PR Newswire
LAS VEGAS, Aug. 2, 2023
Second quarter 2023 GAAP diluted earnings per share of $4.80
Second quarter 2023 diluted earnings per share, excluding Sunseeker special charges of $4.35(1)(4)(5)
Second quarter 2023 airline only diluted earnings per share of $4.57(1)
Declares an Annual Cash Dividend of $2.40 per Share
LAS VEGAS, Aug. 2, 2023 /PRNewswire/ -- Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the second quarter 2023, as well as comparisons to the prior year:
Consolidated | Three Months Ended June 30, | Percent Change | |||
(unaudited) (in millions, except per share amounts) | 2023 | 2022 | YoY | ||
Total operating revenue | $ 683.8 | $ 629.8 | 8.6 % | ||
Total operating expense | 550.4 | 603.7 | (8.8) % | ||
Operating income | 133.4 | 26.1 | 411.1 % | ||
Income before income taxes | 116.3 | 5.8 | NM | ||
Net income | 88.5 | 4.4 | NM | ||
Diluted earnings per share | 4.80 | 0.24 | NM | ||
Sunseeker special charges, net of recovery (5) | (11.2) | — | NM | ||
Diluted earnings per share excluding recovery of Sunseeker special charges(1)(4)(5) | 4.35 | 0.24 | NM | ||
Airline only | Three Months Ended June 30, | Percent Change(2) | |||
(unaudited) (in millions, except per share amounts) | 2023 | 2022 | YoY | ||
Airline operating revenue (1) | $ 683.8 | $ 629.8 | 8.6 % | ||
Airline operating expense (1) | 556.3 | 602.0 | (7.6) % | ||
Airline operating income(1) | 127.5 | 27.9 | 357.0 % | ||
Airline income before income taxes (1) | 110.4 | 10.4 | 961.5 % | ||
Airline net income (1)(3) | 84.2 | 7.7 | 993.5 % | ||
Airline operating margin | 18.6 % | 4.4 % | 14.2 % | ||
Airline diluted earnings per share(1) | 4.57 | 0.43 | 962.8 % | ||
Consolidated | Six Months Ended June 30, | Percent Change | |||
(unaudited) (in millions, except per share amounts) | 2023 | 2022 | YoY | ||
Total operating revenue | $ 1,333.5 | $ 1,130.0 | 18.0 % | ||
Total operating expense | 1,105.2 | 1,096.6 | 0.8 | ||
Operating income | 228.3 | 33.4 | 583.5 | ||
Income (loss) before income taxes | 190.8 | (4.7) | NM | ||
Net income (loss) | 144.6 | (3.5) | NM | ||
Diluted earnings (loss) per share | 7.84 | (0.20) | NM | ||
Sunseeker special charges, net of recovery (5) | (12.8) | — | NM | ||
Diluted earnings per share excluding recovery of Sunseeker special charges(1)(4)(5) | 7.35 | (0.20) | NM | ||
Airline only | Six Months Ended June 30, | Percent Change(2) | |||
(unaudited) (in millions, except per share amounts) | 2023 | 2022 | YoY | ||
Airline operating revenue (1) | $ 1,333.5 | $ 1,130.0 | 18.0 % | ||
Airline operating expense (1) | 1,108.4 | 1,091.9 | 1.5 | ||
Airline operating income(1) | 225.1 | 38.1 | 490.8 | ||
Airline income before income taxes (1) | 189.2 | 4.7 | NM | ||
Airline net income (1)(3) | 144.2 | 3.7 | NM | ||
Airline operating margin | 16.9 % | 3.4 % | 13.5 | ||
Airline diluted earnings per share(1) | 7.81 | 0.20 | NM | ||
(1) | Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures. | |
(2) | Except Airline Operating Margin, which is percentage point change. | |
(3) | Utilizing an effective tax rate of 23.7% and 23.8% for quarter-to-date and year-to-date 2023 and 25.4% and 21.4% for quarter-to-date and year-to-date 2022, respectively. | |
(4) | Adjusted to exclude insurance recoveries from property damage to Sunseeker Resort. | |
(5) | In 2022, we recognized the full amount of estimated property damage to Sunseeker Resort due to Hurricane Ian and other insured events less the amount of recognized insurance recoveries through the end of the applicable period. The negative amount of special charges we are reporting in 2023 reflects further insurance recoveries either received or determined to be probable of collection. We sometimes refer to this negative amount as "specials" in this earnings release. | |
NM | Not meaningful | |
"Second quarter diluted earnings per share, excluding special items was $4.35, a more than six-fold improvement over the second quarter of 2022," stated John Redmond, CEO of Allegiant Travel Company. "These outstanding results are attributable to the hard work of our team members during this peak summer travel period. The team delivered industry-leading operational performance with a controllable completion of 99.7 percent for the quarter.
"We recognized a record $684 million in total operating revenue for the second quarter, evidence of a robust leisure demand environment. Capacity increased slightly, up 1.3 percent year-over-year, with TRASM increasing 7.5 percent over the second quarter of 2022. During the second quarter, total ancillary per passenger was $71.75, an 8.6 percent increase over the prior year. This strength is driven by early success with the Allegiant Extra product and sustained growth with our Allegiant Allways cobrand credit card. Our direct-to-consumer approach helps underpin our ability to enhance revenues.
"As we head into the second half of the year, our focus remains on three primary objectives. First, we will make progress on outstanding labor contracts that our team members are proud to support. Second, we will continue delivering a solid operation. Finally, we are only a few short months from the long awaited opening of our world-class, Sunseeker Resort, in Port Charlotte, Florida. Construction is entering the final stages, and the operations teams are beginning to hire personnel in earnest. We remain on track to open the property mid-October.
"I could not be happier with the success the team delivered this quarter. Achieving industry-leading operational performance in the backdrop of a challenging operational environment is admirable. This operational success has been the catalyst for the strong financial performance delivered year-to-date."
Second Quarter 2023 Results and Highlights
- Income before income tax, excluding specials(1)(3) of $105.1 million, yielding a pre-tax margin of 15.4 percent
- Airline-only income before income tax(1) of $110.4 million, yielding a pre-tax margin of 16.1 percent
- Operating income, excluding specials(1)(3) of $122.2 million, yielding an operating margin of 17.9 percent
- Airline-only operating income(1) of $127.5 million, yielding an airline-only operating margin of 18.6 percent
- Consolidated EBITDA, excluding specials(1)(3) of $176.1 million, yielding an EBITDA margin of 25.8 percent
- Airline-only EBITDA(1) of $181.3 million, a 26.5 percent margin
- Total operating revenue was $683.8 million, up 8.6 percent over the prior year and the highest quarterly total in company history
- Total fixed fee contracts revenue of $11.7 million, up 31.6 percent year-over-year
- TRASM(2) of 13.64 cents, up 7.5 percent year-over-year on scheduled service capacity increase of 0.7 percent year-over-year
- Total average fare of $142.31, up 8.1 percent year-over-year
- Total average ancillary fare of $71.75, up 8.6 percent year-over-year
- Surpassed 600 thousand Allways rewards credit card holders during the quarter
- Received $29 million in remuneration during the quarter
- Transitioning our cobrand credit card network from Mastercard to Visa
- Core program and benefits will remain the same, but this transition is expected to boost program revenue through higher levels of new cardholders and increased cardholder spend
- Allways Rewards program enrolled 570 thousand new members during the quarter, bringing total members to 16.5 million
- Paid out over $12 million to our airline team members in profit share for the first half of the year
- Airline-only Operating CASM, excluding fuel, of 7.79 cents, up 12.9 percent year-over-year
- Includes $12 million in incremental cost related to pilot retention bonuses
- Allegiant flight dispatchers ratified contract with International Brotherhood of Teamsters, extending the contract through May 31, 2026
- In early July, expanded the network by announcing six new routes
- Pledged $1 million to Boys & Girls Clubs of America to develop and launch a new program that will inspire children to choose future careers in aviation
(1) | Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures. |
(2) | TRASM represents total passenger revenue per scheduled service available seat mile. |
(3) | In 2022, we recognized the full amount of estimated property damage to Sunseeker Resort due to Hurricane Ian and other insured events less the amount of recognized insurance recoveries through the end of the applicable period. The negative amount of special charges we are reporting in 2023 reflects further insurance recoveries either received or determined to be probable of collection. We sometimes refer to this negative amount as "specials" in this earnings release. |
Balance Sheet, Cash and Liquidity
- Total available liquidity at June 30, 2023 was $1.4 billion, which included $1.0 billion in cash and investments, and $356.2 million in undrawn revolving credit facilities and PDP facilities
- $131.2 million in cash from operations during the second quarter 2023
- Total debt at June 30, 2023 was $2.2 billion
- Net debt at June 30, 2023 was $1.1 billion
- Debt principal payments of $97.9 million during the second quarter
- Includes $61 million prepayment of an aircraft-secured facility during the quarter
- Declared annual cash dividend in the amount of $2.40 per share payable $0.60 per quarter with the first dividend to be paid September 1, 2023 to shareholders of record on August 15, 2023
- Air traffic liability at June 30, 2023 was $411.1 million
Airline Capital Expenditures
- Second quarter capital expenditures of $176 million, which included $147 million for aircraft purchases and inductions, pre-delivery deposits, and other related costs, and $29 million in other airline capital expenditures
- Second quarter deferred heavy maintenance spend was $22 million
Sunseeker Resort Charlotte Harbor
- Total capital expenditures(1) as of June 30, 2023 were $611 million
- Second quarter capital expenditures(1) were $92 million
- Previously recorded special charges were reduced by $11.3 million for recognized insurance recoveries related to outstanding insurance claims at Sunseeker Resort
(1) | Total capital expenditures is inclusive of Sunseeker Resort, Aileron Golf Club, remediation work related to insurance events, accrued expenditures not yet paid and spend included as part of the COVID impairment. Capitalized interest, operating expenses, special charges related to COVID, and estimated losses related to insurance events have been excluded from this total. |
Guidance, subject to revision | |||
Full-year 2023 guidance | Previous | Current | |
System ASMs - year over year change | 0 to 3% | 0 to 3% | |
Scheduled service ASMs - year over year change | 0 to 3% | 0 to 3% | |
Fuel cost per gallon | $ 3.00 | $ 2.90 | |
Available seat miles (ASMs)/gallon | ~84 | ~84 | |
Depreciation expense (millions) | $230 to $240 | $230 to $235 | |
Interest expense (millions) | $150 to $160 | $145 to $150 | |
Capitalized interest (1) (millions) | ($35) to ($45) | ($30) to ($35) | |
Interest income (millions) | $35 to $45 | $40 to $45 | |
Earnings per share - airline only(2) | $9.00 - $13.00 | $10.50 - $13.00 | |
Loss per share - Sunseeker (3) | ~($1.25) | ~($1.25) | |
Airline CAPEX | |||
Aircraft, engines, induction costs, and pre-delivery deposits (millions)(4) | $550 to $570 | $490 to $500 | |
Capitalized deferred heavy maintenance (millions) | $50 to $60 | $60 to $70 | |
Other airline capital expenditures (millions) | $130 to $150 | $140 to $145 | |
Recurring principal payments (millions)(5) | $175 to $185 | $210 to $215 | |
Sunseeker Resort Charlotte Harbor Project (millions) | |||
Total projected capital expenditures (6) | $695 | $695 | |
Capital expenditures funded or expected to be funded by Allegiant | $345 | ||
Project debt incurred through June 30, 2023 | $350 | ||
(1) | Includes capitalized interest related to Sunseeker as well as on pre-delivery deposits on new aircraft. |
(2) | Earnings per share calculation is airline only. It includes accruals for increases in pilot and flight attendant compensation beginning in May. Actual results will differ based on economic terms agreed upon and the timing of the collective bargaining agreements. These differences may be material. |
(3) | Excludes recoveries that may be received related to business interruption insurance claim. |
(4) | Excludes capitalized interest related to pre-delivery deposits on new aircraft. |
(5) | Includes $61 million related to aircraft debt prepayment. |
(6) | Total projected capital expenditures does not reflect the impairment or special charges related to COVID or insurance claims. Excludes amounts to remediate physical damage to the property resulting from Hurricane Ian, or other subsequent insurance events. |
Aircraft Fleet Plan by End of Period | ||||
Aircraft - (seats per AC) | 1Q23 | 2Q23 | 3Q23 | YE23 |
A319 (156 seats) | 35 | 35 | 35 | 35 |
A320 (177 seats) | 19 | 19 | 19 | 19 |
A320 (180-186 seats) | 70 | 72 | 73 | 73 |
Total | 124 | 126 | 127 | 127 |
The table above is provided based on the company's current plans and is subject to change. The numbers exclude aircraft expected to be delivered before the end of 2023 for revenue service beginning in 2024. |
Allegiant Travel Company will host a conference call with analysts at 12:30 p.m. ET Wednesday, August 2, 2023 to discuss its second quarter 2023 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 underserved cities to world-class vacation destinations with all-nonstop flights and industry-low average fares. Today, Allegiant serves communities across the nation, with base airfares less than half the cost of the average domestic round trip ticket. For more information, visit us at Allegiant.com. Media information, including photos, is available at http://gofly.us/iiFa303wrtF.
Media Inquiries: [email protected]
Investor Inquiries: [email protected]
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, expenses and earnings, available seat mile growth, expected capital expenditures, the cost of fuel, the timing of aircraft acquisitions and retirements, the number of contracted aircraft to be placed in service in the future, our ability to consummate announced aircraft transactions, the capital expenditures budget and timing for completion and opening of our Sunseeker Resort and Aileron Golf Club, 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 of Hurricane Ian on our Florida markets and completion of Sunseeker Resort, the impact and duration of the COVID-19 pandemic on airline travel and the economy, 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 impact of government regulations on the airline industry, the ability to finance aircraft to be acquired, the ability to obtain necessary government approvals to implement the announced alliance with Viva Aerobus and to otherwise prepare to offer international service, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the impact of management changes and 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, increases in maintenance costs, cyclical and seasonal fluctuations in our operating results, and the perceived acceptability of our environmental, social and governance efforts.
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 | ||||
2023 | 2022 | YoY | |||
OPERATING REVENUES: | |||||
Passenger | $ 642,747 | $ 592,604 | 8.5 % | ||
Third party products | 28,904 | 27,787 | 4.0 | ||
Fixed fee contracts | 11,741 | 8,920 | 31.6 | ||
Other | 418 | 536 | (22.0) | ||
Total operating revenues | 683,810 | 629,847 | 8.6 | ||
OPERATING EXPENSES: | |||||
Aircraft fuel | 162,611 | 257,288 | (36.8) | ||
Salaries and benefits | 177,170 | 139,681 | 26.8 | ||
Station operations | 66,715 | 66,909 | (0.3) | ||
Depreciation and amortization | 53,933 | 49,183 | 9.7 | ||
Maintenance and repairs | 33,634 | 31,123 | 8.1 | ||
Sales and marketing | 29,868 | 27,297 | 9.4 | ||
Aircraft lease rentals | 5,975 | 5,451 | 9.6 | ||
Other | 31,683 | 26,643 | 18.9 | ||
Special charges, net of recovery | (11,208) | 142 | NM | ||
Total operating expenses | 550,381 | 603,717 | (8.8) | ||
OPERATING INCOME | 133,429 | 26,130 | 410.6 | ||
OTHER (INCOME) EXPENSES: | |||||
Interest expense | 37,765 | 24,497 | 54.2 | ||
Interest income | (11,845) | (2,218) | 434.0 | ||
Capitalized interest | |||||
