• Mesa Air Group Reports Third Quarter Fiscal 2022 Results

    المصدر: Nasdaq GlobeNewswire / 08 أغسطس 2022 16:00:00   America/New_York

    PHOENIX, Aug. 08, 2022 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported third quarter fiscal 2022 financial and operating results.

    Fiscal Third Quarter Highlights:

    • Pre-tax loss of $12.5 million, net loss of $10.0 million or $(0.28) per diluted share
    • Adjusted net loss1 of $7.1 million or $(0.20) per diluted share
    • Adjusted net loss excludes a $3.9 million (pre-tax) change in the fair value of investments in equity securities
    • Third aircraft with DHL cargo operation entered revenue service
    • Added a second CRJ simulator to increase pilot training capacity

    Jonathan Ornstein, Chairman and CEO, said, “While demand remained resilient for the quarter, our financial results continue to be impacted by industry-wide, elevated pilot attrition and the significant reduction in the commercial pilot pipeline, exacerbated by the 1,500-hour rule. Looking forward, we intend to take dramatic action to address the pilot shortage through increased recruiting, additional simulator capacity, and expansion of our pilot pipeline. We are also pleased that United Airlines has expanded the Aviate program to include all of our pilots.”

    Fiscal Third Quarter Details:

    Total operating revenues in Q3 2022 were $134.4 million, an increase of $9.2 million (7.4%) from $125.2 million for Q3 2021. Contract revenue increased $9.2 million, or 8.4%. This was due to the return to normal rates from our partners, which were temporarily reduced last year related to the PSP program. These were partially offset by a reduction in block hours. Mesa’s Q3 2022 results include, per GAAP, the recognition of $6.8 million of previously deferred revenue, versus the deferral of $1.9 million of revenue in Q3 2021. The remaining deferred revenue balance of $22.7 million will be recognized as flights are completed over the remaining terms of the contracts.

    Mesa’s Adjusted EBITDA1 for Q3 2022 was $20.1 million, compared to $35.3 million in Q3 2021, and Adjusted EBITDAR1 was $29.4 million for Q3 2022, compared to $44.9 million in Q3 2021.

    Mesa’s Q3 FY22 results reflect a net loss of $10.0 million, or $(0.28) per diluted share, compared to net income of $4.3 million, or $0.11 per diluted share for Q3 FY21. Mesa’s Q3 FY22 adjusted pre-tax loss1 was $8.7 million versus an adjusted pre-tax income1 of $5.8 million in Q3 FY21. The year over year decrease in adjusted pre-tax income of $14.5 million was primarily due to lower block hours, the net impact of the PSP program, and the change in deferred revenue.

    Operationally, the Company ran a controllable completion factor of 98.8% for American and 99.8% for United during Q3 2022. This is compared to a controllable completion factor of 99.4% for American and 99.9% for United during Q3 2021. This excludes cancellations due to weather and air traffic control.

    With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 97.7% for American and 98.8% for United during Q3 2022. This is compared to a total completion factor of 97.6% for American and 99.2% for United during Q3 2021.

    Liquidity and Capital Resources:

    Mesa ended the quarter at $54.4 million in unrestricted cash and equivalents. As of June 30, 2022, the Company had $653.4 million in total debt secured primarily with aircraft and engines.

    Fleet:

    For the three months ended June 30, 2022, 46% of the Company’s total revenue was derived from our contracts with United, 47% from American, 2% from DHL, and 5% from leases of aircraft to a third party.

    Below is our current and future fleet plan by partner and fleet type for FY22:

    Fleet Plan (FY22)Q1 (Dec '21)Q2 (Mar '22)Q3 (Jun '22)Q4 (Sep '22)
     ActualActualActualForecast
    E-175 – UA 80 80 80 80
    CRJ-900 – AA 40404040
    737-400F – DHL 2 3 3 3
    Sub-total 122 123 123 123
    CRJ-700 leased 17 18 20 20
    CRJ-700 to be leased
    to third party    		 3 2 - -
    CRJ spares or parked25131313
    CRJ held for sale- 12 12 12
    Total fleet167168168 168

    Mesa Air Group will host a conference call with analysts on August 8th at 4:30 pm EDT. The conference call number is 888-469-2054 (Passcode: Phoenix (7463649)). The conference call can also be accessed live via the web by visiting https://investor.mesa-air.com. 

    A recorded version will be available on Mesa's website approximately two hours after the call for approximately 14 days.

    1Reconciliation of non-GAAP financial measures

    Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa's ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three and nine months ended June 30, 2022 and June 30, 2021. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company's net income or loss. Additionally, these calculations may not be comparable with similarly titled measures of other companies.

    1Reconciliation of GAAP versus Non-GAAP Disclosures
    (In thousands, except for per diluted share) (Unaudited)

     Three Months Ended June 30, 2022 Three Months Ended June 30, 2021
     Income
    (Loss)
    Before
    Taxes    		Income Tax (Expense)/
    Benefit    		Net Income (Loss) Net Income
    (Loss) per
    Diluted Share     		 Income
    Before
    Taxes    		Income Tax (Expense)/
    Benefit    		Net Income Net Income
    per Diluted Share
    GAAP Income (Loss)$(12,478)2,493 (9,985)$(0.28) $5,801 $(1,525)4,276$0.11
    Adjustments(1) (135)32 (103)$(0.00)     
    Loss on
    Investments,    		         
    Net(2) 3,926 (896)3,030 $0.08      
    Adjusted Income         
    (Loss) (8,687)1,629 (7,058)$(0.20)  5,801  (1,525)4,276$0.11
              
    Interest Expense 8,716      8,627    
    Interest Income (24)     (82)   
    Depreciation and Amortization 20,103      20,933    
    Adjusted EBITDA 20,108      35,279    
              
    Aircraft Rent 9,299      9,648    
    Adjusted EBITDAR$29,407     $44,927    


    (1) Includes true-up adjustment of ($0.1) million recorded during the three months ended June 2022. This adjustment is related to the termination loss previously recorded in Q2 2022 pertaining to the abandonment of one of our leased facilities.
    (2) Includes losses resulting from changes in the fair value of the Company's investments in equity securities of $3.9 million for the three months ended June 30, 2022.       

       .        

              
     Nine Months Ended June 30, 2022 Nine Months Ended June 30, 2021
     Income
    (Loss)
    Before
    Taxes    		Income Tax (Expense)/ BenefitNet Income (Loss)Net Income (Loss) per Diluted Share Income
    Before
    Taxes    		Income Tax (Expense)/ BenefitNet Income Net Income
    per Diluted
    Share
    GAAP Income (Loss)$(86,029)18,987 (67,042)$(1.86) $32,319 (8,236)24,083$0.62
    Adjustments (1)(2)(3)(4) 39,708 (9,065)30,643 $0.85   3,558 (900)2,658$0.07
    Loss on Investments, Net(5) 12,649 (2,888)9,761 $0.27      
    Adjusted Income (Loss) (33,672)7,034 (26,638)$(0.74)  35,877 (9,136)26,741$0.69
              
    Interest Expense 24,766      26,464    
    Interest Income (117)     (287)   
    Depreciation and Amortization 61,878      62,108    
    Adjusted EBITDA 52,856      124,162    
              
    Aircraft Rent 28,319      29,688    
    Adjusted EBITDAR$81,174     $153,850    


    (1) Includes adjustment for gain on extinguishment of debt of $1.0 million related to repayment of the Company’s aircraft debts during the nine months ended June 30, 2021.   
    (2) Includes adjustment for lease termination expense of $4.5 million during our nine months ended June 30, 2021 related to the purchase of a CRJ-900 aircraft which was previously leased from Bombardier Capital.    
    (3) Includes adjustment for impairment charges of $39.5 million for the nine months ended June 30, 2022 related to certain of the Company's aircraft which are classified as held for sale.
    (4) Includes adjustment related to the abandonment of one of our leased facilities resulting in operating lease right-of-use asset impairment charges of $0.2 million during our nine months ended June 30, 2022.
    (5) Includes losses resulting from changes in the fair value of the Company's investments in equity securities of $12.6 million for the nine months ended June 30, 2022.   
       

    About Mesa Air Group, Inc.

    Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 121 cities in 41 states, the District of Columbia, the Bahamas, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As of June 30, 2022, Mesa operated a fleet of 168 aircraft with approximately 360 daily departures and 2,600 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc., United Airlines, Inc., and flight service agreement with DHL.

    Forward-Looking Statements

    Certain statements contained in this press release that are not historical facts contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to the “safe harbor” created by those sections. Forward-looking statements can be identified by the use of words such as “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximate” or “plan,” or the negative of these words and phrases or similar words or phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. For more information on risk factors for Mesa Air Group, Inc.’s business, please refer to the periodic reports the Company files with the Securities and Exchange Commission from time to time. Many of the risks identified in the periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from the COVID-19 pandemic. These forward-looking statements herein speak only as of the date of this press release and should not be relied upon as predictions of future events. Mesa Air Group, Inc. expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein, to reflect any change in Mesa Air Group, Inc.’s expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except as required by law.

    MESA AIR GROUP, INC.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts) (Unaudited)

      Three Months Ended
    June 30, 2022    		 Nine Months Ended
    June 30, 2021     		 
       2022  2021  2022
    		   2021 
    Operating revenues:         
    Contract revenue $118,899 $109,654  $367,781  $318,524 
    Pass-through and other revenue  15,498  15,503   37,586   54,284 
    Total operating revenues  134,397  125,157   405,367   372,808 
              
    Operating expenses:         
    Flight operations  43,254  41,314  133,262  115,681 
    Maintenance  49,694  51,986  156,032  156,623 
    Aircraft rent  9,299  9,648  28,319  29,688 
    General and administrative  11,112  12,087  31,550  36,324 
    Depreciation and amortization  20,103  20,933  61,878  62,108 
    Lease termination  —  —  —  4,508 
    Impairment of assets held for sale  —  —  39,475  — 
    Other operating expenses  722  916  3,379  3,148 
    Government grant recognition  —  (26,101) —  (93,379)
    Total operating expenses  134,184  110,783   453,895  314,701 
    Operating income (loss)  213  14,374   (48,528)  58,107 
              
    Other income (expense), net:         
    Interest expense  (8,716) (8,627)  (24,766)   (26,464)
    Interest income  24  82   117  287  
    Loss on investments, net  (3,926) —   (12,649) —  
    Other income (expense), net  (73) (28)  (203) 389  
    Total other (expense), net  (12,691) (8,573)  (37,501) (25,788)
              
    Income (loss) before taxes  (12,478) 5,801  (86,029) 32,319 
    Income tax expense (benefit)  (2,493) 1,525  (18,987) 8,236 
    Net income (loss) $(9,985)$4,276 $(67,042)$24,083 
              
    Net income (loss) per share attributable to common shareholders         
    Basic $(0.28)$0.12
    		 $(1.86)$0.68 
    Diluted $(0.28)$0.11
    		 $(1.86)$0.62 
              
    Weighted-average common shares outstanding         
    Basic  36,183  35,769   36,064  35,642 
    Diluted  36,183  39,513   36,064  38,811 

    MESA AIR GROUP, INC.
    Condensed Consolidated Balance Sheets
    (In thousands, except shares) (Unaudited)

      June 30,
    2022    		 June 30,
    2021
    ASSETS   
                
    CURRENT ASSETS:    
    Cash and cash equivalents $54,448 $120,517
    Restricted cash  3,348  3,350
    Receivables, net  4,050  3,167
    Expendable parts and supplies, net  26,341  24,467
    Prepaid expenses and other current assets  7,234  6,885
    Total current assets  95,421  158,386
         
    Property and equipment, net  1,072,826  1,151,891
    Intangible assets, net  6,026  6,792
    Lease and equipment deposits  6,972  6,808
    Operating lease right-of-use assets  65,878  93,100
    Deferred heavy maintenance, net  6,848  3,499
    Assets held for sale  36,528  —
    Other assets  29,686  36,121
    TOTAL ASSETS $1,320,185 $1,456,597
                
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
         
    CURRENT LIABILITIES:    
    Current portion of long-term debt and finance leases $112,776 $111,710
    Current portion of deferred revenue  726  6,298
    Current maturities of operating leases  16,854  32,652
    Accounts payable  66,811  61,476
    Accrued compensation  10,781  12,399
    Other accrued expenses  32,322  33,657
    Total current liabilities  240,270  258,192
         
    NONCURRENT LIABILITIES:    
    Long-term debt and finance leases, excluding current portion  523,231  539,700
    Noncurrent operating lease liabilities  20,585  33,991
    Deferred credits  3,295  3,934
    Deferred income taxes  50,803  69,940
    Deferred revenue, net of current portion  21,994  28,202
    Other noncurrent liabilities  36,971  34,591
    Total noncurrent liabilities  656,879  710,358
    Total liabilities  897,149  968,550
         
    STOCKHOLDERS' EQUITY:    
    Preferred stock of no par value, 5,000,000 shares authorized; no shares issued and outstanding  —  —
    Common stock of no par value and additional paid-in capital, 125,000,000
    shares authorized; 36,292,401 (2022) and 35,958,759 (2021) shares issued
    and outstanding, and 4,899,497 (2022) and 4,899,497 (2021) warrants
    issued and outstanding    		  258,403  256,372
    Retained earnings  164,633  231,675
    Total stockholders' equity  423,036  488,047
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,320,185 $1,456,597

    MESA AIR GROUP, INC.
    Operating Highlights (unaudited)

      Three months ended
      June 30
      2022  2021  Change
    Available Seat Miles (thousands) 1,553,616  2,056,905  -24.5%
    Block Hours 63,486  85,162  -25.5%
    Average Stage Length (miles) 619  651  -4.9%
    Departures 33,291  42,390  -21.5%
    Passengers 2,164,295  2,572,303  -15.9%
    Controllable Completion Factor*      
    American 98.77% 99.42% -0.7%
    United 99.76% 99.98% -0.2%
    Total Completion Factor**      
    American 97.66% 97.57% 0.1%
    United 98.83% 99.21% -0.4%

    *Controllable Completion Factor excludes cancellations due to weather and air traffic control
    **Total Completion Factor includes all cancellations

    Source: Mesa Air Group, Inc.

    Mesa Air Group, Inc.
    Media
    Jacqueline Palmer
    Media@mesa-air.com

    Investor Relations
    Doug Cooper
    IR@mesa-air.com


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