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Mesa Air Group Reports First Quarter Fiscal 2022 Results
Source: Nasdaq GlobeNewswire / 09 Feb 2022 15:01:00 America/Chicago
PHOENIX, Feb. 09, 2022 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported first quarter fiscal 2022 financial and operating results.
Financial Summary:
- Q1 pre-tax loss of $18.4 million, net loss of $14.3 million or $(0.40) per diluted share.
- Q1 adjusted net loss1 of $9.3 million or $(0.26) per diluted share.
Fiscal Year Q1 Results:
Mesa’s Q1 FY22 results reflect a net loss of $14.3 million, or $(0.40) per diluted share, compared to net income of $14.1 million, or $0.39 per diluted share for Q1 FY21. Mesa’s Q1 FY22 adjusted net loss1 of $9.3 million was down compared to net income of $13.2 million in Q1 FY21. We can attribute this $22.5 million decrease to the impacts related to Covid, such as cancelled flights, a catch up in deferred heavy maintenance expense, and a spike in sick-related absence rates. Mesa also did not recognize any PSP funds as an offset to operating expenses during Q1 2022, compared to an $11.3 million reduction in Q1 2021.
Jonathan Ornstein, Chairman and CEO, said, “Mesa’s results reflect the impact of Covid to our quarter’s operations and financials. Its effect on this quarter was significant and unlike anything we have seen in twenty years. This was further impacted by elevated pilot attrition as the major and national airlines have accelerated hiring. Looking ahead, we are cautiously optimistic that we are already seeing a decrease in Covid-related absence rates. Managing through the challenges of pilot attrition in our core regional operation remains our team’s top priority.
Outside of our core regional operation, we continue to move forward with some of our important strategic initiatives. We are taking delivery of our third 737-400F aircraft this month. We also remain invested in electric aircraft companies Archer Aviation and Heart Aerospace as we look to position Mesa to be the regional airline leader in decarbonization and electric aircraft. Going forward, our strategy is to selectively look for other opportunities in aviation related, green technologies to ensure a leadership role in this area.”
Fiscal Q1 details:
Revenue in Q1 2022 was $147.8 million, a decrease of $2.6 million (1.7%) from $150.4 million for Q1 2021. While contract revenue increased $9.7 million due to more flying on all fleets relative to the prior period, this increase was offset by fewer aircraft flown for American. There was also a decrease in pass through and other revenue of $12.4 million primarily due to a decrease in pass-through maintenance expense. Mesa’s Q1 2022 results include, per GAAP, the recognition of $4.2 million of previously deferred revenue, versus the deferral of $5.2 million of revenue in Q1 2021. The remaining deferred revenue balance will be recognized as flights are completed over the remaining terms of the contracts.
Mesa’s Adjusted EBITDA1 for Q1 2022 was $17.0 million, compared to $47.4 million in Q1 2021, and Adjusted EBITDAR1 was $26.6 million for Q1 2022, compared to $57.5 million in Q1 2021.
Operationally, the Company ran a controllable completion factor of 97.2% for American and 98.3% for United during Q1 2022. This is compared to a controllable completion factor of 99.8% for American and 100.0% for United during Q1 2021. This excludes cancellations due to weather and air traffic control.
With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 95.8% for American and 97.6% for United during Q1 2022. This is compared to a total completion factor of 98.3% for American and 99.4% for United during Q1 2021.
1 See Reconciliation of non-GAAP financial measures
Liquidity and Capital Resources:
Mesa ended the quarter at $102.3 million in unrestricted cash and equivalents. As of December 31, 2021, the Company had $678.6 million in total debt secured primarily with aircraft and engines.
Fleet:
For the three months ended December 31, 2021, 49% of the Company’s total revenue was derived from our contracts with United, 45% from American, 1% from DHL, and 5% from leases of aircraft to a third party.
Below is our current and future fleet plan by partner and fleet type:
Fiscal Year 2021 Fiscal Year 2022 Fleet Plan Q1 (Dec '20) Q2 (Mar '21) Q3 (Jun '21) Q4 (Sep '21) Q1 (Dec '21) Q2 (Mar '22) Q3 (Jun '22) Actual Actual Actual Actual Actual Forecast Forecast E-175 – UA 72 76 80 80 80 80 80 CRJ-700 – UA 8 - - - - - - CRJ-900 – AA 54 45 45 40 40 40 40 737-400F – DHL 2 2 2 2 2 3 3 Sub-total 136 123 127 122 122 123 123 CRJ-700 Leased - 6 12 14 17 20 20 CRJ-700 to be Leased to Third party 12 14 8 6 3 - - CRJ-900 Spares/Parked 10 19 19 24 24 24 24 CRJ-200 Spares/Parked 1 1 1 1 1 1 1 Total Fleet 159 163 167 167 167 168 168 Mesa Air Group will host a conference call with analysts on February 9th at 5:30 pm EDT. The conference call number is 888-469-2054 (Passcode: Phoenix (7463649). The conference call can also be accessed live via the web by visiting Here.
A recorded version will be available on Mesa's website approximately two hours after the call for approximately 14 days.
1Reconciliation of non-GAAP financial measures
Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa's ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three months ended December 31, 2021 and December 31, 2020. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company's net income or loss. Additionally, these calculations may not be comparable with similarly titled measures of other companies.
1Reconciliation of GAAP versus Non-GAAP Disclosures
(In thousands, except for per diluted share) (Unaudited)Three Months Ended Dec 31, 2021 Three Months Ended Dec 31, 2020 Income (Loss) Before Taxes Income Tax (Expense)/ Benefit Net Income (Loss) Net Income (Loss) per Diluted Share Income Before Taxes Income Tax (Expense)/ Benefit Net Income Net Income per Diluted Share GAAP Income (Loss) $ (18,386 ) 4,112 (14,274 ) $ (0.40 ) $ 18,939 (4,821 ) 14,118 $ 0.39 Adjustments (1) (950 ) (950 ) $ (0.03 ) Loss on
Investments,Net (2) 6,462 (1,470 ) 4,992 $ 0.14 Adjusted Income (Loss) (11,924 ) 2,642 (9,282 ) $ (0.26 ) 17,989 (4,821 ) 13,168 $ 0.36 Interest Expense 7,930 9,082 Interest Income (51 ) (126 ) Depreciation and Amortization 21,028 20,470 Adjusted EBITDA
16,983
47,415Aircraft Rent 9,586 10,048 Adjusted EBITDAR $ 26,569 $ 57,463 (1) Includes adjustment for gain on extinguishment of debt of $1.0 million related to repayment of the Company’s aircraft debts during the three months ended December 31, 2020. (2) Includes losses resulting from changes in the fair value of the Company's investments in equity securities of $6.5 million for the three months ended December 31, 2021. About Mesa Air Group, Inc.
Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 114 cities in 42 states, the District of Columbia, the Bahamas, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As December 31, 2021, Mesa operated a fleet of 167 aircraft with approximately 402 daily departures and 3,200 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc., United Airlines, Inc., and DHL.
Forward-Looking Statements
Certain statements contained in this press release that are not historical facts contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to the “safe harbor” created by those sections. Forward-looking statements can be identified by the use of words such as “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximate” or “plan,” or the negative of these words and phrases or similar words or phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. For more information on risk factors for Mesa Air Group, Inc.’s business, please refer to the periodic reports the Company files with the Securities and Exchange Commission from time to time. Many of the risks identified in the periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from the COVID-19 pandemic. These forward-looking statements herein speak only as of the date of this press release and should not be relied upon as predictions of future events. Mesa Air Group, Inc. expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein, to reflect any change in Mesa Air Group, Inc.’s expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except as required by law.
MESA AIR GROUP, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts) (Unaudited)Three Months Ended
December 31,2021 2020 Operating revenues: Contract revenue $ 136,894 $ 127,158 Pass-through and other revenue 10,863 23,213 Total operating revenues 147,757 150,371 Operating expenses: Flight operations 47,598 36,964 Fuel 1,257 390 Maintenance 58,981 52,864 Aircraft rent 9,586 10,048 Aircraft and traffic servicing 715 901 General and administrative 12,578 13,073 Depreciation and amortization 21,028 20,470 Government grant recognition — (11,311 ) Total operating expenses 151,743 123,399 Operating income (loss) (3,986 ) 26,972 Other income (expense), net: Interest expense (7,930 ) (9,082 ) Interest income 51 126 Loss on investments, net (6,462 ) — Other income (expense), net (59 ) 923 Total other (expense), net (14,400 ) (8,033 ) Income (loss) before taxes (18,386 ) 18,939 Income tax expense (benefit) (4,112 ) 4,821 Net income (loss) $ (14,274 ) $ 14,118 Net income (loss) per share attributable to common shareholders Basic $ (0.40 ) $ 0.40 Diluted $ (0.40 ) $ 0.39 Weighted-average common shares outstanding Basic 35,963 35,531 Diluted 35,963 36,647 MESA AIR GROUP, INC.
Condensed Consolidated Balance Sheets
(In thousands, except shares) (Unaudited)December 31, 2021 September 30, 2021 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 102,332 $ 120,517 Restricted cash 3,350 3,350 Receivables, net 2,919 3,167 Expendable parts and supplies, net 25,206 24,467 Prepaid expenses and other current assets 4,488 6,885 Total current assets 138,295 158,386 Property and equipment, net 1,157,922 1,151,891 Intangible assets, net 6,537 6,792 Lease and equipment deposits 8,249 6,808 Operating lease right-of-use assets 88,469 93,100 Deferred heavy maintenance, net 3,271 3,499 Other assets 31,752 36,121 TOTAL ASSETS $ 1,434,495 $ 1,456,597 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of long-term debt and finance leases $ 111,059 $ 111,710 Current portion of deferred revenue 5,528 6,298 Current maturities of operating leases 26,935 32,652 Accounts payable 62,933 61,476 Accrued compensation 7,638 12,399 Other accrued expenses 36,283 33,657 Total current liabilities 250,376 258,192 NONCURRENT LIABILITIES: Long-term debt and finance leases, excluding current portion 547,409 539,700 Noncurrent operating lease liabilities 34,405 33,991 Deferred credits 3,721 3,934 Deferred income taxes 65,716 69,940 Deferred revenue, net of current portion 24,788 28,202 Other noncurrent liabilities 33,606 34,591 Total noncurrent liabilities 709,645 710,358 Total liabilities 960,021 968,550 STOCKHOLDERS' EQUITY: Preferred stock of no par value, 5,000,000 shares authorized; no shares issued and outstanding — — Common stock of no par value and additional paid-in capital, 125,000,000 shares authorized; 35,963,984 (2022) and 35,958,759 (2021) shares issued and outstanding, and 4,899,497 (2022) and 4,899,497 (2021) warrants issued and outstanding 257,073 256,372 Retained earnings 217,401 231,675 Total stockholders' equity 474,474 488,047 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,434,495 $ 1,456,597 MESA AIR GROUP, INC.
Operating Highlights (unaudited)Three months ended December 31, 2021 2021 2020 Change Available Seat Miles (thousands) 2,104,621 1,670,943 26.0% Block Hours 86,079 69,247 24.3% Average Stage Length (miles) 644 637 1.1% Departures 43,447 35,344 22.9% Passengers 2,693,468 1,829,714 47.2% Controllable Completion Factor* American 97.17% 99.81% -2.6% United 98.33% 99.98% -1.65% Total Completion Factor** American 95.76% 98.30% -2.6% United 97.58% 99.36% -1.8% *Controllable Completion Factor excludes cancellations due to weather and air traffic control
**Total Completion Factor includes all cancellationsSource: Mesa Air Group, Inc.
Mesa Air Group, Inc.
Media
Jacqueline Palmer
Media@mesa-air.com
Investor Relations
Susan M. Donofrio
IR@mesa-air.com
