ST. GEORGE, Utah,
Aug. 8 /PRNewswire-FirstCall/ -- SkyWest, Inc.
(Nasdaq: SKYW) today reported operating revenues of
$855.0 million for the
quarter ended
June 30, 2007, an 8.2% increase, compared to
$790.4 million for
the same period last year. SkyWest also reported net income of
$40.6 million
for the quarter ended
June 30, 2007, or
$0.62 per diluted share, compared to
$39.3 million of net income or
$0.62 per diluted share for the same period
last year.
SkyWest also reported operating revenues of $1.64 billion for the six
months ended June 30, 2007, a 7.2% increase, compared to $1.53 billion for the
same period last year. SkyWest also reported net income of $75.4 million for
the six months ended June 30, 2007, or $1.15 per diluted share, compared to
$73.9 million of net income or $1.19 per diluted share for the same period
last year.
The primary items of significance affecting the second quarter of 2007 are
outlined below:
Total operating revenues for the second quarter of 2007 increased
primarily as a result of a 14.5% increase in available seat miles (ASMs) which
was partially offset by a reduction in yield per revenue passenger mile of
5.7% and by increased fuel cost reimbursements by SkyWest's major partners
that are recorded as operating revenues and as operating expenses, under
contract flying arrangements.
Total operating expenses and interest per ASM for the second quarter of
2007, excluding fuel charges of $276.2 million or $0.048 per ASM, decreased
approximately 2.2% to $0.090 from $0.092 for the same quarter of 2006.
Total ASMs for the second quarter of 2007 increased 14.5% from the second
quarter of 2006, primarily as a result of SkyWest increasing its fleet size to
434 aircraft as of June 30, 2007, from 397 aircraft as of June 30, 2006. At
June 30, 2007, SkyWest's fleet consisted of: 362 regional jets (233 Delta, 117
United and 12 Midwest); 60 EMB-120 aircraft (48 United, and 12 Delta); and 12
ATR72 aircraft (all Delta). During the second quarter of 2007 SkyWest
generated 5.8 billion ASMs, compared to 5.1 billion ASMs during the same
period of 2006.
During the quarter ended June 30, 2007, SkyWest began repurchasing
outstanding shares of its common stock under a 5 million share stock buyback
program previously authorized by its board of directors. As of June 30, 2007,
SkyWest had repurchased approximately 2.3 million shares at a cost of
approximately $60.2 million. SkyWest will continue to purchase common shares
of its outstanding stock under the authorized stock buyback program, from time
to time, as it deems appropriate.
SkyWest recorded stock based compensation expense of approximately $3.9
million ($2.5 million after tax) for the quarter ended June 30, 2007. Future
stock based compensation expense will be contingent upon the amount of future
option or stock grants that are made by SkyWest's Board of Directors.
At June 30, 2007 SkyWest had $676.9 million in cash and marketable
securities compared to $651.9 million as of December 31, 2006. SkyWest's
long-term debt increased to $1.79 billion as of June 30, 2007, compared to
$1.68 billion at December 31, 2006, consistent with SkyWest's financing
arrangements on aircraft and making normal recurring debt payments. During the
quarter ended June 30, 2007, SkyWest took delivery of eight CRJ 200 aircraft
and two CRJ900 aircraft and financed them through a combination of permanent
third-party operating leases and long-term debt. One CRJ200 was acquired with
cash from working capital. SkyWest has significant long-term lease
obligations that are recorded as operating leases and are not reflected as
liabilities on SkyWest's consolidated balance sheets. At a 7.39% discount
factor, the present value of these lease obligations was approximately $2.1
billion as of June 30, 2007.
Under SkyWest Airlines' United Express agreement, specific amounts are
included in the rates charged for mature maintenance on regional jet aircraft
engines that SkyWest records as revenue. However, consistent with the time
and material maintenance policy, as more fully described in SkyWest's Annual
Report on Form 10-K for the year ended December 31, 2006, SkyWest records
maintenance expense on its regional jet aircraft engines as the maintenance
events occur. As a result, during the second quarter of 2007, SkyWest
collected and recorded as revenue $7.5 million (pretax) under the United
Express agreement which is net of any regional jet engine maintenance
overhauls.
SkyWest Airlines, based in St. George, Utah, and ASA, based in Atlanta,
Georgia are wholly owned subsidiaries of SkyWest, Inc. SkyWest Airlines
operates as United Express, Delta Connection and Midwest Connect carriers
under contractual agreements with United Airlines, Delta Air Lines and Midwest
Airlines. ASA operates as a Delta Connection carrier under a contractual
agreement with Delta Air Lines. System-wide, SkyWest, Inc. serves a total of
approximately 242 cities in the United States, Canada, Mexico and the
Caribbean, with approximately 2,739 daily departures. This press release and
additional information regarding SkyWest, Inc. can be accessed at
www.skywest.com.
In addition to historical information, this release contains forward-
looking statements. SkyWest may, from time-to-time, make written or oral
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements encompass SkyWest's 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 SkyWest as of such date. SkyWest assumes no
obligation to update any forward-looking statement. Actual results will vary,
and may vary materially, from those anticipated, estimated, projected or
expected for a number of reasons, including, among others: the failure to
successfully operate as anticipated under the terms of the Delta Connection,
United Express and Midwest Connect Agreements; the impact of negotiations with
ASA's organized labor forces and the impact of the costs of such labor forces
on SkyWest's operations and financial condition; and the challenges of
competing successfully in a highly competitive and rapidly changing industry.
Other factors that may cause actual results to vary from SkyWest's
expectations include developments associated with fluctuations in the economy
and the demand for air travel; ongoing negotiations between SkyWest and its
major partners regarding their contractual relationships; variations in market
and economic conditions; the impact of global instability, including the
continued impact of the United States military presence in foreign countries,
the September 11, 2001 terrorist attacks and the potential impact of future
hostilities, terrorist attacks or other global events; employee relations and
labor costs; rapidly escalating fuel costs; the degree and nature of
competition; potential fuel shortages in markets where SkyWest Airlines or ASA
operates; the impact of weather-related or other natural disasters on air
travel and airline costs; the ability of SkyWest Airlines and ASA to expand
services in new and existing markets and to maintain profit margins in the
face of pricing pressures; aircraft deliveries; SkyWest's ability to obtain
financing; and other unanticipated factors. Risk factors, cautionary
statements and other conditions which could cause actual results to differ
from management's current expectations are contained in SkyWest's filings with
the Securities and Exchange Commission, including the section of SkyWest's
Annual Report on form 10-K, entitled "Risk Factors."
SKYWEST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and Shares in Thousands, Except per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Operating revenues:
Passenger $846,356 $784,332 $1,626,923 $1,518,758
Ground handling and
other
8,692 6,072 17,092 14,501
855,048 790,404 1,644,015 1,533,259
Operating expenses:
Flying operations 470,900 442,731 880,962 841,197
Customer service 107,774 99,390 225,226 199,066
Maintenance 96,463 73,779 190,952 152,090
Depreciation and
amortization 52,175 47,262 102,453 92,751
General and
administrative 38,881 37,621 75,993 75,671
766,193 700,783 1,475,586 1,360,775
Operating income 88,855 89,621 168,429 172,484
Other income (expense):
Interest income 8,130 4,225 15,241 7,132
Interest expense (31,731) (28,519) (62,302) (57,062)
Gain (loss) on sale
of property and
equipment 278 13 467 (1,084)
(23,323) (24,281) (46,594) (51,014)
Income before income
taxes 65,532 65,340 121,835 121,470
Provision for income
taxes 24,910 26,054 46,425 47,596
Net income $40,622 $39,286 $ 75,410 $ 73,874
Basic earnings per
share
$ 0.64 $ 0.62 $1.18 $1.21
Diluted earnings per
share $ 0.62 $ 0.62 $1.15 $1.19
Weighted average common
shares:
Basic 63,811 62,970 64,045 61,044
Diluted 65,245 63,759 65,541 62,088
Unaudited Operating Highlights
Operating Highlights
Three Months Ended
June 30,
2007 2006 % Change
Passengers carried 8,932,439 8,144,992 9.7
Revenue passenger miles (000) 4,661,303 4,054,909 15.0
Available seat miles (000) 5,803,018 5,070,300 14.5
Passenger load factor 80.3% 80.0% (0.3)pts
Passenger breakeven load
factor 74.9% 73.8% 1.5 pts
Yield per revenue passenger
mile $0.182 $0.193 (5.7)
Revenue per available seat
mile $0.147 $0.156 (5.8)
Cost per available seat mile $0.138 $0.144 (4.2)
Fuel cost per available seat
mile
$0.048 $0.052 (7.7)
Average passenger trip length 522 498 4.8
Block hours 358,286 321,422 11.5
Departures 227,414 213,358 2.7
Operating Highlights
Six Months Ended
June 30,
2007 2006 % Change
Passengers carried 16,755,545 15,553,706 7.7
Revenue passenger miles
(000) 8,685,859 7,701,308 12.8
Available seat miles (000) 11,096,920 9,772,278 13.6
Passenger load factor 78.3% 78.8% (0.5)pts
Passenger breakeven load
factor 73.2% 72.9% 0.4 pts
Yield per revenue passenger
mile $0.187 $0.197 (5.1)
Revenue per available seat
mile $0.148 $0.157 (5.7)
Cost per available seat mile $0.139 $0.145 (4.1)
Fuel cost per available seat
mile
$0.045 $0.050 (10.0)
Average passenger trip length 518 495 4.6
Block hours 697,278 627,056 11.2
Departures 441,700 416,427 6.1
Print This Page
Email This Page
Archives
Copyright Permissions
