Spirit Airlines, Inc. (SAVE) 10-Q Quarterly Report Wed May 06 2020

results reflect the adverse impact of the material decline in demand for both international and domestic travel resulting from the spread of novel coronavirus ("COVID-19").

First Quarter 2020

First Quarter 2019

As Reported

Adjusted

As Reported

Adjusted

(GAAP)

(non-GAAP)¹

(GAAP)

(non-GAAP)¹

Revenue

$771.1 million

$855.8 million

Pre-tax Income (Loss)

$(74.6) million

$72.1 million

$74.0 million

Pre-tax Margin

(9.7)%

8.4%

8.6%

Net Income (Loss)

$(27.8) million

$(58.9) million

$56.1 million

$57.5 million

Diluted Earnings (Loss) Per Share

$(0.41)

$(0.86)

$0.82

$0.84

Prior to March 2020, the Company was on track to meet or beat its first quarter 2020 pre-tax margin guidance of 6.5 percent to 7.5 percent. However, beginning with the second week of March through the end of the month, load factors and yields declined significantly as events across the U.S. were canceled, theme parks closed, and travel restrictions were implemented and broadened, resulting in a significant drop in passenger demand and bookings.

"The health crisis, loss of demand, and corresponding economic impact caused by COVID-19 is unprecedented. I want to thank all of our Team Members for their dedication to the safety and well-being of our Guests and each other, and for pulling together to help the Company meet the financial challenges we are facing. I am very proud of the Spirit team and I am confident that given our quick action to adjust, our industry-leading low-cost structure, our strong balance sheet, and the resiliency and commitment of our Team Members, we will emerge from this crisis ready to deliver on our promise of high quality and low fares," said Ted Christie, Spirit's President and Chief Executive Officer.

In response to COVID-19, the Government approved a financial stabilization assistance package through the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). Spirit commends President Trump, the Administration and members of Congress, for their support of the airline assistance programs included in the CARES Act. The benefits under the CARES Act help to position Spirit to support the economic recovery in the destinations it serves by continuing to provide low fare air travel to millions of Guests annually.

COVID-19 Response

Capacity Reductions, Expense Management, and Liquidity Measures

In response to government restrictions on travel and drastically reduced consumer demand compared to its original 2020 plan, Spirit has taken many steps to reduce costs and to preserve and enhance liquidity, including:

The following information was filed by Spirit Airlines, Inc. (SAVE) on Wednesday, May 6, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Spirit Airlines, Inc.'s 10-Q Quarterly Report:

Financial - Expense Highlight
On a per-ASM basis, aircraft rent expense also decreased due to a change in the composition of our aircraft fleet between leased aircraft (for which rent expense is recorded under aircraft rent) and purchased aircraft (for which depreciation expense is recorded under depreciation and amortization).

Other - Other Highlight
Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled "Risk Factors" in this report and in Item 1A "Risk Factors" in our Annual Report on Form 10-K/A for the year ended December 31, 2019 and subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
Revenue - Product Highlight
We continued to experience weak passenger demand and bookings in April 2020 driving a decrease in operating revenues of 95.7% year over year and a decrease in capacity of 35% year over year.
Financial - Expense Highlight
Aircraft rent expense for the first quarter of 2020 decreased by $0.6 million, or 1.4%, as compared to the first quarter of 2019.
Financial - Expense Highlight
28 Aircraft fuel expense decreased by $16.4 million, or 7.2%, from $229.6 million in the first quarter of 2019 to $213.2 million in the first quarter of 2020.
Financial - Expense
We also have high-density seating...Read more
Financial - Expense
As our fleet continues to...Read more
Financial - Expense
The increase in maintenance costs...Read more
Financial - Expense
Deferred $20 million in heavy...Read more
Financial - Earnings
For the first quarter of...Read more
Financial - Shares
In connection with our participation...Read more
Revenue - Product
Comparison of three months ended...Read more
Financial - Cash Flow
Due to the impact of...Read more
Other - Other
Our participation in the Loan...Read more
Financial - Cash Flow
Due to the impact of...Read more
Financial - Expense
Distribution costs decreased by $2.0...Read more
Financial - Expense
As compared to the prior...Read more
Revenue - Product
We also had lower credit...Read more
Financial - Expense
We expect maintenance expense to...Read more
Other - Other
The decrease in tax rate...Read more
Financial - Expense
On a per-ASM basis, maintenance...Read more
Other - Other
33 During the first quarter...Read more
Financial - Expense
The imposition of these tariffs...Read more
Financial - Expense
The imposition of these tariffs...Read more
Financial - Expense
Operating Expenses Operating expenses increased...Read more
Financial - Expense
On both a dollar and...Read more
Other - Other
On April 20, 2020, we...Read more
Other - Other
During the three months ended...Read more
Revenue - Product
The decrease on a dollar...Read more
Other - Other
As of March 31, 2020,...Read more
Financial - Expense
This increase in heavy maintenance...Read more
Revenue - Product
High passenger volumes and load...Read more
Financial - Cash Flow
We will continue to evaluate...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Spirit Airlines, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 4.2: Warrant Agreement

Exhibit 10.1: Credit And Guaranty Agreement

Exhibit 10.2: Payroll Support Program Agreement

Exhibit 10.3: Promissory Note

Exhibit 10.4: Matt Klein Offer Letter

Exhibit 31.1: Certification Of The Chief Executive Officer Pursuant To Section 302 Of The Sarb

Exhibit 31.2: Certification Of The Chief Financial Officer Pursuant To Section 302 Of The Sarb

Exhibit 32.1: Certification Of The Chief Executive Officer Pursuant To 18 U.S.C. Section 1350

Exhibit 32.2: Certification Of The Chief Financial Officer Pursuant To 18 U.S.C. Section 1350

Ticker: SAVE
CIK: 1498710
Form Type: 10-Q Quarterly Report
Accession Number: 0001498710-20-000160
Submitted to the SEC: Wed May 06 2020 4:48:33 PM EST
Accepted by the SEC: Wed May 06 2020
Period: Tuesday, March 31, 2020
Industry: Air Transportation Scheduled