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Mesa Air Group Inc (MESA) SEC Filing 8-K Material Event for the period ending Wednesday, February 9, 2022

Mesa Air Group Inc

CIK: 810332 Ticker: MESA

Exhibit 99.1

 

Mesa Air Group Reports First Quarter Fiscal 2022 Results

February 9, 2022

PHOENIX, February 9, 2022 -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported first quarter fiscal 2022 financial and operating results.

 

Financial Summary:

 

Q1 pre-tax loss of $18.4 million, net loss of $14.3 million or $(0.40) per diluted share.

 

Q1 adjusted net loss1 of $9.3 million or $(0.26) per diluted share.  

 

Fiscal Year Q1 Results:

 

Mesa’s Q1 FY22 results reflect a net loss of $14.3 million, or $(0.40) per diluted share, compared to net income of $14.1 million, or $0.39 per diluted share for Q1 FY21. Mesa’s Q1 FY22 adjusted net loss1 of $9.3 million was down compared to net income of $13.2 million in Q1 FY21. We can attribute this $22.5 million decrease to the impacts related to Covid, such as cancelled flights, a catch up in deferred heavy maintenance expense, and a spike in sick-related absence rates. Mesa also did not recognize any PSP funds as an offset to operating expenses during Q1 2022, compared to an $11.3 million reduction in Q1 2021.

 

Jonathan Ornstein, Chairman and CEO, said, “Mesa’s results reflect the impact of Covid to our quarter’s operations and financials. Its effect on this quarter was significant and unlike anything we have seen in twenty years. This was further impacted by elevated pilot attrition as the major and national airlines have accelerated hiring. Looking ahead, we are cautiously optimistic that we are already seeing a decrease in Covid-related absence rates. Managing through the challenges of pilot attrition in our core regional operation remains our team’s top priority.

 

Outside of our core regional operation, we continue to move forward with some of our important strategic initiatives. We are taking delivery of our third 737-400F aircraft this month. We also remain invested in electric aircraft companies Archer Aviation and Heart Aerospace as we look to position Mesa to be the regional airline leader in decarbonization and electric aircraft. Going forward, our strategy is to selectively look for other opportunities in aviation related, green technologies to ensure a leadership role in this area”

 

Fiscal Q1 details:

 

Revenue in Q1 2022 was $147.8 million, a decrease of $2.6 million (1.7%) from $150.4 million for Q1 2021. While contract revenue increased $9.7 million due to more flying on all fleets relative to the prior period, this increase was offset by fewer aircraft flown for American. There was also a decrease in pass through and other revenue of $12.4 million primarily due to a decrease in pass-through maintenance expense. Mesa’s Q1 2022 results include, per GAAP, the recognition of $4.2 million of previously deferred revenue, versus the deferral of $5.2 million of revenue in Q1 2021. The remaining deferred revenue balance will be recognized as flights are completed over the remaining terms of the contracts.

 

Mesa’s Adjusted EBITDA¹ for Q1 2022 was $17.0 million, compared to $47.4 million in Q1 2021, and Adjusted EBITDAR¹ was $26.6 million for Q1 2022, compared to $57.5 million in Q1 2021.

 

Operationally, the Company ran a controllable completion factor of 97.2% for American and 98.3% for United during Q1 2022. This is compared to a controllable completion factor of 99.8% for American and 100.0% for United during Q1 2021. This excludes cancellations due to weather and air traffic control.

 

With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 95.8% for American and 97.6% for United during Q1 2022. This is compared to a total completion factor of 98.3% for American and 99.4% for United during Q1 2021.

1 See Reconciliation of non-GAAP financial measures

 


Liquidity and Capital Resources:

Mesa ended the quarter at $102.3 million in unrestricted cash and equivalents. As of December 31, 2021, the Company had $678.6 million in total debt secured primarily with aircraft and engines.  

 

Fleet:

 

For the three months ended December 31, 2021, 49% of the Company’s total revenue was derived from our contracts with United, 45% from American, 1% from DHL, and 5% from leases of aircraft to a third party.

 

Below is our current and future fleet plan by partner and fleet type:

 

 

 

Fiscal Year 2021

 

Fiscal Year 2022

 

Fleet Plan

 

Q1

(Dec '20)

 

Q2

(Mar '21)

 

Q3

(Jun '21)

 

Q4

(Sep '21)

 

Q1

(Dec '21)

 

Q2

(Mar '22)

 

Q3

(Jun '22)

 

 

 

Actual

 

Actual

 

Actual

 

Actual

 

Actual

 

Forecast

 

Forecast

 

E-175 - UA

 

 

72

 

 

76

 

 

80

 

 

80

 

 

80

 

 

80

 

 

80

 

CRJ-700 - UA

 

 

8

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

CRJ-900 - AA

 

 

54

 

 

45

 

 

45

 

 

40

 

 

40

 

 

40

 

 

40

 

737-400F - DHL

 

 

2

 

 

2

 

 

2

 

 

2

 

 

2

 

 

3

 

 

3

 

Sub-total

 

 

136

 

 

123

 

 

127

 

 

122

 

 

122

 

 

123

 

 

123

 

CRJ-700 Leased

 

 

-

 

 

6

 

 

12

 

 

14

 

 

17

 

 

20

 

 

20

 

CRJ-700 to be Leased to Third Party

 

 

12

 

 

14

 

 

8

 

 

6

 

 

3

 

 

-

 

 

-

 

CRJ-900 Spares/Parked

 

 

10

 

 

19

 

 

19

 

 

24

 

 

24

 

 

24

 

 

24

 

CRJ-200 Spares/Parked

 

 

1

 

 

1

 

 

1

 

 

1

 

 

1

 

 

1

 

 

1

 

Total Fleet

 

 

159

 

 

163

 

 

167

 

 

167

 

 

167

 

 

168

 

 

168

 

 

Mesa Air Group will host a conference call with analysts on February 9th at 5:30 pm EDT. The conference call number is 888-469-2054 (Passcode: Phoenix (7463649). The conference call can also be accessed live via the web by visiting Here.

 

A recorded version will be available on Mesa's website approximately two hours after the call for approximately 14 days.

 

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 months ended December 31, 2021 and December 31, 2020. 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 December 31, 2021

 

 

Three months ended December 31, 2020

 

 

 

Income

(Loss) Before

Taxes

 

 

Income

Tax

(Expense)

/Benefit

 

 

Net

Income (Loss)

 

 

Net Income (Loss)

per

Diluted Share

 

 

Income

Before

Taxes

 

 

Income Tax

(Expense)

/Benefit

 

 

Net

Income

 

 

Net Income

per

Diluted Share

 

GAAP Income (Loss)

 

$

(18,386

)

 

 

4,112

 

 

 

(14,274

)

 

$

(0.40

)

 

$

18,939

 

 

 

(4,821

)

 

 

14,118

 

 

$

0.39

 

Adjustments(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(950

)

 

 

 

 

 

(950

)

 

$

(0.03

)

Loss on Investments, Net(2)

 

 

6,462

 

 

 

(1,470

)

 

 

4,992

 

 

$

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Income (Loss)

 

 

(11,924

)

 

 

2,642

 

 

 

(9,282

)

 

$

(0.26

)

 

 

17,989

 

 

 

(4,821

)

 

 

13,168

 

 

$

0.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

7,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,082

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

 

(51

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(126

)

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

 

21,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,470

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

16,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aircraft Rent

 

 

9,586

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,048

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDAR

 

$

26,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

57,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)       Includes adjustment for gain on extinguishment of debt of $1.0 million related to repayment of the Company’s aircraft debts during the three months ended December 31, 2020.

 

(2)       Includes losses resulting from changes in the fair value of the Company's investments in equity securities of $6.5 million for the three months ended December 31, 2021.

 

 

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 114 cities in 42 states, the District of Columbia, the Bahamas, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As December 31, 2021, Mesa operated a fleet of 167 aircraft with approximately 402 daily departures and 3,200 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc., United Airlines, Inc., and 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. Many of the risks identified in the periodic reports have been and will continue to be heightened as a result of the ongoing and numerous adverse effects arising from the COVID-19 pandemic. 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.

 


MESA AIR GROUP, INC.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts) (Unaudited)

 

 

 

Three Months Ended

December 31,

 

 

 

 

2021

 

 

2020

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

Contract revenue

 

$

136,894

 

 

$

127,158

 

 

Pass-through and other revenue

 

 

10,863

 

 

 

23,213

 

 

Total operating revenues

 

 

147,757

 

 

 

150,371

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Flight operations

 

 

47,598

 

 

 

36,964

 

 

Fuel

 

 

1,257

 

 

 

390

 

 

Maintenance

 

 

58,981

 

 

 

52,864

 

 

Aircraft rent

 

 

9,586

 

 

 

10,048

 

 

Aircraft and traffic servicing

 

 

715

 

 

 

901

 

 

General and administrative

 

 

12,578

 

 

 

13,073

 

 

Depreciation and amortization

 

 

21,028

 

 

 

20,470

 

 

Government grant recognition

 

 

 

 

 

(11,311

)

 

Total operating expenses

 

 

151,743

 

 

 

123,399

 

 

Operating income (loss)

 

 

(3,986

)

 

 

26,972

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(7,930

)

 

 

(9,082

)

 

Interest income

 

 

51

 

 

 

126

 

 

Loss on investments, net

 

 

(6,462

)

 

 

 

 

Other income (expense), net

 

 

(59

)

 

 

923

 

 

Total other expense, net

 

 

(14,400

)

 

 

(8,033

)

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

 

 

(18,386

)

 

 

18,939

 

 

Income tax expense (benefit)

 

 

(4,112

)

 

 

4,821

 

 

Net income (loss)

 

$

(14,274

)

 

$

14,118

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common

   shareholders

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.40

)

 

$

0.40

 

 

Diluted

 

$

(0.40

)

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

 

35,963

 

 

 

35,531

 

 

Diluted

 

 

35,963

 

 

 

36,647

 

 

 

 


 

MESA AIR GROUP, INC.

Condensed Consolidated Balance Sheets

(In thousands, except shares) (Unaudited)

 

 

 

December 31,

2021

 

 

September 30,

2021

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

102,332

 

 

$

120,517

 

Restricted cash

 

 

3,350

 

 

 

3,350

 

Receivables, net

 

 

2,919

 

 

 

3,167

 

Expendable parts and supplies, net

 

 

25,206

 

 

 

24,467

 

Prepaid expenses and other current assets

 

 

4,488

 

 

 

6,885

 

Total current assets

 

 

138,295

 

 

 

158,386

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

1,157,922

 

 

 

1,151,891

 

Intangible assets, net

 

 

6,537

 

 

 

6,792

 

Lease and equipment deposits

 

 

8,249

 

 

 

6,808

 

Operating lease right-of-use assets

 

 

88,469

 

 

 

93,100

 

Deferred heavy maintenance, net

 

 

3,271

 

 

 

3,499

 

Other assets

 

 

31,752

 

 

 

36,121

 

TOTAL ASSETS

 

$

1,434,495

 

 

$

1,456,597

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Current portion of long-term debt and finance leases

 

$

111,059

 

 

$

111,710

 

Current portion of deferred revenue

 

 

5,528

 

 

 

6,298

 

Current maturities of operating leases

 

 

26,935

 

 

 

32,652

 

Accounts payable

 

 

62,933

 

 

 

61,476

 

Accrued compensation

 

 

7,638

 

 

 

12,399

 

Other accrued expenses

 

 

36,283

 

 

 

33,657

 

Total current liabilities

 

 

250,376

 

 

 

258,192

 

 

 

 

 

 

 

 

 

 

NONCURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Long-term debt and finance leases, excluding current portion

 

 

547,409

 

 

 

539,700

 

Noncurrent operating lease liabilities

 

 

34,405

 

 

 

33,991

 

Deferred credits

 

 

3,721

 

 

 

3,934

 

Deferred income taxes

 

 

65,716

 

 

 

69,940

 

Deferred revenue, net of current portion

 

 

24,788

 

 

 

28,202

 

Other noncurrent liabilities

 

 

33,606

 

 

 

34,591

 

Total noncurrent liabilities

 

 

709,645

 

 

 

710,358

 

Total liabilities

 

 

960,021

 

 

 

968,550

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Preferred stock of no par value, 5,000,000 shares authorized; no shares issued

   and outstanding

 

 

 

 

 

 

Common stock of no par value and additional paid-in capital, 125,000,000

   shares authorized; 35,963,984 (2022) and 35,958,759 (2021) shares issued

   and outstanding, and 4,899,497 (2022) and 4,899,497 (2021) warrants

   issued and outstanding

 

 

257,073

 

 

 

256,372

 

Retained earnings

 

 

217,401

 

 

 

231,675

 

Total stockholders' equity

 

 

474,474

 

 

 

488,047

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

1,434,495

 

 

$

1,456,597

 

 

 


 

MESA AIR GROUP, INC.

Operating Highlights (unaudited)

 

 

 

Three months ended

 

 

 

December 31

 

 

 

2021

 

 

2020

 

 

Change

 

Available Seat Miles (thousands)

 

 

2,104,621

 

 

 

1,670,943

 

 

 

26.0

%

Block Hours

 

 

86,079

 

 

 

69,247

 

 

 

24.3

%

Average Stage Length (miles)

 

 

644

 

 

 

637

 

 

 

1.1

%

Departures

 

 

43,447

 

 

 

35,344

 

 

 

22.9

%

Passengers

 

 

2,693,468

 

 

 

1,829,714

 

 

 

47.2

%

Controllable Completion Factor*

 

 

 

 

 

 

 

 

 

 

 

 

American

 

 

97.17

%

 

 

99.81

%

 

 

-2.6

%

United

 

 

98.33

%

 

 

99.98

%

 

 

-1.65

%

Total Completion Factor**

 

 

 

 

 

 

 

 

 

 

 

 

American

 

 

95.76

%

 

 

98.30

%

 

 

-2.6

%

United

 

 

97.58

%

 

 

99.36

%

 

 

-1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

*Controllable Completion Factor excludes cancellations due to weather and air traffic control

 

 

 

 

 

 

 

 

 

 

 

 

**Total Completion Factor includes all cancellations

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Mesa Air Group, Inc.

Mesa Air Group, Inc.

Media

Jacqueline Palmer

Media@mesa-air.com


Investor Relations

Susan M. Donofrio

IR@mesa-air.com

 

 

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Ticker: MESA
CIK: 810332
Form Type: 8-K Corporate News
Accession Number: 0001564590-22-004415
Submitted to the SEC: Wed Feb 09 2022 4:31:39 PM EST
Accepted by the SEC: Wed Feb 09 2022
Period: Wednesday, February 9, 2022
Industry: Air Transportation Scheduled
Events:
  1. Earnings Release
  2. Financial Exhibit

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