EX-99.1 2 exhibit99_1.htm PRESS RELEASE OF REPUBLIC AIRWAYS HOLDINGS RELATING TO ITS THIRD QUARTER EARNINGS Press Release of Republic Airways Holdings relating to its third quarter earnings
 
 EXHIBIT 99.1
  For Immediate release:
 Contact: Warren R. Wilkinson
 Republic Airways Holdings
 Tel. (317) 484- 6042

 

 
Republic Airways Holdings Announces Third Quarter 2006 Results

Indianapolis, Indiana, (October 25, 2006) - Republic Airways Holdings Inc. (NASDAQ/NM: RJET) today reported operating revenues of $306.1 million for the quarter ended September 30, 2006, a 33.0% increase, compared to $230.2 million for the same period last year.  The Company reported net income of $21.9 million for the quarter ended September 30, 2006, a 57.0% improvement over the $14.0 million reported in the prior year’s third quarter (the prior year’s third quarter results included an after tax expense of $2.0 million for payments made to AMR Corporation related to the operation of 70-seat aircraft on the Chautauqua operating certificate). The Company also reported earnings per diluted share of $0.50 for the quarter, an increase of 42.9% compared to $0.35 for the same period last year. 

The primary items of significance affecting the third quarter of 2006 are outlined below.

Third Quarter Highlights
Total operating revenues for the third quarter of 2006 increased primarily as a result of a 46.5% increase in available seat miles (ASMs) to 2.5 billion ASMs, up from 1.7 billion ASMs, and a 23.9% increase in block hours. These increases reflect the addition of 40 E170 regional jet aircraft, which were placed into service since September 30, 2005, offset by the removal of seven E145 regional jet aircraft during the same time period.

Total operating expenses for the third quarter of 2006, including interest expense but excluding fuel charges (which are reimbursable by the Company’s partners), of $182.8 million, increased 32.6% from $137.8 million for the same quarter of 2005. Operating cost per ASM (CASM), including interest expense but excluding fuel, decreased 9.5% to 7.37¢ compared to the prior year’s 8.14¢.

During the quarter the Company took delivery of four new E170 aircraft and entered into 15-year, fixed rate debt financing arrangements for all four aircraft. During the quarter the Company also purchased five of its E145 aircraft that were under long-term leases and entered into 10-year, fixed rate debt financing arrangements for the five aircraft. At September 30, 2006, the Company’s fleet consisted of 170 regional jets including 75 E170 aircraft.

On July 21st, the Company announced that it had reached an agreement to operate forty-four, 50-seat regional jets for Continental Airlines. Twenty of the aircraft will be E145 regional jets that will be transitioned from the Company’s current US Airways Express operations. The Company has also entered into definitive agreements to lease 12 used CRJ-200 regional jets and has a letter of intent to lease 12 additional used CRJ-200 regional jets under terms and conditions consistent with the Company’s agreement with Continental. All 44 of the aircraft are expected to be placed into service for Continental between January and July 2007 and will be operated for terms that vary from two years to five years. Under certain conditions Continental may extend the term on the aircraft up to five additional years.

Also in July, the Company announced that it had reached agreements with US Airways and Embraer to take delivery of thirty, 86-seat E175 aircraft and to place these aircraft into service for US Airways between February 2007 and the summer of 2008. The new, twelve-year agreement with US Airways also included the removal of the twenty, 50-seat E145 aircraft which will be repositioned to operate under the new Continental agreement.

Balance Sheet Information
At September 30, 2006 the Company had $172.8 million in cash and cash equivalents compared to $162.0 million as of December 31, 2005.  The Company made $41.6 million in aircraft deposits during the quarter, bringing its aircraft deposit balance to $48.9 million as of September 30, 2006. The Company’s long-term debt increased to $1.57 billion as of September 30, 2006, compared to $1.41 billion at December 31, 2005. All of the Company’s long-term debt carry fixed interest rates, and is secured by the aircraft. The Company also has significant long-term operating lease obligations.  At a 7% discount factor, the present value of these lease obligations was approximately $735 million as of September 30, 2006. 

Corporate Information
Republic Airways Holdings, based in Indianapolis, Indiana is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines offer scheduled passenger service on over 1,000 flights daily to 91 cities in 36 states, Canada, Mexico and the U.S. Virgin Islands through airline services agreements with four major U.S. airlines. Substantially all flights are operated under a major airline partner brand, consisting of AmericanConnection, Delta Connection, United Express and US Airways Express. As of September 30, 2006, the airlines employed more than 3,500 aviation professionals and operated 170 regional jet aircraft including 75 E170 aircraft. 

The Company will conduct a telephone briefing to discuss its third quarter results tomorrow, October 26th at 1:00 p.m. EDT. For those wishing to participate please call 866-831-6272 and for international calls please dial 617-213-8859; the pass code is 34170344. A live Web cast of this briefing will also be available online at www.rjet.com - investor relations.

Additional Information
In addition to historical information, this release contains forward-looking statements. Republic Airways may, from time-to-time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass Republic Airways’ beliefs, expectations, hopes or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to Republic Airways as of such date. Republic Airways assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this release by reference.


 

 
CONSOLIDATED STATEMENTS OF INCOME
  
(Dollars and Shares in Thousands, Except per Share Amounts)
  
(Unaudited)
  
Financial Highlights
  
Three Months Ended September 30,
  
Nine Months Ended September 30,
  
 
  
2006
  
2005
  
Change
  
2006
  
2005
  
Change
  
OPERATING REVENUES
  
 
  
 
  
 
  
 
  
 
  
 
  
Passenger
  
$
301,314
  
$
227,365
    
32.5
%
$
828,920
  
$
643,402
    
28.8
%
Other
    
4,818
   
2,873
    
67.7
%
  
18,869
   
9,843
   
91.7
%
Total operating revenues
    
306,132
   
230,238
    
33.0
%
  
847,789
   
653,245
   
29.8
%
 
                          
OPERATING EXPENSES
                          
Wages and benefits
    
46,415
   
38,679
    
20.0
%
  
130,155
    
105,482
    
23.4
%
Aircraft fuel
    
89,766
    
71,193
    
26.1
%
  
248,426
    
199,540
    
24.5
%
Landing fees
    
11,382
    
8,183
    
39.1
%
  
30,468
    
22,961
    
32.7
%
Aircraft and engine rent
    
25,130
    
19,849
    
26.6
%
  
69,876
    
57,508
    
21.5
%
Maintenance and repair
    
28,953
    
19,004
    
52.4
%
  
75,856
    
56,580
    
34.1
%
Insurance and taxes
    
4,710
    
4,363
    
8.0
%
  
13,980
    
12,479
    
12.0
%
Depreciation and amortization
    
23,824
    
15,945
    
49.4
%
  
67,322
    
43,944
    
53.2
%
Other
    
19,398
    
15,597
    
24.4
%
  
54,675
    
45,818
    
19.3
%
Total operating expenses
    
249,578
   
192,813
    
29.4
%
  
690,758
    
544,312
    
26.9
%
OPERATING INCOME
    
56,554
   
37,425
    
51.1
%
  
157,031
    
108,933
    
44.2
%
 
                          
OTHER INCOME (EXPENSE)
                          
Interest expense
    
(22,942
)
  
(16,217
)
  
41.5
%
  
(66,772
)
  
(42,508
)
  
57.1
%
Other income
    
2,633
   
1,792
   
46.9
%
  
7,247
   
3,184
   
127.6
%
Total other income (expense)
    
(20,309
)
  
(14,425
)
  
40.8
%
  
(59,525
)
  
(39,324
)
  
51.4
%
 
                          
INCOME BEFORE INCOME TAXES
    
36,245
   
23,000
   
57.6
%
  
97,506
   
69,609
   
40.1
%
 
                          
INCOME TAX EXPENSE
    
14,313
   
9,029
   
58.5
%
  
38,419
   
27,418
   
40.1
%
 
                          
NET INCOME
  
$
21,932
  
$
13,971
    
57.0
%
$
59,087
  
$
42,191
    
40.0
%
PER SHARE, BASIC
  
$
0.52
  
$
0.36
    
44.4
%
$
1.41
  
$
1.25
    
12.8
%
PER SHARE, DILUTED
  
$
0.50
  
$
0.35
    
42.9
%
$
1.36
  
$
1.22
    
11.5
%
Weighted Average Common Shares
                          
Basic
    
42,205
   
39,284
    
7.4
%
  
41,996
   
33,886
   
23.9
%
Diluted
    
43,539
   
40,150
   
8.4
%
  
43,297
   
34,625
   
25.0
%



   
Three Months Ended
  
Nine Months Ended
  
Operating Highlights
  
September 30
  
September 30
  
 
  
2006
  
2005
  
Change
  
2006
  
2005
  
Change
  
Passengers carried
    
3,456,979
    
2,385,522
    
44.9
%
  
9,340,356
    
6,769,088
    
38.0
%
Revenue passenger miles (000)
    
1,808,115
    
1,153,478
    
56.8
%
  
4,918,382
    
3,243,887
    
51.6
%
Available seat miles (000)
    
2,479,659
    
1,692,544
    
46.5
%
  
6,702,458
    
4,705,310
    
42.4
%
Passenger load factor
    
72.9
%
  
68.2
%
  
4.7pts
    
73.4
%
  
68.9
%
  
4.5 pts
  
Cost per available seat mile, including interest expense (cents)
    
10.99
   
12.35
   
(11.0
%)
  
11.30
   
12.47
   
(9.4
%)
Fuel cost per available seat mile (cents)
    
3.62
    
4.21
    
(14.0
%)
  
3.71
    
4.24
    
(12.5
%)
Cost per available seat mile, excluding fuel expense (cents)
    
7.37
   
8.14
   
(9.5
%)
  
7.59
    
8.23
    
(7.8
%)
Block hours
    
149,288
    
120,454
    
23.9
%
  
407,540
    
345,061
    
18.1
%
Departures
    
86,093
    
72,342
    
19.0
%
  
234,123
    
207,394
    
12.9
%
Average daily utilization of each aircraft (hours)
    
10.6
    
10.5
    
1.0
%
  
10.4
    
10.6
    
(1.9
%)
Average length of aircraft flight (miles)
    
512
    
479
    
6.9
%
  
517
    
471
    
9.8
%