| Republic Airways Holdings Announces Third Quarter 2006 Results |
INDIANAPOLIS--(BUSINESS WIRE)--Oct. 25, 2006--Republic Airways Holdings Inc. (NASDAQ:RJET) today reported operating revenues of $306.1 million for the quarter ended September 30, 2006, a 33.0% increase, compared to $230.2 million for the same period last year. The Company reported net income of $21.9 million for the quarter ended September 30, 2006, a 57.0% improvement over the $14.0 million reported in the prior year's third quarter (the prior year's third quarter results included an after tax expense of $2.0 million for payments made to AMR Corporation related to the operation of 70-seat aircraft on the Chautauqua operating certificate). The Company also reported earnings per diluted share of $0.50 for the quarter, an increase of 42.9% compared to $0.35 for the same period last year. The primary items of significance affecting the third quarter of 2006 are outlined below. Third Quarter Highlights Total operating revenues for the third quarter of 2006 increased primarily as a result of a 46.5% increase in available seat miles (ASMs) to 2.5 billion ASMs, up from 1.7 billion ASMs, and a 23.9% increase in block hours. These increases reflect the addition of 40 E170 regional jet aircraft, which were placed into service since September 30, 2005, offset by the removal of seven E145 regional jet aircraft during the same time period. Total operating expenses for the third quarter of 2006, including interest expense but excluding fuel charges (which are reimbursable by the Company's partners), of $182.8 million, increased 32.6% from $137.8 million for the same quarter of 2005. Operating cost per ASM (CASM), including interest expense but excluding fuel, decreased 9.5% to 7.37 cents compared to the prior year's 8.14 cents. During the quarter the Company took delivery of four new E170 aircraft and entered into 15-year, fixed rate debt financing arrangements for all four aircraft. During the quarter the Company also purchased five of its E145 aircraft that were under long-term leases and entered into 10-year, fixed rate debt financing arrangements for the five aircraft. At September 30, 2006, the Company's fleet consisted of 170 regional jets including 75 E170 aircraft. On July 21st, the Company announced that it had reached an agreement to operate forty-four, 50-seat regional jets for Continental Airlines. Twenty of the aircraft will be E145 regional jets that will be transitioned from the Company's current US Airways Express operations. The Company has also entered into definitive agreements to lease 12 used CRJ-200 regional jets and has a letter of intent to lease 12 additional used CRJ-200 regional jets under terms and conditions consistent with the Company's agreement with Continental. All 44 of the aircraft are expected to be placed into service for Continental between January and July 2007 and will be operated for terms that vary from two years to five years. Under certain conditions Continental may extend the term on the aircraft up to five additional years. Also in July, the Company announced that it had reached agreements with US Airways and Embraer to take delivery of thirty, 86-seat E175 aircraft and to place these aircraft into service for US Airways between February 2007 and the summer of 2008. The new, twelve-year agreement with US Airways also included the removal of the twenty, 50-seat E145 aircraft which will be repositioned to operate under the new Continental agreement. Balance Sheet Information At September 30, 2006 the Company had $172.8 million in cash and cash equivalents compared to $162.0 million as of December 31, 2005. The Company made $41.6 million in aircraft deposits during the quarter, bringing its aircraft deposit balance to $48.9 million as of September 30, 2006. The Company's long-term debt increased to $1.57 billion as of September 30, 2006, compared to $1.41 billion at December 31, 2005. All of the Company's long-term debt carry fixed interest rates, and is secured by the aircraft. The Company also has significant long-term operating lease obligations. At a 7% discount factor, the present value of these lease obligations was approximately $735 million as of September 30, 2006. Corporate Information Republic Airways Holdings, based in Indianapolis, Indiana is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines offer scheduled passenger service on over 1,000 flights daily to 91 cities in 36 states, Canada, Mexico and the U.S. Virgin Islands through airline services agreements with four major U.S. airlines. Substantially all flights are operated under a major airline partner brand, consisting of AmericanConnection, Delta Connection, United Express and US Airways Express. As of September 30, 2006, the airlines employed more than 3,500 aviation professionals and operated 170 regional jet aircraft including 75 E170 aircraft. The Company will conduct a telephone briefing to discuss its third quarter results tomorrow, October 26th at 1:00 p.m. EDT. For those wishing to participate please call 866-831-6272 and for international calls please dial 617-213-8859; the pass code is 34170344. A live Web cast of this briefing will also be available online at www.rjet.com - investor relations. Additional Information In addition to historical information, this release contains forward-looking statements. Republic Airways may, from time-to-time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass Republic Airways' beliefs, expectations, hopes or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to Republic Airways as of such date. Republic Airways assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this release by reference.
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and Shares in Thousands, Except per Share Amounts)
(Unaudited)
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Three Months Ended Nine Months Ended
Financial Highlights September 30, September 30,
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2006 2005 Change 2006 2005 Change
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OPERATING REVENUES
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Passenger $301,314 $227,365 32.5% $828,920 $643,402 28.8%
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Other 4,818 2,873 67.7% 18,869 9,843 91.7%
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Total
operating
revenues 306,132 230,238 33.0% 847,789 653,245 29.8%
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OPERATING EXPENSES
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Wages and benefits 46,415 38,679 20.0% 130,155 105,482 23.4%
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Aircraft fuel 89,766 71,193 26.1% 248,426 199,540 24.5%
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Landing fees 11,382 8,183 39.1% 30,468 22,961 32.7%
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Aircraft and
engine rent 25,130 19,849 26.6% 69,876 57,508 21.5%
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Maintenance and
repair 28,953 19,004 52.4% 75,856 56,580 34.1%
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Insurance and
taxes 4,710 4,363 8.0% 13,980 12,479 12.0%
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Depreciation and
amortization 23,824 15,945 49.4% 67,322 43,944 53.2%
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Other 19,398 15,597 24.4% 54,675 45,818 19.3%
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Total
operating
expenses 249,578 192,813 29.4% 690,758 544,312 26.9%
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OPERATING INCOME 56,554 37,425 51.1% 157,031 108,933 44.2%
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OTHER INCOME
(EXPENSE)
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Interest expense (22,942) (16,217) 41.5% (66,772) (42,508) 57.1%
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Other income 2,633 1,792 46.9% 7,247 3,184 127.6%
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Total other
income
(expense) (20,309) (14,425) 40.8% (59,525) (39,324) 51.4%
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INCOME BEFORE INCOME
TAXES 36,245 23,000 57.6% 97,506 69,609 40.1%
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INCOME TAX EXPENSE 14,313 9,029 58.5% 38,419 27,418 40.1%
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NET INCOME $21,932 $13,971 57.0% $59,087 $42,191 40.0%
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PER SHARE, BASIC $0.52 $0.36 44.4% $1.41 $1.25 12.8%
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PER SHARE, DILUTED $0.50 $0.35 42.9% $1.36 $1.22 11.5%
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Weighted Average
Common Shares
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Basic 42,205 39,284 7.4% 41,996 33,886 23.9%
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Diluted 43,539 40,150 8.4% 43,297 34,625 25.0%
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Unaudited Operating Highlights
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Three Months Ended Nine Months Ended
Operating
Highlights September 30 September 30
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2006 2005 Change 2006 2005 Change
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Passengers
carried 3,456,979 2,385,522 44.9% 9,340,356 6,769,088 38.0%
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Revenue
passenger
miles (000) 1,808,115 1,153,478 56.8% 4,918,382 3,243,887 51.6%
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Available
seat miles
(000) 2,479,659 1,692,544 46.5% 6,702,458 4,705,310 42.4%
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Passenger
load factor 72.9% 68.2% 4.7 pts 73.4% 68.9% 4.5 pts
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Cost per
available
seat mile,
including
interest
expense
(cents) 10.99 12.35 (11.0%) 11.30 12.47 (9.4%)
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Fuel cost per
available
seat mile
(cents) 3.62 4.21 (14.0%) 3.71 4.24 (12.5%)
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Cost per
available
seat mile,
excluding
fuel expense
(cents) 7.37 8.14 (9.5%) 7.59 8.23 (7.8%)
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Block hours 149,288 120,454 23.9% 407,540 345,061 18.1%
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Departures 86,093 72,342 19.0% 234,123 207,394 12.9%
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Average daily
utilization
of each
aircraft
(hours) 10.6 10.5 1.0% 10.4 10.6 (1.9%)
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Average
length of
aircraft
flight
(miles) 512 479 6.9% 517 471 9.8%
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CONTACT: Republic Airways Holdings
Warren R. Wilkinson, 317-484-6042
SOURCE: Republic Airways Holdings
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| "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Republic Airways Holdings's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year. |