HONOLULU, April 23, 2015 /PRNewswire/ -- Hawaiian Holdings, Inc. (NASDAQ: HA) ("Holdings" or the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported its financial results for the first quarter of 2015.

Hawaiian Airlines logo
  • GAAP net income of $25.9 million or $0.40 per diluted share.
  • Adjusted net income, reflecting economic fuel expense and excluding loss on extinguishment of debt, of $24.7 million or $0.38 per diluted share, an increase of $25.6 million or $0.40 cents per diluted share year-over-year.
  • Adjusted pre-tax margin of 7.4% compared to (0.2)% in the prior year period.
  • Unrestricted cash, cash equivalents and short-term investments of $488 million.
  • Lowered leverage ratio to 3.6x.
  • The board of directors approved a share repurchase program authorizing the Company to buy back up to $100 million of its common stock.

"Producing these record results for the seasonally weak first quarter demonstrates the growing strength of our business," said Mark Dunkerley, Hawaiian Airlines president and chief executive officer.  "Low fuel prices and strong demand across our network combined to more than offset the impact of a strengthening U.S. dollar, declining fuel surcharges in some markets and an increase in industry capacity between North America and Hawai'i.  Reflecting this performance we have announced a $100 million share repurchase program today.  As always, our employees are at the forefront of our successes.  Their performance makes our financial success possible and they have my undying thanks."

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.

Liquidity and Capital Resources

As of March 31, 2015 the Company had:

  • Unrestricted cash, cash equivalents and short-term investments of $488 million.
  • Outstanding debt and capital lease obligations of approximately $962 million consisting of the following:
    • $693 million outstanding under secured loan agreements to finance a portion of the purchase price for 11 Airbus A330-200 aircraft.
    • $132 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.
    • $100 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.
    • $29 million outstanding under floating rate notes to finance the acquisition of two Boeing 767-300 ER aircraft.
    • $8 million of outstanding Convertible Senior Notes.

In the first quarter, the Company repurchased $63 million (principal balance) of convertible notes outstanding.  Repurchases to date have totaled $78 million (principal balance) or 91%, thereby eliminating the need to issue 10 million shares when the notes may have otherwise converted to common stock.

First Quarter 2015 Highlights

Product and loyalty

  • Introduced the first of its 18 refurbished Boeing 717 aircraft with a comprehensive interior retrofit and a standard consistent layout of 128 seats in March 2015. The refurbishment will provide more seats for the peak demand period and eliminate operational complexity arising from different seat counts. To date, seven aircraft have completed the refurbishment program with all remaining Boeing 717 aircraft in the Company's fleet expected to be retrofitted by the end of the year.

Fleet and financing

  • Added one new A330-200 aircraft under lease financing.

Second Quarter and Full Year 2015 Outlook

The table below summarizes the Company's expectations for the second quarter ending June 30, 2015 and full year ending December 31, 2015, expressed as an expected percentage change compared to the results for the quarter ended June 30, 2014 or the year ended December 31, 2014 (the historical results for which are presented for reference).

   

Second Quarter

     

Item

 

2014

   

Second Quarter 2015 Guidance

Cost per ASM Excluding Fuel (cents)

 

8.21

   

Up 0.5% to up 3.5%

Operating Revenue Per ASM (cents)

 

13.51

   

Down 1% to down 4%

ASMs (millions)

 

4,262.8

   

Up 3% to up 5%

Gallons of jet fuel consumed (millions)

 

56.9

   

Up 2% to up 4%

Economic fuel cost per gallon (a)

 

$

3.09

   

$2.10 to $2.20

             
           
   

Full Year

     

Item

 

2014

   

Full Year 2015 Guidance

Cost per ASM Excluding Fuel (cents)

 

8.15

   

Up 1% to up 4%

ASMs (millions)

 

17,073.6

   

Up 3% to up 6%

Gallons of jet fuel consumed (millions)

 

230.2

   

Up 1% to up 4%

Economic fuel cost per gallon (a)

 

$

3.03

   

$2.10 to $2.20

             
 

(a) Economic fuel cost per gallon estimates are based on the April 15, 2015 fuel forward curve.

Investor Conference Call

Hawaiian Holdings' quarterly earnings conference call is scheduled to begin today (April 23, 2015) 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 11 years (2004-2014) as reported by the U.S. Department of Transportation. Consumer surveys by Conde Nast Traveler, Travel + Leisure and Zagat have all ranked Hawaiian the highest of all domestic airlines serving Hawai'i.

Now in its 86th year of continuous service, Hawaiian is Hawai'i'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 Hawai'i from more U.S. gateway cities (11) than any other airline, along with service from Japan, South Korea, China, Australia, New Zealand, American Samoa and Tahiti. Hawaiian also provides approximately 160 jet flights daily between the Hawaiian Islands, with a total of more than 200 daily flights system-wide.

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com. Follow updates on Twitter about Hawaiian (@HawaiianAir) and its special fare offers (@HawaiianFares), and become a fan on its Facebook page.

Forward-Looking Statements

This press release contains "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, the Company's expectations regarding cost per available seat mile excluding fuel, available seat miles, gallons of jet fuel consumed and economic fuel cost per gallon, each for the quarter ending June 30, 2015 and the equivalent measures for full year 2015; the Company's expectations regarding operating revenue per available seat mile for the quarter ending June 30, 2015; the Company's expectations regarding the refurbishment of its Boeing 717 aircraft; and statements as to other matters that do not relate strictly to historical facts or 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 assumptions 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.  These risks and uncertainties include, without limitation, the Company's ability to accurately forecast quarter and year-end results; economic volatility; the price and availability of aircraft fuel; fluctuations in demand for transportation in the markets in which the Company operates; the Company's dependence on tourist travel; foreign currency exchange rate fluctuations; and the Company's ability to implement its growth strategy and related cost reduction goals.

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, 2014 and the Company's subsequent Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission.  All forward-looking statements included in this document are based on information available to the Company on the date hereof.  The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.

 

 

Table 1.

Hawaiian Holdings, Inc.

Consolidated Statements of Operations

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

 
   

Three Months Ended March 31,

   

2015

 

2014

 

% Change

   

(unaudited)

Operating Revenue:

           

 Passenger

 

$

469,145

   

$

468,013

   

0.2

%

 Other

 

71,135

   

56,845

   

25.1

%

  Total

 

540,280

   

524,858

   

2.9

%

Operating Expenses:

           

 Aircraft fuel, including taxes and delivery

 

111,327

   

171,139

   

(34.9)

%

 Wages and benefits

 

120,014

   

107,494

   

11.6

%

 Aircraft rent

 

28,371

   

26,279

   

8.0

%

 Maintenance materials and repairs

 

55,245

   

58,310

   

(5.3)

%

 Aircraft and passenger servicing

 

28,316

   

30,221

   

(6.3)

%

 Commissions and other selling

 

30,428

   

31,335

   

(2.9)

%

 Depreciation and amortization

 

25,179

   

22,811

   

10.4

%

 Other rentals and landing fees

 

22,831

   

20,562

   

11.0

%

 Other

 

47,405

   

46,670

   

1.6

%

  Total

 

469,116

   

514,821

   

(8.9)

%

Operating Income

 

71,164

   

10,037

   

609.0

%

Nonoperating Income (Expense):

           

 Interest expense and amortization of debt discounts and issuance costs

 

(15,518)

   

(15,010)

     

 Interest income

 

636

   

219

     

 Capitalized interest

 

1,293

   

2,776

     

 Losses on fuel derivatives

 

(5,687)

   

(6,899)

     

 Loss on extinguishment of debt

 

(6,955)

   

     

 Other, net

 

(2,934)

   

585

     

  Total

 

(29,165)

   

(18,329)

     

Income (Loss) Before Income Taxes

 

41,999

   

(8,292)

     

 Income tax expense (benefit)

 

16,116

   

(3,217)

     

Net Income (Loss)

 

$

25,883

   

$

(5,075)

     

Net Income (Loss) Per Share

           

 Basic

 

$

0.47

   

$

(0.10)

     

 Diluted

 

$

0.40

   

$

(0.10)

     

Weighted Average Number of Common Stock Shares Outstanding:

           

 Basic

 

54,614

   

52,686

     

 Diluted

 

64,926

   

52,686

     

 

Table 2.

Hawaiian Holdings, Inc.

Selected Statistical Data (unaudited)

 
   

Three months ended March 31,

   

2015

 

2014

 

% Change

   

(in thousands, except as otherwise indicated)

Scheduled Operations (c) :

           

 Revenue passengers flown

 

2,521

   

2,405

   

4.8

%

 Revenue passenger miles (RPM)

 

3,345,379

   

3,228,609

   

3.6

%

 Available seat miles (ASM)

 

4,227,045

   

4,035,674

   

4.7

%

 Passenger revenue per RPM (Yield)

 

14.02

¢

 

14.50

¢

 

(3.3)

%

 Passenger load factor (RPM/ASM)

 

79.1

%

 

80.0

%

 

(0.9)

 pt.

 Passenger revenue per ASM (PRASM)

 

11.10

¢

 

11.60

¢

 

(4.3)

%

Total Operations (c) :

           

 Revenue passengers flown

 

2,522

   

2,406

   

4.8

%

 Revenue passenger miles (RPM)

 

3,347,608

   

3,231,721

   

3.6

%

 Available seat miles (ASM)

 

4,229,686

   

4,038,973

   

4.7

%

 Passenger load factor (RPM/ASM)

 

79.1

%

 

80.0

%

 

(0.9)

 pt.

 Operating revenue per ASM (RASM)

 

12.77

¢

 

12.99

¢

 

(1.7)

%

 Operating cost per ASM (CASM)

 

11.09

¢

 

12.75

¢

 

(13.0)

%

 CASM excluding aircraft fuel (b)

 

8.46

¢

 

8.51

¢

 

(0.6)

%

 Aircraft fuel expense per ASM (a)

 

2.63

¢

 

4.24

¢

 

(38.0)

%

 Revenue block hours operated

 

42,198

   

39,213

   

7.6

%

 Gallons of jet fuel consumed

 

56,998

   

55,163

   

3.3

%

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

 

$

1.95

   

$

3.10

   

(37.1)

%

 Economic fuel cost per gallon (a)(d)

 

$

2.21

   

$

3.10

   

(28.7)

%

   
   

(a)

Includes applicable taxes and fees.

(b)

Represents adjusted unit costs, a non-GAAP measure.  We believe this is a useful measure because it better reflects our controllable costs.  See Table 4 for a reconciliation of operating expenses excluding aircraft fuel.

(c) 

Includes the operations of our contract carrier under a capacity purchase agreement.

(d)

See Table 3 for a reconciliation of economic fuel costs.

 

Table 3.

Hawaiian Holdings, Inc.

Economic Fuel Expense

(in thousands, except per-gallon amounts) (unaudited)

 

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.

 

 

 
   

Three months ended March 31,

   

2015

 

2014

 

Change

   

(in thousands, except per-gallon amounts)

   

Aircraft fuel expense, including taxes and delivery

 

$

111,327

   

$

171,139

   

(34.9)

%

Realized losses (gains) on settlement of fuel derivative contracts

 

14,591

   

(110)

   

(13,364.5)

%

Economic fuel expense

 

$

125,918

   

$

171,029

   

(26.4)

%

Fuel gallons consumed

 

56,998

   

55,163

   

3.3

%

Economic fuel costs per gallon

 

$

2.21

   

$

3.10

   

(28.7)

%

 

Table 4.

Hawaiian Holdings, Inc.

Non-GAAP Financial Reconciliation

(in thousands, except per-share and CASM data) (unaudited)

 

The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including net income (loss), diluted net income (loss) per share, CASM, PRASM, RASM, Passenger Revenue per RPM and EBITDAR.  Pursuant to Regulation G, the Company has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis.  The adjustments are described below:

 

Adjusted net income (loss) and pre-tax income (loss) reflecting economic fuel expense and excluding loss on extinguishment of debt

 
  • Unrealized (gains) losses on fuel derivative contracts, net of tax, are based on market prices for open contracts as of the end of the reporting period.  As the cost and availability of fuel is volatile, excluding the impact of fuel derivative adjustments allows investors to better analyze our operational performance and compare our results to other airlines in the periods presented below.
     
  • Loss on extinguishment of debt, net of tax, is excluded to allow investor to better analyze our core operational performance and more readily compare our results to other airlines in the periods presented below.
   

Three months ended March 31,

   

2015

 

2014

   

Net Income

 

Diluted Net Income Per Share

 

Net Loss

 

Diluted Net Loss Per Share

As reported - GAAP

 

$

25,883

 

$

0.40

 

$

(5,075)

 

$

(0.10)

Add: unrealized (gains) losses on fuel derivative contracts, net of tax

 

(5,343)

 

(0.08)

 

4,205

 

0.08

Add: loss on extinguishment of debt, net of tax

 

4,173

 

0.06

 

 

Adjusted net income (loss)

 

$

24,713

 

$

0.38

 

$

(870)

 

$

(0.02)

 
   
   

Three Months Ended March 31,

   

2015

 

2014

Income (Loss) Before Income Taxes, as reported

 

$

41,999

 

$

(8,292)

Add: unrealized losses (gains) on fuel derivatives

 

(8,905)

 

7,009

Add: loss on extinguishment of debt

 

6,955

 

Adjusted Income (Loss) Before Income Taxes

 

$

40,049

 

$

(1,283)

 

Operating Costs per Available Seat Mile (CASM)

The Company has separately listed in the table below its fuel costs per ASM and non-GAAP unit costs, excluding fuel.  These amounts are included in CASM, but for internal purposes the Company consistently uses cost metrics that exclude fuel and non-recurring items (if applicable) to measure and monitor its costs.

   

Three months ended March 31,

   

2015

 

2014

GAAP operating expenses

 

$

469,116

   

$

514,821

 

 Less: aircraft fuel, including taxes and delivery

 

(111,327)

   

(171,139)

 

 Adjusted operating expenses - excluding aircraft fuel

 

$

357,789

   

$

343,682

 

Available Seat Miles

 

4,229,686

   

4,038,973

 

CASM - GAAP

 

11.09

¢

 

12.75

¢

 Less: aircraft fuel

 

(2.63)

   

(4.24)

 

CASM - excluding aircraft fuel

 

8.46

¢

 

8.51

¢

 

Pre-tax margin

The Company excludes unrealized (gains) losses from fuel derivative contracts and losses on extinguishment of debt from pre-tax margin for the same reasons as described above.

   

Three Months Ended March 31,

   

2015

 

2014

Pre-Tax Margin, as reported

 

7.8

%

 

(1.6)

%

Add: unrealized losses (gains) on fuel derivatives

 

(1.7)

%

 

1.4

%

Add: loss on extinguishment of debt

 

1.3

%

 

%

Pre-Tax Margin, adjusted

 

7.4

%

 

(0.2)

%

 

Leverage ratio

The Company uses adjusted total debt, including aircraft rent, in addition to long-term adjusted debt and capital leases, to represent long-term financial obligations. The Company excludes unrealized (gains) losses from fuel derivative contracts and losses on extinguishment of debt from earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) for the reasons as described above.  Management believes this metric is helpful to investor in assessing the company's overall debt.

   

Twelve Months Ended

   

March 31, 2015

Debt and capital lease obligations

 

$

962,410

 Plus: Aircraft Leases capitalized at 7x last twelve months' aircraft rent

 

759,598

Adjusted debt and capital lease obligations

 

$

1,722,008

     

EBITDAR:

   

Income Before Income Taxes

 

$

163,739

Add back:

   

 Interest and amortization of debt expense

 

64,748

 Depreciation and amortization

 

98,743

 Rent expense

 

108,514

EBITDAR

 

$

435,744

     

Adjustments:

   

 Add: Unrealized losses on fuel hedges

 

27,192

 Add: Loss on Extinguishment of debt

 

10,840

 Adjusted EBITDAR

 

$

473,776

     

Leverage Ratio

 

3.6x

 

Logo - https://photos.prnewswire.com/prnh/20040827/LAF044LOGO

 

To view the original version on PR Newswire, visit:https://www.prnewswire.com/news-releases/hawaiian-holdings-reports-2015-first-quarter-financial-results-300070869.html

SOURCE Hawaiian Holdings, Inc.