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Hawaiian: First Quarter 2016 - Key Financial Metrics

The following excerpt is from the company's SEC filing.

YoY Change

Adjusted

Net Income

$51.5M

+$25.6M

$43.0M

+$18.3M

Diluted EPS

+$0.55

+$0.42

Pre-tax Margin

+7.3 pts.

+5.2 pts.

“The outstanding first quarter results reflect a strong start to 2016,” said Mark Dunkerley, Hawaiian Airlines president and chief executive officer. “Solid demand for travel to Hawai'i, manageable industry capacity growth, and the low cost of fuel combined with the exceptional service that our employees deliver to our guests propelled our record results this quarter. Looking ahead, our outlook is for the se positive trends to continue reinforcing our confidence that 2016 will be a great year.”

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.

Liquidity and Capital Resources

As of

March 31, 2016

the Company had:

Unrestricted cash, cash equivalents and short-term investments of

$669 million

Outstanding debt and capital lease obligations of

$683 million

The Company early retired $52 million (principal balance) of existing debt in the

. In addition, the Company repurchased $2.5 million of common stock in the first quarter.

First Quarter

Highlights

Operational

Ranked #1 nationally for on-time performance for the 12th consecutive year in 2015 and for the months of January and February 2016 by the U.S. Department of Transportation Air Travel Consumer Report.

Implemented changes to insource the sales team in Australia and New Zealand and announced similar changes in Japan to provide cost savings and better enable long-term success in these markets.

Announced the purchase of an Airbus A320 series Full Flight Simulator for on-site pilot training which is expected to return several million dollars in annual cost savings.

Product and loyalty

Commenced the installation of fully lie-flat seats beginning the retrofit program for the entire A330 fleet.

Second Quarter and Full Year

Outlook

The table below summarizes the Company’s expectations for the second quarter ending June 30, 2016 and full year ending December 31, 2016, expressed as an expected percentage change compared to the results for the quarter ended June 30, 2015 and full year ended December 31, 2015, as applicable (the historical results for which are presented for reference)

Second Quarter

Second Quarter 2016 Guidance

Cost per ASM Excluding Fuel (cents)

Up 3.5% to up 6.5%

Operating Revenue Per ASM (cents)

Down 1.5% to up 1.5%

ASMs (millions)

4,441.6

Up 1.5% to up 3.5%

Gallons of jet fuel consumed (millions)

Up 1% to up 3%

Economic fuel cost per gallon (a)

$1.50 to $1.60

Full Year 2016 Guidance

Up in the low single digit range

17,726.3

Up 2.5% to up 5.5%

Up 1.5% to up 4.5%

$1.45 to $1.55

(a) Economic fuel cost per gallon estimates are based on the April 13, 2016 fuel forward curve.

Investor Conference Call

Hawaiian Holdings’ quarterly earnings conference call is scheduled to begin today (

April 21, 2016

) at 4:30 p.m. Eastern Time (USA). The conference call will be broadcast live over the Internet. Investors may listen to the live audio webcast on the investor relations section of the Company’s website at

www.HawaiianAirlines.com.

For those who are not available for the live webcast, the call will be archived for 90 days on the investor relations section of the Company's website.

About Hawaiian Airlines

has led all U.S. carriers in on-time performance for each of the past 12 years (2004-2015) as reported by the U.S. Department of Transportation. Consumer surveys by

Condé Nast Traveler

Travel + Leisure

have all ranked Hawaiian the highest of all domestic airlines serving Hawai‘i.

Now in its 87th year of continuous service, Hawaiian is Hawai‘i’s biggest and longest-serving airline, as well as the largest provider of passenger air service from its primary visitor markets on the U.S. mainland. Hawaiian offers nonstop service to Hawai‘i from more U.S. gateway cities (11) than any other airline, along with service from Japan, South Korea, China, Australia, New Zealand, American Samoa and Tahiti. Hawaiian also provides approximately 160 jet flights daily between the Hawaiian Islands, with a total of more than 200 daily flights system-wide.

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at

. Follow updates on Twitter about Hawaiian (

@HawaiianAir

) and its special fare offers (

@HawaiianFares

), and become a fan on its

Facebook page

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to certain current and future events and financial performance. Such forward-looking statements include, without limitation, the Company’s expectations regarding cost per available seat mile excluding fuel, available seat miles, gallons of jet fuel consumed and economic fuel cost per gallon, each for the quarter ending June 30, 2016 and full year ending December 31, 2016; the Company's expectations regarding operating revenue per available seat mile for the quarter ending June 30, 2016; the Company's expectations regarding cost savings related to the Full Flight Simulator; the statement of the Company's CEO regarding expectations for 2016; and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Words such as “expects,” “anticipates,” “projects,” “intends,” “plans,” “believes,” “estimates,” variations of such words, and similar expressions are also intended to identify such forward-looking statements. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and assumptions relating to the Company’s operations and business environment, all of which may cause the Company’s actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. These risks and uncertainties include, without limitation, the Company’s ability to accurately forecast quarterly and annual results; economic volatility; the price and availability of aircraft fuel; fluctuations in demand for transportation in the markets in which the Company operates; the Company’s dependence on tourist travel; foreign currency exchange rate fluctuations; and the Company’s ability to implement its growth strategy and related cost reduction goals.

The risks, uncertainties and assumptions referred to above that could cause the Company’s results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company’s other public filings and public announcements, including the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available to the Company on the date hereof. The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.

Table 1.

Hawaiian Holdings, Inc.

Consolidated Statements of Operations

(in thousands, except for per share data) (unaudited)

Three Months Ended March 31,

% Change

Operating Revenue:

Passenger

482,027

469,145

69,153

71,135

551,180

540,280

Operating Expenses:

Aircraft fuel, including taxes and delivery

69,900

111,327

Wages and benefits

133,643

120,014

Aircraft rent

29,388

28,371

Maintenance, materials and repairs

60,504

55,245

Aircraft and passenger servicing

28,551

28,316

Commissions and other selling

33,031

30,428

Depreciation and amortization

27,146

25,179

Other rentals and landing fees

24,434

22,831

Purchased services

22,732

21,240

29,983

26,165

459,312

469,116

Operating Income

91,868

71,164

Nonoperating Income (Expense):

Interest expense and amortization of debt discounts and issuance costs

(11,004

(15,518

Interest income

Capitalized interest

Losses on fuel derivatives

(2,065

(5,687

Loss on extinguishment of debt

(3,350

(6,955

Other, net

(2,934

(8,764

(29,165

Income Before Income Taxes

83,104

41,999

Income tax expense

31,638

16,116

51,466

25,883

Net Income Per Share

Weighted Average Number of Common Stock Shares Outstanding:

53,656

54,614

53,955

64,926

Table 2.

Selected Statistical Data (unaudited)

Three months ended March 31,

(in thousands, except as otherwise indicated)

Scheduled Operations (c) :

Revenue passengers flown

Revenue passenger miles (RPM)

3,541,069

3,345,379

Available seat miles (ASM)

4,366,995

4,227,045

Passenger revenue per RPM (Yield)

Passenger load factor (RPM/ASM)

2.0 pt.

Passenger revenue per ASM (PRASM)

Total Operations (c) :

3,542,059

3,347,608

4,368,096

4,229,686

Operating revenue per ASM (RASM)

Operating cost per ASM (CASM)

CASM excluding aircraft fuel (b)

Aircraft fuel expense per ASM (a)

Revenue block hours operated

42,726

42,198

57,855

56,998

Average cost per gallon of jet fuel (actual) (a)

Economic fuel cost per gallon (a)(d)

Includes applicable taxes and fees.

Represents adjusted unit costs, a non-GAAP measure. The Company believes this is a useful measure because it better reflects its controllable costs. See Table 4 for a reconciliation of operating expenses excluding aircraft fuel.

Includes the operations of the Company's contract carrier under a capacity purchase agreement.

(d) See Table 3 for a reconciliation of economic fuel costs.

Table 3.

Economic Fuel Expense

(in thousands, except per-gallon amounts) (unaudited)

The Company believes that

economic fuel expense

is the best measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period. The Company defines economic fuel expense as GAAP fuel expense plus (gains)/losses realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period.

Aircraft fuel expense, including taxes and delivery

Realized losses on settlement of fuel derivative contracts

19,025

14,591

Economic fuel expense

88,925

125,918

Fuel gallons consumed

Economic fuel costs per gallon

Table 4.

Non-GAAP Financial Reconciliation

(in thousands, except per share and CASM data) (unaudited)

The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including net income, diluted net income per share, CASM, PRASM, RASM, Passenger Revenue per RPM and EBITDAR. Pursuant to Regulation G, the Company has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis. The adjustments are described below:

Changes in fair value of derivative contracts, net of tax, are based on market prices for open contracts as of the end of the reporting period. This line item includes the unrealized amounts of fuel and interest rate derivatives (not designated as hedges) that will settle in future periods and the reversal of prior period unrealized amounts. Excluding the impact of these derivative adjustments allows investors to better analyze our operational performance and compare our results to other airlines in the periods presented below.

Loss on extinguishment of debt, net of tax, is excluded to allow investors to better analyze the Company's core operational performance and more readily compare its results to other airlines in the periods presented below.

Diluted Net Income Per Share

As reported - GAAP

Add: changes in fair value of derivative contracts, net of tax

(10,515

(5,343

Add: loss on extinguishment of debt, net of tax

Adjusted net income

43,028

24,713

Income Before Income Taxes, as reported

(16,960

(8,905

Adjusted Income Before Income Taxes

69,494

40,049

Operating Costs per Available Seat Mile (CASM)

The Company has separately listed in the table below its fuel costs per ASM and non-GAAP unit costs, excluding fuel. These amounts are included in CASM, but for internal purposes the Company consistently uses cost metrics that exclude fuel and non-recurring items (if applicable) to measure and monitor its costs.

GAAP operating expenses

Less: aircraft fuel, including taxes and delivery

(69,900

(111,327

Adjusted operating expenses - excluding aircraft fuel

389,412

357,789

Available Seat Miles

CASM - GAAP

CASM - excluding aircraft fuel

Pre-tax margin

The Company excludes unrealized gains from fuel derivative contracts and losses on extinguishment of debt from pre-tax margin for the same reasons as described above.

Pre-Tax Margin, as reported

Adjusted Pre-Tax Margin

Leverage ratio

The Company uses adjusted total debt, including aircraft rent, in addition to long-term adjusted debt and capital leases, to represent long-term financial obligations. The Company excludes unrealized (gains) losses from fuel derivative contracts and losses on extinguishment of debt from earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) for the reasons as described above. Management believes this metric is helpful to investors in assessing the Company’s overall debt.

Twelve months ended

Debt and capital lease obligations

682,779

Plus: Aircraft leases capitalized at 7x last twelve months' aircraft rent

816,690

Adjusted debt and capital lease obligations

1,499,469

EBITDAR:

336,793

Add back:

Interest and amortization of debt expense

51,164

107,548

Rent expense

116,670

612,175

Adjustments:

(9,069

Adjusted EBITDAR

611,559

Leverage Ratio

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Hawaiian Holdings's President and CEO just disposed of 85,000 shares - April 18, 2016
Hawaiian: V[$;Qyo>&_1,Qy M*Gf)>>=Z1Gje>P1[8Wo"?"%\@7Sa?4%]H7X!?F)^Pg\C?X1_Y8!'@*B!"H%K M@ %JX8.AG*&UXD :0;I#6D3^1J)(1DGJ2XY-- MD[:4()2*E/257Y7)EC26GY0)ZNGQV?BY_ZH&F@V*%'H;:B)J*6HP:C=J/FI%:DQZ4XI:FF&J: - April 8, 2016
Hawaiian Holdings releases salary data. CEO sees compensation rise 5% - April 8, 2016