HOUSTON, Nov. 4 /PRNewswire-FirstCall/ -- ExpressJet Holdings, Inc.
(NYSE: XJT), parent company of regional and charter airline
operator, ExpressJet Airlines, Inc., today reported a third quarter
loss for 2009, excluding special items, of $7.7 million or $0.52
per common share. These results reflect an improvement over the
same period in 2008 where the company reported a loss of $15.8
million or $1.00 per common share, excluding special items.
Overall, ExpressJet reported a third quarter loss of $9.0 million
or $0.61 per common share versus income of $4.4 million or $0.28
per common share during third quarter 2008. (Logo:
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Year-to-date excluding special items, ExpressJet narrowed its loss
to $30.9 million or $1.98 per common share compared to a loss of
$47 million or $5.38 per common share for the nine months ended
third quarter 2008. Overall, ExpressJet reported a year-to-date
loss of $33.5 million or $2.15 per common share. These results
reflect the continued downward pressure on financial performance
due to lower aircraft utilization driven by a decrease in travel
demand experienced across the airline industry. "While we are
pleased with the financial improvement versus last year, our
results continue to be negatively impacted by the softness in
passenger demand that is affecting the entire industry," said Jim
Ream, President and Chief Executive Officer. Ream added, "Going
forward, our results will get better as the utilization of our
fleet returns to pre-recessionary levels, and we remain very
positive in our ability to attract new customers in both our
contract and corporate aviation divisions." Operational Overview
Scheduled Flying Under its capacity purchase agreement with
Continental, ExpressJet flew 169,255 block hours during the third
quarter using 214 aircraft versus 171,840 block hours during the
same period in 2008 using 205 aircraft. The Continental Express
average aircraft utilization during the quarter was the highest
year-to-date totaling 8.6 hours per day yet was lower than the 9.11
hours per day flown during third quarter of 2008. Aircraft
utilization began trending downward in third quarter 2008 due to
capacity withdrawals made in response to record-high fuel prices
and continued the trend through 2009 as the global recession
adversely affected passenger demand. In third quarter 2009,
ExpressJet generated 2.1 billion revenue passenger miles on 2.7
billion available seat miles producing a load factor of 80.2% under
its agreement with Continental. For the nine months ended September
30, 2009, ExpressJet flew 490,848 block hours as Continental
Express compared to 529,583 block hours during same period in 2008.
Year-to-date ExpressJet generated 5.9 billion revenue passenger
miles on 7.6 billion available seat miles producing a load factor
of 77.1% under its agreement with Continental. Corporate Aviation
ExpressJet flew 8,393 block hours during the third quarter within
its corporate aviation division, including those hours flown under
a short-term agreement with United Air Lines for ten 50-seat
aircraft that accounted for 6,684 block hours flown during the
quarter. Block hours generated for the nine months ended September
30, 2009 within the corporate aviation division totaled 16,469.
ExpressJet's fleet within the corporate aviation division consisted
of eight 41-seat aircraft and twenty-two 50-seat aircraft during
the quarter, totaling an operating fleet of 30 aircraft. All Flying
ExpressJet operated 244 aircraft during third quarter 2009. Last
year during the third quarter, ExpressJet returned 29 aircraft to
Continental as part of the amended capacity purchase agreement that
began on July 1, 2008. Aviation Services During the quarter,
ExpressJet managed 40 contracts at 30 stations. Total activity
during the quarter as measured by aircraft turns was 19,578.
Financial Overview ExpressJet generated $179.2 million in revenue
during the three months ended September 30, 2009 versus $262.3 for
the three months ended September 30, 2008. The year-over-year
decrease in passenger revenue stems from numerous factors
including: lower utilization due to the global economic recession
and ExpressJet's suspension of flying for both its branded and
Delta operations during third quarter 2008. Under the amended
capacity purchase agreement, Continental paid ExpressJet $151.9
million in block hour revenue and pass-through expense
reimbursements for third quarter 2009 versus $161.1 million for
third quarter 2008. The decrease in revenue earned from Continental
year-over-year primarily relates to the transition of agent wages
and facility rents from pass-through expenses under the amended
capacity purchase agreement. ExpressJet also experienced an
off-setting decline in expenses related to this transition. Revenue
earned during the third quarter 2009 in the corporate aviation
division totaled $18 million. This included revenue from the
short-term flying arrangement with United Air Lines. Third quarter
revenue from aviation services (ground handling and other) totaled
$8.1 million versus $9.5 million in third quarter 2008 primarily
due to the sale of American Composites, LLC and the suspension of
ancillary revenue from ExpressJet branded operations. "We were
successful in a bid for aircraft cleaning in our aviation services
division and added several new customers in corporate aviation,"
said Ream. "Booking trends for our charter ad hoc flying improved
during October, so we continue to be encouraged about our progress
in these two lines of business," Ream added. Year-to-date,
ExpressJet earned $519.5 million in revenue, including $446.6
million in passenger revenue from flying under its agreement with
Continental, $46.9 million through corporate aviation and $26
million through aviation services. ExpressJet ended the third
quarter 2009 with $105.4 million in cash, cash equivalents and
short-term investments. The cash balance included $19.5 million in
restricted cash and $24.1 million in short-term investments,
primarily auction rate securities, after accounting adjustments to
impair the value of these assets. ExpressJet entered into a
settlement agreement with Royal Bank of Canada pursuant to which
Royal Bank of Canada repurchased certain auction rate securities
from ExpressJet for 87.5% of the par value allowing ExpressJet to
realize $15.8 million in cash and cash equivalents. Subsequent to
quarter end, ExpressJet entered into agreements for the sale of $10
million in par value of its auction rate securities realizing
approximately $9 million in cash on the sales and expects to
consummate such transactions in the very near future. ExpressJet
intends to continue monitoring the auction rate securities market
to attempt to monetize the assets at or near face value and
recently initiated litigation against Bank of America Corporation
related to auction rate securities sold to ExpressJet by Bank of
America in January 2008. In August 2009, ExpressJet announced its
board of directors authorized an additional $10 million for the
previously announced securities repurchase program and subsequently
ExpressJet spent approximately $5.8 million to repurchase $6.8
million par value of its 11.25% Secured Convertible Notes due 2023.
The total remaining in the program, after accounting for
repurchases made during third quarter 2009, is approximately $9.7
million. The company expects any future purchases of the notes or
stock to be made from time to time in the open market or in
privately negotiated transactions. After accounting for the debt
repurchases made during the quarter, the outstanding balance of
ExpressJet's 11.25% Secured Convertible Notes due 2023 is $52.1
million. This balance represents the par value due to noteholders
when the notes become due August 1, 2023. Capital expenditures
totaled $1.2 million during the quarter compared to $2 million
during the third quarter 2008. Year-to-date capital expenditures
total $3.9 million and the company plans to spend between $1 and $2
million during the fourth quarter of 2009 to meet operational
requirements. The company will review its third quarter 2009
results on Wednesday, November 4, 2009 at 10:00 a.m. EST (9:00 a.m.
CST). A live webcast of the call will be available at
http://www.expressjet.com/. To access the conference call by phone,
dial (866) 638-3022 approximately 10 minutes prior to the scheduled
start time and ask to join the ExpressJet call. International
callers should dial (630) 691-2765. Corporate Background ExpressJet
Holdings operates several divisions designed to leverage the
management experience, efficiencies and economies of scale present
in its subsidiaries, including ExpressJet Airlines, Inc. and
ExpressJet Services, LLC. ExpressJet Airlines serves 130 scheduled
destinations in North America and the Caribbean with approximately
1,100 departures per day. Operations include a capacity purchase
agreement for Continental; providing clients customized 41-seat and
50-seat charter options (http://www.expressjet.com/charter); and
supplying third-party aviation and ground handling services. For
more information, visit http://www.expressjet.com/. This release
contains forward-looking statements. Statements including words
such as "believes," "intends," "plans," "anticipates, "estimates,"
"projects," "expects" or similar expressions represent
forward-looking statements that are based on the Company's
expectations in light of facts known by management on the date of
this release. Specifically, statements regarding ExpressJet's
future results of operations, operating costs, business prospects,
growth and capital expenditures, including plans with respect to
its fleet, are forward-looking statements. The forward-looking
statements in this release reflect the Company's plans, assumptions
and expectations about future events and are subject to
uncertainties, many of which are outside ExpressJet's control.
Important factors that could cause actual results to differ
materially from the expectations expressed or implied in the
forward-looking statements include known and unknown risks. The
five key areas of the known risks that could significantly impact
the company's revenues, operating results and capacity include:
operations under the Company's capacity purchase agreement with
Continental Airlines, Inc. may no longer be profitable; charter
operations and other aviation services may affect ExpressJet's
ability to operate profitably; rising costs, a global, economic
recession and the highly competitive nature of the airline
industry; the profile of the Company's current shareholders; and
regulations, including listing regulations for publicly traded
companies, and other factors. For further discussions of these
risks and others, please see the sections entitled "Risk Factors",
as well as other sections, of ExpressJet's filings with the
Securities and Exchange Commission. The events described in the
forward-looking statements might not occur or might occur to a
materially different extent than described in this release.
ExpressJet undertakes no duty to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. EXPRESSJET HOLDINGS, INC. AND
SUBSIDIARIES FINANCIAL SUMMARY (In thousands, except per share
data) Three Months Ended September 30, Increase/ 2009 2008
(Decrease) ---- ---- -------- Operating Revenue Passenger $153,017
$245,170 (37.6%) Corporate Aviation 18,045 7,615 nm Ground handling
and other 8,138 9,541 (14.7%) ----- ----- 179,200 262,326 (31.7%)
Operating Expenses: Wages, salaries and related costs 81,435 98,252
(17.1%) Maintenance, materials and repairs 44,251 48,296 (8.4%)
Other rentals and landing fees 16,367 22,646 (27.7%) Depreciation
and amortization 6,921 6,718 3.0% Outside services 6,344 8,509
(25.4%) Aircraft rentals 5,472 18,917 (71.1%) Aircraft fuel and
related taxes 4,555 32,235 (85.9%) Ground handling 1,896 5,862
(67.7%) Marketing and distribution 428 1,767 (75.8%) Special
charges - 21,187 nm Other operating expenses 19,670 26,898 (26.9%)
------ ------ 187,339 291,287 (35.7%) ------- ------- Operating
Loss (8,139) (28,961) (71.9%) ----- ------ Nonoperating Income
(Expense): Gain on sale of short-term investments, net 1,274 - nm
Impairment charges on investment (108) - nm Extinguishment of debt
(966) - nm Gain from debt discount - 27,785 nm Settlement of fuel
contracts - 23,149 nm Amortization of debt discount (1,583) (2,516)
(37.1%) Interest expense, net of capitalized interest (1,825)
(2,057) (11.3%) Interest income 200 1,218 (83.6%) Equity
investments loss, net - 96 nm Other, net 200 (203) nm --- ---
(2,808) 47,472 nm ----- ------ Income (Loss) before Income Taxes
(10,947) 18,511 nm Income Tax Benefit (Expense) 1,902 (14,096) nm
----- ------ Net Income (Loss) $(9,045) $4,415 nm ======= ======
Basic and Diluted Earnings (Loss) per Common Share $(0.61) $0.28 nm
====== ===== Shares Used in Computing Basic Earnings (Loss) per
Common Share 14,851 15,872 (6.4%) Shares Used in Computing Diluted
Earnings (Loss) per Common Share 14,851 15,880 (6.5%) EXPRESSJET
HOLDINGS, INC. AND SUBSIDIARIES FINANCIAL SUMMARY (In thousands,
except per share data) Nine Months Ended September 30, Increase/
2009 2008 (Decrease) ---- ---- -------- Operating Revenue Passenger
$446,618 $1,094,240 (59.2%) Corporate Aviation 46,920 31,441 49.2%
Ground handling and other 25,959 31,989 (18.9%) ------ ------
519,497 1,157,670 (55.1%) ------- --------- Operating Expenses:
Wages, salaries and related costs 240,729 321,686 (25.2%)
Maintenance, materials and repairs 123,922 160,349 (22.7%) Other
rentals and landing fees 45,491 81,398 (44.1%) Depreciation and
amortization 22,180 24,145 (8.1%) Outside services 20,071 41,819
(52.0%) Aircraft rentals 16,416 192,432 (91.5%) Aircraft fuel and
related taxes 10,175 226,184 (95.5%) Ground handling 7,497 57,813
(87.0%) Marketing and distribution 2,093 25,173 (91.7%) Impairments
of fixed assets and goodwill - 21,410 nm Special charges - 21,896
nm Other operating expenses 60,958 91,107 (33.1%) ------ ------
549,532 1,265,412 (56.6%) ------- --------- Operating Loss (30,035)
(107,742) (72.1%) ------ ------- Nonoperating Income / (Expense):
Gain on sale of short-term investments, net 1,755 - nm Impairment
charges on investment (108) (18,892) (99.4%) Extinguishment of debt
(394) 2,107 nm Gain from debt discount - 27,785 nm Settlement of
fuel contracts - 23,149 nm Amortization of debt discount (3,912)
(8,431) (53.6%) Interest expense, net of capitalized interest
(5,835) (6,265) (6.9%) Interest income 837 4,980 (83.2%) Equity
investments loss, net (377) (967) (61.0%) Other, net (929) 1,408 nm
--- ----- (8,963) 24,874 nm ----- ------ Loss before Income Taxes
(38,998) (82,868) (52.9%) Income Tax Benefit 5,452 22,764 (76.0%)
----- ------ Net Loss $(33,546) $(60,104) (44.2%) ======== ========
Basic and Diluted Loss per Common Share $(2.15) $(6.88) (68.8%)
Shares Used in Computing Basic and Diluted Loss per Common Share
15,581 8,737 78.3% EXPRESSJET HOLDINGS, INC. AND SUBSIDIARIES FINAL
STATISTICS ----------------------------- Continental Corporate
Express Aviation ----------- --------- Three Months Ended September
30, 2009 Revenue Passenger Miles (millions) 2,129 83 Available Seat
Miles (ASM) (millions) 2,655 124 Passenger Load Factor 80.2% 67.1%
Block Hours 169,255 8,393 Departures 92,151 5,769 Nine Months Ended
September 30, 2009 Revenue Passenger Miles (millions) 5,852 153
Available Seat Miles (ASM) (millions) 7,589 247 Passenger Load
Factor 77.1% 61.9% Block Hours 490,848 16,469 Departures 260,884
11,391 Non-GAAP Financial Measures (In thousands, except per share
data) Three Months Ended September 30, ---------------------- 2009
2008 ---------------------- Net Income Reconciliation: Net income
(loss) $(9,045) $4,415 Adjustments for special items (gains): Less:
Realized gain from sale of short-term investments(1) (1,274) - Add:
Realized loss from impairment charge on investment(2) 108 - Add:
Realized loss from extinguishment of debt(3) 966 - Less: Realized
gain from special charges, net(4) - (22,102) Add: Realized loss
from amortization of debt discount(5) 1,583 1,870 ===== ===== Net
loss excluding special items (gains)(6) $(7,662) $(15,817) =======
======== Earnings / (Loss) Per Share Reconciliation: Diluted loss
per share $(0.61) $0.28 Adjustments for special items (gains): 0.09
(1.28) ==== ==== Diluted loss per share, excluding special item
(gains)(6) $(0.52) $(1.00) ====== ====== (1) During the third
quarter of 2009, we settled a portion of our auction rate
securities portfolio and recognized a gain of $1.3 million. (2) In
2009, we recognized an impairment charge on investments of $0.1
million for declines in fair value below the adjusted cost basis of
our ARS holdings for the three months ended September 30, 2009. (3)
Effective January 1, 2009, ExpressJet adopted Financial Accounting
Standards Board's Staff Position No. APB 14-1, "Accounting for
Convertible Debt Instruments that May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)", which clarifies
the accounting for convertible debt instruments that may be settled
in cash (including partial cash settlements) upon conversion.
Repurchases of our convertible notes during the three months ended
September 30, 2009, resulted in losses on extinguishment of debt of
$1 million within the scope of FSP APB 14-1. Such gains were
calculated as the difference between the fair value of the
liability component immediately prior to extinguishment and its
book value. No repurchases of our convertible notes were made
during the three months ended September 30, 2008. (4) During the
third quarter of 2008, we recognized special charges including
charges of $15.7 million, net of taxes, related to the suspension
of several lines of our at-risk flying operation, a gain of ($20.6)
million, net of taxes, resulting from the refinancing of our
convertible notes and a gain of ($17.2) million, net of taxes, due
to the sale of fuel contracts. (5) In 2008, we recorded $27.8
million in debt discount related to the refinancing of our
convertible notes. The financial statements for the three months
ended September 30, 2008 were adjusted to reflect an additional
$0.7 million, net of taxes, to the previously reported $1.2
million, net of taxes in amortization of debt discount as a result
of the adoption of Financial Accounting Standards Board's Staff
Position No. APB 14-1, "Accounting for Convertible Debt Instruments
that May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)". During the third quarter of 2009, we recognized $1.6
million in amortization of the debt discount recorded in 2008. (6)
By excluding special non-recurring items, these financial measures
provide management and investors the ability to measure and monitor
ExpressJet's performance on a consistent year-over-year basis.
Non-GAAP Financial Measures (In thousands, except per share data)
Nine Months Ended September 30, ---------------------- 2009 2008
---- ---- Net Income Reconciliation: Net loss $(33,546) $(60,104)
Adjustments for special items (gains): Less: Realized gain from
sale of short-term investments(1) (1,755) - Add: Realized loss from
impairment charge on investments (2) 108 14,036 Add: Realized loss
from extinguishment of debt(3) 394 (1,565) Less: Realized gain from
special charges, net(4) - (5,667) Add: Realized loss from
amortization of debt discount(5) 3,912 6,264 Net loss excluding
special items (gains)(6) $(30,887) $(47,036) Earnings / (Loss) Per
Share Reconciliation: Diluted loss per share $(2.15) $(6.88)
Adjustments for special items (gains): 0.17 1.50 Diluted loss per
share, excluding special items (gains)(6) $(1.98) $(5.38) (1)
During the first quarter of 2009, we sold a portion of our auction
rate securities portfolio and recognized a gain of $0.5 million.
During the third quarter of 2009, we settled a portion of our
auction rate securities portfolio and recognized a gain of $1.3
million. (2) During the first quarter of 2008, we determined that
our investment in auction rate securities was
other-than-temporarily impaired and recognized a realized loss, net
of taxes, of $10.1 million. During the second quarter of 2008, we
determined that the carrying value of our investment in Wing
Holding, LLC was fully impaired. This non-recurring charge of $3.9
million, net of taxes, was recognized as a decrease to our
investment balance and a corresponding equity loss. In 2009, we
recognized an impairment charge on investments of $0.1 million for
declines in fair value below the adjusted cost basis of our ARS
holdings for the nine months ended September 30, 2009. (3)
Effective January 1, 2009, ExpressJet adopted Financial Accounting
Standards Board's Staff Position No. APB 14-1, "Accounting for
Convertible Debt Instruments that May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)", which clarifies
the accounting for convertible debt instruments that may be settled
in cash (including partial cash settlements) upon conversion.
Repurchases of our convertible notes during the nine months ended
September 30, 2008, resulted in gains on extinguishment of debt of
$1.6 million, net of taxes, within the scope of FSP APB 14-1.
Repurchases of our convertible notes during the nine months ended
September 30, 2009, resulted in losses on extinguishment of debt of
$0.4 million within the scope of FSP APB 14-1. Such gains were
calculated as the difference between the fair value of the
liability component immediately prior to extinguishment and its
book value. (4) During the second quarter of 2008, we recognized a
$0.5 million, net of taxes, charge related to previously disputed
base closure costs associated with the original capacity purchase
agreement with Continental Airlines. During the third quarter of
2008, we recognized special charges including charges of $15.7
million, net of taxes, related to the suspension of several lines
of our at-risk flying operation, a gain of ($20.6) million, net of
taxes, resulting from the refinancing of our convertible notes and
a gain of ($17.2) million, net of taxes, due to the sale of fuel
contracts. In addition, we recognized in the second quarter of
2008, special charges including an $9.5 million, net of taxes,
impairment of goodwill related to the original capacity purchase
agreement with Continental Airlines, and a $6.4 million, net of
taxes, impairment charge to write off certain capital assets. (5)
In 2008, we recorded $27.8 million in debt discount related to the
refinancing of our convertible notes. The financial statements for
the nine months ended September 30, 2008 were adjusted to reflect
an additional $5.1 million, net of taxes, to the previously
reported $1.2 million, net of taxes in amortization of debt
discount as a result of the adoption of Financial Accounting
Standards Board's Staff Position No. APB 14-1, "Accounting for
Convertible Debt Instruments that May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)". During the nine
months ended September 30, 2009, we recognized $3.9 million in
amortization of the debt discount recorded in 2008. (6) By
excluding special non-recurring items, these financial measures
provide management and investors the ability to measure and monitor
ExpressJet's performance on a consistent year-over-year basis.
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http://photoarchive.ap.org/ DATASOURCE: ExpressJet Holdings, Inc.
CONTACT: Kristy Nicholas, Corporate Communications of ExpressJet,
+1-832-353-3333, toll free, 1-877-958-NEWS, Web Site:
http://www.expressjet.com/
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