Republic Airways Holdings Announces Second Quarter 2005 Results.INDIANAPOLIS -- Republic Airways Holdings Republic Airways Holdings, Inc. (NASDAQ: RJET) is an aviation holding corporation based in Indianapolis, Indiana, which owns three regional airlines operating in the United States: Chautauqua Airlines, Republic Airlines and Shuttle America. Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :RJET) today reported 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. of $188.8 million for the quarter ended June 30, 2005, a 35.8% increase, compared to $139.0 million for the same period last year. The Company also reported net income of $13.4 million for the quarter ended June 30, 2005, or $0.40 per diluted share, compared to $7.2 million of net income or $0.31 per diluted share for the same period last year. Weighted average diluted common shares outstanding increased to 33.3 million, or 44.6% as a result of the Company's public offerings in May 2004 and February 2005. The primary items of significance affecting the second quarter of 2005 are outlined below: Total operating revenues for the second quarter of 2005 increased primarily as a result of a 40.7% increase in available seat miles Available seat miles (ASM) is a measure of an airline flight's passenger carrying capacity. It is equal to the number of seats available multiplied by the number of miles flown. This measures an airlines capacity for transporting passengers. (ASMs) to 1.6 billion ASMs, up from 1.1 billion ASMs and a 26.5% increase in block hours In aviation, block hours is the time between an aircraft leaving from the departure gate and ariving at the destination gate. . These increases reflect the addition of 36 regional jet aircraft that were placed into service since June 30, 2004. Total 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. for the second quarter of 2005, including interest expense but excluding fuel charges (which are reimbursable by the Company's major partners) of $128.7 million, increased approximately 29.3% from $99.5 million for the same quarter of 2004. Operating cost per ASM (1) (Association for Systems Management) An international membership organization based in Cleveland, Ohio. Founded in 1947 and disbanded in 1996, it sponsored conferences in all phases of administrative systems and management. (CASM CASM Cost per Available Seat Mile CASM Communities and Small-scale Mining CASM Canadian Academy of Sports Medicine CASM Certificate of Advanced Study in Mathematics (Univeristy of Cambridge, UK) CASM Coherent Adaptive Subcarrier Modulation ), including interest expense, but excluding fuel, decreased 8.2% to 8.2 cents per ASM, from the prior year's 8.9 cents per ASM. Included in operating expenses in 2005 was $2.8 million, or approximately 0.2 cents per ASM of amounts paid to American relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the operation of 70-seat aircraft at Chautauqua Airlines Chautauqua Airlines is an airline based in Indianapolis, Indiana, USA. It operates scheduled passenger services on more than 670 flights daily to cities in 30 states, Canada and the Bahamas, through feeder services under the names Delta Connection for Delta Air Lines, . Beginning in May 2005, US Airways elected to provide fuel directly for all of the Company's US Airways Express US Airways Express is an airline brand name, rather than a fully certificated airline, and as such, the US Airways Express name is used by several individually owned airlines or airline holding companies which provide regional airline and commuter service for US Airways. aircraft operations. This change eliminates fuel expense and the related fuel reimbursement (previously recorded as revenue) for the US Airways operations. Operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. are not affected by this change. During the quarter, the Company announced that it intends to proceed with its transaction with US Airways to purchase Embraer 170's and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. for approximately $110.0 million. The Company will purchase ten Embraer 170 aircraft and assume leases on an additional 18 Embraer 170 aircraft and will begin operating them in the US Airways network under a previously negotiated regional jet service agreement that has been approved by the U.S. Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. . The Company will also purchase, and lease back to US Airways, 113 commuter slots at Ronald Reagan Washington National Airport Ronald Reagan Washington National Airport (IATA: DCA, ICAO: KDCA, FAA LID: DCA) is a public airport located three miles (5 km) south of the central business district of Washington, D.C., in Arlington County, Virginia, United States. , and 24 commuter slots at New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of LaGuardia Airport LaGuardia Airport (IATA: LGA, ICAO: KLGA, FAA LID: LGA) is an airport serving New York City, New York, United States, located on the waterfront of Flushing Bay, and borders the neighborhoods of Astoria, Jackson Heights and East Elmhurst in the borough . Other assets to be acquired include a flight simulator flight simulator, device providing a controlled environment in which a flight trainee can experience conditions approximating those of actual flight. A simulator generally consists of an enclosure housing a working replica of the interior of the cockpit of an , spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. , and certain facilities to support the Embraer 170 aircraft operations. Also during the quarter, the Company acquired Shuttle America Shuttle America is a major airline based in Indianapolis, Indiana, USA. It feeds United Airlines flights at Chicago, Denver, and Washington as United Express, and feeds Delta Air Lines flights at Atlanta and New York as Delta Connection. Corporation, which gives the Company added flexibility in operating larger gauge regional jets as the Company will soon have 3 operating certificates with each operating a single-fleet type of regional jets as follows: 37-50 seat (Chautauqua Airlines), 70 seat (Shuttle America), and 70+ seats (Republic Airline). The Company also amended its airline services agreement with United to provide an additional five 70-seat Embraer 170s bringing the total number of 170s to be operated as United Express to 28 aircraft. Two 50-seat Embraer 145 aircraft will be removed from service as a result of the amended agreement and used as spares and for charter operations. The Company increased its fleet of Embraer regional jet aircraft to 124 (40 Delta, 32 United, 15 American, 35 US Airways and 2 Charter; including 24 Embraer 170 aircraft) as of June 30, 2005, from 116 aircraft as of March 31, 2005. During the quarter, the Company took delivery of eight Embraer 170, 70-seat regional jet aircraft. The Company also returned 6 Saab turboprop turboprop: see turbine. turboprop Hybrid engine that provides jet thrust and also drives a propeller. It is similar to the turbojet except that an added turbine, behind the combustion chamber, works through a shaft and speed-reducing gears to turn a aircraft during the quarter, reducing the Saab fleet to 11 aircraft, which are expected to be phased out of service by the end of November 2005. At June 30, 2005, the Company had $127.6 million in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has compared to $119.7 million as of March 31, 2005. The Company entered into lease financing arrangements for two of the eight aircraft delivered during the quarter and debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay arrangements for the remaining six aircraft. The Company's long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. increased to $1.03 billion as of June 30, 2005, compared to $934.8 million at March 31, 2005. The Company also has significant long-term operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. obligations. At a 7.0% discount factor, the present value of these lease obligations was approximately $552.0 million as of June 30, 2005. Republic Airways Holdings, based in Indianapolis, Indiana “Indianapolis” redirects here. For other uses, see Indianapolis (disambiguation). Indianapolis (IPA: [ˌɪndiəˈnæpəlɪs]) is the capital city of the U.S. is an airline holding company that operates Chautauqua Airlines, Republic Airline and Shuttle America. The Company offers scheduled passenger service on more than 800 flights daily to 82 cities in 32 states, Canada and the Bahamas through airline services agreements with four major U.S. airlines. All of its flights are operated under its major airline partner brand, such as AmericanConnection, Delta Connection, United Express and US Airways Express. The airline currently employs more than 2,900 aviation professionals and operates 124 aircraft including 24 Embraer 170 aircraft. The Company will conduct a telephone briefing to discuss its second quarter results today at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . A live Webcast of this briefing will be available online at www.rjet.com - investor relations Investor relations The process by which the corporation communicates with its investors. . Additional Information In addition to historical information, 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. . Republic Airways may, from time-to-time, make written or oral forward-looking statements 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. Such statements encompass Republic Airways' beliefs, expectations, hopes or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to Republic Airways as of such date. Republic Airways assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our 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. and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this release by reference.
REPUBLIC AIRWAYS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and Shares in Thousands, Except per Share Amounts)
(Unaudited)
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Three Months Ended Six Months Ended
June 30 June 30
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Financial Highlights 2005 2004 Change 2005 2004 Change
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OPERATING REVENUES
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Passenger $186,860 $137,728 35.7% $370,213 $265,447 39.5%
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Other 1,985 1,291 53.8% 6,970 5,103 36.6%
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Total
operating
revenues 188,845 139,019 35.8% 377,183 270,550 39.4%
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----------------------------------------------------------------------
OPERATING EXPENSES
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Wages and
benefits 34,846 27,335 27.5% 66,802 54,104 23.5%
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Aircraft fuel 38,781 26,753 45.0% 84,064 51,003 64.8%
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Landing fees 7,059 5,205 35.6% 13,428 10,303 30.3%
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Aircraft and
engine rent 19,096 17,865 6.9% 37,595 35,488 5.9%
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Maintenance and
repair 19,231 18,512 3.9% 37,576 34,694 8.3%
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Insurance and
taxes 4,145 3,490 18.8% 7,990 6,419 24.5%
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Depreciation and
amortization 14,391 7,974 80.5% 27,999 15,190 84.3%
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Other 16,327 13,123 24.4% 30,221 23,946 26.2%
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Total
operating
expenses 153,876 120,257 28.0% 305,675 231,147 32.2%
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OPERATING INCOME 34,969 18,762 86.4% 71,508 39,403 81.5%
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OTHER INCOME
(EXPENSE)
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Interest expense (13,566) (5,979) 126.9% (26,291) (12,371)112.5%
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Other income 876 74 1083.8% 1,392 150 828.0%
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Total other
income
(expense) (12,690) (5,905) 114.9% (24,899) (12,221)103.7%
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INCOME BEFORE INCOME
TAXES 22,279 12,857 73.3% 46,609 27,182 71.5%
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INCOME TAX EXPENSE 8,883 5,623 58.0% 18,389 11,669 57.6%
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NET INCOME 13,396 7,234 85.2% 28,220 15,513 81.9%
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PER SHARE, BASIC $0.41 $0.32 27.2% $0.91 $0.73 23.6%
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PER SHARE, DILUTED $0.40 $0.31 28.1% $0.88 $0.71 23.8%
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Weighted Average
Common Shares
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Basic 32,483 22,317 45.6% 31,142 21,159 47.2%
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Diluted 33,341 23,055 44.6% 31,906 21,718 46.9%
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Unaudited Operating Highlights
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Operating Three Months Ended Six Months Ended
Highlights June 30, 2005 June 30, 2005
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2005 2004 Change 2005 2004 Change
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Passengers
carried 2,346,187 1,713,179 36.9% 4,383,566 3,103,237 41.3%
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Revenue
passenger
miles (000) 1,128,722 777,980 45.1% 2,090,409 1,419,929 47.2%
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Available
seat miles
(000) 1,573,120 1,118,305 40.7% 3,012,766 2,189,060 37.6%
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Passenger
load factor 71.8% 69.6% 2.2 pts 69.4% 64.9% 4.5 pts
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Cost per
available
seat mile,
including
interest
expense
(cents) 10.64 11.29 -5.8% 11.02 11.12 -0.9%
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Fuel cost per
available
seat mile 2.47 2.39 3.3% 2.79 2.33 19.7%
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Cost per
available
seat mile,
excluding
fuel expense
(cents) 8.17 8.90 -8.2% 8.23 8.79 -6.4%
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Block hours 115,257 91,146 26.5% 224,606 177,904 26.3%
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Departures 69,685 57,720 20.7% 135,052 112,168 20.4%
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Average daily
utilization
of each
aircraft
(hours) 10.6 10.1 5.0% 10.7 10.0 7.0%
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Average
aircraft
stage length 470 444 5.9% 468 448 4.5%
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