Allegiant Travel Company Third Quarter 2019 Financial Results

LAS VEGAS, Oct. 24, 2019 /PRNewswire/ -- Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the third quarter 2019, as well as comparisons to the prior year:

"I couldn't be happier about our post-fleet transition results with our third consecutive quarter of airline margin expansion," stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. "This is our 67^th consecutive profitable quarter and we've nearly tripled EPS versus the same period a year ago, despite having eight fewer aircraft in the current fleet. Airline operating margin increased ten-plus points to almost 18 percent in the quarter. Even without the year-over-year benefits from lower fuel cost per gallon, our airline operating margins would have been greater than 15 percent, almost twice as high as last year.

"We have discussed a number of times previously how our model post-transition will remain intact. After three full quarters, I am comfortable stating not only is it intact, it is actually better today than with the MD-80 fleet. Our revenue per aircraft is greater, and we have the ability to fly profitably further down the off-peak curve, thereby allowing us greater fleet utilization both in our weekly cycle and in our peak months. As an example, our average daily block hour per aircraft in the past three years, 2016-2018 averaged 6.2 hours in Q3. This year we averaged 7.4 hours, a 19.4 percent increase in utilization. We are in an excellent place in the history of the company. We have spent the past three-to-four years devising our current Allegiant 2.0 plan, and we are pacing nicely in the implementation. Our team members have been a critical component in the execution of the plan. We continue to excel in operational performance, number one in overall completion reported to date for the third quarter. Our product is our people, and it keeps getting better every day.  Hats off to all who produced a tremendous quarter during a very busy summer."

Airline only third quarter 2019 results

• Diluted earnings per share were $3.06, an increase of nearly $2.00 per share versus last year
• 17.9 percent operating margin for the quarter and 21.3 percent year to date
• TRASM increased 4.3 percent despite capacity growth of 5.8 percent
• Quarter negatively impacted .5 percent due to Hurricane Dorian
• Total fare increased 1.8 percent despite increasing aircraft utilization by 15.6 percent
• Fixed fee flying set a quarterly record of almost $20 million in revenue contribution
• Cobrand credit card total revenue was $2.58 per passenger during the quarter
• Named Best Airline Co-Branded Credit Card by the USA Today 10Best Readers Choice Awards
• Third party hotel net revenue grew 17 percent easily exceeding growth in passengers
• Fuel gallons used increased only 3.0 percent on ASM growth of 6.7 percent
• Increase in ASMs per gallon of 3.6 percent to 80.3
• Airline unit cost excluding fuel decreased by 5.6 percent
• Maintenance, continued improvement in operations, and lower airport fees were the largest drivers

Airline operational highlights

• Departures in the third quarter were up 8.2 percent year over year despite eight fewer average number of aircraft in service
• Improved industry leading completion despite an increase in cancellations of more than 1.5x due to weather
• Controllable completion was 99.97 percent, up from 99.52 percent year over year
• On time performance (A-14) for the quarter was 79.2 percent up 4.7 points year over year
• Controllable A-14 was 88.3 percent, up 4.5 points from last year
• Irregular operations costs - third quarter down $5.5 million or 53 percent
• Year to date irregular operations costs were down $14 million or 53 percent

Liquidity and shareholder returns

• Total cash and investments at September 30 were $442 million
• Total debt declined from the second quarter to $1.4 billion
• We have 30 unencumbered aircraft
• $81 million available under the revolving credit facility
• Returned $14.7 million through share repurchases in the quarter - purchased at an average of $141.64 per share
• Currently have approximately $85 million in share repurchase authority
• Returned $11 million in dividends in the third quarter
• Expect to pay dividend of $0.70 per share on December 12, 2019 to shareholders of record as of November 22, 2019

Non-airline highlights

• Non-airline businesses resulted in a combined operating loss of $5.2 million during third quarter
• In discussion with potential buyers for Teesnap

Allegiant Travel Company will host a conference call with analysts at 5:30 p.m. ET Thursday, October 24, 2019 to discuss its third quarter 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: