Republic Airways Holdings Announces Second Quarter 2006 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 $284.3 million for the quarter ended June 30, 2006, a 33.3% increase, compared to $213.2 million for the same period last year. The Company reported net income of $20.3 million for the quarter ended June 30, 2006, a 51.2% improvement over the $13.4 million reported in the prior year's second quarter (the prior year's second quarter results included an after tax expense of $1.7 million for payments made to AMR (1) (Adaptive Multi-Rate) A variable rate speech codec selected by the 3GPP for the 3G evolution of the GSM cellphone system (WCDMA). Using the Algebraic CELP (ACELP) compression technology, AMR provides toll quality sound at transmission rates from 4.75 to 12. related to the operation of 70-seat aircraft on the Chautauqua Chau`tau´qua 1. a meeting, usually held in the summer outdoors or under a temporary tent, providing public lectures combined with entertainment such as concerts and plays. It originated in the village of Chautauqua, N. Y. operating certificate Operating certificate is a category of license issued by a government agency allowing an individual or company to provide a controlled type of service. These certificates are generally issued for a limited time period. ). The Company also reported earnings 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 of $0.47, compared to $0.40 for the same period last year. Weighted average diluted common shares outstanding increased to 43.3 million, or 29.8% as a result of the Company's follow on offering of common stock in July 2005. The primary items of significance affecting the second quarter of 2006 are outlined below. Second Quarter Highlights Total operating revenues for the second quarter of 2006 increased primarily as a result of a 43.5% 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 2.3 billion ASMs, up from 1.6 billion ASMs and an 18.5% 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 48 E170 regional jet aircraft, which were placed into service since June 30, 2005 offset by the removal of seven E145 regional jet aircraft and 10 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 from fixed-fee service during the same time period. 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 2006, including interest expense but excluding fuel charges (which are reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. by the Company's partners), of $171.6 million, increased approximately 32.6% from $129.4 million for the same quarter of 2005. 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 7.7% to 7.6 cents compared to the prior year's 8.2 cents. During the quarter the Company transitioned the final ten E170 aircraft from US Airways airways Anatomy The 'pipes'–trachea, bronchi, bronchioles–through which air passes to and from the alveoli. See Small airways. and took delivery of four new E170 aircraft which were placed into fixed-fee service for Delta Air Lines. The Company entered into 15-year, fixed rate 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 four Delta aircraft. At June 30, 2006, the Company's fleet consisted of 166 regional jets including 71 E170 aircraft. Recent Developments In July, the Company announced that it had reached an agreement to operate forty-four 50-seat regional jets for Continental. The aircraft are expected to be placed into service between January and July 2007 and will be operated for terms that vary from two years to five years. Under certain conditions Continental may extend the term on the aircraft up to five additional years. Also in July, the Company announced that it had reached agreements with Embraer and US Airways to take delivery of thirty 86-seat E175 aircraft and to place these aircraft into service for US Airways between January 2007 and the summer of 2008. The agreement with US Airways also included the removal of twenty 50-seat aircraft, which will be repositioned to operate under the new Continental agreement. The Company expects the remaining 24 aircraft for Continental to be acquired on short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. operating leases 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. consistent with the terms of the Continental agreement. Balance Sheet Information At June 30, 2006 the Company had $204.5 million in cash and cash equivalents compared to $162.0 million as of December 31, 2005. 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 $1.48 billion as of June 30, 2006, compared to $1.41 billion at December 31, 2005. All of the Company's long-term debt is at fixed interest rates, and is secured by the aircraft. The Company also has significant 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. operating lease obligations. At a 7% discount factor, the present value of these lease obligations was approximately $800 million as of June 30, 2006. Corporate Information 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 owns 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, , Republic Airlines and 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. . The airlines offer scheduled passenger service on approximately 1,000 flights daily to 89 cities in 35 states, Canada, Mexico and the Bahamas through airline services agreements with four major U.S. airlines. All flights are operated under a major airline partner brand, such as AmericanConnection, Delta Connection, United Express and 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. . As of June 30, 2006, the airlines employed more than 3,300 aviation professionals and operated 166 regional jet aircraft including 71 E170 aircraft. The Company will conduct a telephone briefing to discuss its second quarter results on August 2nd, 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 . For those wishing to participate please call 866-831-6272 and for international calls please dial 617-213-8859; the passcode is 64515445. A live Webcast of this briefing will also 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 here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" 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
Financial Highlights June 30, June 30,
------------------------ ------------------------
2006 2005 Change 2006 2005 Change
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OPERATING REVENUES
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Passenger $279,430 $211,263 32.3% $527,606 $416,036 26.8%
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Other 4,883 1,985 146.0% 14,051 6,970 101.6%
--------------------------------------------- ------------------------
Total
operating
revenues 284,313 213,248 33.3% 541,657 423,006 28.0%
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OPERATING EXPENSES
--------------------------------------------- ------------------------
Wages and benefits 43,595 34,846 25.1% 83,740 66,802 25.4%
--------------------------------------------- ------------------------
Aircraft fuel 82,137 62,411 31.6% 158,660 128,347 23.6%
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Landing fees 10,492 7,737 35.6% 19,086 14,778 29.2%
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Aircraft and
engine rent 24,394 19,128 27.5% 44,746 37,659 18.8%
--------------------------------------------- ------------------------
Maintenance and
repair 24,522 19,231 27.5% 46,903 37,576 24.8%
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Insurance and
taxes 4,978 4,208 18.3% 9,270 8,116 14.2%
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Depreciation and
amortization 22,080 14,391 53.4% 43,498 27,999 55.4%
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Other 19,555 16,327 19.8% 35,277 30,221 16.7%
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Total
operating
expenses 231,753 178,279 30.0% 441,180 351,498 25.5%
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OPERATING INCOME 52,560 34,969 50.3% 100,477 71,508 40.5%
--------------------------------------------- ------------------------
--------------------------------------------- ------------------------
OTHER INCOME
(EXPENSE)
--------------------------------------------- ------------------------
Interest expense (21,961) (13,566) 61.9% (43,830) (26,291) 66.7%
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Other income 2,648 876 202.3% 4,614 1,392 231.5%
--------------------------------------------- ------------------------
Total other
income
(expense) (19,313) (12,690) 52.2% (39,216) (24,899) 57.5%
--------------------------------------------- ------------------------
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INCOME BEFORE INCOME
TAXES 33,247 22,279 49.2% 61,261 46,609 31.4%
--------------------------------------------- ------------------------
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INCOME TAX EXPENSE 12,992 8,883 46.3% 24,106 18,389 31.1%
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NET INCOME 20,255 13,396 51.2% 37,155 28,220 31.7%
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PER SHARE, BASIC $0.48 $0.41 17.1% $0.89 $0.91 (2.1%)
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PER SHARE, DILUTED $0.47 $0.40 17.5% $0.86 $0.88 (2.3%)
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Weighted Average
Common Shares
--------------------------------------------- ------------------------
Basic 41,941 32,483 29.1% 41,889 31,142 34.5%
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--------------------------------------------- ------------------------
Diluted 43,277 33,341 29.8% 43,149 31,906 35.2%
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Unaudited Operating Highlights
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Operating Three Months Ended Six Months Ended
Highlights June 30, 2006 June 30, 2006
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2006 2005 Change 2006 2005 Change
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Passengers
carried 3,328,129 2,346,187 41.9% 5,883,377 4,383,566 34.2%
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Revenue
passenger
miles (000) 1,735,977 1,128,722 53.8% 3,110,267 2,090,409 48.8%
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Available
seat miles
(000) 2,257,596 1,573,120 43.5% 4,222,798 3,012,766 40.2%
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Passenger
load factor 76.9% 71.8% 5.1 pts 73.7% 69.4% 4.3 pts
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Cost per
available
seat mile,
including
interest
expense
(cents) 11.24 12.20 (7.9%) 11.49 12.54 (8.4%)
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Fuel cost per
available
seat mile 3.64 3.97 (8.3%) 3.76 4.26 (11.7%)
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Cost per
available
seat mile,
excluding
fuel expense
(cents) 7.60 8.23 (7.7%) 7.73 8.28 (6.6%)
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Block hours 136,620 115,257 18.5% 258,252 224,606 15.0%
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Departures 78,874 69,803 13.0% 148,030 135,052 9.6%
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Average daily
utilization
of each
aircraft
(hours) 10.3 10.6 (2.8%) 10.2 10.7 (4.7%)
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Average
aircraft
stage length 516 470 9.8% 520 468 11.1%
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