PR Newswire
HONOLULU, July 22, 2014
HONOLULU, July 22, 2014 /PRNewswire/ -- Hawaiian Holdings, Inc. (NASDAQ: HA) ("Holdings" or the "Company"), parent company of Hawaiian Airlines, Inc. ("Hawaiian"), today reported its financial results for the second quarter of 2014.
"The same trajectory of substantially improving financial performance was evident in the second quarter as it has been over the last few quarters," said Mark Dunkerley, Hawaiian Airlines president and chief executive officer. "Strong demand across our geographies, good macro-economic conditions, stable fuel prices and good cost control inside the business all played their part. Absent changes to the environment or competitor behavior, our prospects in the back half of the year look similar. As ever, we continue to build the business with new routes, this summer featuring our first flights from North America to Kaua'i and the island of Hawai'i, and a host of customer improvements including the roll out of our extra comfort economy section of the aircraft. Our wonderful employees continue to deliver the level of service on the ground and in the air that set the standard for others to aspire to. Without their dedication, none of this would be possible."
Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.
Liquidity and Capital Resources
As of June 30, 2014 the Company had:
Second Quarter 2014 Highlights
Operational
Fleet and financing
New routes and increased frequencies
Third Quarter and Full Year 2014 Outlook
The table below summarizes the Company's expectations for the third quarter ending September 30, 2014 and the full year ending December 31, 2014, expressed as an expected percentage change compared to the results for the quarter ended September 30, 2013 or the year ended December 31, 2013, as applicable (the results for which are presented for reference).
Third |
||
Quarter |
||
Item |
2013 |
Guidance |
Cost per ASM Excluding Fuel (cents) |
7.78 |
Up 1% to up 4% |
Operating Revenue Per ASM (cents) |
13.57 |
Up 3% to up 6% |
ASMs (millions) |
4,415.1 |
Up 1% to up 3% |
Gallons of jet fuel consumed (millions) |
59.3 |
Up 0.5% to up 2.5% |
Full Year |
||
Item |
2013 |
Guidance |
Cost per ASM Excluding Fuel (cents) |
7.88 |
Up 3% to up 5% |
ASMs (millions) |
16,785.8 |
Up 1% to up 3% |
Investor Conference Call
Hawaiian Holdings' quarterly earnings conference call is scheduled to begin today (July 22, 2014) at 4:30 p.m. Eastern Time (USA). The conference call will be broadcast live over the Internet. Investors may listen to the live audio webcast on the investor relations section of the Company's website at www.HawaiianAirlines.com. For those who are not available for the live webcast, the call will be archived for 90 days on Hawaiian's investor website.
About Hawaiian Airlines
Hawaiian® has led all U.S. carriers in on-time performance for each of the past 10 years (2004-2013) as reported by the U.S. Department of Transportation. Consumer surveys by Condé Nast Traveler, Travel + Leisure and Zagat have all ranked Hawaiian the highest of all domestic airlines serving Hawai'i.
Now in its 85th year of continuous service, Hawaiian is Hawai'i's biggest and longest-serving airline, as well as the largest provider of passenger air service from its primary visitor markets on the U.S. mainland. Hawaiian offers nonstop service to Hawai'i from more U.S. gateway cities (11) than any other airline, along with service from Japan, South Korea, China, Australia, New Zealand, American Samoa and Tahiti. Hawaiian also provides approximately 160 jet flights daily between the Hawaiian Islands, with a total of more than 200 daily flights system-wide.
Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com. Follow updates on Twitter about Hawaiian (@HawaiianAir) and its special fare offers (@HawaiianFares), and become a fan on its Facebook page.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to certain current and future events and financial performance. Such forward-looking statements include, without limitation, statements regarding the Company's prospects in the back half of the year; new routes; customer improvements; the Company's expectations regarding cost per available seat mile excluding fuel, operating revenue per available seat mile, available seat miles and gallons of jet fuel consumed, each for the quarter ending September 30, 2014; the Company's expectations regarding cost per available seat mile excluding fuel and available seat miles, each for the year ending December 31, 2014; and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Words such as "expects," "anticipates," "projects," "intends," "plans," "believes," "estimates," variations of such words, and similar expressions are also intended to identify such forward-looking statements. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and assumptions relating to the Company's operations and business environment, all of which may cause the Company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. These risks and uncertainties include, without limitation, the Company's ability to accurately forecast quarter and year-end results; economic volatility; the price and availability of aircraft fuel; fluctuations in demand for transportation in the markets in which the Company operates; the Company's dependence on tourist travel; foreign currency exchange rate fluctuations; and the Company's ability to implement its growth strategy and related cost reduction goals.
The risks, uncertainties and assumptions referred to above that could cause the Company's results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company's other public filings and public announcements, including the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and the Company's subsequent Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available to the Company on the date hereof. The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.
Table 1 |
|||||||||||||
Hawaiian Holdings, Inc |
|||||||||||||
Consolidated Statements of Operations |
|||||||||||||
(in thousands, except for per share data) (unaudited) | |||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||
June 30, |
June 30, |
||||||||||||
2014 |
2013 |
% Change |
2014 |
2013 |
% Change |
||||||||
Operating Revenue: |
|||||||||||||
Passenger |
$ 506,797 |
$ 481,461 |
5.3 |
% |
$ 974,810 |
$ 921,400 |
5.8 |
% | |||||
Other |
68,923 |
52,467 |
31.4 |
% |
125,768 |
103,282 |
21.8 |
% | |||||
Total |
575,720 |
533,928 |
7.8 |
% |
1,100,578 |
1,024,682 |
7.4 |
% | |||||
Operating Expenses: |
|||||||||||||
Aircraft fuel, including taxes and delivery |
174,139 |
169,223 |
2.9 |
% |
345,278 |
343,712 |
0.5 |
% | |||||
Wages and benefits |
112,478 |
103,384 |
8.8 |
% |
219,972 |
206,119 |
6.7 |
% | |||||
Aircraft rent |
26,095 |
28,285 |
(7.7) |
% |
52,374 |
54,304 |
(3.6) |
% | |||||
Maintenance materials and repairs |
58,399 |
53,036 |
10.1 |
% |
116,709 |
108,295 |
7.8 |
% | |||||
Aircraft and passenger servicing |
30,860 |
29,228 |
5.6 |
% |
61,081 |
58,287 |
4.8 |
% | |||||
Commissions and other selling |
30,773 |
32,186 |
(4.4) |
% |
62,108 |
65,997 |
(5.9) |
% | |||||
Depreciation and amortization |
23,765 |
19,788 |
20.1 |
% |
46,576 |
38,901 |
19.7 |
% | |||||
Other rentals and landing fees |
21,656 |
19,630 |
10.3 |
% |
42,218 |
38,777 |
8.9 |
% | |||||
Other |
45,961 |
41,777 |
10.0 |
% |
92,631 |
84,825 |
9.2 |
% | |||||
Total |
524,126 |
496,537 |
5.6 |
% |
1,038,947 |
999,217 |
4.0 |
% | |||||
Operating Income |
51,594 |
37,391 |
61,631 |
25,465 |
|||||||||
Nonoperating Income (Expense): |
|||||||||||||
Interest expense and amortization of debt discounts and issuance costs |
(15,997) |
(12,163) |
(31,007) |
(23,540) |
|||||||||
Interest income |
398 |
126 |
617 |
253 |
|||||||||
Capitalized interest |
1,974 |
2,891 |
4,750 |
6,331 |
|||||||||
Gains (Losses) on fuel derivatives |
6,285 |
(6,906) |
(614) |
(13,467) |
|||||||||
Other, net |
725 |
(3,124) |
1,310 |
(4,206) |
|||||||||
Total |
(6,615) |
(19,176) |
(24,944) |
(34,629) |
|||||||||
Income (Loss) Before Income Taxes |
44,979 |
18,215 |
36,687 |
(9,164) |
|||||||||
Income tax expense (benefit) |
17,652 |
6,899 |
14,435 |
(3,335) |
|||||||||
Net Income (Loss) |
$ 27,327 |
$ 11,316 |
$ 22,252 |
$ (5,829) |
|||||||||
Net Income (Loss) Per Common Stock Share: |
|||||||||||||
Basic |
$ 0.51 |
$ 0.22 |
$ 0.42 |
$ (0.11) |
|||||||||
Diluted |
$ 0.43 |
$ 0.21 |
$ 0.39 |
$ (0.11) |
|||||||||
Weighted Average Number of |
|||||||||||||
Common Stock Shares Outstanding: |
|||||||||||||
Basic |
53,499 |
52,008 |
53,095 |
51,837 |
|||||||||
Diluted |
62,847 |
53,071 |
57,046 |
51,837 |
Table 2 |
||||||||||||
Hawaiian Holdings, Inc. |
||||||||||||
Selected Statistical Data (unaudited) |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
June 30, |
June 30, |
|||||||||||
2014 |
2013 |
% Change |
2014 |
2013 |
% Change |
|||||||
Scheduled Operations: |
||||||||||||
Revenue passenger miles (RPM) (a) |
3,393.2 |
3,405.7 |
(0.4%) |
6,621.8 |
6,611.1 |
0.2% |
||||||
Available seat miles (ASM) (a) |
4,260.6 |
4,211.5 |
1.2% |
8,296.2 |
8,171.8 |
1.5% |
||||||
Passenger revenue per RPM (Yield) |
14.94 |
¢ |
14.14 |
¢ |
5.7% |
14.72 |
¢ |
13.94 |
¢ |
5.6% |
||
Passenger load factor (RPM/ASM) |
79.6% |
80.9% |
(1.3) |
pt. |
79.8% |
80.9% |
(1.1) |
pt. | ||||
Passenger revenue per ASM (PRASM) |
11.90 |
¢ |
11.43 |
¢ |
4.1% |
11.75 |
¢ |
11.28 |
¢ |
4.2% |
||
Total Operations (e): |
||||||||||||
Revenue passenger miles (RPM) (a) |
3,395.2 |
3,409.0 |
(0.4%) |
6,626.9 |
6,619.6 |
0.1% |
||||||
Available seat miles (ASM) (a) |
4,262.8 |
4,215.9 |
1.1% |
8,301.7 |
8,181.7 |
1.5% |
||||||
Passenger load factor (RPM/ASM) |
79.6% |
80.9% |
(1.3) |
pt. |
79.8% |
80.9% |
(1.1) |
pt. | ||||
Operating revenue per ASM (RASM) |
13.51 |
¢ |
12.66 |
¢ |
6.7% |
13.26 |
¢ |
12.52 |
¢ |
5.9% |
||
Operating cost per ASM (CASM) |
12.30 |
¢ |
11.78 |
¢ |
4.4% |
12.51 |
¢ |
12.21 |
¢ |
2.5% |
||
CASM excluding aircraft fuel (b) |
8.21 |
¢ |
7.76 |
¢ |
5.8% |
8.36 |
¢ |
8.01 |
¢ |
4.4% |
||
Gallons of jet fuel consumed (a) |
56.9 |
56.6 |
0.6% |
112.1 |
110.6 |
1.4% |
||||||
Average cost per gallon of jet fuel (actual) (c) |
$ 3.06 |
$ 2.99 |
2.3% |
$ 3.08 |
$ 3.11 |
(1.0%) |
||||||
Economic fuel cost per gallon (c)(d) |
$ 3.09 |
$ 3.07 |
0.7% |
$ 3.10 |
$ 3.18 |
(2.5%) |
||||||
(a) |
In millions. |
(b) |
See Table 4 for reconciliations of operating expenses excluding aircraft fuel. |
(c) |
Includes applicable taxes and fees. |
(d) |
See Table 3 for a reconciliation of economic fuel costs. |
(e) |
Includes the operations of our contract carrier under a capacity purchase agreement. |
Table 3. |
Hawaiian Holdings, Inc. |
Economic Fuel Expense |
(in thousands, except per-gallon amounts) (unaudited) |
The Company believes that economic fuel expense is the best measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period. The Company defines economic fuel expense as GAAP fuel expense plus (gains)/losses realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period. |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||
2014 |
2013 |
% Change |
2014 |
2013 |
% Change | ||||||
Aircraft fuel expense, including taxes and delivery |
$ 174,139 |
$ 169,223 |
2.9% |
$ 345,278 |
$ 343,712 |
0.5% | |||||
Realized losses on settlement of fuel derivative contracts |
2,009 |
4,740 |
(57.6%) |
1,899 |
7,436 |
(74.5%) | |||||
Economic fuel expense |
$ 176,148 |
$ 173,963 |
1.3% |
$ 347,177 |
$ 351,148 |
(1.1%) | |||||
Fuel gallons consumed |
56,937 |
56,625 |
0.6% |
112,101 |
110,560 |
1.4% | |||||
Economic fuel cost per gallon |
$ 3.09 |
$ 3.07 |
0.7% |
$ 3.10 |
$ 3.18 |
(2.5%) |
Table 4. | ||||||||||||||||
Hawaiian Holdings, Inc. | ||||||||||||||||
Non-GAAP Financial Reconciliation | ||||||||||||||||
(in thousands, except per-share and CASM data) (unaudited) | ||||||||||||||||
The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including, net income, diluted net income per share, CASM, PRASM, RASM and Passenger Revenue per RPM. Pursuant to Regulation G, the Company has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis. The Company believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. | ||||||||||||||||
Three months ended June 30, |
Six months ended June 30, | |||||||||||||||
2014 |
2013 |
2014 |
2013 | |||||||||||||
Net income |
Diluted net income |
Net income |
Diluted net income |
Net income |
Diluted net income |
Net loss |
Diluted net loss | |||||||||
As reported - GAAP |
$ 27,327 |
$ 0.43 |
$ 11,316 |
$ 0.21 |
$ 22,252 |
$ 0.39 |
$ (5,829) |
$ (0.11) | ||||||||
Add: unrealized losses (gains) on fuel derivative contracts, net of tax |
(4,976) |
(0.08) |
1,300 |
0.03 |
(771) |
(0.01) |
3,619 |
0.07 | ||||||||
Reflecting economic fuel expense |
$ 22,351 |
$ 0.35 |
$ 12,616 |
$ 0.24 |
$ 21,481 |
$ 0.38 |
$ (2,210) |
$ (0.04) |
Three Months Ended |
Six Months Ended |
|||||||
June 30, |
June 30, |
|||||||
2014 |
2013 |
2014 |
2013 |
|||||
GAAP operating expenses |
$ 524,126 |
$ 496,537 |
$ 1,038,947 |
$ 999,217 |
||||
Less: aircraft fuel, including taxes and delivery |
(174,139) |
(169,223) |
(345,278) |
(343,712) |
||||
Adjusted operating expense - excluding aircraft fuel |
$ 349,987 |
$ 327,314 |
$ 693,669 |
$ 655,505 |
||||
Available Seat Miles |
4,262,774 |
4,215,893 |
8,301,743 |
8,181,671 |
||||
CASM - GAAP |
12.30 |
¢ |
11.78 |
¢ |
12.51 |
¢ |
12.21 |
¢ |
Less: aircraft fuel |
(4.09) |
(4.02) |
(4.15) |
(4.20) |
||||
CASM - excluding aircraft fuel |
8.21 |
¢ |
7.76 |
¢ |
8.36 |
¢ |
8.01 |
¢ |
Table 5. |
Hawaiian Holdings, Inc. |
Fuel Derivative Contract Summary (unaudited) |
As of July 15, 2014 |
The Company utilizes heating oil swaps and purchased put options to hedge against price volatility of its future aircraft fuel consumption. Swap positions are outlined below: |
Weighted |
Percentage of |
Fuel Barrels | |||
Third Quarter 2014 |
|||||
Heating Oil Swaps |
$ 2.98 |
60% |
868,000 | ||
Fourth Quarter 2014 |
|||||
Heating Oil Swaps |
$ 2.94 |
48% |
676,000 | ||
First Quarter 2015 |
|||||
Heating Oil Swaps |
$ 2.90 |
34% |
483,000 | ||
Second Quarter 2015 |
|||||
Heating Oil Swaps |
$ 2.89 |
19% |
282,000 | ||
Third Quarter 2015 |
|||||
Heating Oil Swaps |
$ 2.89 |
13% |
67,000 |
Table 6. | ||||||||
Hawaiian Holdings, Inc. | ||||||||
Foreign Exchange Forward Contract Summary (unaudited) | ||||||||
As of July 15, 2014 | ||||||||
Japanese Yen |
Australian Dollar | |||||||
Quarter of Settlement |
Weighted Average Forward Contract Price |
Percentage of Projected Foreign Denominated JPY Sales Hedged |
Weighted Average Forward Contract Price |
Percentage of Projected Foreign Denominated AUD Sales Hedged | ||||
(in USD|JPY) |
(in AUD|USD) |
|||||||
Third Quarter 2014 |
¥100.52 |
62% |
AUD 0.9122 |
58% | ||||
Fourth Quarter 2014 |
¥99.86 |
53% |
AUD 0.9019 |
49% | ||||
First Quarter 2015 |
¥99.13 |
38% |
AUD 0.9084 |
38% | ||||
Second Quarter 2015 |
¥101.83 |
31% |
AUD 0.8861 |
30% | ||||
Third Quarter 2015 |
¥101.49 |
25% |
AUD 0.8795 |
23% | ||||
Fourth Quarter 2015 |
¥101.28 |
18% |
AUD 0.9005 |
17% | ||||
First Quarter 2016 |
¥100.99 |
9% |
||||||
Second Quarter 2016 |
¥100.58 |
8% |
||||||
Korean Won |
New Zealand Dollar | |||||||
Quarter of Settlement |
Weighted Average Forward Contract Price |
Percentage of Projected Foreign Denominated KRW Sales Hedged |
Weighted Average Forward Contract Price |
Percentage of Projected Foreign Denominated NZD Sales Hedged | ||||
(in USD|KRW) |
(in NZD|USD) |
|||||||
Third Quarter 2014 |
₩1,108 |
23% |
NZD 0.7762 |
18% |
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SOURCE Hawaiian Holdings, Inc.