Spirit Airlines, Inc. (Fort Lauderdale/Hollywood) reported fourth quarter 2012 and full year 2012 financial results.
- Net income for the fourth quarter 2012 was $19.5 million, or $0.27 per diluted share. Results for the fourth quarter and full year 2012 include an estimated $25 million negative revenue impact ($24 million pre-tax income, $15 million after tax) from Hurricane Sandy.
- Adjusted CASM ex-fuel for the fourth quarter 2012 decreased 2.5 percent year-over-year. See “Reconciliation of Adjusted CASM ex-fuel to CASM” table below for more details.
- Net income, excluding special items, for the full year 2012 was a record $103.8 million, or $1.43 per diluted share1. GAAP net income for the full year 2012 was a record $108.5 million, or $1.49 per diluted share.
- For the fourth quarter 2012, Spirit achieved an operating margin, excluding special items, of 9.7 percent (15.8 percent adjusted for Hurricane Sandy)1. For the full year 2012, Spirit’s operating margin, excluding special items, was 12.6 percent (14.2 percent adjusted for Hurricane Sandy). Operating margin on a GAAP basis was 9.7 percent and 13.2 percent for the fourth quarter and full year 2012, respectively.
- Spirit ended 2012 with $416.8 million in unrestricted cash.
- Spirit’s return on invested capital (before taxes and excluding special items) was 26.5 percent (28.8 percent adjusted for Hurricane Sandy) for the year ended December 31, 2012. See “Calculation for Return on Invested Capital” table below for more details.
“2012 was a very exciting year for Spirit. We successfully grew our business, delivered strong financial results and remained committed to our low-cost, low-fare strategy. This low-cost, low-fare strategy helped us to achieve among the highest margins in the industry,” said Ben Baldanza, Spirit’s President and Chief Executive Officer. “I want to thank and congratulate our team members that contributed to our success.”
For the fourth quarter 2012, Spirit’s total operating revenue was $328.3 million, an increase of 19.8 percent, compared to fourth quarter 2011.
Total revenue per available seat mile (“RASM”) for the fourth quarter 2012 was 11.10 cents, a decrease of 6.6 percent compared to the fourth quarter 2011 due to the negative revenue impact from Hurricane Sandy and a 5.3 percent increase in average stage length.
Passenger flight segment (“PFS”) volume grew 22.0 percent year-over-year in the fourth quarter 2012 with average non-ticket revenue per PFS for the fourth quarter 2012 increasing 9.4 percent year-over-year to $52.73 and average ticket revenue per PFS for the quarter decreasing 8.6 percent year-over-year to $71.30. The growth in non-ticket revenue per PFS was primarily driven by a passenger usage fee increase implemented late in the fourth quarter of 2011.
For the full year 2012, total operating revenue increased 23.1 percent to $1.3 billion compared to the same period last year on a 21.3 percent increase in available seat miles.
Total operating expenses in the fourth quarter 2012 were $296.3 million, an increase of 25.6 percent compared to the same period in 2011. The increase in operating expenses was primarily driven by fuel and other expenses associated with additional available seat miles (“capacity”) which grew by 28.3 percent year-over-year.
Cost per available seat mile excluding special items and fuel (“Adjusted CASM ex-fuel”) for the fourth quarter 2012 decreased 2.5 percent year-over-year to 5.93 cents. Primary drivers of the decrease included lower labor expense per ASM year-over-year due to lower unit overhead costs, lower distribution expense per ASM as a result of a decrease in credit card fees, and an increase in average stage length. These benefits were partially offset by start-up costs related to Spirit’s seat maintenance program of $1.4 million during the fourth quarter 2012, bringing the total start-up costs related to this program to $6.8 million, and higher depreciation and amortization expense related to amortization of heavy maintenance events.
Total operating expense for the full year 2012 was $1.1 billion, up 23.5 percent as compared to the full year 2011, largely driven by fuel and other expenses associated with capacity increasing by 21.3 percent year-over-year.
Selected Balance Sheet and Cash Flow Items
As of December 31, 2012, Spirit had $416.8 million in unrestricted cash and cash equivalents, no restricted cash, no debt on its balance sheet, and total shareholders’ equity of $582.5 million.
During the fourth quarter 2012, Spirit incurred capital expenditures of $2.1 million, paid $5.8 million in pre-delivery deposits (“PDPs”) for future deliveries of aircraft, net of reimbursements, and paid $2.1 million in maintenance reserves, net of reimbursements.
Spirit ended 2012 with 45 aircraft in its fleet. The Company has nine aircraft scheduled for delivery in 2013, including seven new Airbus A320 aircraft and two used A319s.
Copyright Photo: Bruce Drum. Spirit Airlines is expected to retire its last two Airbus A321s (N587NK and N588NK) in 2017. Both are not expected to be repainted in the new colors. A321-231 N587NK (msn 2476) climbs away from the Fort Lauderdale/Hollywood hub.