XJT Posts $31.3 Q1 Loss

ExpressJet Holdings, Inc. today reported a first quarter loss of $31.3 million, or $0.61 per share. Excluding an impairment charge relating to investments in auction-rate securities held by the company, ExpressJet reported a first quarter loss of $22.6 million, or $0.44 per share. As it suggest in its year-end conference call, the company continues to reduce its branded flying and, by June, will drop average daily departures from 193 to 166.
ExpressJet disclosed that it currently holds approximately $65 million in auction-rate securities and cautioned that unsuccessful auctions for its securities could result in further limiting short-term liquidity. If liquidating the securities becomes necessary and their market has not yet recovered, ExpressJet will explore opportunities to borrow against the securities or sell them.
ExpressJet ended first quarter 2008 with $191.7 million in cash, cash equivalents and short-term investments. ExpressJet’s cash burn rate for operating activities, excluding capital expenditures, securities repurchased and increases in credit card holdback provisions, was $17.5 million in first quarter 2008. ExpressJet expects continued improvement in second quarter 2008 based on increasing market awareness and cost savings initiatives. The cash balance above includes $38.4 million in restricted cash and $65 million in short-term investments before an accounting adjustment to impair the value of these investments.
XJT is threatened with the loss of more of its Continental Express operation to SkyWest owing to the failure of rate negotiations that have been underway for three years. Related Story  The company said it continues to negotiate 2008 rates for its Continental capacity purchase agreement which is currently set at cost plus a 10 percent operating margin. Continental advised ExpressJet in February that if the companies were unable to reach agreement by March 14, that Continental might initiate arbitration proceedings as it did in 2007. ExpressJet also has the right to initiate arbitration if the company thinks it necessary. To date, neither party has done so.