ALGT
$124.97
Allegiant Travel Com
($.36)
(.29%)
Earnings Details
3rd Quarter September 2018
Wednesday, October 24, 2018 4:00:00 PM
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Summary

Allegiant Travel Reaffirms

Allegiant Travel Com (ALGT) reported 3rd Quarter September 2018 earnings of $0.94 per share on revenue of $393.1 million. The consensus earnings estimate was $1.02 per share on revenue of $389.5 million. Revenue grew 12.7% on a year-over-year basis.

The company said it continues to expect 2018 earnings of $9.00 to $10.00 per share. The current consensus earnings estimate is $9.57 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
$0.94
Earnings Whisper
-
Consensus Estimate
$1.02
Reported Revenue
$393.1 Mil
Revenue Estimate
$389.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Allegiant Travel Company Third Quarter 2018 Financial Results

Third quarter 2018 Fully Diluted Earnings per Share of $0.94

LAS VEGAS, Oct. 24, 2018 (GLOBE NEWSWIRE) -- Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the third quarter 2018, as well as comparisons to the prior year:

 Three Months Ended September 30,  Nine Months Ended September 30, 
Unaudited20182017Change 20182017Change
Total operating revenue (millions)$393.1 $350.2 12.3% $1,255.3 $1,132.0 10.9%
Operating income (millions)26.2 44.3 (41.0) 180.4 203.9 (11.5)
Net income (millions)15.1 23.4 (35.2) 120.4 114.8 4.9 
Diluted earnings per share$0.94 $1.45 (35.2) $7.45 $6.99 6.6 
                  

"We are proud to announce our 63rd consecutive profitable quarter," stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company.  "Our transition to an all-Airbus fleet is nearly complete.  Our decision to move the transition up by a year from 2019 to 2018 has proven to be an excellent one given the higher fuel cost environment.  Compared to our all-MD-80 fleet from 2010, we expect our ASMs per gallon to increase by almost 40 percent in 2019, from 59 ASMs per gallon to the low 80s.

"This has been a busy couple of years across the Company as we transitioned our fleet.  Since the end of 2016:

  1. We will have purchased and inducted 43 Airbus aircraft, while retiring 47 MDs.  We will have trained more than 350 Airbus pilots and 300 maintenance technicians as well as our flight attendants, ground staff and other operations personnel by the time we fly the final MD-80 flight at the end of November.
  2. We have grown the Company 20 percent in capacity (ASMs), adding 51 routes and carrying 13.6 million passengers during the last twelve months, an increase of 1.64 million passengers over 2016.
  3. We have dramatically improved our operations.  Since last October, we have led the industry in monthly completion factor six times and have been among the top three except for a few months.  Our on-time performance is improving nicely as well; this September we were up ten percentage points in A14, from 72 percent to 82 percent.

"I couldn’t be more excited about where we are at this point in our history.  As we outlined in our Sunseeker Resort investor day, we are ready for Allegiant 2.0.  Stay tuned!

"Needless to say, we couldn’t have accomplished this difficult transition without our great group of team members.  They have done an amazing job this quarter - as well as over this entire past year - with the highly complex effort to transition our fleet and improve our operations.  Hats off to the entire team for their tireless professionalism in any environment."

Shareholder returns

  • 2018 shareholder returns - over $33 million in the first three quarters of the year through dividends
    ° Will pay dividends of $0.70 per share on December 5, 2018 to shareholders of record as of November 23, 2018

2018 outlook

  • Fourth quarter scheduled and system ASMs are expected to grow between four and six percent vs last year
    ° The remaining MD-80s will be retired immediately after the Thanksgiving travel period
  • 2018 full year ASM growth is expected to be between 9.5 and 10.5 percent
  • 2018 full year tax rate is expected to be between 18 and 19 percent
  • 2018 full year average fuel cost is expected to be $2.38 per gallon using the forward curve as of October 23, 2018
  • Due to several one-time maintenance events, 2018 maintenance per aircraft per month is expected to be between $90 and $95 thousand
  • 2018 EPS is expected to be between $9 and $10 per share even with the higher than expected fuel cost
Guidance, subject to revision  
   
Full year 2018 guidancePrevious*Current
Fuel cost per gallon$2.35$2.38
Available seat miles (ASMs) / gallon77.5 to 78.577.5 to 78.5
   
Interest expense (millions)$50 to $60$50 to $60
Tax rate21 to 22%18 to 19%
Share count (millions) 15.9 15.9
Earnings per share$9 to $10$9 to $10
   
System ASMs - year over year change9 to 11%9.5 to 10.5%
Scheduled service ASMs - year over year change9 to 11%9.5 to 10.5%
   
Depreciation expense / aircraft / month (thousands)$115 to $120$115 to $120
Maintenance expense / aircraft / month (thousands)$80 to $85$90 to $95
   
Full year 2018 CAPEX guidance  
Capital expenditures (millions) **$300$300
Capitalized Airbus deferred heavy maintenance (millions) ***$45$45
   
Sunseeker CAPEX  
2018 year to date (millions) $15
Project since inception (millions) $46

* - Previous guidance as of July 25, 2018
** - Excludes Sunseeker Resorts
*** - Not included in capital expenditure total

Aircraft fleet plan by end of period     
      
Aircraft - (seats per AC) 1Q182Q183Q18YE18
MD-80 (166 seats) 32 27 19 — 
A319 (156 seats) 26 31 31 32 
A320 (177/186 seats) 30 35 43 44 
Total 88 93 93 76 

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

Non-airline business

For greater transparency around the non-airline portion of the business, we are providing what we believe is a better measure of controllable airline costs that excludes costs driven by non-airline entities as well as their revenue contribution.

Adjusted CASM ex fuelThree Months Ended September 30,  
 2018 2017 Change
CASM (cents)10.07 9.50 6.0%
Adjusted for:     
  Aircraft fuel3.12 2.50 24.8 
  Non-airline0.16 0.08 100.0
Adjusted CASM ex6.79 6.92 (1.9)
      
Non-airline revenue (millions)$2.7 $1.7 58.8


Adjusted CASM ex fuelNine Months Ended September 30,  
 2018 2017 Change
CASM (cents)9.52 9.12 4.4%
Adjusted for:     
  Aircraft fuel3.03 2.46 23.2
  Non-airline0.11 0.07 57.1
Adjusted CASM ex6.38 6.59 (3.2)
      
Non-airline revenue (millions)$6.0 $3.4 76.5

Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. ET Wednesday, October 24, 2018 to discuss its third 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 and mid-sized 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, 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 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 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 September 30, Percent
  2018
  2017
 change
OPERATING REVENUE:     
Passenger revenue (1)$355,100  $315,308  12.6 
Third party products 15,921   12,348  28.9 
Fixed fee contract revenue 14,791   11,831  25.0 
Other revenue 7,297   10,708  (31.9)
Total operating revenue 393,109   350,195  12.3 
OPERATING EXPENSES:     
Aircraft fuel 113,525   80,421  41.2 
Salary and benefits 97,706   88,788  10.0 
Station operations 43,128   37,148  16.1 
Maintenance and repairs 31,983   28,870  10.8 
Depreciation and amortization 34,658   31,894  8.7 
Sales and marketing 16,798   13,884  21.0 
Aircraft lease rentals 671   533  25.9 
Other 28,459   24,315  17.0 
Total operating expense 366,928   305,853  20.0 
OPERATING INCOME 26,181   44,342  (41.0)
OTHER (INCOME) EXPENSE:     
Interest expense 14,309   10,041  42.5 
Interest income (2,425)  (1,454) 66.8 
Other, net (118)  (400) (70.5)
Total other expense 11,766   8,187  43.7 
INCOME BEFORE INCOME TAXES 14,415   36,155  (60.1)
PROVISION FOR INCOME TAXES (732)  12,771  NM
NET INCOME$15,147  $23,384  (35.2)
Earnings per share to common shareholders (2):     
Basic$0.94  $1.45  (35.2)
Diluted$0.94  $1.45  (35.2)
Weighted average shares outstanding used in computing earnings per share to common shareholders (2):     
Basic 15,957   15,852  0.7 
Diluted 15,962   15,862  0.6 

NM - Not meaningful
(1) Passenger revenue previously reported as Scheduled service revenue and Ancillary air-related 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 September 30, Percent
 2018 2017 change (1)
OPERATING STATISTICS     
Total system statistics:     
Passengers3,503,849  3,045,642  15.0 
Revenue passenger miles (RPMs) (thousands)3,037,540  2,672,963  13.6 
Available seat miles (ASMs) (thousands)3,643,948  3,220,246  13.2 
Load factor83.4% 83.0% 0.4 
Operating expense per ASM (CASM) (cents)10.07  9.50  6.0 
Fuel expense per ASM (cents)3.12  2.50  24.8 
Operating CASM, excluding fuel (cents)6.95  7.00  (0.7)
ASMs per gallon of fuel77.5  72.6  6.7 
Departures25,601  22,723  12.7 
Block hours56,329  49,932  12.8 
Average stage length (miles)838  842  (0.5)
Average number of operating aircraft during period95.6  89.7  6.6 
Average block hours per aircraft per day6.4  6.1  4.9 
Full-time equivalent employees at end of period3,835  3,704  3.5 
Fuel gallons consumed (thousands)47,016  44,346  6.0 
Average fuel cost per gallon$2.41  $1.81  33.1 
Scheduled service statistics:     
Passengers3,461,267  2,998,476  15.4 
Revenue passenger miles (RPMs) (thousands)2,988,962  2,618,446  14.2 
Available seat miles (ASMs) (thousands)3,485,800  3,073,360  13.4 
Load factor85.7% 85.2% 0.5 
Departures24,281  21,498  12.9 
Block hours53,723  47,481  13.1 
Total passenger revenue per ASM (TRASM) (cents) (2)10.64  10.66  (0.2)
Average fare - scheduled service (3)$59.23  $61.34  (3.4)
Average fare - air-related charges (3)$43.36  $43.81  (1.0)
Average fare - third party products$4.60  $4.12  11.7 
Average fare - total$107.19  $109.27  (1.9)
Average stage length (miles)845  849  (0.5)
Fuel gallons consumed (thousands)44,910  42,193  6.4 
Average fuel cost per gallon$2.41  $1.80  33.9 
Percent of sales through website during period93.7% 93.3% 0.4 

(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 of revenue in accordance with revenue recognition accounting rules adopted by us as of January 1, 2018.
(3) 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)
    
 Nine Months Ended September 30, Percent
  2018
  2017
 change
OPERATING REVENUE:     
Passenger Revenue (1)$1,157,443  $1,030,395  12.3 
Third party products 44,045   39,394  11.8 
Fixed fee contract revenue 33,000   34,120  (3.3)
Other revenue 20,845   28,140  (25.9)
Total operating revenue 1,255,333   1,132,049  10.9 
OPERATING EXPENSES:     
Aircraft fuel 342,006   250,470  36.5 
Salary and benefits 312,314   277,307  12.6 
Station operations 122,265   107,979  13.2 
Maintenance and repairs 75,864   87,611  (13.4)
Depreciation and amortization 92,641   92,571  0.1 
Sales and marketing 54,224   40,707  33.2 
Aircraft lease rentals 767   3,098  (75.2)
Other 74,881   68,440  9.4 
Total operating expense 1,074,962   928,183  15.8 
OPERATING INCOME 180,371   203,866  (11.5)
OTHER (INCOME) EXPENSE:     
Interest expense 40,188   27,332  47.0 
Interest income (6,259)  (4,193) 49.3 
Other, net (408)  (1,254) (67.5)
Total other expense 33,521   21,885  53.2 
INCOME BEFORE INCOME TAXES 146,850   181,981  (19.3)
PROVISION FOR INCOME TAXES 26,494   67,208  (60.6)
NET INCOME 120,356   114,773  4.9 
Earnings per share to common shareholders (2):     
Basic$7.46  $7.00  6.6 
Diluted$7.45  $6.99  6.6 
Weighted average shares outstanding used in computing earnings per share to common shareholders (2):     
Basic 15,929   16,142  (1.3)
Diluted 15,938   16,160  (1.4)

(1) Passenger revenue previously reported as Scheduled service revenue and Ancillary air-related 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)
    
 Nine Months Ended September 30, Percent
 2018 2017 change (1)
OPERATING STATISTICS     
Total system statistics:     
Passengers10,510,913  9,233,083  13.8 
Revenue passenger miles (RPMs) (thousands)9,408,944  8,340,269  12.8 
Available seat miles (ASMs) (thousands)11,294,805  10,181,292  10.9 
Load factor83.3% 81.9% 1.4 
Operating expense per ASM (CASM) (cents)9.52  9.12  4.4 
Fuel expense per ASM (cents)3.03  2.46  23.2 
Operating CASM, excluding fuel (cents)6.49  6.66  (2.6)
ASMs per gallon of fuel76.8  72.2  6.3 
Departures76,912  69,739  10.3 
Block hours174,838  159,181  9.8 
Average stage length (miles)868  870  (0.2)
Average number of operating aircraft during period92.4  86.6  6.7 
Average block hours per aircraft per day6.9  6.7  3.0 
Full-time equivalent employees at end of period3,835  3,704  3.5 
Fuel gallons consumed (thousands)147,172  141,054  4.3 
Average fuel cost per gallon$2.32  $1.78  30.3 
Scheduled service statistics:     
Passengers10,422,579  9,110,745  14.4 
Revenue passenger miles (RPMs) (thousands)9,299,355  8,183,636  13.6 
Available seat miles (ASMs) (thousands)10,883,630  9,747,395  11.7 
Load factor85.4% 84.0% 1.4 
Departures73,537  66,355  10.8 
Block hours167,947  151,988  10.5 
Total passenger revenue per ASM (TRASM) (cents) (2)11.04  10.98  0.5 
Average fare - scheduled service (3)$65.72  $68.04  (3.4)
Average fare - air-related charges (3)$45.33  $45.06  0.6 
Average fare - third party products$4.23  $4.32  (2.1)
Average fare - total$115.28  $117.42  (1.8)
Average stage length (miles)874  875  (0.1)
Fuel gallons consumed (thousands)141,452  134,906  4.9 
Average fuel cost per gallon$2.31  $1.76  31.3 
Percent of sales through website during period93.8% 94.1% (0.3)

(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 of revenue in accordance with revenue recognition accounting rules adopted by us as of January 1, 2018.
(3) Reflects division of passenger revenue between scheduled service and air-related charges in Company's booking path.

Summary Balance Sheet

(millions)9/30/2018 12/31/2017 Change
 (unaudited)    
Unrestricted cash     
Cash and cash equivalents$140.8  $59.4  137.0%
Short-term investments284.6  352.7  (19.3)
Long-term investments53.4  78.6  (32.1)
Total unrestricted cash and investments478.8  490.7  (2.4)
Debt     
Current maturities of long-term debt and capital lease obligations, net of related costs654.7  214.8  204.8 
Long-term debt and capital lease obligations, net of current maturities and related costs658.4  950.1  (30.7)
Total debt1,313.1  1,164.9  12.7 
Total Allegiant Travel Company shareholders’ equity$653.0  $553.3  18.0%

Summary Cash Flow

 Nine Months Ended September 30,  
Unaudited (millions)2018 2017 Change
Cash provided by operating activities$290.1  $302.1  (4.0)%
Purchase of property and equipment, including capitalized interest274.0  333.7  (17.9)
Repurchase of common stock3.6  90.4  (96.0)
Cash dividends paid to shareholders33.9  34.5  (1.7)
Proceeds from the issuance of long-term debt191.7  292.5  (34.5)
Principal payments on long-term debt & capital lease obligations$171.4  $88.0  94.8%

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 September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
Basic:       
Net income$15,147  $23,384  $120,356  $114,773 
Less net income allocated to participating securities(194) (331) (1,602) (1,784)
Net income attributable to common stock$14,953  $23,053  $118,754  $112,989 
Earnings per share, basic$0.94  $1.45  $7.46  $7.00 
Weighted-average shares outstanding15,957  15,852  15,929  16,142 
Diluted:       
Net income$15,147  $23,384  $120,356  $114,773 
Less net income allocated to participating securities(194) (330) (1,601) (1,782)
Net income attributable to common stock$14,953  $23,054  $118,755  $112,991 
Earnings per share, diluted$0.94  $1.45  $7.45  $6.99 
Weighted-average shares outstanding15,957  15,852  15,929  16,142 
Dilutive effect of stock options and restricted stock35  18  42  60 
Adjusted weighted-average shares outstanding under treasury stock method15,992  15,870  15,971  16,202 
Participating securities excluded under two-class method(30) (8) (33) (42)
Adjusted weighted-average shares outstanding under two-class method15,962  15,862  15,938  16,160 

AllegiantLogoBlue no tagline.jpg

Source: Allegiant Travel Company