First quarter 2022 GAAP diluted (loss) per share of $(0.44)

First quarter 2022 diluted (loss) per share, excluding recognition bonus(1) of $(0.12)(1)(2)

LAS VEGAS, May 4, 2022 /PRNewswire/ — Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the first quarter 2022, as well as comparisons to prior years:

Consolidated Three Months Ended March 31, Percent Change
(unaudited) (in millions, except per share amounts) 2022 2021 2019 YoY Yo3Y
Total operating revenue $           500.1 $           279.1 $            451.6 79.2% 10.7%
Total operating expense 492.9 254.5 360.5 93.6 36.7
Operating income 7.2 24.6 91.1 (70.6) (92.1)
Income (loss) before income taxes (10.6) 8.7 73.9 (221.9) (114.3)
Net income (loss) (7.9) 6.9 57.1 (214.7) (113.8)
Diluted earnings (loss) per share $            (0.44) $              0.42 $              3.52 (204.8) (112.5)
(1) Recognition bonus awarded despite not meeting internal profit-sharing targets
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information

The first quarter marked a sizable shift in the demand environment,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “For the first time since the onset of the pandemic, we observed both load factor and TRASM improvements over 2019 during the month of March. Despite a nearly 40 percent increase in the cost per fuel gallon throughout the quarter, we recognized a more than 21 percent operating margin during March. These demand trends have persisted, and we now expect second quarter total revenue to be up as much as 30 percent compared to 2019 revenue.

“We continue making progress on further expanding our Allegiant 2.0 strategy. We are awaiting DOT approval for our joint venture with Viva Aerobus and are on track to begin selling flights to Mexico by the end of the year. Our Allways Allegiant World Mastercard continues to exceed expectations. New cardholders were up 99 percent compared to the first quarter of 2019. During 2021 we averaged 10,000 new cardholders per month while in this most recent quarter we added 45 thousand (March was the first month with more than 18 thousand cardholders acquired). Our Allways Rewards program now has more than one million active members. Rewards members average more total itineraries annually as well as higher ancillary and third-party take rates compared to non-members. Overall our total ancillary fare per passenger was nearly $68 for the quarter. During the quarter we began accepting reservations for our Sunseeker Resort which is due to open this time next year. Although too early to determine trends, the average daily rate for bookings to date is more than 50 percent higher than the average daily rate we used in our model.

“We have adjusted our growth rate for the second quarter to better align with the high fuel cost environment and prioritize operational performance. We now expect capacity to increase roughly 12 percent year-over-three year. We expect these capacity adjustments will help drive TRASM increases of nearly 20 percent during the second quarter. Additionally, I have been encouraged by improvements in operational performance the past several weeks. While we are mindful of future slowdowns in the economy as the Fed begins its necessary tightening, we are bullish our historic industry leading performances in difficult times will continue as well as the substantial opportunities we see for new routes and continued growth in the coming years.

“In closing I want to thank our more than five thousand team members for their efforts throughout the quarter. The operating environment continues to be a challenge. In recognition of their hard work, we approved a special bonus accrual consistent with levels paid to our team members during 2019, despite not meeting internal profit-sharing targets during the quarter.”

First Quarter 2022 Results

  • Loss before income taxes of $10.6 million
  • GAAP operating income of $7.2 million, yielding an operating margin of 1.4 percent
  • Achieved a 21 percent operating margin during the month of March, despite a more than 40 percent increase in the average fuel cost per gallon throughout the quarter
  • Consolidated EBITDA(2) of $53.5 million, yielding an EBITDA margin of 10.7 percent
  • Total operating revenue was $500.1 million, up 10.7 percent year over three-year
  • Scheduled capacity up 18.7 percent year over three-year
  • Continued sequential improvement in load factor, with March loads exceeding March of 2019, the first load factor improvement over 2019 since the onset of the pandemic
  • Fixed fee revenue of $13.4 million, up 26.6 percent year over three-year, with March being the third highest performing month for fixed fee revenue in company history
  • TRASM down 6.3 percent for the quarter versus 2019, but March TRASM in excess of March of 2019 on capacity growth of 14.4 percent
  • Total average fare of $131.15, up 2.7 percent from the first quarter of 2019
  • Total average fare – third party products of $6.06, up 21.0 percent year over three-year driven by Allways Allegiant World Mastercard strength
  • 131 percent growth in Allways Allegiant World Mastercard cash compensation during the quarter, as compared with 2019
  • 11 of the past 12 months have been top performing months for new cardholder acquisitions with March activity a program record of 18 thousand new cardholders
  •  Operating CASM, excluding fuel and recognition bonus (1) (2)of 6.95 cents, up 4.2 percent when compared with the first quarter of 2019, driven primarily by costs related to increased irregular operations
  • Expanded the network by announcing 12 new routes and one new aircraft base in Provo, Utah, bringing total routes served to 617 and 132 cities
(1) Recognition bonus awarded despite not meeting internal profit-sharing targets
(2) Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information

Balance Sheet, Cash and Liquidity

  • Total cash and investments at March 31, 2022 were $1.2 billion
  • $176.0 million in total operating cash inflow for the first quarter 2022
  • Total debt at March 31, 2022 was $1.8 billion
  • Net debt at March 31, 2022 was $563.0 million, a more than 40 percent reduction from pre-pandemic levels
  • Debt principal payments of $37.3 million during the quarter
  • Air traffic liability at March 31, 2022 was $453 million
  • Balance related to future scheduled flights is $394 million
  • Balance related to travel vouchers issued for future use is $59 million

Airline Capital Expenditures

  • First quarter capital expenditures of $74 million, which included $56 million for aircraft pre-delivery deposits, used aircraft induction costs, and other related costs, as well as $18 million in other airline capital expenditures
  • First quarter deferred heavy maintenance spend was $7 million

Sunseeker Resort

  • Updated budget to $618 million, primarily due to inflationary pressures on materials as well as supply chain delays
  • Anticipated opening second quarter 2023
  • Total project spend as of March 31, 2022 was $275 million with $87 million funded by debt and the remaining $188 million funded by Allegiant
  • First quarter capital expenditures were $64 million, of which 100 percent was funded by debt

 

Guidance, subject to revision Previous Current
Second Quarter 2022 guidance
System ASMs – year over three-year change 9.0 to 13.0%
Scheduled Service  ASMs – year over three-year change 10.0 to 14.0%
Total operating revenue – year over three-year change 28 to 32%
Operating CASM, excluding fuel – year over three-year change 12.0 to 16.0%
Fuel cost per gallon $4.00
Full year 2022 guidance
Airline CAPEX
    Aircraft, engines, induction costs, and pre-delivery deposits (millions) $255 to $265
    Capitalized deferred heavy maintenance (millions) $85 to $95
    Other airline capital expenditures (millions) $95 to $105
Interest expense (millions) $85 to $95
Recurring principal payments (millions) $150 to $160
Sunseeker Resorts – Charlotte Harbor Project  (millions)
Total projected project spend $618
Allegiant contributions through March 31, 2022 $188
Allegiant contributions remaining to be spent $80
Project spend funded by debt through March 31, 2022 $87
Remaining project spend expected to be funded by debt $263
(1) Year over three-year percentage changes compare 2022 to 2019
(2) Includes capitalized interest related to pre-delivery deposits on new aircraft as well as the construction of Sunseeker Resorts – Charlotte Harbor

Aircraft Fleet Plan by End of Period

  • Updated fleet count shifting three aircraft inductions into 2023 due to labor and supply chain constraints
Aircraft – (seats per AC) 1Q22 2Q22 3Q22 YE22
A319 (156 seats) 35 35 35 35
A320 (177 seats) 22 22 22 22
A320 (186 seats) 55 58 64 67
Total 112 115 121 124

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, May 4 to discuss its first quarter 2022 financial results. A live broadcast of the conference call will be available via the Company’s Investor Relations website homepage at https://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 fleet 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 https://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 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, our ability to consummate announced aircraft transactions, number of possible future markets that may be served, the implementation of a joint alliance with Viva Aerobus, the development of our Sunseeker Resort, 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, the ability to obtain necessary U.S. and Mexican 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 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
Three Months Ended March 31, Percent Change
2022 2021 2019 YoY Yo3Y
OPERATING REVENUES:
  Passenger $      463,961 $      256,695 $      419,977 80.7% 10.5%
  Third party products 22,480 13,622 17,141 65.0 31.1
  Fixed fee contracts 13,386 7,692 10,575 74.0 26.6
  Other 282 1,115 3,929 (74.7) (92.8)
     Total operating revenues 500,109 279,124 451,622 79.2 10.7
OPERATING EXPENSES:
  Salaries and benefits 134,010 117,950 119,411 13.6 12.2
  Aircraft fuel 164,137 82,848 99,682 98.1 64.7
  Station operations 65,744 43,094 38,965 52.6 68.7
  Depreciation and amortization 46,343 43,174 36,182 7.3 28.1
  Maintenance and repairs 27,820 23,371 22,824 19.0 21.9
  Sales and marketing 22,350 11,609 20,926 92.5 6.8
  Aircraft lease rental 6,132 4,720 29.9
  Other 26,202 17,776 22,554 47.4 16.2
  Payroll Support Programs grant recognition (91,758) 100.0
  Special charges 142 1,738 (91.8)
     Total operating expenses 492,880 254,522 360,544 93.6 36.7
OPERATING INCOME 7,229 24,602 91,078 (70.6) (92.1)
OTHER (INCOME) EXPENSES:
  Interest expense 19,791 16,788 18,083 17.9 9.4
  Interest income (773) (463) (3,201) 67.0 (75.9)
  Capitalized interest (1,216) (1,503) (19.1)
  Loss on extinguishment of debt 3,677 (100.0)
  Other, net (6) (393) 103 (98.5) 105.8
     Total other expenses 17,796 15,932 17,159 11.7 3.7
INCOME (LOSS) BEFORE INCOME TAXES (10,567) 8,670 73,919 (221.9) (114.3)
INCOME TAX PROVISION (BENEFIT) (2,686) 1,801 16,795 (249.1) (116.0)
NET INCOME (LOSS) $         (7,881) $           6,869 $        57,124 (214.7) (113.8)
Earnings (loss) per share to common shareholders:
  Basic ($0.44) $0.42 $3.52 (204.8) (112.5)
  Diluted ($0.44) $0.42 $3.52 (204.8) (112.5)
Weighted average shares outstanding used in computing earnings per share attributable to common shareholders
  Basic 17,954 16,167 16,011 11.1 12.1
  Diluted 17,954 16,167 16,013 11.1 12.1
(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
Three Months Ended March 31, Percent Change(1)
2022 2021 2019 YoY Yo3Y
OPERATING STATISTICS
  Total system statistics:
    Passengers 3,734,262 2,334,503 3,450,278 60.0 % 8.2 %
    Available seat miles (ASMs) (thousands) 4,620,144 4,013,989 3,910,239 15.1 18.2
    Operating expense per ASM (CASM) (cents) 10.67 6.34 9.22 68.3 15.7
    Fuel expense per ASM (cents) 3.55 2.06 2.55 72.3 39.2
    Operating CASM, excluding fuel (cents) 7.12 4.28 6.67 66.4 6.7
    ASMs per gallon of fuel 86.5 90.4 84.1 (4.3) 2.9
    Departures 28,494 25,684 25,200 10.9 13.1
    Block hours 69,655 60,373 59,819 15.4 16.4
    Average stage length (miles) 920 898 904 2.4 1.8
    Average number of operating aircraft during period 109.5 97.3 79.6 12.5 37.6
    Average block hours per aircraft per day 7.1 7.4 8.3 (4.1) (14.5)
    Full-time equivalent employees at end of period 4,728 3,998 4,067 18.3 16.3
    Fuel gallons consumed (thousands) 53,438 44,426 46,474 20.3 15.0
    Average fuel cost per gallon $           3.07 $           1.86 $           2.14 65.1 43.5
Scheduled service statistics:
    Passengers 3,709,104 2,323,302 3,421,538 59.6 8.4
    Revenue passenger miles (RPMs) (thousands) 3,558,045 2,166,417 3,191,045 64.2 11.5
    Available seat miles (ASMs) (thousands) 4,512,315 3,921,090 3,802,132 15.1 18.7
    Load factor 78.9 % 55.3 % 83.9 % 23.6 (5.0)
    Departures 27,637 24,947 24,344 10.8 13.5
    Block hours 67,829 58,851 57,963 15.3 17.0
    Average seats per departure 175.6 173.6 171.4 1.2 2.5
    Yield (cents) 6.59 6.26 7.47 5.3 (11.8)
    Total passenger revenue per ASM (TRASM) (cents) 10.78 6.89 11.50 56.5 (6.3)
    Average fare – scheduled service $        63.22 $        58.38 $        69.64 8.3 (9.2)
    Average fare – air-related charges $        61.87 $        52.11 $        53.10 18.7 16.5
    Average fare – third party products $           6.06 $           5.86 $           5.01 3.4 21.0
    Average fare – total $      131.15 $      116.35 $      127.75 12.7 2.7
    Average stage length (miles) 926 902 908 2.7 2.0
    Fuel gallons consumed (thousands) 52,110 43,306 45,068 20.3 15.6
    Average fuel cost per gallon $           3.01 $           1.82 $           2.13 65.4 41.3
    Percent of sales through website during period 96.0 % 93.3 % 93.6 % 2.7 2.4
Other data:
    Rental car days sold 367,094 275,584 471,598 33.2 (22.2)
    Hotel room nights sold 72,539 56,208 105,015 29.1 (30.9)
(1) Except load factor and percent of sales through website, which is percentage point change
(2) Defined as scheduled service revenue divided by revenue passenger miles.
(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
(5) 2021 operating CASM includes the benefit from the PSP2 and PSP3

 

Summary Balance Sheet
Unaudited (millions) March 31, 2022
(unaudited)
December 31,
2021
Percent
Change
Unrestricted cash and investments
    Cash and cash equivalents $                           403.1 $                  363.4 10.9%
    Short-term investments 808.9 819.5 (1.3)
        Total unrestricted cash and investments 1,212.0 1,182.9 2.5
Debt
    Current maturities of long-term debt and finance lease obligations, net of related costs 140.5 130.1 8.0
    Long-term debt and finance lease obligations, net of current maturities and related costs 1,634.5 1,612.5 1.4
        Total debt 1,775.0 1,742.6 1.9
Debt, net of liquidity 563.0 559.7 0.6
Total Allegiant Travel Company shareholders’ equity 1,222.3 1,223.6 (0.1)

 

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 March 31,
2022 2021
Basic:
    Net income (loss) $             (7,881) $              6,869
    Less income allocated to participating securities (103)
    Net income (loss) attributable to common stock $             (7,881) $              6,766
    Earnings (loss) per share, basic $               (0.44) $                0.42
Weighted-average shares outstanding 17,954 16,167
Diluted:
    Net income (loss) $             (7,881) $              6,869
    Less income allocated to participating securities (103)
    Net income (loss) attributable to common stock $             (7,881) $              6,766
    Earnings (loss) per share, diluted $               (0.44) $                0.42
Weighted-average shares outstanding 17,954 16,167
(1) Dilutive effect of common stock equivalents excluded from the diluted per share calculation is not material.

 

Appendix A
Non-GAAP Presentation
Three Months Ended March 31, 2022 and 2021
(Unaudited)

Net loss excluding recognition bonus and net loss per share excluding recognition bonus both eliminate the effect of a recognition bonus awarded despite not meeting internal profit-sharing targets. As such, these are non-GAAP financial measures.

EBITDA, as presented in this press release, is a supplemental measure of our performance that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). It is not a measurement 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. We caution investors that amounts presented in accordance with this definition may not be comparable to similar measures disclosed by other issuers, because not all issuers and analysts calculate EBITDA in the same manner.

We use EBITDA to evaluate our operating performance and liquidity and this is among the primary measures used by management for planning and forecasting of future periods. We believe the presentation of EBITDA is relevant and useful for investors because it allows 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 is relevant and useful for investors because it allows them to better compare our results to other airlines.

In addition to EBITDA as defined above, we have included a separate EBITDA as defined by certain credit agreements. This measurement of EBITDA adjusts for 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 net loss and net 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 March  31,
2022
Reconciliation of net (loss) excluding recognition bonus and (loss) per share
excluding recognition bonus (millions except per share numbers)
Net (loss) before income taxes as reported (GAAP) $                                                    (10.6)
Recognition bonus 7.7
(Loss) before income taxes excluding recognition bonus (2.9)
(Benefit) for income taxes as reported GAAP (2.7)
(Benefit) for income taxes excluding recognition bonus (0.7)
Net (loss) excluding recognition bonus (2.2)
Diluted shares as reported (GAAP) (thousands) 17,954
Diluted earnings (loss) per share as reported (GAAP) (0.44)
Diluted (loss) per share excluding recognition bonus (0.12)
Three Months Ended March  31,
2022
Reconciliation of CASM and CASM excluding fuel and recognition bonus (millions,
unless otherwise noted)
Operating expense as reported (GAAP) $                                                    492.9
Recognition bonus (7.7)
Operating expense excluding recognition bonus 485.2
Fuel expense as reported (164.1)
Operating expense excluding fuel and recognition bonus 321.1
Available seat miles (ASMs) (thousands) 4,620,144
Operating expense per ASM as reported (CASM) (cents) 10.67
Operating expense per ASM (CASM) (cents) 10.50
Operating CASM, excluding fuel as reported (cents) 7.12
Operating CASM, excluding fuel and recognition bonus (cents) 6.95
Three Months Ended March 31,
2022
Reconciliation of consolidated EBITDA to EBITDA as defined by certain credit
agreements (millions)
Net income (loss) $                                                       (7.9)
Interest expense, net 17.8
Income tax provision (benefit) (2.7)
Depreciation and amortization 46.3
Consolidated EBITDA 53.5
Adjusting items as defined per credit agreements 68.2
EBITDA as defined by certain credit agreements 121.7
(1) Denotes non-GAAP figure
(2) Adjusting items include the following: 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

 

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SOURCE Allegiant Travel Company