Allegiant Travel Company Fourth Quarter and Full Year 2010 Financial Results

/ Source: GlobeNewswire

32nd Consecutive Profitable Quarter

Fully Diluted Earnings Per Share of $.64

12.9% Operating Margin in the 4th Quarter

15.8% Operating Margin in Full Year 2010

LAS VEGAS, Jan. 31, 2011 (GLOBE NEWSWIRE) -- Allegiant Travel Company (Nasdaq:ALGT) today reported the following financial results for the 4th quarter 2010 as well as full year 2010 and comparisons to prior year equivalents:

"We have concluded another very successful year," stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. "Our 4th quarter results represented the 32nd consecutive quarter and eight straight years of profits. Our $105M operating profit translated into $66M of net income and just short of $140M of EBITDA for the year. 4th quarter results generated a 13% operating margin, lower than our goal of 20%. The substantial increase in jet fuel prices which peaked during the last two weeks of the quarter weighted on the quarter's results. In three months our scheduled service cost per gallon increased almost 11% or $.25 to $2.61. If we had maintained our 3rd quarter unit fuel cost, our operating margin would have approached 17%. In spite of this, we were able to grow earnings per share by 23% compared to last year's 4th quarter.

"On the revenue front, we had reasonable increases. Our total RASM in the 4th quarter, including ancillary products, increased 9.2% year over year while sequentially total RASM was up 12%. Our scheduled service selling fare sequentially was up 16.6% in the 4th quarter versus the 3rd quarter, a healthy increase. Our combined scheduled service average fare of almost $117, exceeded only by our 3rd quarter 2008 combined fare, was a necessary increase given the pressure from energy costs. 

"We have recently added several individuals to our senior management team, including new leaders in our flight operations and station operations areas as well as the creation of a new Chief Information Officer position. We are excited to be able to attract highly capable leaders who will help us manage the business as it becomes larger and more complex. Strengthening our foundation is a key part of our 2011 Plan and bringing on new leadership in certain areas of the business is a very important part of that effort.

"Lastly, I want to thank our team members for their efforts in producing another excellent year. Their efforts every day delivering our customers safely, reliably and on-time are critical to our success," concluded Gallagher. 

Andrew C. Levy, President of Allegiant Travel Company, stated, "We are very pleased with the improvement in our revenue metrics. Our average fare, air-related and third party ancillaries all increased by more than 7% even with a 14% increase in capacity.

"The revenue strength we experienced during the 4th quarter has continued into 2011 and while we are pleased with our revenue performance, we are wary of the accelerating climb in jet fuel prices we have seen in the last six weeks. Our capacity plan for the 1st half of 2011 had already reflected a slowing growth rate, but we have now reduced our growth even further, particularly for the 2nd quarter. We now expect 2nd quarter scheduled capacity to range from flat to up 4% year over year. 

"As we slow our growth rate, we will experience an increase in unit costs due in large part to lower fleet utilization, but less capacity gives us the opportunity to increase fares and attempt to pass on the higher costs of fuel to our customers. In addition to added cost pressure due to our decision to lower utilization, we are projecting a substantial increase in engine maintenance for the first half of the year due to several planned engine overhaul events.

"Our increased emphasis on our third party business continues to pay dividends. During the 4th quarter, gross revenues from third party products increased 10%, but net revenues were up by 24% reflecting improved profitability. Full year gross revenues approached $90 million, an increase of 22%, while net revenues increased by 24% to $24.4 million. Our third party business continues to be an important area of focus for the company and we expect to maintain momentum with our recent advertising campaign emphasizing the value of bundled packages," concluded Levy.

Our unrestricted cash at the end of 2010 was $150 million which was down from $231 million at the beginning of the year. Capital expenditures of $98.5 million for the year were lower than expected as the purchases of several part out MD-80s and one 757 moved to the 1st quarter of 2011. We also paid down over $31 million in debt and capital lease obligations, while raising $14 million of debt on our two owned 757 aircraft. Finally, during 2010 we returned over $68 million to shareholders through a $14.9 million special dividend and re-purchases of almost $53 million of the company's shares. We currently have $46 million remaining under our share repurchase authority.

Other highlights in the most recent quarter include:

  • Entered into a three year agreement with Alamo Rent A Car whereas Alamo will be the exclusive rental car provider for Allegiant through 2013.
  • Added 5 new cities and 16 new routes
  • Executed term sheets on three 757s for short term leases to European operators.
  • Instituted new Low-Price Pledge to help emphasize customer savings when purchasing travel packages
  • Named one of "America's 100 Best Small Companies" by Forbes Magazine

At this time, Allegiant Travel Company provides the following guidance to investors, subject to revision. 

  • 1st quarter fixed fee and other revenues expected to be between $12 and $16 million.
  • 1st quarter 2011 cost per available seat mile, excluding fuel (CASM ex fuel), is expected to be up between 8 and 10% compared to the 1st quarter of 2010.
  • An operating fleet of 51 MD-80 aircraft through the 1st half of 2011.
  • 2011 capital expenditures of approximately $100 million. The 3rd 757 that was originally scheduled to be purchased in the 4th quarter of 2010 will now be purchased in the 1st quarter of 2011.
  • 1st quarter 2011 block hours per aircraft per day will be approximately 6.3, an 8% decline from aircraft utilization during the 1st quarter of 2010.

At this time we have no fuel hedges in place.

Allegiant Travel Company will host a conference call with analysts at 4:30 EST, Jan. 31st, 2011, to discuss its 4th quarter and full year 2010 financial results. A live broadcast of the conference call will be available via the Company's Investor Relations website homepage at . The webcast will also be archived in the "Events & Presentations" section of the website.

About the Company

Las Vegas-based Allegiant Travel Company (Nasdaq:ALGT) is focused on linking travelers in small cities to major leisure destinations such as Las Vegas, Orlando, Fla., Tampa/St. Petersburg, Fla., Phoenix-Mesa, Los Angeles and Fort Lauderdale, Fla. Through its subsidiary, Allegiant Air, the Company operates a low-cost, high-efficiency, all-jet passenger airline offering air travel both on a stand-alone basis and bundled with hotel rooms, rental cars and other travel related services. ALGT/G

The Allegiant Travel Company logo is available at  

Detailed financial information follows:

Allegiant Travel Company
Non-GAAP Presentations
Quarters Ended December 31, 2010 and 2009
(Unaudited)

"EBITDA" represents earnings before interest expense, income taxes, depreciation and amortization. EBITDA is not a calculation based on generally accepted accounting principles and should not be considered as an alternative to net income or operating income as indicators of our financial performance or to cash flow as a measure of liquidity. EBITDA is included as a supplemental disclosure because we believe it is a useful indicator of our operating performance. Further, EBITDA is a well-recognized performance measurement that is frequently used by securities analysts, investors and other interested parties in comparing the operating performance of companies. We believe EBITDA is useful in evaluating our operating performance compared to our competitors because its calculation generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which items may vary between periods and for different companies for reasons unrelated to overall operating performance. The following represents the reconciliation of EBITDA to net income for the periods indicated below.

The SEC has adopted rules (Regulation G) regulating the use of non-GAAP financial measures. Because of our use of the non-GAAP financial measure EBITDA to supplement our consolidated financial statements presented on a GAAP basis, Regulation G requires us to include in this press release a presentation of the most directly comparable GAAP measure, which is net income, and a reconciliation of the non-GAAP measure to the most comparable GAAP measure. Our utilization of a non-GAAP measurement is not meant to be considered in isolation or as a substitute for net income or other measures of financial performance prepared in accordance with GAAP. EBITDA is not a GAAP measurement and our use of it may not be comparable to similarly titled measures employed by other companies in the airline industry. The reconciliations to GAAP measures follow.

CONTACT: Media Inquiries: Tyri Squyres +1-702-851-7370 mediarelations@allegiantair.com Investor Inquiries: Chris Allen +1-702-851-7365 ir@allegiantair.com