- Delivered GAAP 2Q23 Revenue of $6.2 million for Surf Air and
$22.4 million for Southern, in line with Flash Expectations
provided on July 12, 2023, (“Flash Expectations”)
- Delivered Pro Forma1 2Q23 Revenue of $28.3 million, up 17.5%
YoY, in line with Flash Expectations
- Generated GAAP 2Q23 Operating Loss of $(13.2) million for Surf
Air and $(1.3) million for Southern, in line with Flash
Expectations
- Generated Pro Forma 2Q23 Operating Loss of $(15.1) million,
approximately flat with prior year, in line with Flash
Expectations
- Expects Full Year 2023 Pro Forma Revenue of $107.5 million to
$112.5 million, up 6.9% to 11.8% YoY
- Long Term Guidance for Steady State Revenue Growth of 20% to
25% and Gross Profit as a Percent of Revenue of 35% to 45%
Surf Air Mobility Inc. (NYSE: SRFM) (“Surf Air Mobility”), a
regional air mobility platform aiming to sustainably connect the
world’s communities, today announced its second quarter results and
outlook for full year 2023. Please visit the Surf Air Mobility
investor relations website at investors.surfair.com to view the
accompanying letter to its shareholders.
“For over a decade, we have been committed to changing how
people fly by providing our passengers convenience and ease. In
that period, we have built the largest commuter airline in America
by daily departures and given millions of passengers a more
delightful travel experience. Our performance in the first half of
2023 demonstrates clear demand for accessible regional travel, and
we are entering the second half with positive momentum,” said Stan
Little, CEO of Surf Air Mobility. “The combination of Surf Air
Mobility and Southern Airways provides the basis for our expanded,
nationwide regional air mobility platform, and we are thrilled to
emerge as a publicly-traded company. Together, we are creating a
flywheel of growth that will improve our unit economics over time:
more passengers, more planes, and lower costs throughout the
system.”
Sudhin Shahani, co-founder of Surf Air Mobility continued, “Our
public listing is an important milestone on our journey to bring
accessible, affordable, and sustainable regional travel to our
customers. We have unlocked strategic partnerships across the value
chain that will allow us to execute on our ambitious vision for
electrified flight, and we are excited to accelerate this
work.”
“Surf Air Mobility is on a mission to sustainably connect the
world's communities, and we are confident in our execution
strategy. We will remain committed to delivering long-term value to
our shareholders for years to come, and we look forward to
demonstrating continued progress,” concluded Mr. Shahani.
FINANCIAL HIGHLIGHTS, PRO
FORMA:
The acquisition of Southern Airways (“Southern”) by Surf Air
Mobility closed immediately prior to the listing of Surf Air
Mobility on the New York Stock Exchange under the ticker symbol
“SRFM” on July 27, 2023. Surf Air Mobility is providing unaudited
pro forma financial results for the period ending June 30, 2023, on
a quarter and year-to-date basis, which combines the unaudited
results of Surf Air and unaudited results of Southern, for those
same periods, as if the acquisition of Southern occurred on January
1, 2023. Year-over-year (“YoY”) comparisons are likewise made based
on unaudited pro forma results for the quarter and year-to-date
ended June 30, 2022, as if the acquisition of Southern occurred on
January 1, 2022.
2Q23 Financial
Highlights:
- Revenue
- GAAP Revenue of $6.2 million for Surf Air and $22.4 million for
Southern, in line with Flash Expectations
- Pro Forma Revenue of $28.3 million for 2Q23, up 17.5% YoY,
recurring revenue from Government Contracts was 39.6%, in line with
Flash Expectations
- Gross Profit
- Pro Forma Gross Profit of $3.6 million, up 44.3% YoY
- Operating Income (Loss)
- GAAP Operating loss of $(13.2) million for Surf Air and $(1.3)
million for Southern
- Pro Forma Operating loss of $(15.1) million, which is inclusive
of $3.9 million of one-time transaction-related expenses and $1.7
million in stock based compensation, and is approximately flat with
the prior year
- Non-GAAP Adjusted EBITDA2
- Non-GAAP Adjusted EBITDA of $(7.8) million for Surf Air and
$0.0 million for Southern
- Pro Forma Non-GAAP Adjusted EBITDA of $(7.8) million, compared
to $(3.7) million for the same period of the prior year. See the
Pro Forma Non-GAAP Adjusted EBITDA table for the reconciliation
from Net loss to Non-GAAP Adjusted EBITDA
1H23 Financial
Highlights:
- Revenue
- GAAP Revenue of $11.7 million for Surf Air and $45.1 million
for Southern
- Pro Forma Revenue of $56.3 million, up 23.4% YoY, recurring
revenue from Government Contracts was 43.5%
- Gross Profit
- Pro Forma Gross Profit of $6.6 million, up 20.1% YoY
- Operating Income (Loss)
- GAAP Operating Loss of $(25.2) million for Surf Air and $(3.2)
million for Southern
- Pro Forma Operating Loss of $(29.6) million, which is inclusive
of $5.2 million one-time transaction-related expenses and $2.8
million in stock based compensation, and is approximately flat with
the prior year
- Adjusted EBITDA
- Non-GAAP Adjusted EBITDA of $(17.4) million for Surf Air and
$(0.8) million for Southern
- Non-GAAP Adjusted EBITDA2 of $(18.2) million compared to $(7.7)
million for the same period of the prior year. See the Pro Forma
Non-GAAP Adjusted EBITDA table for the reconciliation from Net loss
to Non-GAAP Adjusted EBITDA
Following the Close of the acquisition
of Southern:
- As of July 27, 2023, Surf Air Mobility had 69.7 million Basic
Shares Outstanding and 71.6 Million Fully Diluted Shares
Outstanding
- As of July 27, 2023, Surf Air Mobility had $34.7 million cash
on hand, with the ability to draw $100 million in cash advances and
up to a maximum aggregate purchase price of $400 million under the
GEM share subscription facility3
- Acquired Southern Airways and became the largest commuter
airline in the US4
- Initiated fleet order with Textron Aviation Inc. for 100 Cessna
Grand Caravans, with the option to order 50 more
- Closed a separate deal with Textron Aviation Inc. to become the
exclusive provider of battery-electric and hybrid-electric
powertrain technology for the Cessna Grand Caravan
- Secured an aircraft financing facility with Jetstream for up to
$450 million to finance further expansion
- Received $25 million in cash from GEM, through a private
placement equity sale.3
FINANCIAL OUTLOOK
Full year of 2023:
Surf Air Mobility acquired Southern on July 27, 2023 and will be
reporting GAAP results that reflect operating results for Surf Air
for the twelve months ended December 31, 2023 and Southern for the
period beginning July 28, 2023 through December 31, 2023. The
Company is providing guidance for GAAP Revenue, as well as Non-GAAP
Revenue and Non-GAAP Adjusted EBITDA, which represents operating
results for Surf Air and Southern on a proforma basis for the full
year 2023.
- GAAP Revenue, which assumes operating results for Surf
Air for the full year 2023 period and Southern for the period July
28, 2023 through December 31, 2023, in the range of $54.5 million
to $59.5 million
- Non-GAAP Revenue, which assumes proforma operating
results for Surf Air and Southern, for the full year 2023 period,
in the range of $107.5 million to $112.5 million, as compared to
$100.6 million for the full year 2022, up 6.9% - 11.8%. Slower YoY
growth in 2H23 attributable to supply chain-related constraint of
aircraft parts delivery, closure of Marianas Joint Venture in Guam
effective March 31, 2023, and limited fleet expansion due to
aircraft availability. We expect these concerns to be resolved as
part of the Textron Aviation, Inc. fleet order.
- Non-GAAP Adjusted EBITDA2, which assumes proforma
operating results for Surf Air and Southern, for the full year 2023
period, in the range of $(46.3) million to $(56.3) million, which
excludes the expected impact of stock-based compensation, and
one-time direct listing related expenses, as compared to $(28.8)
million for period year of 2022. The expected decrease in Non-GAAP
Adjusted EBITDA in 2023, as compared to 2022, is driven by
incremental investments in Technology and Electrification R&D,
Sales and Marketing, and G&A expenses primarily associated with
expenses related to public company readiness and the company’s
Southern transaction.
Full Year 2025 Outlook: Buildup to
Electrification
- Revenue of $210 million to $230 million
- Scheduled service growth driven by 31 new airplane deliveries
under our fleet order of 100-150 aircraft with Textron Aviation,
Inc.
- Continued growth in our on-demand platform driven by the
addition of flight operators and sales and marketing resources
- Continuing to scale our network of flight operators through
2025 will build our pipeline of committed customers for the
transition to electrification at scale in 2026 and beyond
Long Term Outlook:
Electrification
- Steady state Revenue growth in the range of 20% to 25% YoY
- Gross Profit as a percent of revenue in the range of 35% to
45%
- 10% to 15% of the Caravan market to be electrified or in
contract to be electrified
We believe our commitment to electrification will allow our
business to achieve rapid growth and expand margins for many years
to come. Electrified aircraft, once certified, will improve the
unit economics across our network to what we believe will be
industry-leading margins in regional air travel.
Given our scale as the nation’s largest commuter airline today,
we believe we can demonstrate the economic benefits of electric
travel to other air travel operators, creating a massive market for
our powertrain technology.
Our agreement with Textron to be the exclusive provider of
electrification to the Cessna Grand Caravan market is a major
competitive advantage that will allow us to build a significant
market position in the Caravan space.
As we look to repeat this success with other aircraft, we
believe there is significant upside to our outlook and business
performance over time.
Upside Drivers to Long Term
Outlook:
The Company's long term outlook does not include contemplated
strategic initiatives including (but not limited to)
- Electrification of larger aircraft
- Integration of electrified aircraft from 3rd party
manufacturers into our network
- International network expansion
- International franchise operations
- Strategic acquisitions
The company is actively assessing these and other initiatives,
any or all of which may provide significant upside to both revenue
and margins in the long term.
Deanna White, CFO of Surf Air Mobility commented, “Looking
ahead, we believe our vision for electrified powertrains will
unlock additional revenue growth opportunities, including recurring
revenue channels, reduce direct operating costs, and further drive
profitability over time. We believe that the combination of our
mid-term targets, network expansion plans, and Aircraft as a
Service (ACaaS) offering on traditional and future electric
engines, will drive revenue growth and profitability.”
“We believe we have a clear path to achieve our financial
targets this year and beyond,” concluded Ms. White.
ABOUT SURF AIR MOBILITY
Surf Air Mobility is a Los Angeles-based regional air mobility
platform expanding the category of regional air travel to reinvent
flying through the power of electrification. In an effort to
substantially reduce the cost and environmental impact of flying
and as the operator of the largest commuter airline in the US, Surf
Air Mobility intends to develop powertrain technology with its
commercial partners to electrify existing fleets and bring
electrified aircraft to market at scale. The management team has
deep experience and expertise across aviation, electrification, and
consumer technology.
Forward Looking Statements
The information in this press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements include, among
other things, statements about: Surf Air Mobility’s ability to
anticipate the future needs of the air mobility market; future
trends in the aviation industry, generally; Surf Air Mobility’s
future growth strategy and growth rate and its ability to access
its financings, grow its fleet. In some cases, you can identify
forward-looking statements by terminology such as “may”, “should”,
“could”, “might”, “plan”, “possible”, “project”, “strive”,
“budget”, “forecast”, “expect”, “intend”, “will”, “estimate”,
“anticipate”, “believe”, “predict”, “potential” or “continue”, or
the negatives of these terms or variations of them or similar
terminology. These forward-looking statements include, without
limitation, statements regarding the satisfaction of required
conditions for the listing of the Surf Air Mobility common stock.
Factors that may cause actual results to differ materially from
current expectations include, but are not limited to: Surf Air
Mobility’s future ability to pay contractual obligations and
liquidity will depend on operating performance, cash flow and
ability to secure adequate financing; Surf Air Mobility’s limited
operating history and that Surf Air Mobility has not yet
manufactured any hybrid-electric or fully-electric aircraft; the
powertrain technology Surf Air Mobility plans to develop does not
yet exist; the inability to maintain and strengthen Surf Air’s
brand and its reputation as a regional airline; any accidents or
incidents involving hybrid-electric or fully-electric aircraft; the
inability to accurately forecast demand for products and manage
product inventory in an effective and efficient manner; the
dependence on third-party partners and suppliers for the components
and collaboration in Surf Air Mobility’s development of
hybrid-electric and fully-electric powertrains, and any
interruptions, disagreements or delays with those partners and
suppliers; the inability to execute business objectives and growth
strategies successfully or sustain Surf Air Mobility’s growth; the
inability of Surf Air Mobility’s customers to pay for Surf Air
Mobility’s services; the inability of Surf Air Mobility to obtain
additional financing or access the capital markets to fund its
ongoing operations on acceptable terms and conditions; the outcome
of any legal proceedings that might be instituted against Surf Air,
Southern or Surf Air Mobility; changes in applicable laws or
regulations, and the impact of the regulatory environment and
complexities with compliance related to such environment; and other
risks and uncertainties indicated in the prospectus.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made and are subject
to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from
those anticipated in the forward-looking statements. Although Surf
Air Mobility believes that the expectations reflected in the
forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. Surf Air
Mobility cannot guarantee future results, level of activity,
performance or achievements and there is no representation that the
actual results achieved will be the same, in whole or in part, as
those set out in the forward-looking statements and financial
projections. Forward-looking statements speak only as of the date
they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and Surf Air Mobility does not
undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law. Additional information
regarding these and other factors that could affect SAM’s results
is included in SAM’s SEC filings, which may be obtained by visiting
the SEC’s website at www.sec.gov or the investor relations page on
SAM’s website at https://investors.surfair.com under the
“Financials—SEC Filings” section. Information contained on, or that
is referenced or can be accessed through, our website does not
constitute part of this document and inclusions of any website
addresses herein are inactive textual references only.
Footnotes:
(1)
Use of Pro Forma Results: Surf Air
Mobility financial results for 2022 quarterly, year-to-date, and
the year ending December 31, 2022 are derived by combining the
historical financial statements of Surf Air and the historical
financial statements of Southern, as if the acquisition of Southern
occurred on January 1, 2022. Surf Air Mobility financial results
for 2023 quarterly, year-to-date, and the period ending June 30,
2023 are derived by combining the financial statements of Surf Air
and the financial statements of Southern, as if the acquisition of
Southern occurred on January 1, 2023.
(2)
Use of Non-GAAP Financial Measures: Surf
Air Mobility uses Adjusted EBITDA to identify and target
operational results which is beneficial to management and investors
in evaluating operational effectiveness. Pro Forma Adjusted EBITDA
is a supplemental measure of Surf Air Mobility’s performance that
is not required by, or presented in accordance with, U.S. GAAP. Pro
Forma Adjusted EBITDA is not a measurement of Surf Air Mobility’s
financial performance under U.S. GAAP and should not be considered
as an alternative to net income (loss) or any other performance
measure derived in accordance with U.S. GAAP. Surf Air Mobility’s
calculation of this non-GAAP financial measure may differ from
similarly titled non-GAAP measures, if any, reported by other
companies. This non-GAAP financial measure should not be considered
in isolation from, or as a substitute for, financial information
prepared in accordance with U.S. GAAP.
Non-GAAP financial measures have
limitations in their usefulness to investors because they have no
standardized meaning prescribed by GAAP and are not prepared under
any comprehensive set of accounting rules or principles. In
addition, non-GAAP financial measures may be calculated differently
from, and therefore may not be directly comparable to, similarly
titled measures used by other companies.
Surf Air Mobility presents Pro Forma
Adjusted EBITDA because it considers this measure to be an
important supplemental measure of its performance and believes it
is frequently used by securities analysts, investors, and other
interested parties in the evaluation of companies in its industry.
Management believes that investors’ understanding of Surf Air
Mobility’s performance is enhanced by including this non-GAAP
financial measure as a reasonable basis for comparing its ongoing
results of operations.
Surf Air Mobility calculates Pro Forma
Adjusted EBITDA as net income (loss) adjusted for depreciation and
amortization, interest expense, income tax expense, stock-based
compensation, changes in fair value of financial instruments, and
transaction costs, incentive income from Southern’s Marianas joint
venture and impact from PPP/PSP grants and loans.
(3)
Draws on the GEM share subscription
facility are subject to certain conditions. Please refer to further
details in the company’s registration statement available on the
SEC’s website or the Company’s Investor Relations website at
https://investors.surfair.com/.
(4)
Based on the number of scheduled flight
departures during 2022
Unaudited Condensed Consolidated Balance Sheets as of
June 30, 2023 and December 31, 2022 for Surf Air:
June 30,
December 31,
2023
2022
Assets: Current assets: Cash
$
2,269
$
6
Accounts receivable, net
67
161
Prepaid expenses and other current assets
7,733
7,755
Total current assets
10,069
7,922
Restricted cash
907
906
Property and equipment, net
701
624
Intangible assets, net and other assets
2,658
3,102
Operating lease right-of-use assets
446
1,143
Total assets
$
14,781
$
13,697
Liabilities, Redeemable Convertible Preferred Shares and
Shareholders’ Deficit: Current liabilities: Accounts payable
$
13,106
$
12,891
Accrued expenses
15,301
14,740
Deferred revenue
8,394
7,820
Operating lease liabilities, current
317
903
SAFE notes at fair value, current
46,844
149
Convertible notes at fair value, current
35,106
15,948
Due to related parties
12,699
4,947
Total current liabilities
$
131,767
$
57,398
Convertible notes at fair value, long term
—
13,148
SAFE notes at fair value, long term
10,001
24,565
Operating lease liabilities
135
246
Other long term liabilities
18,546
9,762
Total liabilities
$
160,449
$
105,119
Commitments and contingencies (Note 7): Redeemable convertible
preferred shares $0.001 par value; 263,459,277 shares authorized as
of June 30, 2023 and December 31, 2022; 234,856,003 shares issued
and outstanding as of June 30, 2023 and 229,144,283 shares issued
and outstanding as of December 31, 2022, respectively; and
aggregate liquidation preference of $181,598 as of June 30, 2023
and $178,608 as of December 31, 2022, respectively
$
133,667
$
130,667
Shareholders’ deficit: Class B-6s convertible preferred shares,
$0.001 par value; 108,242,028 authorized shares as of June 30, 2023
and 98,799,158 authorized shares as of December 31, 2022;
83,819,163 shares issued and outstanding as of June 30, 2023 and
71,478,742 shares issued and outstanding as of December 31, 2022,
respectively
$
8,889
$
3,414
Ordinary shares, $0.001 par value; 801,996,399 shares authorized as
of June 30, 2023 and December 31, 2022; 300,561,151 shares issued
and outstanding as of June 30, 2023 and 279,720,332 shares issued
and outstanding as of December 31, 2022, respectively
300
279
Additional paid-in capital
128,408
126,057
Accumulated deficit
(416,932
)
(351,839
)
Total shareholders’ deficit
$
(279,335
)
$
(222,089
)
Total liabilities, redeemable convertible preferred shares and
shareholders’ deficit
$
14,781
$
13,697
Unaudited Condensed Consolidated Balance Sheets as of
June 30, 2023 and December 31, 2022 for Southern:
June 30, December 31,
2023
2022
ASSETS Cash
$
1,067
$
1,402
Accounts receivable, net
4,530
3,931
Prepaid expenses and other current assets
4,825
5,545
Total current assets
10,422
10,878
Property and equipment, net
34,940
36,554
Operating lease right-of-use assets
13,476
15,149
Finance lease right-of-use assets
1,301
1,546
Intangible assets, net
155
—
Goodwill
805
805
Other assets
3,446
3,283
Total assets
$
64,545
$
68,215
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED SHARES AND
STOCKHOLDERS’ DEFICIT Current liabilities Accounts
payable
$
6,013
$
4,644
Accrued salaries, wages and benefits
2,773
2,549
Deferred revenue
7,570
6,260
Current maturities of long-term debt
1,985
1,980
Operating lease liabilities
3,572
3,302
Finance lease liabilities
142
134
Current portion due to related parties
2,790
3,125
Other current liabilities
4,555
5,516
Total current liabilities
29,400
27,510
Noncurrent liabilities Long-term debt, net of current
maturities
19,224
21,275
Long-term operating lease liabilities
7,188
8,452
Long-term finance lease liabilities
1,750
1,838
Due to related parties, net of current portion
7,579
6,217
Other noncurrent liabilities
298
697
Total noncurrent liabilities
36,039
38,479
Total liabilities
$
65,439
$
65,989
Commitments and contingencies (Note 16) Redeemable
convertible preferred shares Redeemable convertible preferred
shares, $0.0001 par value; 162,589 shares authorized; 162,589
shares issued and outstanding at June 30, 2023 and December 31,
2022; and aggregate liquidation preference of $7,332 and $7,092 at
June 30, 2023 and December 31, 2022, respectively.
$
3,624
$
3,624
Stockholders’ deficit: Common stock, $0.0001 par value;
1,000,000 shares authorized; 373,935 and 364,841 shares issued and
outstanding at June 30, 2023, and December 31, 2022, respectively.
$
—
$
—
Additional paid-in capital
9,965
9,858
Accumulated deficit
(14,483
)
(10,579
)
Total stockholders’ deficit attributable to common shareholders
(4,518
)
(721
)
Noncontrolling interests
—
(677
)
Total stockholders’ deficit
(4,518
)
(1,398
)
Total liabilities, redeemable convertible preferred shares and
stockholders’ deficit
$
64,545
$
68,215
Unaudited Condensed
Consolidated Statements of Operations for the Three Months Ended
June 30, 2023 for Surf Air and Southern: (in thousands, except
share and per share data):
Surf Air GlobalLimited(Historical) Southern
AirwaysCorporation(Historical) Revenue
$
6,195
$
22,387
Operating expenses Cost of revenue, exclusive of depreciation and
amortization
$
7,049
Gross Profit Maintenance, materials and repairs
1,690
Aircraft fuel
3,314
Airport-related expenses
1,207
Aircraft rent
2,468
Salaries, wages and benefits
8,664
Technology and development
816
Sales and marketing
1,927
General and administrative
9,296
Depreciation and amortization
261
923
Other operating expenses
5,407
Total operating expenses
19,349
23,673
Operating loss
(13,154
)
(1,286
)
Other income (expense) Changes in fair value of financial
instruments carried at fair value, net
(30,404
)
Interest income (expense), net
(525
)
(785
)
Gain on extinguishment of debt
(389
)
Other income (expense)
(48
)
335
Total other expense, net
(31,366
)
(450
)
Income (loss) before taxes
(44,520
)
(1,736
)
Income tax expense (benefit)
2
Net income (loss) including noncontrolling interests
(44,520
)
(1,738
)
Net loss attributable to noncontrolling interest
-
Net income (loss) attributable to common shareholders
(44,520
)
(1,738
)
Unaudited Condensed
Consolidated Statements of Operations for the Three Months Ended
June 30, 2022 for Surf Air and Southern: (in thousands, except
share and per share data):
Surf Air GlobalLimited(Historical) Southern
AirwaysCorporation(Historical) Revenue
$
4,478
$
19,636
Operating expenses Cost of revenue, exclusive of depreciation and
amortization
$
5,948
$
-
Gross Profit Maintenance, materials and repairs
1,369
Aircraft fuel
4,270
Airport-related expenses
1,045
Aircraft rent
2,048
Salaries, wages and benefits
7,196
Technology and development
716
-
Sales and marketing
1,132
-
General and administrative
9,479
-
Depreciation and amortization
258
675
Other operating expenses
4,311
Total operating expenses
17,533
20,914
Operating loss
(13,055
)
(1,278
)
Other income (expense) Changes in fair value of financial
instruments carried at fair value, net
(9,378
)
-
Interest income (expense), net
(165
)
(347
)
Gain on extinguishment of debt
3,959
-
Other income (expense)
(114
)
(3
)
Total other expense, net
(5,698
)
(350
)
Income (loss) before taxes
(18,753
)
(1,628
)
Income tax expense (benefit)
-
(417
)
Net income (loss) including noncontrolling interests
(18,753
)
(1,211
)
Net loss attributable to noncontrolling interest
-
-
Net income (loss) attributable to common shareholders
(18,753
)
(1,211
)
Unaudited Condensed
Consolidated Statements of Operations for the Six Months Ended June
30, 2023 for Surf Air and Southern (in thousands, except share and
per share data):
Surf Air Global
Limited (Historical)
Southern AirwaysCorporation(Historical) Revenue
$
11,702
$
45,061
Operating expenses Cost of revenue, exclusive of depreciation and
amortization
$
13,699
Gross Profit Maintenance, materials and repairs
3,763
Aircraft fuel
7,355
Airport-related expenses
2,670
Aircraft rent
4,655
Salaries, wages and benefits
17,117
Technology and development
1,629
Sales and marketing
3,321
General and administrative
17,736
Depreciation and amortization
519
1,860
Other operating expenses
10,795
Total operating expenses
36,904
48,215
Operating loss
(25,202
)
(3,154
)
Other income (expense) Changes in fair value of financial
instruments carried at fair value, net
(38,500
)
Interest income (expense), net
(697
)
(1,451
)
Gain on extinguishment of debt
(389
)
Other income (expense)
(305
)
507
Total other expense, net
(39,891
)
(944
)
Income (loss) before taxes
(65,093
)
(4,098
)
Income tax expense (benefit)
7
Net income (loss) including noncontrolling interests
(65,093
)
(4,105
)
Net loss attributable to noncontrolling interest
(201
)
Net income (loss) attributable to common shareholders
(65,093
)
(3,904
)
Unaudited Condensed
Consolidated Statements of Operations for the Six Months Ended June
30, 2022 for Surf Air and Southern (in thousands, except share and
per share data):
Surf Air GlobalLimited(Historical) Southern
AirwaysCorporation(Historical) Revenue
$
9,296
$
36,355
Operating expenses Cost of revenue, exclusive of depreciation and
amortization
$
11,268
Gross Profit Maintenance, materials and repairs
2,467
Aircraft fuel
7,152
Airport-related expenses
1,956
Aircraft rent
3,970
Salaries, wages and benefits
13,023
Technology and development
1,458
-
Sales and marketing
2,263
-
General and administrative
18,077
-
Depreciation and amortization
515
1,223
Other operating expenses
8,361
Total operating expenses
33,581
38,152
Operating loss
(24,285
)
(1,797
)
Other income (expense) Changes in fair value of financial
instruments carried at fair value, net
(10,304
)
-
Interest income (expense), net
(524
)
(529
)
Gain on extinguishment of debt
5,951
-
Other income (expense)
(238
)
(5
)
Total other expense, net
(5,115
)
(534
)
Income (loss) before taxes
(29,400
)
(2,331
)
Income tax expense (benefit)
(412
)
Net income (loss) including noncontrolling interests
(29,400
)
(1,919
)
Net loss attributable to noncontrolling interest
-
Net income (loss) attributable to common shareholders
(29,400
)
(1,919
)
Non-GAAP Financial Measures;
Reconciliation of Adjusted EBITDA to net loss for the Three Months
Ended June 30, 2023 Surf Air, Southern, and Pro forma (in
thousands):
Surf Air Global Limited
(Historical)
Southern Airways Corporation
(Historical)
Pro forma
Net loss including non-controlling interests
(44,520
)
(1,738
)
(46,736
)
Addback: Depreciation and amortization
261
923
1,789
Interest expense
525
785
1,310
Income tax expense (benefit)
-
2
(125
)
Share-based compensation expense
1,653
-
1,653
Changes in fair value of financial instruments
30,404
-
30,404
Transaction costs
3,868
-
3,868
Adjusted EBITDA
(7,809
)
(28
)
(7,837
)
Non-GAAP Financial Measures;
Reconciliation of Adjusted EBITDA to net loss for the Three Months
Ended June 30, 2022 Surf Air, Southern, and Pro forma (in
thousands):
Surf Air GlobalLimited(Historical) Southern
AirwaysCorporation(Historical) Pro forma Net loss
including non-controlling interests
(18,753
)
(1,211
)
(19,964
)
Addback: Depreciation and amortization
258
675
933
Interest expense
165
347
512
Income tax expense (benefit)
-
(417
)
(417
)
Share-based compensation expense
5,262
-
5,262
Changes in fair value of financial instruments
9,378
-
9,378
Transaction costs
591
-
591
Adjusted EBITDA
(3,099
)
(606
)
(3,705
)
Non-GAAP Financial Measures;
Reconciliation of Adjusted EBITDA to net loss for the Six Months
Ended June 30, 2023 Surf Air, Southern, and Pro forma (in
thousands):
Surf Air GlobalLimited(Historical) Southern
AirwaysCorporation(Historical) Pro forma Net loss
including non-controlling interests
(65,093
)
(4,105
)
(70,125
)
Addback: Depreciation and amortization
519
1,860
3,590
Interest expense
697
1,451
2,148
Income tax expense (benefit)
-
7
(277
)
Share-based compensation expense
2,798
-
2,798
Changes in fair value of financial instruments
38,500
-
38,500
Transaction costs
5,205
-
5,205
Adjusted EBITDA
(17,374
)
(787
)
(18,161
)
Non-GAAP Financial Measures;
Reconciliation of Adjusted EBITDA to net loss for the Six Months
Ended June 30, 2022 Surf Air, Southern, and Pro forma (in
thousands):
Surf Air GlobalLimited(Historical) Southern
AirwaysCorporation(Historical) Pro forma Net loss
including non-controlling interests
(29,400
)
(1,919
)
(31,319
)
Addback: Depreciation and amortization
515
1,223
1,738
Interest expense
524
529
1,053
Income tax expense (benefit)
-
(412
)
(412
)
Share-based compensation expense
9,991
-
9,991
Changes in fair value of financial instruments
10,304
-
10,304
Transaction costs
958
-
958
Adjusted EBITDA
(7,107
)
(579
)
(7,686
)
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