EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1 REPUBLIC AIRWAYS EARNINGS RELEASE FOR SECOND QUARTER 2006 Exhibit 99.1 Republic Airways Earnings Release for Second Quarter 2006
 
 


 Exhibit 99.1
  For Immediate release:
 Contact: Warren R. Wilkinson
 Republic Airways Holdings
 Tel. (317) 484- 6042
Republic Airways Holdings Announces Second Quarter 2006 Results

Indianapolis, Indiana, (August 1, 2006) - Republic Airways Holdings Inc. (NASDAQ/NM: RJET) today reported operating revenues of $284.3 million for the quarter ended June 30, 2006, a 33.3% increase, compared to $213.2 million for the same period last year.  The Company reported net income of $20.3 million for the quarter ended June 30, 2006, a 51.2% improvement over the $13.4 million reported in the prior year’s second quarter (the prior year’s second quarter results included an after tax expense of $1.7 million for payments made to AMR related to the operation of 70-seat aircraft on the Chautauqua operating certificate). The Company also reported earnings per diluted share of $0.47, compared to $0.40 for the same period last year.  Weighted average diluted common shares outstanding increased to 43.3 million, or 29.8% as a result of the Company’s follow on offering of common stock in July 2005. The primary items of significance affecting the second quarter of 2006 are outlined below.

Second Quarter Highlights
Total operating revenues for the second quarter of 2006 increased primarily as a result of a 43.5% increase in available seat miles (ASMs) to 2.3 billion ASMs, up from 1.6 billion ASMs and an 18.5% increase in block hours. These increases reflect the addition of 48 E170 regional jet aircraft, which were placed into service since June 30, 2005 offset by the removal of seven E145 regional jet aircraft and 10 Saab turboprop aircraft from fixed-fee service during the same time period.

Total operating expenses for the second quarter of 2006, including interest expense but excluding fuel charges (which are reimbursable by the Company’s partners), of $171.6 million, increased approximately 32.6% from $129.4 million for the same quarter of 2005. Operating cost per ASM (CASM), including interest expense but excluding fuel, decreased 7.7% to 7.6¢ compared to the prior year’s 8.2¢.

During the quarter the Company transitioned the final ten E170 aircraft from US Airways and took delivery of four new E170 aircraft which were placed into fixed-fee service for Delta Air Lines. The Company entered into 15-year, fixed rate debt financing arrangements for the four Delta aircraft. At June 30, 2006, the Company’s fleet consisted of 166 regional jets including 71 E170 aircraft.

Recent Developments
In July, the Company announced that it had reached an agreement to operate forty-four 50-seat regional jets for Continental. The aircraft are expected to be placed into service 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 Embraer and US Airways to take delivery of thirty 86-seat E175 aircraft and to place these aircraft into service for US Airways between January 2007 and the summer of 2008. The agreement with US Airways also included the removal of twenty 50-seat aircraft, which will be repositioned to operate under the new Continental agreement. The Company expects the remaining 24 aircraft for Continental to be acquired on short-term operating leases consistent with the terms of the Continental agreement.

Balance Sheet Information
At June 30, 2006 the Company had $204.5 million in cash and cash equivalents compared to $162.0 million as of December 31, 2005.  The Company’s long-term debt increased to $1.48 billion as of June 30, 2006, compared to $1.41 billion at December 31, 2005. All of the Company’s long-term debt is at 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 $800 million as of June 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 approximately 1,000 flights daily to 89 cities in 35 states, Canada, Mexico and the Bahamas through airline services agreements with four major U.S. airlines. All flights are operated under a major airline partner brand, such as AmericanConnection, Delta Connection, United Express and US Airways Express. As of June 30, 2006, the airlines employed more than 3,300 aviation professionals and operated 166 regional jet aircraft including 71 E170 aircraft. 

The Company will conduct a telephone briefing to discuss its second quarter results on August 2nd, at 11:00 a.m. EDT. For those wishing to participate please call 866-831-6272 and for international calls please dial 617-213-8859; the passcode is 64515445. A live Webcast 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 June30,
  
Six Months Ended June 30,
 
2006
2005
Change
 
2006
2005
Change
OPERATING REVENUES
 
 
 
 
 
 
 
Passenger
$ 279,430
$ 211,263
32.3%
 
$ 527,606
$ 416,036
26.8%
Other
4,883
1,985
146.0%
 
14,051
6,970
101.6%
Total operating revenues
284,313
213,248
33.3%
 
541,657
423,006
28.0%
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
Wages and benefits
43,595
34,846
25.1%
 
83,740
66,802
25.4%
Aircraft fuel
82,137
62,411
31.6%
 
158,660
128,347
23.6%
Landing fees
10,492
7,737
35.6%
 
19,086
14,778
29.2%
Aircraft and engine rent
24,394
19,128
27.5%
 
44,746
37,659
18.8%
Maintenance and repair
24,522
19,231
27.5%
 
46,903
37,576
24.8%
Insurance and taxes
4,978
4,208
18.3%
 
9,270
8,116
14.2%
Depreciation and amortization
22,080
14,391
53.4%
 
43,498
27,999
55.4%
Other
19,555
16,327
19.8%
 
35,277
30,221
16.7%
Total operating expenses
231,753
178,279
30.0%
 
441,180
351,498
25.5%
OPERATING INCOME
52,560
34,969
50.3%
 
100,477
71,508
40.5%
 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSE)
 
 
 
 
 
 
 
Interest expense
(21,961)
(13,566)
61.9%
 
(43,830)
(26,291)
66.7%
Other income
2,648
876
202.3%
 
4,614
1,392
231.5%
Total other income (expense)
(19,313)
(12,690)
52.2%
 
(39,216)
(24,899)
57.5%
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
33,247
22,279
49.2%
 
61,261
46,609
31.4%
 
 
 
 
 
 
 
 
INCOME TAX EXPENSE
12,992
8,883
46.3%
 
24,106
18,389
31.1%
 
 
 
 
 
 
 
 
NET INCOME
20,255
13,396
51.2%
 
37,155
28,220
31.7%
PER SHARE, BASIC
$ 0.48
$ 0.41
17.1%
 
$ 0.89
$ 0.91
(2.1%)
PER SHARE, DILUTED
$ 0.47
$ 0.40
17.5%
 
$ 0.86
$ 0.88
(2.3%)
Weighted Average Common Shares
 
 
 
 
 
 
 
Basic
41,941
32,483
29.1%
 
41,889
31,142
34.5%
               
Diluted
43,277
33,341
29.8%
 
43,149
31,906
35.2%
               

 

Unaudited Operating Highlights
Operating Highlights
Three Months Ended
 
Six Months Ended
June 30, 2006
 
June 30, 2006
 
2006
2005
Change
  
2006
2005
Change
Passengers carried
3,328,129
2,346,187
41.9%
  
5,883,377
4,383,566
34.2%
Revenue passenger miles (000)
1,735,977
1,128,722
53.8%
  
3,110,267
2,090,409
48.8%
Available seat miles (000)
2,257,596
1,573,120
43.5%
  
4,222,798
3,012,766
40.2%
Passenger load factor
76.9%
71.8%
5.1 pts
  
73.7%
69.4%
4.3 pts
Cost per available seat mile, including interest expense (cents)
11.24
12.20
(7.9%)
  
11.49
12.54
(8.4%)
Fuel cost per available seat mile
3.64
3.97
(8.3%)
  
3.76
4.26
(11.7%)
Cost per available seat mile, excluding fuel expense (cents)
7.60
8.23
(7.7%)
  
7.73
8.28
(6.6%)
Block hours
136,620
115,257
18.5%
  
258,252
224,606
15.0%
Departures
78,874
69,803
13.0%
  
148,030
135,052
9.6%
Average daily utilization of each aircraft (hours)
10.3
10.6
(2.8%)
  
10.2
10.7
(4.7%)
Average aircraft stage length
516
470
9.8%
  
520
468
11.1%