Allegiant Travel Company Fourth Quarter And Full Year 2019 Financial Results

LAS VEGAS, Jan. 29, 2020 /PRNewswire/ -- Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the fourth quarter and full year 2019, as well as comparisons to the prior year:

"I am very happy to report our 68^th consecutive profitable quarter and another profitable year," stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. "The airline group successfully grew operating margin from 15 percent in 2018 to over 21 percent in 2019. Our success is very much tied to the efforts of our valued team members, who this year have also voted Allegiant as one of the Top 100 Best Places to Work according to Glassdoor's national survey. We are committed to investing in our people and are happy to report that profit sharing payments to our employees company-wide are up nearly 80 percent from 2018. We could not achieve these outstanding financial and operational results without our dedicated team members, and I thank them for another truly extraordinary year.

"The highlights below show what a remarkable year we had in 2019, post our transition to our all-Airbus fleet. This transition is working as expected regarding both operations and profitability. We had an excellent operational quarter and year, averaging $6.3 million of EBITDA per aircraft this year, as predicted. We recently announced 44 new routes in the coming months - the largest network expansion in company history - which will bring us to more than 500 routes served. We truly are becoming a national brand as our reach stretches from coast to coast. Our non-competitive approach and limited-utilization model continues to work as it has for the past 18 years, allowing us to generate industry-leading profits.

"In closing, I would like to congratulate Scott DeAngelo on his promotion to executive vice president and chief marketing officer. In the nearly two years he has been with us, he has been the critical cog in our efforts to better understand our customers via a more data centric approach. This is a critical requirement in our Allegiant 2.0 evolution. He also led the negotiations in our recent efforts to obtain the Allegiant Stadium naming rights. We are fortunate to have Scott, with his talent and experience on the team as we evolve into a customer-centric travel company in the coming years."

FY 2019 guidance recap

• Fuel cost per gallon for 2019 was $2.18, three cents higher than our expectation of $2.15
• Expectation going into fourth quarter was $2.08, whereas actual cost was $2.18
• Increase drove a $0.29 reduction in our expected fourth quarter EPS
• Sunseeker Resort project spend expected between $90 to $100 million with actual spend at $48 million
• No change in anticipated second quarter 2021 opening
• Lower spend resulted in reduced capitalized interest causing interest expense to be slightly higher than guidance
• Ended 2019 with 91 total A320 series aircraft, two fewer than expected
• Incremental two aircraft have been placed in service in early 2020
• Still expect to have 105 aircraft by end of 2020
• Airline capex spend exceeded guidance
• Driven by opportunistic engine acquisitions and earlier than planned aircraft deliveries

Airline only fourth quarter 2019 results

• Diluted earnings per share were $4.04, an increase of over 40 percent versus last year
• 21.3 percent operating margin for the quarter, up 4.7 points year over year
• TRASM increased 2.5 percent despite capacity growth of 8.3 percent
• Despite a 0.5 percent TRASM headwind from our initial co-branded credit card breakage revenue in fourth quarter 2018
• Average fare - air related charges (air ancillary) up 13.4 percent year over year
• Four consecutive quarters of air ancillary in excess of $50 per passenger
• Third party products revenue up 17.4 percent versus last year
• Hotel net revenue grew 22 percent and car rental net revenue grew 16 percent, far exceeding passenger growth
• Operating CASM, excluding fuel, declined 1.5 percent
• Efficiencies in maintenance along with more targeted marketing spend were the largest drivers of improvement
• Year over year decrease is less than initial expectations due to higher than expected profit sharing payments to employees and unplanned line maintenance events

Airline only full year 2019 highlights

• Industry-leading controllable completion of 99.96 percent, up versus prior year
• On time performance (A-14) for the year was 78.7 percent, up 1.8 points year over year
• Average fare - third party products revenue up 10.5 percent year over year on a per passenger basis
• Driven by higher rental car net revenue and increased activity from our co-branded credit card
• Fixed fee contract revenue of $65 million
• Highest annual total in the company's history
• Operating CASM, excluding fuel, declined 3.3 percent
• Reduction on a unitized basis in every operating expense line item with the exception of depreciation
• CASM, excluding fuel and profit sharing would have declined 4.4 percent
• ASMs per gallon up 5.8 percent in 2019 versus 2018
• EBITDA of $536.9 million, up 40 percent over the prior year
• Average airline EBITDA per aircraft of $6.3 million

Liquidity and shareholder returns

• Total cash and investments at December 31, 2019 were $473 million
• Total debt of $1.4 billion
• We have 27 unencumbered aircraft
• Returned $11 million in dividends in the fourth quarter
• Expect to pay dividend of $0.70 per share on March 12, 2020 to shareholders of record as of March 2, 2020
• Currently have approximately $85 million in share repurchase authority
• Drew down $81 million from the revolving credit facility to facilitate aircraft and engine acquisitions
• Intend to raise long-term financing on these assets individually and use the proceeds to pay down the facility

Non-airline highlights

• Non-airline businesses resulted in a combined operating loss of $4.7 million during fourth quarter
• In negotiation with potential buyer for Teesnap

Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. ET Wednesday January 29, 2020 to discuss its fourth quarter and full year 2019 financial results. A live broadcast of the conference call will be available via the Company's Investor Relations website homepage at http://ir.allegiantair.com. The webcast will also be archived in the "Events & Presentations" section of the website.

Allegiant Travel Company

Las Vegas-based Allegiant (NASDAQ: ALGT) is an integrated travel company with an airline at its heart, focused on connecting customers with premier leisure experiences - from vacations to hometown family entertainment. Since 1999, Allegiant Air has linked travelers in small-to-medium cities to world-class vacation destinations with all-nonstop flights and industry-low average fares. Today, Allegiant serves more than 450 routes across the country, with base airfares less than half the cost of the average domestic roundtrip ticket. Allegiant's Sunseeker Resorts subsidiary is currently under construction with its inaugural resort property, Sunseeker Resort Charlotte Harbor in Southwest Florida - a unique waterside integrated resort like no other. And a growing group of Allegiant Nonstop family entertainment centers offer state-of-the art indoor games and attractions to thrill seekers of all ages. For more information, visit us at Allegiant.com. Media information, including photos, is available at http://gofly.us/iiFa303wrtF

Media Inquiries: mediarelations@allegiantair.com

Investor Inquiries: ir@allegiantair.com

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in this press release that are not historical facts are forward-looking statements. These forward-looking statements are only estimates or predictions based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include our statements regarding future expenses, revenues, earnings, ASM growth, fuel consumption, expected capital expenditures, number of contracted aircraft to be placed in service in the future, the development and financing of our Sunseeker Resort, as well as other information concerning future results of operations, business strategies, financing plans, industry environment and potential growth opportunities. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "guidance," "anticipate," "intend," "plan," "estimate", "project", "hope" or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on third parties to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed , the effect of economic conditions on leisure travel, debt covenants and balances, the ability to finance aircraft under contract, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the possible loss of key personnel, economic and other conditions in markets in which we operate, the ability to successfully develop and finance a resort in Southwest Florida, governmental regulation, increases in maintenance costs and cyclical and seasonal fluctuations in our operating results.

Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.

Detailed financial information follows: