Atlas Air Worldwide Holdings, Inc. Reports Strong Second-Quarter Results; 2Q05 Net Income Totals $15.9 Million, $0.77 Per Share; Earnings Reflect Enhanced Business Mix, Higher Unit Revenues, Flat Operating Expenses Excluding Aircraft Fuel.PURCHASE, N.Y. -- Atlas Air Atlas Air is an American cargo airline based in Purchase, New York, United States. It operates scheduled freight flights on an ACMI contract basis for some of the world's leading airlines, flying to 101 cities in 46 countries. Worldwide Holdings, Inc. (AAWW AAWW Asian American Writers' Workshop AAWW Alpaca Association of Western Washington AAWW Anti-Air Warfare Warship ) (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : AAWW.PK), a leading provider of global air cargo air cargo: see aviation. services, today reported net income of $15.9 million, or $0.77 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, on revenues of $395.2 million for the quarter ended June June: see month. 30, 2005. The June quarter also included operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $43.8 million and pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. of $26.9 million. "Our second-quarter net income reflects several positive factors," said Jeffrey H. Erickson Erickson can refer to several persons:
n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of our aircraft, and the continued optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of available capacity in favor of upon the side of; favorable to; for the advantage of. See also: favor ACMI ACMI Aircraft, Crew, Maintenance and Insurance (wet lease) ACMI Art & Creative Materials Institute ACMI Air Combat Maneuvering Instrumentation ACMI American College of Medical Informatics ACMI Australian Center for the Moving Image leasing and AMC (Advanced Mezzanine Card) See AdvancedTCA. charter operations. Unit revenues in all four of our service types were also higher during the quarter, and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , excluding aircraft fuel, were essentially flat." For the six months ended June 30, 2005, AAWW reported net income of $16.5 million, or $0.80 per diluted share, on revenues of $742.1 million. Operating income in the first half of 2005 totaled $64.2 million, while pretax income reached $28.4 million. Conference Call Management will host a conference call to discuss the Company's second-quarter 2005 financial and operating results at 9:30 A.M. Eastern Daylight Time on Thursday Thursday: see week. , September September: see month. 22, 2005. Interested parties are invited to listen to the call live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.atlasair.com or www.earnings.com. For those unable to listen to the live call, a replay will be available on the above Web sites for 90 days following the call. A replay will also be available through September 29, 2005 by dialing (800) 405-2236 (domestic) and (303) 590-3000 (international) and using Pass Code 11039909#. 2Q05 Performance Highlights Versus 2Q04 Revenue in the second quarter of 2005 totaled $395.2 million, an increase of $56.9 million compared with revenue of $338.3 million in the second quarter of 2004. Operating expenses, meanwhile, increased to $351.4 million from $330.1 million in the same period last year. Operating income of $43.8 million in the second quarter of 2005 improved by $35.6 million compared with operating income of $8.2 million in the second quarter of 2004. For the quarter, AAWW posted net income of $15.9 million, including post-emergence costs and related professional fees of $0.8 million. In contrast, it reported a net loss of $51.4 million in the second quarter of 2004, including net reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. expenses of $39.4 million. With respect to non-GAAP measures frequently used by AAWW's management to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. its results, second-quarter 2005 EBITDAR Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring Costs - EBITDAR An indicator of a company's financial performance calculated as: = Revenue - Expenses (excluding tax, interest, depreciation, amortization, and restructuring costs) (earnings before interest, taxes, depreciation, amortization, aircraft rent expense, and pre-petition and post-emergence costs and related professional fees, as applicable) totaled $95.2 million compared with second-quarter 2004 EBITDAR of $57.8 million. In addition, second-quarter EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings before interest, taxes, depreciation, amortization and pre-petition and post-emergence costs and related professional fees, as applicable) increased to $57.7 million compared with EBITDA of $23.6 million in the second quarter of 2004. 2Q05 Performance Factors Versus 2Q04 Sharply higher revenues in the second quarter of 2005 contributed to a significant improvement in AAWW's operating income compared with the second quarter of 2004. Second-quarter 2005 operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. reflect the continued reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation of capacity from the Scheduled Service business into ACMI leasing and AMC charter operations. Total operating revenues increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 17% versus the same quarter last year, reflecting a more than 44% increase in ACMI lease revenue, a nearly 34% increase in AMC charter revenue, and a roughly 89% increase in Commercial charter revenue, offset in part by a 9% reduction in Scheduled Service revenue. Total operated block hours In aviation, block hours is the time between an aircraft leaving from the departure gate and ariving at the destination gate. increased by more than 10%, compared with the second quarter of 2004, on improved aircraft utilization Average numbers of hours during each 24-hour period that an aircraft is actually in flight. and an approximately 6% increase in the number of average operating aircraft. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , all four service types realized higher unit revenues on a year-over-year basis. Revenue per block hour increased by approximately 1% in the ACMI leasing business, 11% in the AMC charter business, and more than 24% in the Commercial charter business, while revenue per ATM increased by 32% in the Scheduled Service business. In the ACMI segment, both an increase in the volume of leasing activity and a modest improvement in average contract lease rates contributed to the expansion in ACMI revenues. In the AMC and Commercial charter segments, stronger revenues reflected an increase in both rates and volumes. While total capacity in Scheduled Service was reduced by over 31% (as measured by ATMs), unit revenues (RATM RATM Rage Against The Machine (band) ) increased 32% and yield grew by more than 24%. In addition, load factor increased to more than 66% from less than 63% in the second quarter of 2004. Scheduled Service's unit-revenue performance continued to improve due to a number of factors, including the continued optimization of the scheduled-service network and the impact of higher fuel surcharges. Operating expenses during the quarter were 6% higher than in the second quarter of 2004. Higher fuel prices, increased salaries, wages and benefits, and increased aircraft rent were partially offset by lower ground handling charges and landing fees, reduced depreciation expense, and lower maintenance expense. The reallocation of capacity out of Scheduled Service and into ACMI operations had a beneficial impact on direct operating expenses during the quarter, including ground handling, landing and overfly o·ver·fly tr.v. o·ver·flew , o·ver·flown , o·ver·fly·ing, o·ver·flies 1. To fly over (a particular area or territory) in an aircraft or spacecraft. 2. fees. Total fuel consumption declined by approximately 13%, reflecting a roughly 13% reduction in non-ACMI block hours. The reduction in consumption was more than offset by a 44% increase in average fuel prices. The net impact was a 25% increase in fuel expense. Lower maintenance expense was primarily due to fewer D checks (one 747-200) compared with same quarter in 2004 (three 747-400s and two 747-200s), partially offset by an increase in the number of C checks (five 747-200s versus one 747-200). Significantly lower non-operating expenses during the quarter also contributed to the improvement in AAWW's pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern results. The principal factors were a $39.4 million reduction in net reorganization expenses and a $2.6 million reduction in net interest expense. Cash and Cash Equivalents Cash and cash equivalents, which totaled $133.9 million at December December: see month. 31, 2004 and $163.6 million at March 31, 2005, rose to $192.5 million at June 30, 2005. Since June 30, 2005, AAWW's cash position has benefited from the release to the Company of $15.0 million in restricted funds from the Polar Creditor An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and receive money, either through the fulfillment of a contract or due to injury sustained as a result of another's Negligence Trust and from the receipt of $12.6 million in insurance claims proceeds. 2005 Business Outlook AAWW's principal business is the airport-to-airport transportation of heavy-freight cargo. AAWW's current fleet of 42 Boeing (language) BOEING - An early system on the IBM 1130. [Listed in CACM 2(5):16, May 1959]. 747 freighter aircraft operates throughout the world, providing air cargo and related services through four principal business segments: ACMI Lease Contracts, Scheduled Service, AMC (military) Charters, and Commercial Charters. AAWW's current outlook for its principal business segments during 2005 is summarized below: --We continue to expect that demand for widebody freighter aircraft will exceed supply throughout 2005, which should benefit all of our service types. --We expect to continue to optimize optimize - optimisation capacity allocations among our service types. --We expect that demand in AMC Charter business will be strong in 2005. Successor Company Versus Predecessor Company AAWW completed a financial restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and emerged from Chapter 11 bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party in July July: see month. 2004. In conjunction with its emergence, AAWW applied the provisions of fresh-start accounting effective as of July 27, 2004, at which time a new reporting entity was deemed to be created. As a result, readers of AAWW's financial statements are cautioned that reported historical financial statements of the Company for periods prior to emergence are not comparable with those for periods after emergence. About Non-GAAP Financial Measures To supplement AAWW's financial statements presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , AAWW presents certain non-GAAP financial measures to assist in the evaluation of the performance of its business. These non-GAAP measures include EBITDAR and EBITDA, each excluding pre-petition and post-emergence costs and related professional fees. AAWW's management uses these non-GAAP financial measures in assessing the performance of the Company's ongoing operations and liquidity and in planning and forecasting future periods. About Atlas Air Worldwide Holdings, Inc.: AAWW is the parent company of Atlas Air, Inc. (Atlas Atlas, in Greek mythology Atlas (ăt`ləs), in Greek mythology, a Titan; son of Iapetus and Clymene and the brother of Prometheus. ) and Polar Air Cargo Polar Air Cargo is an American cargo airline based in Purchase, New York, USA. It operates scheduled all-cargo services to Asia, Europe, Australia, New Zealand and the Americas. Its main base is John F. , Inc. (Polar), which together operate the world's largest fleet of Boeing 747 freighter aircraft. AAWW, through its principal subsidiaries Atlas and Polar, offers scheduled air cargo service, cargo charters, military charters, and ACMI aircraft leasing in which customers receive a dedicated aircraft, crew, maintenance and insurance on a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. lease basis. AAWW's press releases, SEC filings and other information can be accessed through the Company's home page, www.atlasair.com. This release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 that reflect AAWW's current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the operations and business environments of AAWW and its subsidiaries (collectively, the "companies") that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements. Factors that could cause actual results to differ materially from those forward-looking statements with respect to other matters include, but are not limited to, the following: the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies' ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to remedy weaknesses in our internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies' products and services; pending and future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; the market acceptance of AAWW's new common stock; and other risks and uncertainties set forth from time to time in AAWW's reports to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission. For additional information, we refer you to the risk factors set forth under the heading "Risk Factors" in the Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed by AAWW with the Securities and Exchange Commission on June 30, 2005. Other factors and assumptions not identified above are also involved in the preparation of forward-looking statements, and the failure of such other factors and assumptions to be realized may also cause actual results to differ materially from those discussed. Except as stated in this release, AAWW is not providing guidance or estimates regarding its anticipated business and financial performance for 2005. AAWW assumes no obligation to update the statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law.
Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Successor Predecessor Successor Predecessor
--------- ----------- --------- -----------
For the For the For the For the
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
--------- ----------- --------- -----------
Operating Revenues
Scheduled service $140,971 $155,491 $262,115 $ 300,559
ACMI lease contracts 122,624 84,871 232,161 168,101
AMC charter 104,357 78,069 193,273 131,182
Charter service 15,562 8,254 31,100 13,852
Other revenue 11,671 11,623 23,482 22,069
-------- -------- -------- ---------
Total operating
revenues 395,185 338,308 742,131 635,763
-------- -------- -------- ---------
Operating Expenses
Aircraft fuel 101,911 81,417 181,518 151,253
Salaries, wages &
benefits 57,709 51,056 114,061 103,921
Maintenance, materials
and repairs 58,936 61,999 122,955 114,877
Aircraft rent 37,570 34,159 74,429 71,814
Ground handling 19,350 23,433 37,508 46,014
Landing fees and other
rent 20,665 23,530 39,052 45,608
Depreciation and
amortization 13,066 15,404 26,070 29,671
Travel 14,553 12,643 29,352 24,789
Pre-petition and post-
emergence costs and
related professional
fees 843 - 2,484 9,439
Other 26,825 26,463 50,463 52,035
-------- -------- -------- ---------
Total operating
expenses 351,428 330,104 677,892 649,421
-------- -------- -------- ---------
Operating income (loss) 43,757 8,204 64,239 (13,658)
-------- -------- -------- ---------
Non-operating Expenses
(Income)
Interest income (1,301) (280) (2,119) (470)
Interest expense
(excluding post-petition
contractual interest
of $10,678 and $17,797
for the three and six
months ended June 30,
2004, respectively) 17,976 19,563 35,798 43,131
Other, net 212 961 2,170 992
Reorganization items, net - 39,388 - 51,580
-------- -------- -------- ---------
Total non-operating
expenses 16,887 59,632 35,849 95,233
-------- -------- -------- ---------
Income (loss) before
income tax expense 26,870 (51,428) 28,390 (108,891)
Income tax expense 11,016 - 11,861 1,117
-------- -------- -------- ---------
Net income (loss) $ 15,854 $(51,428) $ 16,529 $(110,008)
======== ======== ======== =========
Income (loss) per share:
Basic $ 0.78 $ (1.34) $ 0.82 $ (2.87)
======== ======== ======== =========
Diluted $ 0.77 $ (1.34) $ 0.80 $ (2.87)
======== ======== ======== =========
Weighted average shares:
Basic 20,209 38,378 20,210 38,378
======== ======== ======== =========
Diluted 20,548 38,378 20,536 38,378
======== ======== ======== =========
Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in millions)
(Unaudited)
Successor Predecessor Successor Predecessor
---------- ----------- --------- -----------
For the For the For the For the
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
---------- ----------- --------- -----------
Income (loss) before
income taxes $26,870 $(51,428) $ 28,390 $(108,891)
Reorganization items,
net - 39,388 - 51,580
Pre-petition and post-
emergence costs and
related professional
fees 843 - 2,484 9,439
------- -------- -------- ---------
Pretax income (loss)
before pre-petition and
post-emergence costs
and related
professional fees and
reorganization items,
net 27,713 (12,040) 30,874 (47,872)
Interest expense, net 16,675 19,283 33,679 42,661
Other non-operating
expense 212 961 2,170 992
------- -------- -------- ---------
Operating income (loss)
before non-operating
expenses, pre-petition
and post-emergence
costs and related
professional fees and
reorganization items,
net 44,600 8,204 66,723 (4,219)
Depreciation and
amortization 13,066 15,404 26,070 29,671
------- -------- -------- ---------
EBITDA 57,666 23,608 92,793 25,452
Aircraft rent 37,570 34,159 74,429 71,814
------- -------- -------- ---------
EBITDAR $95,236 $ 57,767 $167,222 $ 97,266
======= ======== ======== =========
Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)
Successor Predecessor
------------------ -------------------
For the Three For the Three
Months Ended Months Ended Percent
June 30, 2005 June 30, 2004 Change
------------------ ------------------- -----------
Operating Fleet:
(average during the
period)
Aircraft count (1) 39.0 36.7 6.3%
Block Hours
Scheduled Service 9,935 14,374 (30.9%)
ACMI Contract 22,611 15,742 43.6%
AMC Charter 7,507 6,237 20.4%
Commercial Charter 998 659 51.5%
All Other 203 290 (29.9%)
------------ ----------------
Total Block Hours 41,254 37,302 10.6%
============ ================
Revenue Per Block
Hour
ACMI Contract $ 5,423 $ 5,391 0.6%
AMC Charter $ 13,901 $ 12,517 11.1%
Commercial Charter $ 15,593 $ 12,525 24.5%
Scheduled Service
Traffic
RTM's (000's) 385,631 529,934 (27.2%)
ATM's (000's) 580,186 846,374 (31.5%)
Load Factor 66.5% 62.6% 3.9 pts
RATM (2) $ 0.243 $ 0.184 32.1%
RTM Yield (3) $ 0.366 $ 0.293 24.6%
Fuel
Average fuel cost
per gallon $ 1.61 $ 1.12 44.1%
Fuel gallons
consumed (000's) 63,094 72,867 (13.4%)
(1) Operating Fleet excludes the following aircraft count that were
dry leased or out of service:
Dry leased 3.0 4.0 (25.0%)
Out of service * 0.7 4.0 (82.5%)
Successor Predecessor
------------------ -------------------
For the Six For the Six
Months Ended Months Ended Percent
June 30, 2005 June 30, 2004 Change
------------------ ------------------- -----------
Operating Fleet:
(average during the
period)
Aircraft count (1) 39.1 37.8 3.3%
Block Hours
Scheduled Service 19,017 28,284 (32.8%)
ACMI Contract 43,098 31,454 37.0%
AMC Charter 13,738 10,774 27.5%
Commercial Charter 2,231 1,268 76.0%
All Other 467 590 (20.9%)
----------- ----------------
Total Block Hours 78,551 72,370 8.5%
=========== ================
Revenue Per Block
Hour
ACMI Contract $ 5,387 $ 5,344 0.8%
AMC Charter $ 14,068 $ 12,176 15.5%
Commercial Charter $ 13,940 $ 10,928 27.6%
Scheduled Service
Traffic
RTM's (000's) 722,296 1,019,669 (29.2%)
ATM's (000's) 1,109,884 1,661,599 (33.2%)
Load Factor 65.1% 61.4% 3.7 pts
RATM (2) $ 0.236 $ 0.181 30.6%
RTM Yield (3) $ 0.363 $ 0.295 23.1%
Fuel
Average fuel cost
per gallon $ 1.54 $ 1.12 37.2%
Fuel gallons
consumed (000's) 117,791 134,905 (12.7%)
(1) Operating Fleet excludes the following aircraft count that were
dry leased or out of service:
Dry leased 3.1 4.0 (22.5%)
Out of service * 0.7 5.1 (86.3%)
* Includes the impact of one aircraft that was damaged and removed
from service on January 24, 2005 with respect to which AAWW
received a $12.6 million cash-in-lieu-of-repair settlement from its
insurance carriers in July 2005.
(2) RATM represents scheduled service revenue dollars per available
ton mile.
(3) RTM Yield represents scheduled service revenue dollars per revenue
ton mile.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion