Mesa Air Group Reports Third Quarter Fiscal 2023 Results
PHOENIX, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported third quarter fiscal 2023 financial and operating results.
Fiscal Third Quarter Update:
- Total operating revenues of
$114.7 million - Pre-tax loss of
$50.3 million , net loss of$47.6 million or$(1.17) per diluted share - Adjusted net loss1 of
$27.2 million or$(0.67) per diluted share - Adjusted net loss excludes
$21.2 million , primarily a$30.5 million impairment loss on assets - Paid down
$27 million of debt with engine sale proceeds
Jonathan Ornstein, Chairman and CEO, said, “As expected, Fiscal 2023 has been a transformative year as we ended our agreement with American Airlines and transitioned all of our regional capacity to United. While we are pleased with the progress we have made in some areas, we have more work to do in others. One of our key initiatives remains the disposition of excess CRJ-900 aircraft and related assets. To date, we have entered into agreements to sell 18 excess CRJ-900s, four of which we closed earlier this year, with the remaining 14 expected to close by calendar-year end. We are currently in active negotiations for the sale of additional aircraft. We also continue to focus on maximizing aircraft utilization with our existing pilot resources through more productive scheduling of our fleet in cooperation with United.”
Mr. Ornstein continued, “The CRJ-900 transition from American to United was a complex process and our people have done an amazing job. With little incremental regional capacity available industry-wide, we were pleased to fly almost half a million passengers for United on our CRJ fleet during our third quarter. With United’s continued support, we believe, based on current pilot staffing outlook, we will be at United’s target block-hour utilization rate by the end of fiscal-year 2024.
“Mesa has been a long-time Express carrier for United, and we believe United will ensure we remain an integral part of their regional portfolio. While Mesa’s primary service to United is providing valuable feed traffic, we also assist in the creation of future United pilots through our participation in Aviate, help maintain competitiveness among their regional portfolio, and share co-investments in advanced aviation technology and electric aircraft. In return, United has been an invaluable partner, helping us create additional liquidity through a number of initiatives, which we expect will continue through to the completion of our transformation and return to profitability.”
Fiscal Third Quarter Details:
Total operating revenues in Q3 2023 were
Total operating expenses in Q3 2023 were
Mesa’s Q3 2023 results reflect a net loss of
Mesa’s Adjusted EBITDA1 loss for Q3 2023 was
Operationally, the Company reported a controllable completion factor of
With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of
For Q3 2023, approximately
Balance Sheet and Cash Flow:
Mesa ended the quarter at
During the quarter, Mesa closed on the sales of the remaining 20 engines that the Company previously agreed to sell to United, using the proceeds to pay down
Conference Call Details:
Mesa Air Group will host a conference call with analysts on August 9th at 4:30 pm EDT. The conference call number is 800-857-9792 (Passcode: Phoenix (7463649)). The conference call can also be accessed live via the web by visiting https://investor.mesa-air.com.
A recorded version will be available on Mesa's website approximately two hours after the call for approximately 14 days.
About Mesa Air Group, Inc.
Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 89 cities in 40 states, the District of Columbia, the Bahamas, Canada, Cuba, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As of June 30, 2023, Mesa operated a fleet of 80 aircraft with approximately 277 daily departures and four 737 cargo aircraft. The Company had approximately 2,300 employees. Mesa operates all its flights as either United Express or DHL Express flights pursuant to the terms of a capacity purchase agreement entered into with United Airlines, Inc. and a flight service agreement with DHL.
Forward-Looking Statements
Certain statements contained in this press release that are not historical facts contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to the “safe harbor” created by those sections. Forward-looking statements can be identified by the use of words such as “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximate” or “plan,” or the negative of these words and phrases or similar words or phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. For more information on risk factors for Mesa Air Group, Inc.’s business, please refer to the periodic reports the Company files with the Securities and Exchange Commission from time to time. These forward-looking statements herein speak only as of the date of this press release and should not be relied upon as predictions of future events. Mesa Air Group, Inc. expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein, to reflect any change in Mesa Air Group, Inc.’s expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except as required by law.
Contact:
Mesa Air Group, Inc.
Media
Media@mesa-air.com
Investor Relations
investor.relations@mesa-air.com
MESA AIR GROUP, INC.
Consolidated Statements of Operations and Comprehensive (Loss) Income
(In thousands, except per share amounts) (Unaudited)
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Operating revenues: | ||||||||||||||||
| Contract revenue (2023— | $ | 94,356 | $ | 118,899 | $ | 326,588 | $ | 367,781 | ||||||||
| Pass-through and other revenue | 20,335 | 15,498 | 57,111 | 37,586 | ||||||||||||
| Total operating revenues | 114,691 | 134,397 | 383,699 | 405,367 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Flight operations | 51,557 | 43,254 | 164,707 | 133,262 | ||||||||||||
| Maintenance | 51,072 | 49,694 | 145,344 | 156,032 | ||||||||||||
| Aircraft rent | 864 | 9,299 | 5,782 | 28,319 | ||||||||||||
| General and administrative | 11,346 | 11,112 | 38,872 | 31,550 | ||||||||||||
| Depreciation and amortization | 15,316 | 20,103 | 47,060 | 61,878 | ||||||||||||
| Asset Impairment | 30,489 | — | 50,951 | 39,475 | ||||||||||||
| (Gain) on sale of assets | (6,722 | ) | — | (7,271 | ) | — | ||||||||||
| Other operating expenses | 999 | 722 | 2,358 | 3,379 | ||||||||||||
| Total operating expenses | 154,921 | 134,184 | 447,803 | 453,895 | ||||||||||||
| Operating income (loss) | (40,230 | ) | 213 | (64,104 | ) | (48,528 | ) | |||||||||
| Other income (expense), net: | ||||||||||||||||
| Interest expense | (12,015 | ) | (8,716 | ) | (36,321 | ) | (24,766 | ) | ||||||||
| Interest income | 8 | 24 | 128 | 117 | ||||||||||||
| Gain on investments, net | 2,859 | (3,926 | ) | 3,275 | (12,649 | ) | ||||||||||
| Other income, net | (946 | ) | (73 | ) | (540 | ) | (203 | ) | ||||||||
| Total other expense, net | (10,094 | ) | (12,691 | ) | (33,458 | ) | (37,501 | ) | ||||||||
| Income (loss) before taxes | (50,324 | ) | (12,478 | ) | (97,562 | ) | (86,029 | ) | ||||||||
| Income tax expense (benefit) | (2,764 | ) | (2,493 | ) | (5,791 | ) | (18,987 | ) | ||||||||
| Net income (loss) | $ | (47,560 | ) | $ | (9,985 | ) | $ | (91,771 | ) | $ | (67,042 | ) | ||||
| Net income (loss) per share attributable to common shareholders | ||||||||||||||||
| Basic | $ | (1.17 | ) | $ | (0.28 | ) | $ | (2.35 | ) | $ | (1.86 | ) | ||||
| Diluted | $ | (1.17 | ) | $ | (0.28 | ) | $ | (2.35 | ) | $ | (1.86 | ) | ||||
| Weighted-average common shares outstanding | ||||||||||||||||
| Basic | 40,688 | 36,183 | 38,986 | 36,064 | ||||||||||||
| Diluted | 40,688 | 36,183 | 38,986 | 36,064 | ||||||||||||
MESA AIR GROUP, INC.
Consolidated Balance Sheets
(In thousands, except shares) (Unaudited)
| June 30, 2023 | September 30, 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 48,349 | $ | 57,683 | ||||
| Restricted cash | 3,146 | 3,342 | ||||||
| Receivables, net ( | 3,582 | 3,978 | ||||||
| Expendable parts and supplies, net | 28,731 | 26,715 | ||||||
| Assets held for sale | 90,954 | — | ||||||
| Prepaid expenses and other current assets | 6,364 | 6,616 | ||||||
| Total current assets | 181,126 | 98,334 | ||||||
| Property and equipment, net | 709,694 | 865,254 | ||||||
| Intangible assets, net | — | 3,842 | ||||||
| Lease and equipment deposits | 1,172 | 6,085 | ||||||
| Operating lease right-of-use assets | 11,416 | 43,090 | ||||||
| Deferred heavy maintenance, net | 8,753 | 9,707 | ||||||
| Assets held for sale | 21,000 | 73,000 | ||||||
| Other assets | 28,841 | 16,290 | ||||||
| TOTAL ASSETS | $ | 962,002 | $ | 1,115,602 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of long-term debt and finance leases ( | $ | 124,341 | $ | 97,218 | ||||
| Current portion of deferred revenue | 6,398 | 385 | ||||||
| Current maturities of operating leases | 4,380 | 17,233 | ||||||
| Accounts payable | 51,916 | 59,386 | ||||||
| Accrued compensation | 8,358 | 11,255 | ||||||
| Other accrued expenses | 26,721 | 29,000 | ||||||
| Total current liabilities | 222,114 | 214,477 | ||||||
| NONCURRENT LIABILITIES: | ||||||||
| Long-term debt and finance leases, excluding current portion ( | 441,941 | 502,517 | ||||||
| Noncurrent operating lease liabilities | 8,966 | 16,732 | ||||||
| Deferred credits ( | 4,489 | 3,082 | ||||||
| Deferred income taxes | 11,561 | 17,719 | ||||||
| Deferred revenue, net of current portion | 16,327 | 23,682 | ||||||
| Other noncurrent liabilities | 28,706 | 29,219 | ||||||
| Total noncurrent liabilities | 511,990 | 592,951 | ||||||
| Total liabilities | 734,104 | 807,428 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock of no par value and additional paid-in capital, 125,000,000 shares authorized; 40,619,274 (2023) and 36,376,897 (2022) shares and 4,899,497 (2023) and 4,899,497 (2022) warrants issued and outstanding | 270,673 | 259,177 | ||||||
| Retained earnings/(Accumulated deficit) | (42,775 | ) | 48,997 | |||||
| Total stockholders' equity | 227,898 | 308,174 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 962,002 | $ | 1,115,602 | ||||
MESA AIR GROUP, INC.
Operating Highlights (unaudited)
| Three months ended | |||||||||
| June 30, | |||||||||
| 2023 | 2022 | Change | |||||||
| Available seat miles (thousands) | 1,002,945 | 1,553,616 | (35.4)% | ||||||
| Block hours | 45,301 | 63,486 | (28.6)% | ||||||
| Average stage length (miles) | 555 | 619 | (10.3)% | ||||||
| Departures | 24,555 | 33,291 | (26.2)% | ||||||
| Passengers | 1,500,634 | 2,164,295 | (30.7)% | ||||||
| Controllable completion factor* | |||||||||
| American | |||||||||
| United | (0.9)% | ||||||||
| Total completion factor** | |||||||||
| American | (0.7)% | ||||||||
| United | (2.5)% | ||||||||
*Controllable completion factor excludes cancellations due to weather and air traffic control
**Total completion factor includes all cancellations
1Reconciliation of non-GAAP financial measures
Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa's ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three and nine months ended June 30, 2023 and June 30, 2022. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company's net income or loss. Additionally, these calculations may not be comparable with similarly titled measures of other companies.
1Reconciliation of GAAP versus non-GAAP Disclosures
(In thousands, except for per diluted share) (Unaudited)
| Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | ||||||||||||||||||||||||
| Income (Loss) Before Taxes | Income Tax (Expense) Benefit | Net Income (Loss) | Net Income (Loss) per Diluted Share | Income (Loss) Before Taxes | Income Tax (Expense) Benefit | Net Income (Loss) | Net Income (Loss) per Diluted Share | ||||||||||||||||||
| GAAP income (loss) | $ | (50,324 | ) | $ | 2,764 | $ | (47,560 | ) | $ | (1.17 | ) | $ | (12,478 | ) | $ | 2,493 | $ | (9,985 | ) | $ | (0.28 | ) | |||
| Adjustments(1)(2)(3)(4)(5)(6) | 21,239 | (884 | ) | 20,355 | $ | 0.50 | 3,791 | (864 | ) | 2,927 | $ | 0.08 | |||||||||||||
| Adjusted income (loss) | (29,085 | ) | 1,880 | (27,205 | ) | $ | (0.67 | ) | (8,687 | ) | 1,629 | (7,058 | ) | $ | (0.20 | ) | |||||||||
| Interest expense | 12,015 | 8,716 | |||||||||||||||||||||||
| Interest income | (8 | ) | (24 | ) | |||||||||||||||||||||
| Depreciation and amortization | 15,316 | 20,103 | |||||||||||||||||||||||
| Adjusted EBITDA | (1,762 | ) | 20,108 | ||||||||||||||||||||||
| Aircraft rent | 864 | 9,299 | |||||||||||||||||||||||
| Adjusted EBITDAR | $ | (898 | ) | $ | 29,407 | ||||||||||||||||||||
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| Nine Months Ended June 30, 2023 | Nine Months Ended June 30, 2022 | ||||||||||||||||||||||||
| Income (Loss) Before Taxes | Income Tax (Expense) Benefit | Net Income (Loss) | Net Income (Loss) per Diluted Share | Income (Loss) Before Taxes | Income Tax (Expense) Benefit | Net Income (Loss) | Net Income (Loss) per Diluted Share | ||||||||||||||||||
| GAAP income (loss) | $ | (97,562 | ) | $ | 5,791 | $ | (91,771 | ) | $ | (2.35 | ) | $ | (86,029 | ) | $ | 18,987 | $ | (67,042 | ) | $ | (1.86 | ) | |||
| Adjustments(1)(2)(3)(4)(5)(6)(7)(8) | 41,398 | (2,459 | ) | 38,939 | $ | 1.00 | 52,357 | (11,953 | ) | 40,404 | $ | 1.12 | |||||||||||||
| Adjusted income (loss) | (56,164 | ) | 3,332 | (52,832 | ) | $ | (1.36 | ) | (33,672 | ) | 7,034 | (26,638 | ) | $ | (0.74 | ) | |||||||||
| Interest expense | 36,321 | 24,766 | |||||||||||||||||||||||
| Interest income | (128 | ) | (117 | ) | |||||||||||||||||||||
| Depreciation and amortization | 47,060 | 61,878 | |||||||||||||||||||||||
| Adjusted EBITDA | 27,089 | 52,855 | |||||||||||||||||||||||
| Aircraft rent | 5,782 | 28,319 | |||||||||||||||||||||||
| Adjusted EBITDAR | $ | 32,871 | $ | 81,174 | |||||||||||||||||||||
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Source: Mesa Air Group, Inc.
1 See Reconciliation of non-GAAP financial measures
