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Actionable news in SAVE: Spirit Airlines, Inc.,

Spirit: Adjusted Pre-Tax Margin Of Percent MIRAMAR, FL. (

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

April 26, 2016

) - Spirit Airlines, Inc. (NASDAQ: SAVE) today reported

quarter

financial results.

Adjusted net income for the

$72.3 million

per diluted share)

. GAAP net income for the

$61.9 million

per diluted share).

Adjusted pre-tax margin for the

21.3 percent

. On a GAAP basis, pre-tax margin for the first quarter 2016 was

18.2 percent

Unrestricted cash and cash equivalents as of March 31, 2016 was

$902.8 million

Spirit's return on invested capital (before taxes and excluding special items) for the twelve months ended

March 31, 2016

28.3 percent

“I want to thank our Spirit team members for their contributions in achieving these solid first quarter results. The pricing environment remains very competitive, but we aren't just sitting passively by. We have upgraded our pricing systems, made modest revisions to our schedules, and adjusted our approach to inventory management, all of which have produced improvements to our revenue results," said Bob Fornaro, Spirit’s Chief Executive Officer. "As we head into the peak summer travel months, we are focused on continued cost and revenue execution, improving our operational reliability and providing friendly customer service."

Revenue Performance

For the

, Spirit's total operating revenue was

$538.1 million

increase

percent compared to the

, driven by an increase in flight volume, partially offset by a decrease in operating yields.

Total revenue per passenger flight segment ("PFS") for the

decreased

13.0 percent

$16.08

, year over year to

$107.88

, primarily driven by a

20.5 percent

decrease, or

$14.06

, in ticket revenue per PFS. Non-ticket revenue declined

3.7 percent

, year over year on a per flight segment basis to

$53.23

. Although non-ticket revenue per passenger segment remains relatively stable, the Company has experienced modest pressure on take rates for certain ancillary items which it believes is correlated to low fare levels in its markets.

Cost Performance

Adjusted operating expense for the

increased

10.2 percent

$39.0 million

$420.4 million

on a capacity increase of

26.5 percent

year over year. During the first quarter 2016, the Company purchased two A319 aircraft it formerly financed under operating lease agreements which resulted in lease termination charges. GAAP total operating expenses, including special items of

$16.4 million

that are primarily driven by lease termination charges,

percent, or

$52.7 million

$436.8 million

Economic fuel expense decreased

$24.7 million

24.4 percent

in fuel volume. This decrease was driven by a

37.4 percent

in the average economic fuel cost per gallon compared to the same period last year.

Spirit reported

cost per available seat mile ("ASM") excluding special items and fuel (“Adjusted CASM ex-fuel”)

5.59 cent

2.3 percent

compared to the same period last year, driven primarily by lower aircraft rent per ASM. The decrease in aircraft rent per ASM was driven by a change in the mix of leased (rent recorded under aircraft rent) and purchased (depreciation recorded under depreciation and amortization) aircraft. This benefit was partially offset by higher other operating expense related to increased passenger re-accommodation expense, and higher depreciation and amortization expense related to the depreciation of aircraft. Additionally, during the first quarter 2016, the Company and its flight attendants, represented by the Association of Flight Attendants - CWA (AFA), reached a tentative agreement for a five-year contract. During the first quarter 2016, labor expense per ASM was higher year over year due to the accrual of a one-time ratification incentive payment of $8.4 million related to this tentative agreement.

"Our greatest competitive strength is our relative cost advantage. We are focused on getting better all the time and doing so while maintaining, or improving upon, our relative cost advantage," said Ted Christie, Spirit's Chief Financial Officer. "After adjusting for the economic impact of our tentative flight attendant agreement, including the $8.4 million ratification incentive accrual, we are confident we can hold the line on costs and now estimate our full year 2016 adjusted CASM ex-fuel will be about flat year over year."

quarter 2016, Spirit took delivery of 4 new aircraft (2 A320ceo and 2 A321ceo aircraft), ending the

with

aircraft in its fleet.

Conference Call/Webcast Detail

Spirit will conduct a conference call to discuss these results today,

, at 8:30 a.m. ET. A live audio webcast of the conference call will be available to the public on a listen-only basis at

http://ir.spirit.com

. An archive of the webcast will be available under Webcasts & Presentations for 60 days.

About Spirit Airlines:

Spirit Airlines (NASDAQ: SAVE) is committed to offering the lowest total price to the places we fly, on average much lower than other airlines. Our customers start with an unbundled, stripped-down Bare Fare™ and get Frill Control™ which allows them to pay only for the options they choose - like bags, seat assignments and refreshments - the things other airlines bake right into their ticket prices. We help people save money and travel more often, create new jobs and stimulate business growth in the communities we serve. With our Fit Fleet™, the youngest fleet of any major US airline, we operate more than 400 daily flights to 56 destinations in the U.S., Latin America and the Caribbean. Come save with us at www.spirit.com.

Investors are encouraged to read the Company's periodic and current reports filed with or furnished to the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, for additional information regarding the Company.

End Notes

See "Reconciliation of Adjusted Net Income to GAAP Net Income" table below for more details.

See "Calculation for Return on Invested Capital" table below for more details.

See "Reconciliation of Adjusted Operating Expense to GAAP Operating Expense" table below for more details.

(4) See "Special Items" table for more details.

Forward-Looking Statements

Statements in this release and certain oral statements made from time to time by representatives of the Company contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act) which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are “forward-looking statements” for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” and similar expressions intended to identify forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Additional risks or uncertainties (i) that are not currently known to us, (ii) that we currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. You should carefully consider the risks described below and the other information in this report. If any of the following risks materialize, our business could be materially harmed, and our financial condition and results of operations could be materially and adversely affected. References in this report to “Spirit,” “we,” “us,” “our,” or the “Company” shall mean Spirit Airlines, Inc., unless the context indicates otherwise. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.

SPIRIT AIRLINES, INC.

Statement of Operations

(unaudited, in thousands, except per share data)

Three Months Ended

Percent

Change

Operating revenues:

Passenger

272,626

273,466

265,517

219,889

Total operating revenues

538,143

493,355

Operating expenses:

Aircraft fuel

85,982

112,426

Salaries, wages and benefits

116,410

88,961

Aircraft rent

52,202

52,788

Landing fees and other rents

34,807

30,546

Distribution

22,933

20,497

Maintenance, materials and repairs

20,940

19,160

Depreciation and amortization

23,109

14,863

Other operating

64,045

43,843

Loss on disposal of assets

Special charges

16,202

Total operating expenses

436,844

384,104

Operating income

101,299

109,251

Other (income) expense:

Interest expense

Capitalized interest

(3,325

(2,533

Interest income

(1,566

Other expense

Total other (income) expense

Income before income taxes

98,060

109,034

Provision for income taxes

36,140

40,032

Net income

61,920

69,002

Basic earnings per share

Diluted earnings per share

Weighted average shares, basic

71,572

73,054

Weighted average shares, diluted

71,777

73,370

Statements of Comprehensive Income

(unaudited, in thousands)

Unrealized loss on interest rate derivative instruments, net of deferred tax benefit of $0 and $940

(1,594

Interest rate swap losses reclassified into earnings

Other comprehensive income (loss)

Comprehensive income

62,010

67,408

Balance Sheets

December 31,

Assets

Current assets:

Cash and cash equivalents

902,809

803,632

Accounts receivable, net

32,469

28,266

Aircraft maintenance deposits

79,276

73,415

Prepaid income taxes

72,278

Prepaid expenses and other current assets

54,760

48,749

Total current assets

1,069,314

1,026,340

Property and equipment:

Flight equipment

1,031,886

827,282

Ground and other equipment

93,724

82,459

Less accumulated depreciation

(76,703

(65,524

1,048,907

844,217

Deposits on flight equipment purchase contracts

289,835

286,837

Long-term aircraft maintenance deposits

196,470

206,485

Deferred heavy maintenance, net

80,144

89,127

Other long-term assets

78,578

77,539

Total assets

2,763,248

2,530,545

Liabilities and shareholders’ equity

Current liabilities:

Accounts payable

23,017

17,043

Air traffic liability

263,430

216,831

Current maturities of long-term debt

53,012

49,637

Other current liabilities

228,137

182,729

Total current liabilities

567,596

466,240

Long-term debt less current maturities

655,103

596,693

Long-term deferred income taxes

242,602

221,481

Deferred gains and other long-term liabilities

20,179

20,821

Shareholders’ equity:

Common stock

Additional paid-in-capital

545,377

544,277

Treasury stock, at cost

(126,779

(116,182

Retained earnings

860,674

798,754

Accumulated other comprehensive loss

(1,511

(1,546

Total shareholders’ equity

1,277,768

1,225,310

Total liabilities and shareholders’ equity

SPIRIT AIRLINES, INC.SPIRIT AIRLINES, INC.

Statement of Cash Flows

Three Months Ended March 31,

Operating activities:

Adjustments to reconcile net income to net cash provided by operations:

Unrealized losses on open derivative contracts, net

Losses reclassified from other comprehensive income

Equity-based compensation

Allowance for doubtful accounts (recoveries)

Amortization of deferred gains and losses

Deferred income tax expense (benefit)

21,066

(5,560

Lease termination cost

Changes in operating assets and liabilities:

(4,229

(5,444

(12,311

(12,317

Prepaid Income Taxes

Long-term deposits and other assets

(8,495

(6,160

46,473

79,350

Other liabilities

33,296

28,810

Net cash provided by operating activities

258,099

169,535

Investing activities:

Pre-delivery deposits for flight equipment, net of refunds

(50,358

(50,388

(2,575

(1,700

Purchase of property and equipment

(159,829

(184,609

Net cash used in investing activities

(212,762

(236,697

Financing activities:

Proceeds from issuance of long-term debt

73,914

185,000

Proceeds from stock options exercised

Payments on debt and capital lease obligations

(9,749

(2,968

Excess tax benefit (deficiency) from equity-based compensation

Repurchase of common stock

(9,601

(10,943

Debt issuance costs

(2,976

Net cash provided by financing activities

53,840

176,005

Net increase in cash and cash equivalents

99,177

108,843

Cash and cash equivalents at beginning of period

632,784

Cash and cash equivalents at end of period

741,627

Supplemental disclosures

Cash payments for:

Interest, net of capitalized interest

Income taxes paid, net of refunds

(64,158

Selected Operating Statistics (unaudited)

Available seat miles (ASMs) (thousands)

5,983,005

4,729,463

Revenue passenger miles (RPMs) (thousands)

5,070,313

4,017,559

Load factor (%)

(0.2) pts

Passenger flight segments (thousands)

Block hours

93,545

77,035

Departures

35,160

29,044

Total operating revenue per ASM (TRASM) (cents)

Average yield (cents)

Average ticket revenue per passenger flight segment ($)

Average non-ticket revenue per passenger flight segment ($)

Total revenue per passenger flight segment ($)

123.96

CASM (cents)

Adjusted CASM (cents) (1)

Adjusted CASM ex-fuel (cents) (2)

(2.3)%

Fuel gallons consumed (thousands)

70,550

56,723

Average economic fuel cost per gallon ($)

Aircraft at end of period

Average daily aircraft utilization (hours)

Average stage length (miles)

Excludes special items.

Excludes economic fuel expense and special items.

The Company is providing a reconciliation of GAAP financial information to non-GAAP financial information as it believes that non-GAAP financial measures provide management and investors the ability to measure the performance of the Company on a consistent basis. These non-GAAP financial measures have limitations as an analytical tool. Because of these limitations, determinations of the Company's operating performance excluding unrealized gains and losses or special items should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

Special Items

(in thousands)

Operating special items include the following (1):

Unrealized losses (gains) related to fuel derivative contracts

Special charges

Total operating special items

16,416

Reconciliation of Adjusted Operating Expense to GAAP Operating Expense

(unaudited)

(in thousands, except CASM data in cents)

Total operating expenses, as reported

Less operating special items (1)

Adjusted operating expenses, non-GAAP (2)

420,428

381,389

Less: Economic fuel expense

110,731

Adjusted operating expenses excluding fuel, non-GAAP (3)

334,446

270,658

Adjusted CASM (cents) (2)

Adjusted CASM ex-fuel (cents) (3)

Special items include unrealized gains and losses related to outstanding outstanding fuel derivative contracts, loss on disposal of assets, and special charges. Special charges for the first quarter 2016 are primarily related to lease termination costs.

Excludes operating special items.

Excludes operating special items and economic fuel expense as described in the "Reconciliation of Economic Fuel Expense to GAAP Fuel Expense" table below.

Reconciliation of Adjusted Net Income to GAAP Net Income

(in thousands, except per share data)

Net income, as reported

Add: Provision for income taxes

Income before income taxes, as reported

Pre-tax margin, GAAP

Add operating special items (1)

Income before income taxes, non-GAAP (2)

114,476

111,749

Adjusted pre-tax margin, non-GAAP (2)

Provision for income taxes (3)

42,190

41,029

Adjusted net income, non-GAAP (2)(3)

72,286

70,720

Adjusted net income per share, diluted (2)(3)

Reconciliation of Adjusted Operating Income to GAAP Operating Income

Operating income, as reported

Operating margin, GAAP

Adjusted operating income, non-GAAP (2)

117,715

111,966

Adjusted operating margin, non-GAAP (2)

See "Special Items" for more details.

Assumes same marginal tax rate as is applicable to GAAP net income.

The Company believes economic fuel expense is the best measure of the effect fuel prices are currently having on our business, because it most closely approximates the net cash outflow associated with purchasing fuel used for our operations during the period. Economic fuel expense is defined as into-plane fuel expense, realized gains or losses on derivative contracts, plus the economic premium expense related to fuel option contracts in the period the option is benefiting. The key difference between aircraft fuel expense as recorded in our statement of operations and economic fuel expense is unrealized mark-to-market changes in the value of aircraft fuel derivatives outstanding and the timing of premium gain or loss recognition on our outstanding fuel option contracts. Many industry analysts evaluate airline results using economic fuel expense, and it is used in our internal management reporting.

Reconciliation of Economic Fuel Expense to GAAP Fuel Expense

(in thousands, except per gallon data)

Fuel expense

Aircraft fuel, as reported

Unrealized losses (gains) related to fuel derivative contracts

Economic fuel expense, non-GAAP

Economic fuel cost per gallon, non-GAAP

Calculation of Return on Invested Capital

Twelve Months Ended

501,170

12,098

Adjustment for aircraft rent

210,945

Adjusted operating income (2)

724,213

Tax (36.9%) (3)

267,235

Adjusted operating income, after-tax

456,978

Total debt

708,115

Book equity

Less: Unrestricted cash

Add: Capitalized aircraft operating leases (7x Aircraft Rent)

1,476,615

Total invested capital

2,559,689

Return on invested capital (ROIC), pre-tax (2)

Return on invested capital (ROIC), after-tax (2)(3)

Special items include unrealized gains or losses related to outstanding fuel derivative contracts, loss on disposal of assets, and special charges primarily related to lease termination costs in the first quarter 2016.

Excludes special items as described above.

Assumes same marginal tax rate as is applicable to GAAP net income for the twelve months ended

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:

Spirit: Capacity - Available Seat Miles (Asms) - April 18, 2016
Spirit Airlines's SrVP & Chief Financial Officer just disposed of 4,975 shares - April 18, 2016
Vice President of Spirit Airlines just disposed of 301 shares - April 12, 2016
Spirit Airlines insider just disposed of 2,756 shares - April 12, 2016