ALGT
$155.85
Allegiant Travel Com
$4.05
2.67%
Earnings Details
1st Quarter March 2018
Wednesday, April 25, 2018 4:01:00 PM
Tweet Share Watch
Summary

Allegiant Travel Reaffirms

Allegiant Travel Com (ALGT) reported 1st Quarter March 2018 earnings of $3.42 per share on revenue of $425.4 million. The consensus earnings estimate was $3.00 per share on revenue of $425.1 million. Revenue grew 13.2% on a year-over-year basis.

The company said it continues to expect 2018 earnings of $10.00 to $12.00 per share. The current consensus earnings estimate is $10.84 per share for the year ending December 31, 2018.

Allegiant Travel Co LLC a leisure travel company, engaged in transporting travelers in small cities to leisure destinations. The Company provides air-related services and products along with air transportation.

Results
Reported Earnings
$3.42
Earnings Whisper
-
Consensus Estimate
$3.00
Reported Revenue
$425.4 Mil
Revenue Estimate
$425.1 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Allegiant Travel Company First Quarter 2018 Financial Results

LAS VEGAS, April 25, 2018 (GLOBE NEWSWIRE) -- Allegiant Travel Company (NASDAQ:ALGT) today reported the following financial results for the first quarter 2018, as well as comparisons to the prior year:

 Three Months Ended
 March 31,
 
Unaudited20182017Change
Total operating revenue (millions)$425.4 $380.0 12.0%
Operating income (millions)80.0 73.7 8.5 
Net income (millions)55.2 42.2 30.9 
Diluted earnings per share$3.42 $2.53 35.2 

"We are proud to announce our 61st consecutive profitable quarter," stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. "We are in the final year of our fleet transition and are seeing impressive results. Our first quarter operating margin only declined approximately one percentage point in spite of a greater than 20 percent increase in the cost of fuel. The transition to an all-Airbus fleet has been and continues to be a substantial one-time effort.  We look forward to its completion.

“In addition, we are seeing a very positive impact from the transition to our new revenue management system. The year-over-year scheduled service load factor in March rose for the first time since 2011 without a sacrifice in March yields. Last but absolutely not least, we have continued to see a material improvement in our operations. According to the latest DOT statistics, in January our cancellation rate was the second lowest in the industry, which demonstrates our operational integrity and commitment to safety and reliability. This is directly correlated with the hard work of team members and the strong safety culture embedded throughout our system."

Shareholder returns

  • 2018 shareholder returns - $11 million in the first quarter through dividends
    • Will pay dividends of $0.70 per share on June 1, 2018 to shareholders of record as of May 18, 2018
    • Current share repurchase authority of $100 million as of April 25, 2018

Balance sheet update

  • Amended senior secured revolving credit facility to increase borrowing limit to $81 million, in the first quarter
    • The revolver is currently undrawn
  • 24 Airbus aircraft are unencumbered as of April 25, 2018

Changes to Accounting Standards

  • On January 1, Allegiant adopted several new accounting standards, including the new revenue recognition standard
  • The prior periods presented here have been recast to reflect adoption of these new standards. In particular, Allegiant is no longer disaggregating passenger revenue by scheduled service and air-related ancillary revenue
    • Including all adjustments related to the New Revenue Standard, TRASM increased 1.4 percent
    • Excluding these items, TRASM would have increased 2.5 percent over the same period last year

2018 outlook

  • Second quarter TRASM impact - Earlier Easter in the quarter is expected to decrease TRASM by two percentage points as part of Easter travel was in the first quarter of this year
  • Second quarter scheduled and system ASMs are expected to grow between ten and fourteen percent vs last year
  • 2018 fuel cost is expected to be $2.20 per gallon
  • 2018 tax rate  - 2018 effective tax rate is expected to decline to between 21 and 22 percent impacted by:
    • Adjustment of deferred tax balances due to the dissolution of foreign subsidiaries which are special purpose entities that were set up for the 12 aircraft on lease to a European carrier
   
Guidance, subject to revision  
   
Full year 2018 guidance Previous*Current
Fuel cost per gallon $2.17$2.20
Available seat miles (ASMs) / gallon 77.5 to 79.577.5 to 79.5
    
Interest expense (millions) $50 to $60$50 to $60
Tax rate 24 to 25%21 to 22%
Share count (millions)  15.9 15.9
Earnings per share $10 to $12$10 to $12
    
System ASMs - year over year change 11 to 15%11 to 15%
Scheduled service ASMs - year over year change 11 to 15%11 to 15%
    
Depreciation expense / aircraft / month (thousands) $120 to $130$120 to $130
Maintenance expense / aircraft / month (thousands) $95 to $105$95 to $105
    
Full year 2018 CAPEX guidance   
Capital expenditures (millions) ** $290$300
Capitalized Airbus deferred heavy maintenance (millions) *** $45$45

* - Previous guidance as of January 31, 2018
** - Excludes Sunseeker Resorts
*** - Not included in capital expenditure total


Aircraft fleet plan by end of period     
      
Aircraft - (seats per AC) 1Q18 2Q18 3Q18 YE18 
MD-80 (166 seats) 32 27 19  
A319 (156 seats) 26 31 31 32 
A320 (177/186 seats) 30 41 45 50 
Total 88 99 95 82 

Aircraft listed in table above include only in-service aircraft, planned retirements and future aircraft under contract (subject to change)

Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. ET Wednesday, April 25, 2018 to discuss its first quarter 2018 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.®

Las Vegas-based Allegiant (NASDAQ:ALGT) is focused on linking travelers in small cities to world-class leisure destinations. The airline offers industry-low fares on an all-jet fleet while also offering other travel-related products such as hotel rooms and rental cars. All can be purchased only through the company website, Allegiant.com. Beginning with one aircraft and one route in 1999, the company has grown to more than 80 aircraft and approximately 400 routes across the country with base airfares less than half the cost of the average domestic roundtrip ticket. For downloadable press kit, including photos, visit: 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 expenses, ASM growth, expected capital expenditures, number of contracted aircraft to be placed in service in the future, timing of aircraft retirements, 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, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, limitation on growth as we transition to a single fleet type, 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 under contract, 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 a hotel-condo project 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 March 31, Percent
  2018
   2017
  change
OPERATING REVENUE:     
Passenger revenue (1)$396,771  $347,836  14.1 
Third party products 10,325   12,742  (19.0)
Fixed fee contract revenue 10,556   11,259  (6.2)
Other revenue 7,792   8,174  (4.7)
Total operating revenue 425,444   380,011  12.0 
OPERATING EXPENSES:     
Aircraft fuel 106,027   84,662  25.2 
Salary and benefits 112,963   96,298  17.3 
Station operations 37,584   31,832  18.1 
Maintenance and repairs 19,270   30,095  (36.0)
Depreciation and amortization 28,149   30,549  (7.9)
Sales and marketing 19,078   13,331  43.1 
Aircraft lease rentals 21   164  (87.2)
Other 22,384   19,351  15.7 
Total operating expense 345,476   306,282  12.8 
OPERATING INCOME 79,968   73,729  8.5 
OTHER (INCOME) EXPENSE:     
Interest expense 12,724   8,401  51.5 
Interest income (1,907)  (1,264) 50.9 
Other, net (240)  (360) (33.3)
Total other (income) expense 10,577   6,777  56.1 
INCOME BEFORE INCOME TAXES 69,391   66,952  3.6 
PROVISION FOR INCOME TAXES 14,198   24,785  (42.7)
NET INCOME$55,193  $42,167  30.9 
Earnings per share to common shareholders (2):     
Basic$3.43  $2.53  35.6 
Diluted$3.42  $2.53  35.2 
Weighted average shares outstanding used in computing earnings per share to common shareholders (2):     
Basic 15,889   16,382  (3.0)
Diluted 15,898   16,405  (3.1)

*NM - Not meaningful
(1) Passenger revenue previously reported as Scheduled service revenue.
(2) 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 March 31, Percent
 2018 2017 change (1)
OPERATING STATISTICS     
Total system statistics:     
Passengers3,302,951  2,881,248  14.6 
Revenue passenger miles (RPMs) (thousands)3,094,805  2,708,498  14.3 
Available seat miles (ASMs) (thousands)3,728,563  3,376,837  10.4 
Load factor83.0% 80.2% 2.8 
Operating expense per ASM (CASM) (cents)9.27  9.07  2.2 
Fuel expense per ASM (cents)2.84  2.51  13.1 
Operating CASM, excluding fuel (cents)6.43  6.56  (2.0)
ASMs per gallon of fuel76.7  72.1  6.4 
Departures24,248  22,295  8.8 
Block hours57,803  53,193  8.7 
Average stage length (miles)910  903  0.8 
Average number of operating aircraft during period90.7  84.7  7.1 
Average block hours per aircraft per day7.1  7.0  1.4 
Full-time equivalent employees at end of period3,776  3,536  6.8 
Fuel gallons consumed (thousands)48,640  46,850  3.8 
Average fuel cost per gallon$2.18  $1.81  20.4 
Scheduled service statistics:     
Passengers3,279,368  2,845,480  15.2 
Revenue passenger miles (RPMs) (thousands)3,064,619  2,661,934  15.1 
Available seat miles (ASMs) (thousands)3,602,015  3,237,164  11.3 
Load factor85.1% 82.2% 2.9 
Departures23,264  21,248  9.5 
Block hours55,689  50,876  9.5 
Total passenger revenue per ASM (TRASM) (cents) (2)11.30  11.14  1.4 
Average fare - scheduled service (3)$73.81  $75.24  (1.9)
Average fare - air-related charges (3)$47.18  $47.00  0.4 
Average fare - third party products$3.15  $4.48  (29.7)
Average fare - total$124.14  $126.72  (2.0)
Average stage length (miles)916  908  0.9 
Fuel gallons consumed (thousands)46,872  44,892  4.4 
Average fuel cost per gallon$2.17  $1.80  20.6 
Percent of sales through website during period93.8% 95.1% (1.3)

(1) Except load factor and percent of sales through website, which is percentage point change.
(2) 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. The 2017 figure reflected has been adjusted from previously reported as a result of recast.
(3) Reflects division of passenger revenue between scheduled service and air-related charges in Company's booking path.


Summary Balance Sheet

(millions)3/31/2018 12/31/2017 Change
 (unaudited)    
Unrestricted cash     
Cash and cash equivalents$50.8  $59.4  (14.5)%
Short-term investments341.3  352.7  (3.2)
Long-term investments85.6  78.6  8.9 
Total unrestricted cash and investments477.7  490.7  (2.6)
Debt     
Current maturities of long-term debt, net of related costs150.5  214.8  (29.9)
Long-term debt, net of current maturities and related costs912.3  950.1  (4.0)
Total debt1,062.8  1,164.9  (8.8)
Total Allegiant Travel Company shareholders’ equity$598.3  $551.8  8.4%


Summary Cash Flow

 Three Months Ended March 31,  
Unaudited (millions)2018 2017 Change
Cash provided by operating activities$176.3  $146.6  20.3%
Purchase of property and equipment, including capitalized interest*72.5  58.5  23.9 
Repurchase of common stock2.2  4.9  (55.1)
Cash dividends paid to shareholders11.3  11.7  (3.4)
Proceeds from the issuance of long-term debt  22.0  (100.0)
Principal payments on long-term debt & capital lease obligations$102.9  $26.4  289.8%

* Includes aircraft pre-delivery deposits.


EPS Calculation

The following table sets forth the computation of net income 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 March 31,
 2018 2017
Basic:   
Net income$55,193  $42,167 
Less net income allocated to participating securities(768) (691)
Net income attributable to common stock$54,425  $41,476 
Net income per share, basic$3.43  $2.53 
Weighted-average shares outstanding15,889  16,382 
Diluted:   
Net income$55,193  $42,167 
Less net income allocated to participating securities(768) (690)
Net income attributable to common stock$54,425  $41,477 
Net income per share, diluted$3.42  $2.53 
Weighted-average shares outstanding15,889  16,382 
Dilutive effect of stock options and restricted stock46  91 
Adjusted weighted-average shares outstanding under treasury stock method15,935  16,473 
Participating securities excluded under two-class method(37) (68)
Adjusted weighted-average shares outstanding under two-class method15,898  16,405 


Appendix A
Consolidated Statements of Income
As Recast for Adoption of New Accounting Standard on January 1, 2018
Twelve Months Ended December 31, 2017
(in thousands, except per share amounts)
(Unaudited)

On January 1, 2018, the Company adopted Accounting Standard Update ("ASU") 2014-09: Revenue from Contracts with Customers (the “New Revenue Standard”). In accordance with the transition provisions of this new standard, the Company has recast certain 2017 financial information previously reported in accordance with GAAP in effect as of December 31, 2017 to reflect the expected effects of adoption. This recast financial information is labeled “As Recast” and is included for supplemental purposes only. The adoption and related disclosures required by GAAP will be reported in the Company’s report on Form 10-Q for the quarter ended March 31, 2018.

    New Revenue Standard  
  As Reported Deferred Revenue
Method
 Reclassifications As Recast
OPERATING REVENUE:        
Passenger revenue* $818,136  $3,463  $550,440  $1,372,039 
Ancillary revenue:        
Air-related charges 546,476    (546,476)  
Third party products 52,707      52,707 
Fixed fee contract revenue 48,708      48,708 
Other revenue 37,751      37,751 
Total operating revenue 1,503,778  3,463  3,964  1,511,205 
OPERATING EXPENSES:        
Aircraft fuel 343,333      343,333 
Salary and benefits 371,599      371,599 
Station operations 142,581      142,581 
Maintenance and repairs 113,481      113,481 
Depreciation and amortization 121,713      121,713 
Sales and marketing 52,711    3,964  56,675 
Aircraft lease rentals 3,098      3,098 
Other 92,840      92,840 
Special charge 35,253      35,253 
Total operating expense 1,276,609    3,964  1,280,573 
OPERATING INCOME 227,169  3,463    230,632 
OTHER (INCOME) EXPENSE:        
Interest expense 38,990      38,990 
Interest income (5,808)     (5,808)
Other, net (1,559)     (1,559)
Total other (income) expense 31,623      31,623 
INCOME BEFORE INCOME TAXES 195,546  3,463    199,009 
PROVISION FOR INCOME TAXES 644  1,178    1,822 
NET INCOME $194,902  $2,285  $  $197,187 
Earnings per share to common shareholders (1):        
Basic $11.94      $12.08 
Diluted $11.93      $12.07 
Weighted average shares outstanding used in computing earnings per share to common shareholders (1):  
Basic 16,073      16,073 
Diluted 16,095      16,095 

*Labeled as "Scheduled service revenue" in previous filings.

  As Reported As Recast
Operating Stats:    
Total System ASMs 13,612,003  13,612,003 
Scheduled Service ASMs 13,031,824  13,031,824 
TRASM (cents) 10.88  10.93 
CASM (cents) 9.38  9.41 


Consolidated Statements of Income
As Recast for Adoption of New Accounting Standard on January 1, 2018
(in thousands, except per share amounts)
(Unaudited)

As previously discussed, on January 1, 2018, the Company adopted the New Revenue Standard. The following table presents the As Recast quarterly and annual 2017 Consolidated Statements of Income.

  1Q17 2Q17 3Q17 4Q17 FY17
OPERATING REVENUE:          
Passenger revenue* $347,836  $367,250  $315,308  $341,645  $1,372,039 
Third party products 12,742  14,304  12,348  13,313  52,707 
Fixed fee contract revenue 11,259  11,029  11,831  14,589  48,708 
Other revenue 8,174  9,261  10,708  9,608  37,751 
Total operating revenue 380,011  401,844  350,195  379,155  1,511,205 
OPERATING EXPENSES:          
Aircraft fuel 84,662  85,387  80,421  92,863  343,333 
Salary and benefits 96,298  92,221  88,788  94,292  371,599 
Station operations 31,832  38,998  37,148  34,603  142,581 
Maintenance and repairs 30,095  28,645  28,870  25,871  113,481 
Depreciation and amortization 30,549  30,129  31,894  29,141  121,713 
Sales and marketing 13,331  13,492  13,884  15,968  56,675 
Aircraft lease rentals 164  2,400  533  1  3,098 
Other 19,351  24,777  24,315  24,397  92,840 
Special charge       35,253  35,253 
Total operating expense 306,282  316,049  305,853  352,389  1,280,573 
OPERATING INCOME 73,729  85,795  44,342  26,766  230,632 
OTHER (INCOME) EXPENSE:          
Interest income (1,264) (1,475) (1,454) (1,615) (5,808)
Interest expense 8,401  8,889  10,041  11,659  38,990 
Other, net (360) (493) (400) (306) (1,559)
Total other (income) expense 6,777  6,921  8,187  9,738  31,623 
INCOME BEFORE INCOME TAXES 66,952  78,874  36,155  17,028  199,009 
PROVISION FOR INCOME TAXES 24,785  30,018  12,955  (65,936) 1,822 
NET INCOME $42,167  $48,856  $23,200  $82,964  $197,187 
Earnings per share to common shareholders (1):          
Basic $2.53  $2.97  $1.44  $5.16  $12.08 
Diluted $2.53  $2.96  $1.44  $5.16  $12.07 
Weighted average shares outstanding used in computing earnings per share to common shareholders (1):  
Basic 16,382  16,198  15,852  15,868  16,073 
Diluted 16,404  16,220  15,862  15,879  16,095 

*Labeled as "Scheduled service revenue" in previous filings.

  1Q17 2Q17 3Q17 4Q17 FY17
Operating Stats:          
Total System ASMs 3,376,837  3,584,209  3,220,246  3,430,711  13,612,003 
Scheduled Service ASMs 3,237,164  3,436,872  3,073,360  3,284,429  13,031,824 
TRASM (cents) 11.14  11.10  10.66  10.81  10.93 
CASM (cents) 9.07  8.82  9.50  10.27  9.41 


2017 Quarterly Adjustments to Statements of Income
Resulting From Adoption of New Accounting Standard on January 1, 2018
(in thousands)
(Unaudited)

As previously discussed, on January 1, 2018, the Company adopted the New Revenue Standard. The following table presents certain selected line items As Recast from the Company's quarterly and annual 2017 Consolidated Statements of Income.

  FY17 As
Reported
 1Q17 2Q17 3Q17 4Q17 FY17 As
Recast
Passenger revenue $1,364,612  $4,174  $1,230  $1,426  $597  $1,372,039 
             
Sales and marketing 52,711  3,333  631      56,675 
             
Provision for income taxes 644  306  218  519  135  1,822 


Consolidated Balance Sheets
As Recast for Adoption of New Accounting Standard on January 1, 2018
December 31, 2017
(in thousands)
(Unaudited)

As previously discussed, on January 1, 2018, the Company adopted the New Revenue Standard. The following table presents the effects of the adoption of the New Revenue Standard on the December 31, 2017 consolidated balance sheet.

  As Reported New Revenue
Standard
 As Recast
CURRENT ASSETS:      
Cash and cash equivalents $59,449  $  $59,449 
Restricted cash 11,190    11,190 
Short-term investments 352,681    352,681 
Accounts receivable 71,057    71,057 
Expendable parts, supplies and fuel, net 17,647    17,647 
Prepaid expenses 23,931    23,931 
Other current assets 5,320    5,320 
TOTAL CURRENT ASSETS 541,275    541,275 
Property and equipment, net 1,512,415    1,512,415 
Long-term investments 78,570    78,570 
Deferred major maintenance, net 31,326    31,326 
Deposits and other assets 16,571    16,571 
TOTAL ASSETS $2,180,157  $  $2,180,157 
CURRENT LIABILITIES:      
Accounts payable $20,108  $  $20,108 
Accrued liabilities 105,127    105,127 
Air traffic liability 210,184  (5,885) 204,299 
Current maturities of notes payable, net of related costs 214,761    214,761 
TOTAL CURRENT LIABILITIES 550,180  (5,885) 544,295 
Long-term debt, net of current maturities and related costs 950,131    950,131 
Deferred income taxes 118,492  2,064  120,556 
Other noncurrent liabilities 13,407    13,407 
TOTAL LIABILITIES: 1,632,210  (3,821) 1,628,389 
SHAREHOLDERS' EQUITY:      
Common stock, par value $.001 23    23 
Treasury stock (605,655)   (605,655)
Additional paid in capital 253,840    253,840 
Accumulated other comprehensive loss, net (2,840)   (2,840)
Retained earnings 902,579  3,821  906,400 
TOTAL EQUITY 547,947  3,821  551,768 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,180,157  $  $2,180,157 


Primary Logo

Source: Allegiant Travel Company