fee contracts
5,134
3,237
12,487
58.6
(58.9)
Other
551
5,147
6,285
(89.3)
(91.2)
Total operating revenues
472,433
133,347
491,759
254.3
(3.9)
OPERATING EXPENSES:
Salary and benefits
121,906
94,790
113,592
28.6
7.3
Aircraft fuel
109,456
27,358
119,987
300.1
(8.8)
Station operations
57,210
27,405
45,870
108.8
24.7
Maintenance and repairs
22,597
13,032
20,877
73.4
8.2
Depreciation and amortization
44,522
43,296
38,494
2.8
15.7
Sales and marketing
17,632
8,909
20,540
97.9
(14.2)
Aircraft lease rental
5,117
1,427
-
258.6
-
Other
15,501
23,752
24,294
(34.7)
(36.2)
Payroll Support Programs grant recognition
(61,213)
(74,539)
-
17.9
-
Special charges
854
81,169
-
(98.9)
-
Total operating expenses
333,582
246,599
383,654
35.3
(13.1)
OPERATING INCOME (LOSS)
138,851
(113,252)
108,105
222.6
28.4
OTHER (INCOME) EXPENSES:
Interest income
(500)
(1,417)
(3,502)
64.7
85.7
Interest expense
16,720
14,053
20,942
19.0
(20.2)
Capitalized interest
-
-
(1,038)
-
100.0
Loss on extinguishment of debt
71
-
-
-
-
Special charges
-
19,830
-
(100.0)
-
Other, net
(11)
698
(86)
(101.6)
87.2
Total other expenses
16,280
33,164
16,316
(50.9)
(0.2)
INCOME (LOSS) BEFORE INCOME TAXES
122,571
(146,416)
91,789
183.7
33.5
INCOME TAX PROVISION (BENEFIT)
27,544
(53,313)
21,246
151.7
29.6
NET INCOME (LOSS)
$
95,027
$
(93,103)
$
70,543
202.1
34.7
Earnings (loss) per share to common shareholders:
Basic
$5.49
($5.85)
$4.33
193.8
26.8
Diluted
$5.49
($5.85)
$4.33
193.8
26.8
Weighted average shares outstanding used in computing earnings per share attributable to common shareholders(1):
Basic
17,064
15,902
16,063
7.3
6.2
Diluted
17,073
15,902
16,069
7.4
6.2
(1) The Company's unvested restricted stock awards are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock. The Basic and Diluted earnings per share calculations for the periods presented reflect the two-class method mandated by ASC Topic 260, 'Earnings Per Share.' The two-class method adjusts both the net income and the shares used in the calculation. Application of the two-class method did not have a significant impact on the Basic and Diluted earnings per share for the periods presented.
Allegiant Travel Company
Operating Statistics
(Unaudited)
Three Months Ended June 30,
Percent Change(1)
2021
2020
2019
YoY
Yo2Y
OPERATING STATISTICS
Total system statistics:
Passengers
3,699,217
1,273,258
4,169,536
190.5
(11.3)
Available seat miles (ASMs) (thousands)
4,594,542
2,220,755
4,447,066
106.9
3.3
Operating expense per ASM (CASM) (cents)
7.26
11.10
8.63
(34.6)
(15.9)
Adjusted operating expense per ASM (CASM) (cents)(2)
Average number of operating aircraft during period
101.8
90.7
85.0
12.2
19.8
Average block hours per aircraft per day
7.5
3.8
8.8
97.4
(14.8)
Full-time equivalent employees at end of period
4,104
4,349
4,179
(5.6)
(1.8)
Fuel gallons consumed (thousands)
54,188
24,664
54,064
119.7
0.2
Average fuel cost per gallon
$
2.02
$
1.11
$
2.22
82.0
(9.0)
Scheduled service statistics:
Passengers
3,680,254
1,266,077
4,131,855
190.7
(10.9)
Revenue passenger miles (RPMs) (thousands)
3,188,215
1,107,534
3,603,076
187.9
(11.5)
Available seat miles (ASMs) (thousands)
4,505,786
2,174,683
4,311,182
107.2
4.5
Load factor
70.8
%
50.9
%
83.6
%
19.9
(12.8)
Departures
30,763
14,683
29,567
109.5
4.0
Block hours
68,334
32,248
66,135
111.9
3.3
Yield (cents)
7.22
4.63
6.70
56.2
7.8
Total passenger revenue per ASM (TRASM) (cents)(3)
10.36
5.75
10.97
80.2
(5.6)
Average fare - scheduled service(4)
$
62.58
$
40.46
$
58.39
54.7
7.2
Average fare - air-related charges(4)
$
58.00
$
51.57
$
51.68
12.5
12.2
Average fare - third party products
$
6.25
$
6.67
$
4.40
(6.3)
42.0
Average fare - total
$
126.82
$
98.70
$
114.47
28.5
10.8
Average stage length (miles)
842
855
853
(1.5)
(1.3)
Fuel gallons consumed (thousands)
53,022
24,124
52,327
119.8
1.3
Average fuel cost per gallon
$
2.01
$
1.08
$
2.22
86.1
(9.5)
Percent of sales through website during period
94.3
%
93.8
%
93.5
%
0.5
0.8
Other data:
Rental car days sold
404,760
135,536
540,960
198.6
(25.2)
Hotel room nights sold
72,701
12,772
114,191
469.2
(36.3)
(1) Except load factor and percent of sales through website, which is percentage point change.
(2) Adjusted numbers exclude COVID related special charges, the net benefit from the payroll support programs, and profit sharing bonus accruals since the operating margin threshold to accrue these bonuses would not have been met for the six months ended June 30, 2021 without the benefits of the PSPs
(3) Various components of this measurement do not have a direct correlation to ASMs. These figures are provided on a per ASM basis to facilitate comparison with airlines reporting revenues on a per ASM basis.
(4) Reflects division of passenger revenue between scheduled service and air-related charges in Company's booking path.
Allegiant Travel Company
Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Six Months Ended June 30, 2021
Percent Change
2021
2020
2019
YoY
Yo2Y
OPERATING REVENUES:
Passenger
$
700,441
$
495,431
$
874,755
41.4
(19.9)
Third party products
36,622
24,419
35,350
50.0
3.6
Fixed fee contracts
12,827
12,156
23,061
5.5
(44.4)
Other
1,667
10,522
10,215
(84.2)
(83.7)
Total operating revenues
751,557
542,528
943,381
38.5
(20.3)
OPERATING EXPENSES:
Salary and benefits
239,856
207,436
233,003
15.6
2.9
Aircraft fuel
192,305
116,171
219,670
65.5
(12.5)
Station operations
100,303
68,405
84,835
46.6
18.2
Maintenance and repairs
45,968
34,827
43,701
32.0
5.2
Depreciation and amortization
87,696
86,995
74,676
0.8
17.4
Sales and marketing
29,241
27,364
41,466
6.9
(29.5)
Aircraft lease rental
9,837
2,389
-
311.8
-
Other
33,276
50,468
46,849
(34.1)
(29.0)
Payroll Support Programs grant recognition
(152,971)
(74,539)
-
(105.2)
-
Special charges
2,592
247,267
-
(99.0)
-
Total operating expenses
588,103
766,783
744,200
(23.3)
(21.0)
OPERATING INCOME (LOSS)
163,454
(224,255)
199,181
172.9
(17.9)
OTHER (INCOME) EXPENSES:
Interest income
(963)
(3,728)
(6,703)
74.2
85.6
Interest expense
33,508
32,206
39,025
4.0
(14.1)
Capitalized interest
-
(4,067)
(2,541)
100.0
100.0
Loss on extinguishment of debt
71
1,222
3,677
(94.2)
(98.1)
Special charges
-
26,632
-
(100.0)
-
Other, net
(404)
623
15
(164.8)
(2,793.3)
Total other expenses
32,212
52,888
33,473
(39.1)
(3.8)
INCOME (LOSS) BEFORE INCOME TAXES
131,242
(277,143)
165,708
147.4
(20.8)
INCOME TAX PROVISION (BENEFIT)
29,346
(151,030)
38,041
119.4
(22.9)
NET INCOME (LOSS)
$
101,896
$
(126,113)
$
127,667
180.8
(20.2)
Earnings (loss) per share to common shareholders:
Basic
$6.04
($7.93)
$7.85
176.2
(23.1)
Diluted
$6.04
($7.93)
$7.84
176.2
(23.0)
Weighted average shares outstanding used in computing earnings per share attributable to common shareholders(1):
Basic
16,618
15,927
16,037
4.3
3.6
Diluted
16,632
15,927
16,050
4.4
3.6
(1) The Company's unvested restricted stock awards are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock. The Basic and Diluted earnings per share calculations for the periods presented reflect the two-class method mandated by ASC Topic 260, 'Earnings Per Share.' The two-class method adjusts both the net income and the shares used in the calculation. Application of the two-class method did not have a significant impact on the Basic and Diluted earnings per share for the periods presented.
Allegiant Travel Company
Operating Statistics
(Unaudited)
Six Months Ended June 30, 2021
Percent Change(1)
2021
2020
2019
YoY
Yo2Y
OPERATING STATISTICS
Total system statistics:
Passengers
6,033,720
4,448,708
7,619,814
35.6
(20.8)
Available seat miles (ASMs) (thousands)
8,608,531
6,288,427
8,357,304
36.9
3.0
Operating expense per ASM (CASM) (cents)
6.83
12.19
8.90
(44.0)
(23.3)
Adjusted operating expense per ASM (CASM) (cents)(2)
Total passenger revenue per ASM (TRASM) (cents)(3)
8.75
8.47
11.22
-
(22.0)
Average fare - scheduled service(4)
$
60.95
$
57.27
$
63.49
6.4
(4.0)
Average fare - air-related charges(4)
$
55.72
$
54.80
$
52.32
1.7
6.5
Average fare - third party products
$
6.10
$
5.52
$
4.68
10.5
30.3
Average fare - total
$
122.77
$
117.59
$
120.49
4.4
1.9
Average stage length (miles)
869
883
878
(1.6)
(1.0)
Fuel gallons consumed (thousands)
96,329
70,229
97,395
37.2
(1.1)
Average fuel cost per gallon
$
1.92
$
1.60
$
2.18
20.0
(11.9)
Percent of sales through website during period
93.8
%
93.7
%
93.5
%
0.1
0.3
Other data:
Rental car days sold
680,344
616,582
1,012,558
10.3
(32.8)
Hotel room nights sold
128,909
104,776
219,206
23.0
(41.2)
(1) Except load factor and percent of sales through website, which is percentage point change.
(2) Adjusted numbers exclude COVID related special charges, the net benefit from the payroll support programs, and profit sharing bonus accruals since the operating margin threshold to accrue these bonuses would not have been met for the six months ended June 30, 2021 without the benefits of the PSPs
(3) Various components of this measurement do not have a direct correlation to ASMs. These figures are provided on a per ASM basis to facilitate comparison with airlines reporting revenues on a per ASM basis.
(4) Reflects division of passenger revenue between scheduled service and air-related charges in Company's booking path.
Summary Balance Sheet
Unaudited (millions)
June 30, 2021 (unaudited)
December 31, 2020
Percent Change
Unrestricted cash and investments
Cash and cash equivalents
$
418.4
$
152.8
173.8
Short-term investments
767.4
532.5
44.1
Total unrestricted cash and investments
1,185.8
685.3
73.0
Debt
Current maturities of long-term debt and finance lease obligations, net of related costs
144.4
217.2
(33.5)
Long-term debt and finance lease obligations, net of current maturities and related costs
1,441.1
1,441.8
-
Total debt
1,585.5
1,659.0
(4.4)
Debt, net of liquidity
399.7
973.7
(59.0)
Total Allegiant Travel Company shareholders' equity
1,147.1
699.4
64.0
Summary Cash Flow
Six Months Ended June 30,
Percent
Unaudited (millions)
2021
2020
Change
Cash provided by operating activities
$
405.0
$
276.7
46.4
Changes in air traffic liability
129.2
104.8
23.3
Changes in working capital, ex air traffic liability
65.4
(134.1)
148.8
Purchase of property and equipment
134.5
170.7
(21.2)
Cash dividends paid to shareholders
-
11.4
(100.0)
Proceeds from the issuance of long-term debt
106.7
175.7
(39.3)
Principal payments on long-term debt & finance lease obligations
199.6
98.2
103.3
EPS Calculation
The following table sets forth the computation of net income (loss) per share, on a basic and diluted basis, for the periods indicated (share count and dollar amounts other than per-share amounts in table are in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Basic:
Net income (loss)
$
95,027
$
(93,103)
$
101,896
$
(126,113)
Less income allocated to participating securities
(1,285)
-
(1,451)
(236)
Net income (loss) attributable to common stock
$
93,742
$
(93,103)
$
100,445
$
(126,349)
Earnings (loss) per share, basic
$
5.49
$
(5.85)
$
6.04
$
(7.93)
Weighted-average shares outstanding
17,064
15,902
16,618
15,927
Diluted:
Net income (loss)
$
95,027
$
(93,103)
$
101,896
$
(126,113)
Less income allocated to participating securities
(1,284)
-
(1,449)
(236)
Net income (loss) attributable to common stock
$
93,743
$
(93,103)
$
100,447
$
(126,349)
Earnings (loss) per share, diluted
$
5.49
$
(5.85)
$
6.04
$
(7.93)
Weighted-average shares outstanding (1)
17,064
15,902
16,618
15,927
(1) Dilutive effect of common stock equivalents excluded from the diluted per share calculation is not material.
Appendix A
Non-GAAP Presentation
Three and Six Months Ended June 30, 2021 and 2020
(Unaudited)
Adjusted operating income (loss), adjusted income (loss) before income taxes, adjusted net income (loss) and adjusted diluted earnings (loss) per share, all eliminate the effect of special expenses related directly to COVID 19, as well as the net benefit related to the payroll support grants from the U.S. Treasury, which are not reflective of our ongoing operating performance. As such, all of these are non-GAAP financial measures.
EBITDA, as presented in this press release, and the various adjusted metrics disclosed, are supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States ('GAAP'). They are not measurements of our financial performance under GAAP and should not be considered in isolation or as an alternative to net income or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.
We define 'EBITDA' as earnings before interest, taxes, depreciation and amortization. 'Adjusted EBITDA' is EBITDA adjusted to eliminate the effect of special charges and the payroll support grants. We caution investors that amounts presented in accordance with these definitions may not be comparable to similar measures disclosed by other issuers, because not all issuers and analysts calculate EBITDA and Adjusted EBITDA in the same manner.
We use EBITDA and Adjusted EBITDA to evaluate our operating performance and liquidity and these are among the primary measures used by management for planning and forecasting of future periods. We believe the presentation of these measures is relevant and useful for investors because they allow investors to view results in a manner similar to the method used by management and makes it easier to compare our results with other companies that have different financing and capital structures. EBITDA has important limitations as an analytical tool. These limitations include the following:
•EBITDA does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments to purchase capital equipment;
•EBITDA does not reflect interest expense or the cash requirements necessary to service principal or interest payments on our debt;
•although depreciation and amortization are non-cash charges, the assets that we currently depreciate and amortize will likely have to be replaced in the future, and EBITDA does not reflect the cash required to fund such replacements; and
•other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.
Presented below is a quantitative reconciliation of EBITDA to the most directly comparable GAAP financial performance measure, which we believe is net income (loss). We believe the presentation of EBITDA and the various adjusted measures are relevant and useful for investors because they allow them to better compare our results to other airlines.
In addition to EBITDA and Adjusted EBITDA as defined above, we have included a separate EBITDA as defined by certain credit agreements. This measurement of EBITDA adjusts for losses on impairment, Sunseeker net loss, stock compensation expense, amortization of debt issuance costs, (gain)/loss on disposal of assets, tax provision - in excess of cash paid, special non-recurring items, and other items.
The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of non-GAAP financial measures in this press release to supplement our consolidated financial statements presented on a GAAP basis, Regulation G requires us to include in this press release a presentation of the most directly comparable GAAP measure, which is operating revenue, operating income (loss), net income (loss), operating expenses, and diluted earnings (loss) per share and a reconciliation of the non-GAAP measures to the most comparable GAAP measure. Our utilization of non-GAAP measurements is not meant to be considered in isolation or as a substitute for operating income (loss), net income (loss) or other measures of financial performance prepared in accordance with GAAP. Our use of these non-GAAP measures may not be comparable to similarly titled measures employed by other companies in the airline and travel industry. The reconciliation of each of these measures to the most comparable GAAP measure for the periods is indicated below.
Reconciliation of Non-GAAP Financial Measures
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Reconciliation of adjusted operating income (loss) (millions)
Operating income (loss) as reported (GAAP)
$
138.9
$
(113.3)
$
163.5
$
(224.3)
Net benefit from PSPs (4)
(55.3)
(74.5)
(140.6)
(74.5)
Operating special charges
0.9
81.2
2.6
247.3
Profit sharing (5)
9.4
-
9.4
-
Adjusted operating income (loss) (1)
93.9
(106.6)
34.9
(51.5)
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Reconciliation of adjusted income (loss) before income taxes (millions)
Income (loss) before income taxes as reported (GAAP)
$
122.6
$
(146.4)
$
131.2
$
(277.1)
Net benefit from PSPs (4)
(55.3)
(74.5)
(140.6)
(74.5)
Special charges (operating & non-operating)
0.9
101.0
2.6
273.9
Profit sharing (5)
9.4
-
9.4
-
Adjusted income (loss) before income taxes (1)
77.6
(119.9)
2.6
(77.7)
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Reconciliation of adjusted net income (loss) (millions) and adjusted earnings (loss) per share (cents)
Adjusted income (loss) before income taxes as reported (GAAP)
$
77.6
$
(119.9)
$
2.6
$
(77.7)
Provision (benefit) for income taxes as reported (GAAP)
27.5
(53.3)
29.3
(151.0)
Adjusted provision (benefit) for income taxes (1) (2)
17.6
(25.2)
0.6
(16.3)
Net income (loss) adjusted for special items, payroll support, and adjustments to tax resulting from payroll support (1)
60.0
(94.7)
2.0
(61.4)
Diluted shares as reported (GAAP)
17,073
15,902
16,632
15,927
Diluted earnings (loss) per share as reported (GAAP)
5.49
(5.85)
6.04
(7.93)
Adjusted fully diluted earnings (loss) per share (1)
3.46
(5.96)
0.12
(3.87)
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Reconciliation of adjusted CASM and CASM excluding fuel (millions, unless otherwise noted)
Operating expense as reported (GAAP)
$
333.6
$
246.6
$
588.1
$
766.8
Net benefit from PSPs (4)
55.3
74.5
140.6
74.5
Operating special charges
(0.9)
(81.2)
(2.6)
(247.3)
Profit sharing (5)
(9.4)
-
(9.4)
-
Adjusted operating expense
378.6
239.9
716.7
594.0
Fuel expense as reported
109.5
27.4
192.3
116.2
Adjusted operating expense excluding fuel
269.1
212.5
524.4
477.8
Available seat miles (ASMs) (thousands)
4,594,542
2,220,755
8,608,531
6,288,427
Operating expense per ASM as reported (CASM) (cents)
7.26
11.10
6.83
12.19
Adjusted operating expense per ASM (CASM) (cents)
8.24
10.80
8.33
9.45
Operating CASM, excluding fuel as reported (cents)
4.88
9.87
4.60
10.35
Adjusted operating CASM, excluding fuel (cents)
5.86
9.57
6.09
7.60
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Reconciliation of consolidated EBITDA to EBITDA as defined by certain credit agreements (millions)
Net income (loss)
$
95.0
$
(93.1)
$
101.9
$
(126.1)
Interest expense, net
16.2
12.6
32.5
24.4
Income tax provision (benefit)
27.5
(53.3)
29.3
(151.0)
Depreciation and amortization
44.5
43.3
87.7
87.0
Loss on debt extinguishment
0.1
-
0.1
1.2
Consolidated EBITDA (1)
183.3
(90.5)
251.5
(164.5)
Adjusting items as defined per credit agreements (3)
18.6
222.1
41.0
525.0
EBITDA as defined by certain credit agreements (1)
201.9
131.6
292.5
360.5
Three Months Ended June 30,
Six Months Ended June 30,
2021
2020
2021
2020
Reconciliation of consolidated EBITDA to adjusted EBITDA (millions)
Consolidated EBITDA (per calculation in previous table) (1)
$
183.3
$
(90.5)
$
251.5
$
(164.5)
Net Benefit from PSP (4)
(55.3)
(74.5)
(140.6)
(74.5)
Operating special charges
0.9
81.2
2.6
247.3
Non-operating special charges
-
19.8
-
26.6
Profit sharing (5)
9.4
-
9.4
-
Adjusted EBITDA (1)
138.3
(64.0)
122.9
34.9
(1)Denotes non-GAAP figure.
(2) Adjusted income tax for 2021 estimates a 23.0% effective rate
(3) Adjusting items include the following: loss on impairment, Sunseeker net loss, stock compensation expense, amortization of debt issuance costs, (gain)/loss on disposal of assets, tax provision - in excess of cash paid, and other special non-recurring items.
(4) Net benefit from PSPs includes 'PSP3' and top-off from 'PSP2'
(5) Profit sharing bonus accruals included as adjustment since the operating margin threshold to accrue these bonuses would not have been met for the six months ended June 30, 2021 without the benefits of the PSPs
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Disclaimer
Allegiant Travel Co. published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 20:23:35 UTC.
Allegiant Travel Company is a leisure travel company focused on providing travel and leisure services and products to residents of under-served cities in the United States. The Company provides various travel services and products, including scheduled service air transportation, ancillary air-related products and services, third party products and services, and fixed-fee contract air transportation. The Company operates through two segments: Airline and Sunseeker Resort. The Airline segment operates as a single business unit and includes all scheduled service air transportation, ancillary air-related products and services, third party products and services, fixed fee contract air transportation and other airline-related revenue. The Sunseeker Resort segment operates as a single business unit and includes hotel rooms and suites for occupancy, group meeting facilities, food and beverage options, the Aileron Golf Course and other resort amenities.