Allegiant Travel Company (Allegiant Air) (Las Vegas) is celebrating its 40th consecutive profitable quarter. The company produced a net profit of $14.8 million in the fourth quarter (up from a net profit of $10.8 million in the same quarter a year ago) and a net profit of $78.6 million for 2012 (up from a net profit of $49.4 million in 2011). The travel company specializes in serving small markets with limited service to popular vacation destinations. The company issued the following financial results and details for the fourth quarter 2012 and full year results for 2012:
Allegiant Travel Company reported the following financial results for both the fourth quarter and full year 2012, as well as comparisons to prior year equivalents:
| Unaudited |
4Q12 |
4Q11 |
Change |
2012 |
2011 |
Change |
| Total operating revenue (millions) |
$222.8 |
$193.9 |
14.9% |
$908.7 |
$779.1 |
16.6% |
| Operating income (millions) |
$25.4 |
$20.2 |
25.8% |
$132.3 |
$85.4 |
54.8% |
| Operating margin |
11.4% |
10.4% |
1.0pp |
14.6% |
11.0% |
3.6pp |
| EBITDA (millions) |
$42.2 |
$31.3 |
34.7% |
$190.1 |
$127.4 |
49.2% |
| EBITDA margin |
18.9% |
16.2% |
2.7pp |
20.9% |
16.4% |
4.5pp |
| Net income (millions) |
$14.8 |
$10.8 |
36.6% |
$78.6 |
$49.4 |
59.1% |
| Diluted earnings per share |
$0.76 |
$0.56 |
35.7% |
$4.06 |
$2.57 |
58.0% |
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“We are very proud to report our 40thย consecutive profitable quarter,” statedย Maurice J. Gallagher, Jr., Chairman and CEO ofย Allegiant Travel Company. ย “40 consecutive profitable quarters is an outstanding achievement in this industry and we could not do it without the great efforts and contributions of our Team Members. ย In 2012, we recorded the highest system fuel cost per gallon we have ever paid for a full year. ย In spite of that, we were able to grow full year earnings per share over 58 percent to the highest ever.”
Notable company quarterly highlights
- Signed purchase agreements to acquire nine Airbus A320 aircraft previously operated by Iberia
- Successfully converted 100 percent of our customer web traffic to our new booking engine in November
- Returned overย $38 millionย to shareholders through a special dividend ofย $2ย per share in December
- Repurchased approximately 55,000 shares forย $4 millionย during the fourth quarter
- As ofย January 30, 2013, we have converted 47 of an expected 51 MD-80s to 166 seat aircraft
- Began operating 21 new routes during the quarter
- Announced eight new routes starting in the first quarter
- Ranked 14thย on the Forbes’ 100 Best Small Companies. ย We have been listed four years in a row
Revenue performance
- Fourth quarter 2012 total average fare was up 4.4 percent versus 2011 and was the highest in the company’s history
- 12thย consecutive quarter of year over year increases in total average fare
- Ancillary air-related revenue per passenger has grown sequentially every month since April 2012
|
4Q12 |
4Q11 |
Change |
2012 |
2011 |
Change |
| Scheduled Service: |
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|
|
|
| Average fare – scheduled service |
$88.59 |
$91.66 |
(3.3)% |
$88.90 |
$89.15 |
(0.3)% |
| Average fare – ancillary air-related charges |
$39.89 |
$31.51 |
26.6% |
$35.72 |
$31.17 |
14.6% |
| Average fare – ancillary third party products |
$5.19 |
$4.88 |
6.4% |
$5.48 |
$5.18 |
5.8% |
| Average fare – total |
$133.67 |
$128.05 |
4.4% |
$130.10 |
$125.51 |
3.7% |
| Scheduled service passenger revenue per ASM (PRASM) (cents) |
7.99 |
8.91 |
(10.3)% |
8.43 |
8.88 |
(5.1)% |
| Total scheduled service revenue* per ASM (TRASM) (cents) |
12.06 |
12.45 |
(3.1)% |
12.33 |
12.50 |
(1.4)% |
| Load factor |
86.5% |
89.6% |
(3.1)pp |
89.4% |
91.7% |
(2.3)pp |
| Passengers (millions) |
1.6 |
1.4 |
13.3% |
6.6 |
5.8 |
14.1% |
| Average passengers per departure |
141 |
134 |
5.2% |
140 |
136 |
2.9% |
| Average scheduled service stage length (miles) |
930 |
904 |
2.9% |
918 |
901 |
1.9% |
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* Total scheduled service revenue includes scheduled service, ancillary air-related, and ancillary third party revenue.
Cost performance
- Full year 2012 cost per ASM excluding fuel decreased 6.7 percent toย 5.3 centsย in spite of a five percent decrease in aircraft utilization for the same time period
- Full year 2012 ASMs per gallon increased 6.6 percent to 63.0 versus last year, and improved sequentially 3.6 percent in the fourth quarter 2012 versus the third quarter 2012
- Full year 2012 salaries and benefits expense per passenger decreased 1.7 percent despite a 14.2 percent increase in full time equivalent employees
- Full year 2012 maintenance and repairs expense per passenger decreased 19.6 percent due primarily to a 60 percent decline in engine overhaul expenses. ย Maintenance expense per aircraft per month wasย $102,277ย in 2012 versusย $129,558ย in 2011
- Full year 2012 sales and marketing expense per passenger decreased 14.6 percent versus last year, primarily due to the implementation of a discount for customers paying with less expensive forms of payment beginning in the third quarter 2012
|
4Q12 |
4Q11 |
Change |
2012 |
2011 |
Change |
| Total System*: |
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| Operating expense per passenger |
$118.49 |
$116.08 |
2.1% |
$111.12 |
$112.32 |
(1.1)% |
| Operating expense per passenger, excluding fuel |
$63.50 |
$62.04 |
2.4% |
$56.99 |
$58.78 |
(3.0)% |
| Operating expense per ASM (CASM) (cents) |
10.50 |
11.03 |
(4.8)% |
10.37 |
10.90 |
(4.9)% |
| Operating expense, excluding fuel per ASM (CASM ex fuel) (cents) |
5.63 |
5.89 |
(4.4)% |
5.32 |
5.70 |
(6.7)% |
| Average block hours per aircraft per day |
5.3 |
5.6 |
(5.4)% |
5.7 |
6.0 |
(5.0)% |
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* Total system includes scheduled service, fixed-fee contract and non-revenue flying.
Third party products performance
- For the fourth quarter 2012, ancillary revenue – third party products per passenger increased 6.4 percent versus last year. ย This has been our eleventh consecutive quarter of year over year increases.
- For the full year 2012, net revenue from hotels increased about five percent while net revenue from rental cars increased about 33 percent versus 2011
| Supplemental Ancillary Revenue Informationย
Unaudited (millions) |
4Q12 |
4Q11 |
Change |
2012 |
2011 |
Change |
| Gross ancillary revenue – third party products |
$24.9 |
$23.0 |
8.6% |
$119.0 |
$106.4 |
11.9% |
| Cost of goods sold |
($16.2) |
($15.2) |
6.1% |
($79.0) |
($72.0) |
9.7% |
| Transaction costs* |
($.6) |
($.9) |
(35.9)% |
($3.9) |
($4.5) |
(12.1)% |
| Ancillary revenue – third party products |
$8.2 |
$6.8 |
20.5% |
$36.1 |
$29.9 |
20.8% |
| As percent of gross |
32.8% |
29.6% |
3.2pp |
30.3% |
28.1% |
2.2pp |
| ย ย As percent of income before taxes |
34.9% |
36.9% |
(2.0)pp |
29.0% |
37.6% |
(8.6)pp |
| Ancillary revenue – third party products/scheduled passenger |
$5.19 |
$4.88 |
6.4% |
$5.48 |
$5.18 |
5.8% |
| Hotel room nights (thousands) |
137.5 |
142.6 |
(3.5)% |
690.1 |
647.7 |
6.5% |
| Rental car days (thousands) |
169.1 |
113.8 |
48.6% |
763.4 |
577.7 |
32.1% |
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* Includes payment expenses and travel agency commissions.
Balance sheet highlights
- We currently haveย $41 millionย in share repurchase authority
| Unaudited (millions) |
12/31/12 |
12/31/11 |
Change |
| Unrestricted cash* |
$352.7 |
$319.5 |
10.4% |
| Total debt |
$150.9 |
$146.1 |
3.3% |
| Totalย Allegiant Travel Companyย stockholders’ equity |
$400.5 |
$351.5 |
14.0% |
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| Year endedย December 31, |
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| Unaudited (millions) |
2012 |
2011 |
Change |
| Capital expenditures |
$105.1 |
$86.6 |
21.4% |
* Unrestricted cash includes investments in marketable securities.
At this time,ย Allegiant Travel Companyย provides the following guidance to investors, subject to revision.
| Guidance, subject to revision |
|
|
| Revenue guidance |
January 2013 |
1Q13 |
| Estimated PRASM year-over-year change |
(13) to (11)% |
(8) to (6)% |
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| Fixed fee and other revenue guidance |
|
1Q13 |
| Fixed fee and other revenue (millions) |
|
$4 to $6 |
| ย |
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| Capacity guidance |
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| System |
1Q13 |
2Q13 |
| ย ย Departure year-over-year growth |
(8) to (4)% |
(7) to (3)% |
| ย ย ASM year-over-year growth |
+12 to 16% |
+14 to 18% |
| Scheduled |
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| ย ย Departure year-over-year growth |
(2) to 2% |
0 to 4% |
| ย ย ASM year-over-year growth |
+15 to 19% |
+19 to 23% |
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| Cost guidance |
|
1Q13 |
| CASM ex fuel – year-over-year change |
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+1 to 3% |
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| CAPEX guidance |
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FY13 |
| Capital expenditures (millions) |
|
$150 to $160 |
| ย |
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CASM ex fuel – cost per available seat mile excluding fuel expense
* Number of aircraft expected to be completed by end of the quarter
ย
2013 aircraft fleet plan by end of quarter
| Aircraft |
1Q13 |
2Q13 |
3Q13 |
4Q13 |
| MD-80 (166*) |
51 |
51 |
51 |
51 |
| MD-80 (non 166*) |
6 |
5 |
1 |
1 |
| 757 |
6 |
6 |
6 |
6 |
| A319 |
0 |
2 |
2 |
2 |
| A320 |
0 |
0 |
2 |
7 |
| Total |
63 |
64 |
62 |
67 |
* 166 refers to MD-80s that are expected to be converted to 166 seat aircraft, non 166 refers to those aircraft that will not be converted
Aircraft listed in table above are considered in service aircraft
Copyright Photo: Ton Jochems. McDonnell Douglas DC-9-83 (MD-83) N416NV (msn 49555) is pictured arriving at the Las Vegas main hub.
Allegiant Air:ย 
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