Hawaiian Holdings Reports 2012 First Quarter Financial Results


Financial Highlights
- GAAP net income of $7.3 million, or $0.14 per diluted share
- Adjusted net income of $3.3 million, or $0.06 per diluted share, reflecting economic fuel expense
- Operating revenue increase of 19.1% to $435.5 million
- Passenger revenue per available seat mile (PRASM) increase of 6.5% to 12.45 cents
- Operating cost per available seat mile (CASM) increase of 1.1% to 13.45 cents
- CASM excluding fuel decrease of 4.2% to 8.99 cents
- Unrestricted cash and cash equivalents of $376 million

HONOLULU, April 24, 2012 /PRNewswire via COMTEX/ -- Hawaiian Holdings, Inc. (NASDAQ: HA) ("Holdings" or the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported consolidated net income for the three months ended March 31, 2012 of $7.3 million, or $0.14 per diluted share, on total operating revenue of $435.5 million, compared to net income of $0.9 million, or $0.02 per diluted share, on total operating revenue of $365.6 million for the three months ended March 31, 2011.

(Logo: http://photos.prnewswire.com/prnh/20040827/LAF044LOGO)

Adjusted for economic fuel expense, the Company reported net income of $3.3 million, or $0.06 per diluted share for the three months ended March 31, 2012. This compares with adjusted net loss of $3.2 million, or $0.06 per diluted share, for the three months ended March 31, 2011, reflecting economic fuel expense. Table 4 sets forth a reconciliation of net income and diluted net income per share on a GAAP basis and non-GAAP net income and diluted net income per share reflecting economic fuel expense. The Company believes that the presentation of economic fuel expense most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period.

Mark Dunkerley, the Company's president and chief executive officer, commented that "We are pleased to report a profit during a seasonally weak period when the business was nonetheless growing rapidly. Despite higher fuel costs, demand for our long haul services has stayed strong. Adding a sixth A330 and inaugurating our Fukuoka-Honolulu service were the operational highlights of the quarter. Continuing the eventful period we are in, we have three more A330s arriving in the second quarter, allowing us to start service to New York and boost capacity on a number of other routes. Our employees continue to do a peerless job of caring for our customers. In that vein, we are particularly pleased to have reached a long term labor agreement with our Flight Attendant union."

First Quarter Financial Results

The Company reported operating income of $12.9 million in the first quarter of 2012, compared with operating loss of $4.9 million in the prior-year period.

First quarter 2012 operating revenue was $435.5 million, a 19.1% increase compared with the first quarter of 2011. Capacity for the quarter increased 12.8% year-over-year to 3.1 billion available seat miles (ASMs), resulting in operating revenue per ASM (RASM) of 13.86 cents, up 5.6% from the first quarter a year ago. First quarter scheduled passenger load factor declined 0.4 percentage points to 83.8%, while passenger yield (passenger revenue per revenue passenger mile) increased 7.0% to 14.86 cents and PRASM increased 6.5% to 12.45 cents. Selected Statistical Data is included in Table 2.

Total operating expenses for the first quarter of 2012 increased 14.0% year-over-year to $422.6 million, resulting in an operating cost per available seat mile (CASM) of 13.45 cents, up 1.1% versus the same period a year ago. First quarter CASM excluding fuel decreased 4.2% to 8.99 cents when compared to the same period a year ago. A reconciliation of the GAAP and non-GAAP financial measures is included in Tables 3, 4 and 6.

Aircraft fuel costs in the first quarter of 2012 increased 28.3% year-over-year to $140.3 million and represented 33.2% of operating expenses. Hawaiian's average cost per gallon of jet fuel increased 13.8% year-over-year to $3.25 (including taxes and delivery). The financial impact of hedging activities is included in nonoperating income/expenses, and as such is not reflected in fuel expense. Nonoperating income in the first quarter of 2012 reflects $5.8 million in net gains from Hawaiian's fuel hedging activity.

The Company believes that economic fuel expense is the best measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period. The Company defines economic fuel expense as GAAP fuel expense plus (gains)/losses realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period. For the three months ended March 31, 2012, economic fuel expense was $141.2 million ($3.27 per gallon), compared with $107.8 million ($2.82 per gallon) in the prior year period. An analysis of economic fuel expense for the three months ended March 31, 2012 and 2011 and pro-forma net income and diluted net income per share reflecting economic fuel expense is included in Tables 3 and 4.

First quarter 2012 nonoperating expense totaled $1.0 million, compared with nonoperating income of $6.4 million in the first quarter of 2011. The shift from nonoperating income to expense is primarily due to the increase in interest expense and amortization of debt discounts and issuance costs, which increased to $9.0 million compared to $3.2 million in the prior-year period due to the additional financing for aircraft deliveries. Additionally during the first quarter of 2012, the Company recognized nonoperating income of $5.8 million related to fuel hedging activities compared to $8.4 million in the prior year period. In the first quarter 2012, hedging income reflects $0.9 million of realized losses on derivative contracts settled in the quarter, the reversal of $1.8 million of previously recorded losses on these same contracts, and $4.9 million in unrealized gains related to fuel derivative contracts settling in future periods.

Liquidity, Capital Resources and Fuel Hedging

As of March 31, 2012, the Company had:

A summary of the Company's fuel derivatives contracts as of April 13, 2012 is included as Table 5.

First Quarter 2012 Highlights

Investor Conference Call

Hawaiian Holdings' quarterly earnings conference call is scheduled to begin today (Tuesday, April 24, 2012) at 4:30 p.m. Eastern Time (USA). The conference call will be broadcast live over the Internet. Investors may listen to the live audio webcast on the investor relations section of the Company's website at www.HawaiianAirlines.com. For those who are not available for the live webcast, the call will be archived for 90 days on Hawaiian's investor website.

About Hawaiian Airlines

Hawaiian has led all U.S. carriers in on-time performance for each of the past eight years (2004-2011) as reported by the U.S. Department of Transportation. Consumer surveys by Conde Nast Traveler, Travel + Leisure and Zagat have all ranked Hawaiian as the top domestic airline serving Hawaii.

Now in its 83rd year of continuous service, Hawaiian is Hawaii's biggest and longest-serving airline, as well as the largest provider of passenger air service from its primary visitor markets on the U.S. mainland. Hawaiian offers nonstop service to Hawaii from more U.S. gateway cities (10) than any other airline, along with service to Japan, South Korea, the Philippines, Australia, American Samoa, and Tahiti. Daily service to New York City will begin in June 2012. Hawaiian also provides approximately 170 daily jet flights between the Hawaiian Islands.

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com.

Forward-Looking Statements

Statements in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to certain current and future events and financial performance. Such forward-looking statements include, without limitation, statements regarding: our plans for the year; our long haul fleet transition; inauguration of service to new destinations; scheduled aircraft delivery; a rise in capacity; and statements as to other matters that do not relate strictly to historical facts of statements of assumptions underlying any of the foregoing. Words such as "expects," "anticipates," "projects," "intends," "plans," "believes," "estimates," variations of such words, and similar expressions are also intended to identify such forward-looking statements. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment, all of which may cause the Company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements.

The risks, uncertainties and assumptions referred to above that could cause the Company's results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company's other public filings and public announcements, including the Company's Annual Report on Form 10-K for the year ended December 31, 2011. All forward-looking statements included in this document are based on information available to the Company on the date of this release. The Company does not undertake to publicly update or revise its forward-looking statements to reflect events or circumstances that may arise after the date of this release.

Table 1.



Hawaiian Holdings, Inc.



Consolidated Statements of Operations





(in thousands, except for per share data) (unaudited)










Three Months Ended


March 31,


2012

2011





Operating Revenue:



Passenger

$ 390,926

$ 325,281

Other

44,568

40,328

Total

435,494

365,609





Operating Expenses:



Aircraft fuel, including taxes and oil

140,318

109,363

Wages and benefits

90,124

77,572

Aircraft rent

23,222

34,075

Maintenance materials and repairs

43,712

43,414

Aircraft and passenger servicing

21,346

18,423

Commissions and other selling

29,416

26,233

Depreciation and amortization

19,151

14,703

Other rentals and landing fees

19,748

16,324

Other

35,557

30,447

Total

422,594

370,554





Operating Income (Loss)

12,900

(4,945)





Nonoperating Income (Expense):



Interest and amortization of debt discounts



and issuance costs

(9,048)

(3,194)

Interest income

214

357

Capitalized interest

2,573

1,216

Gains on fuel derivatives

5,820

8,379

Other, net

(600)

(327)

Total

(1,041)

6,431





Income Before Income Taxes

11,859

1,486





Income tax expense

4,601

631





Net Income

$ 7,258

$ 855





Net Income Per Common Stock Share:



Basic

$ 0.14

$ 0.02

Diluted

$ 0.14

$ 0.02





Weighted Average Number of



Common Stock Shares Outstanding:



Basic

51,005

50,521

Diluted

52,303

51,968

Table 2.





Hawaiian Holdings, Inc.

Selected Statistical Data













Three Months Ended

March 31,

2012

2011

Change







Scheduled Operations:





Revenue passenger miles (RPM) (a)

2,630.3

2,341.1

12.4%

Available seat miles (ASM) (a)

3,140.0

2,782.7

12.8%

Passenger revenue per RPM (Yield)

14.86

cents

13.89

cents

7.0%

Passenger load factor (RPM/ASM)

83.8%

84.1%

(0.4)

pt.

Passenger revenue per ASM (PRASM)

12.45

cents

11.69

cents

6.5%







Total Operations:





Revenue passenger miles (RPM) (a)

2,631.4

2,341.9

12.4%

Available seat miles (ASM) (a)

3,141.3

2,784.0

12.8%

Passenger load factor (RPM/ASM)

83.8%

84.1%

(0.4)

pt.

Operating revenue per ASM (RASM)

13.86

cents

13.13

cents

5.6%

Operating cost per ASM (CASM)

13.45

cents

13.31

cents

1.1%

CASM excluding aircraft fuel

8.99

cents

9.38

cents

(4.2%)

Gallons of jet fuel consumed (a)

43.1

38.2

12.7%

Average cost per gallon of jet fuel (actual) (b)

$ 3.25

$ 2.86

13.8%







(a) In millions.












(b) Includes applicable taxes and fees.





Table 3.




Hawaiian Holdings, Inc.

Economic Fuel Expense




(in thousands, except per-gallon amounts)











Three Months Ended March 31,

2012

2011

Change






Aircraft fuel expense, including taxes and oil

$ 140,318

$ 109,363

28.3%

Realized (gains) losses on settlement of fuel derivative contracts

854

(1,560)

(154.7%)

Economic fuel expense

$ 141,172

$ 107,803

31.0%

Fuel gallons consumed

43,125

38,249

12.7%

Economic fuel cost per gallon

$ 3.27

$ 2.82

16.1%

Table 4.

Hawaiian Holdings, Inc.

Pro-forma Net Income and Diluted Earnings Per Share Reflecting Economic Fuel Expense

(in thousands, except per-share data)



Three months ended March 31,


2012

2011


Net income


Diluted net income per share

Net income (loss)

Diluted net income (loss)
per share

As reported - GAAP

$ 7,258

$ 0.14

$ 855

$ 0.02

Less: unrealized gains on fuel derivative







contracts, net of tax

4,005

0.08

4,091

0.08

Reflecting economic fuel expense

$ 3,253

$ 0.06

$ (3,236)

$ (0.06)

Table 5.

Hawaiian Holdings, Inc.

Fuel Derivative Contract Summary

As of April 13, 2012











Weighted Average Contract Price

Percentage of Projected Fuel Requirements Hedged

Fuel Barrels Hedged

Cap

Floor




Second Quarter 2012







Heating Oil (per gallon)





Call Options

$3.27

N/A

6%

65,000

Collars

$3.03

$2.65

17%

194,000









Crude Oil (per barrel)





Brent Call Options

$127.97

N/A

25%

288,000

WTI Call Options

$114.93

N/A

9%

103,000

Brent Collars

$111.93

$97.05

4%

42,000

WTI Collars

$106.58

$89.88

4%

48,000

Total



65%

740,000


















Third Quarter 2012







Heating Oil (per gallon)





Collars

$3.05

$2.66

13%

168,000









Crude Oil (per barrel)





Brent Call Options

$132.00

N/A

40%

515,000

WTI Call Options

$112.56

N/A

1%

7,000

Brent Collars

$111.48

$96.56

3%

42,000

WTI Collars

$107.30

$90.30

2%

28,000

Total



59%

760,000


















Fourth Quarter 2012







Heating Oil (per gallon)





Collars

$3.07

$2.66

6%

71,000









Crude Oil (per barrel)





Brent Call Options

$126.46

N/A

27%

333,000

Brent Collars

$111.00

$95.01

3%

42,000

Total



36%

446,000


















First Quarter 2013







Crude Oil (per barrel)





Brent Call Options

$129.32

N/A

17%

211,000

Total



17%

211,000


















Second Quarter 2013







Crude Oil (per barrel)





Brent Call Options

$125.52

N/A

9%

105,000

Total



9%

105,000

Table 6.



Hawaiian Holdings, Inc.



Reconciliation of Non-GAAP Operating Expenses and CASM, Excluding Aircraft Fuel



(in millions, except for CASM data) (unaudited)









Three Months Ended

March 31,

2012

2011





GAAP operating expenses

$ 422.6

$ 370.6

Less: aircraft fuel, including taxes and oil

140.3

109.4

Adjusted operating expenses - excluding aircraft fuel

$ 282.3

$ 261.2










Available Seat Miles

3,141.3

2,784.0





CASM - GAAP

13.45

cents

13.31

cents

Less: aircraft fuel

4.46

3.93

CASM - excluding aircraft fuel

8.99

cents

9.38

cents















SOURCE Hawaiian Holdings, Inc.