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Hawaiian Holdings' (HA) CEO Mark Dunkerley on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Results Earnings Conference Call

April 21, 2016, 04:30 PM ET

Executives

Ashlee Kishimoto - Sr. Director, IR

Mark Dunkerley - President and CEO

Peter Ingram - Chief Commercial Officer

Shannon Okinaka - CFO

Analysts

Helane Becker - Cowen & Company

Hunter Keay - Wolfe Research

Rajeev Lalwani - Morgan Stanley

Adam Hackel - CRT

Stephen O’Hara - Sidoti & Company

Michael Derchin - Sterne Agee

David Siegel - Honolulu Star-Advertiser

Adrian Schofield - Aviation Week

Operator

Greetings and welcome to the Hawaiian Holdings' 2016 Quarter One Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Ms. Ashlee Kishimoto. Thank you, you may begin.

Ashlee Kishimoto

Thank you, Operator. Welcome everyone and thank you for joining us today to discuss Hawaiian Holdings' financial results for the first quarter of 2016. On the call with me today are Mark Dunkerley, President and Chief Executive Officer; Peter Ingram, Chief Commercial Officer; and Shannon Okinaka, Chief Financial Officer.

Mark will begin with some overview comments. Next, Peter will take us through revenue performance. Shannon will follow with a discussion on cost and the balance sheet. We will then open the call up for questions and Mark will end with some closing remarks.

By now everyone should have access to the press release that went out at about 4 o'clock Eastern Time today. If you have not received the release, it is available on the Investor Relations page of our website hawaiianairlines.com. During the course of our call today, we will refer at times to adjusted or non-GAAP numbers and metrics. A detailed reconciliation of GAAP to non-GAAP numbers and metrics can be found in our press release or in the Investor Relations page of our website.

Before we begin, we'd like to remind everyone that the following prepared remarks contain forward-looking statements including statements about our future plans and potential future financial and operating performance and management may make additional forward-looking statements in response to your questions. These statements are subject to risk and uncertainties and do not guarantee future performance and therefore undue reliance should not be placed upon them. For a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statements, we refer you to Hawaiian Holdings' recent filings with the SEC, including the most recent annual report filed on Form 10-K as well as reports filed on Form 10-Q and 8-K.

And with that, I'd like to turn the call over to Mark.

Mark Dunkerley

Thank you Ashley, and hello, hi, everyone. Thank you for joining us today.

Our first quarter's record breaking financial results reflect the continuation of improving trends in our business. Contributing have been solid demand for travel to Hawaii, balance industry capacity over the vast majority of our network, lower fuel prices, and the lapping of a strengthening U.S. dollar against the Japanese yen.

Our adjusted net income grew 43% to $43 million and our adjusted earnings per share more than doubled to $0.80 per share slightly ahead of consensus estimates. Adjusted pretax margin for the quarter grew to 5.2 percentage points to 12.6% in what is typically our weakest quarter. Our pretax return on invested capital rose to 29.7% for the 12 months ended March 31.

Our outstanding financial performance this quarter as well as our outlook for the rest of 2016, reflect the dedication of my colleagues to making Hawaiian Airlines a world class carrier consistently delivering excellence. My gratitude goes through all of Hawaiian's employees for their tremendous efforts and the passion they put into taking care of our guests on the ground and in the air.