Sky Harbour Reports Record Q1 2024 Revenues, Achieves Cash Flow Break-Even at Sky Harbour Capital and Prepares for Accelerated Construction Activity
Sky Harbour Group (NYSE: SKYH) reported record revenues for Q1 2024, achieving a 117% increase compared to Q1 2023. The company reached cash flow break-even at Sky Harbour Capital and plans to expedite construction activities. SG&A expenses rose by 38%, while net cash used in operations decreased slightly from $4.5 million to $4.4 million. Sky Harbour maintains strong liquidity with $160 million in cash and investments. All operating campuses are fully leased, and the new San Jose Mineta campus is 58% leased. Phases 1 in Denver, Phoenix, and Dallas resumed construction. The company aims to secure ground leases at four more airports by the end of 2024 and six more by the end of 2025.
- Q1 2024 revenues increased by 117% compared to Q1 2023.
- Sky Harbour Capital achieved cash flow break-even.
- Cash flow provided by operating activities reached $1.2 million at Sky Harbour Capital, an improvement from $1.0 million used in Q1 2023.
- Strong liquidity with $160 million in cash, restricted cash, and US Treasury investments.
- All operating campuses are fully leased, with several initiatives to surpass 100% occupancy.
- New campus at San Jose Mineta is 58% leased.
- Construction of Phases 1 in Denver, Phoenix, and Dallas back on track.
- Plan to secure ground leases at four additional airports by end of 2024 and six more by end of 2025.
- Parallel initiatives to reduce costs and shorten development timelines.
- SG&A expenses increased by 38% compared to Q1 2023.
- Net cash used in operating activities decreased only slightly from $4.5 million to $4.4 million.
- Previous delays in construction of Phases 1 in Denver, Phoenix, and Dallas.
Insights
The increase in revenues by 117% year-over-year for Q1 2024 is a significant development for Sky Harbour. This indicates strong growth potential and operational efficiency. The fact that the SG&A expenses only increased by 38% suggests that the company is managing its costs effectively despite expanding.
Additionally, the achievement of cash flow break-even is a critical milestone. It signals financial stability and reduces reliance on external financing, making the company more attractive to investors. The liquidity position, with
However, the slight decrease in net cash used in operating activities from
Sky Harbour's strategy focusing on tier-1 markets is indicative of a targeted approach to maximizing revenue potential. Their success in achieving full occupancy in all operating campuses and the commencement of operations at San Jose Mineta with 58% leasing are positive indicators of market demand and customer confidence.
The company's expansion plans, with expected ground leases at an additional ten airports by 2025, showcase aggressive growth strategy poised to increase market share. The new construction activities in Denver, Phoenix and Dallas, although previously delayed, are now back on track, which should help in meeting future demand and further revenue growth.
The semi-private leasing model leading to potential economic occupancy exceeding 100% is a unique selling point that could drive higher revenue per square foot, enhancing profitability.
The hiring of new construction managers and the onboarding of a new COO indicate a strategic pivot to streamline construction processes. This focus on process standardization and cost reduction could lead to faster project completions and lower overhead costs, benefiting the company in the long run.
Moreover, reducing development timelines while cutting costs could mean quicker revenue realization from new projects, boosting overall financial performance.
Investors should keep an eye on these managerial shifts and their impacts on project delivery and cost efficiency, as they could be critical to the company's ability to scale effectively.
10-Q:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823587/000143774924016606/ysac20240331_10q.htm
MSRB/EMMA:
https://emma.msrb.org/P11753880-P11348073-P11784121.pdf
Financial Highlights include:
-
2024 Q1 revenues increased
117% as compared to Q1 2023. -
2024 Q1 SG&A expenses increased
38% as compared to Q1 2023. -
Net cash used in operating activities on a consolidated basis during Q1 decreased from
$4.5 million $4.4 million -
At Sky Harbour Capital (Obligated Group), cash flow provided by operating activities reached
$1.2 million $1.0 million -
The Company continues to maintain strong liquidity and capital resources. As of March 31, 2024, cash, restricted cash, and US Treasury investments amounted to approximately
$160 million
Recent noteworthy events include:
-
All operating campuses are fully leased, with several initiatives underway to surpass
100% occupancy. -
New campus at San Jose Mineta began operations and is now
58% leased. -
Construction of Phases 1 in
Denver ,Phoenix , andDallas is back on track after previously announced delays.
Site Acquisition Update
The Company expects to have executed ground leases at four additional airports by the end of 2024 and an additional six airports by end of year 2025.
Construction Update
New construction managers led by COO Will Whitesell onboarded at the Company are on track to deliver on our revised plan for existing construction sites and ramp up development at recently executed ground leases. Parallel initiatives are underway to reduce costs while shortening development and construction timelines at new projects.
Leasing Update
Sky Harbour’s first three campus phases (SGR, BNA and OPF 1) are approximately
Our campus at SJC commenced operations on April 1, 2024, and is approximately
CEO Remarks
Tal Keinan, Chairman and Chief Executive Officer, commented on 2024 Q1 results and other recent events:
“Sky Harbour continues to execute its 2024 business plan on pace. Our Site Acquisition team’s focus is tier-1 airports. Our Development team’s focus is process-standardization to expand capacity and pursue economies of scale. Our Airfield Operations team is refining Sky Harbour’s highly-differentiated Resident-centric service offering. We expect the results of these efforts to become manifest over the coming quarters.”
2024 Q1 Webcast Conference Replay Link
https://events.q4inc.com/attendee/458580371
About Sky Harbour Group Corporation
Sky Harbour Group Corporation is an aviation infrastructure company developing the first nationwide network of Home-Basing campuses for business aircraft. The company develops, leases and manages general aviation hangars across
Forward Looking Statements
Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, including statements about the financial condition, results of operations, earnings outlook and prospects of SHG may include statements for the period following the first quarter of 2024. When used in this press release, the words “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements are based on the current expectations of the management of SHG as applicable and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in the public filings made or to be made with the SEC by SHG, including the filings described above, regarding the following: expectations regarding SHG’s strategies and future financial performance, including its future business plans, expansion plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and SHG’s ability to invest in growth initiatives; SHG’s ability to scale and build the hangars currently under development or planned in a timely and cost-effective manner; the implementation, market acceptance and success of SHG’s business model and growth strategy; the success or profitability of SHG’s hangar facilities; SHG’s future capital requirements and sources and uses of cash; SHG’s ability to obtain funding for its operations and future growth; developments and projections relating to SHG’s competitors and industry; the ability to recognize the anticipated benefits of the business combination; geopolitical risk and changes in applicable laws or regulations; the possibility that SHG may be adversely affected by other economic, business, and/or competitive factors; operational risk; risk that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic may have an adverse effect on SHG’s business operations, as well as SHG’s financial condition and results of operations. Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of SHG prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. SHG undertakes no 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240514162560/en/
SKYH Investor Relations:
investors@skyharbour.group
Attn: Francisco X. Gonzalez, CFO
Source: Sky Harbour Group Corporation
FAQ
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