EX-99.1 2 a13-22518_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

 

FOR IMMEDIATE RELEASE

Tuesday, October 22, 2013

COMPANY CONTACT:

Scott Topping, CFO - (808) 835-3700

scott.topping@hawaiianair.com

 

INVESTOR RELATIONS CONTACT:

Ashlee Kishimoto, Sr. Director - (808) 838-5421

ashlee.kishimoto@hawaiianair.com

 

MEDIA RELATIONS CONTACT:

Ann Botticelli, SVP - (808) 838-6758

ann.botticelli@hawaiianair.com

 

Hawaiian Holdings Reports 2013 Third Quarter Financial Results

 

HONOLULU — October 22, 2013 — Hawaiian Holdings, Inc. (NASDAQ: HA) (“Holdings” or the “Company”), parent company of Hawaiian Airlines, Inc. (“Hawaiian”), today reported its financial results for the third quarter of 2013.

 

Third Quarter 2013 Financial Results

 

·                  Adjusted net income, reflecting economic fuel expense, of $36.8 million or $0.69 per diluted share.

·                  GAAP net income of $40.6 million or $0.76 cents per diluted share.

·                  Available seat miles (ASMs) increase of 9.0% year-over-year.

·                  Passenger revenue per available seat mile (PRASM) increase of 0.2% and operating revenue per available seat per mile (RASM) increase of 0.1%.

·                  Cost per available seat mile (CASM), excluding fuel, increase of 2.1% year-over-year.

·                  CASM increase of 1.5% year-over-year.

 

Mark Dunkerley, the Company’s President and Chief Executive Officer, commented that “our third quarter results are a good step towards improving financial performance.  The tide of industry capacity between the US West Coast and Hawai‘i is beginning to recede and our new international routes are maturing, both of which are helpful developments.  The strengthening of the US dollar against our major foreign currencies is pushing the other way.  Indeed, were it not for foreign exchange effects, our third quarter results would have been the best in the company’s history.”

 

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.

 

Liquidity and Capital Resources

 

As of September 30, 2013 the Company had:

·                  Unrestricted cash and cash equivalents of $441 million.

·                  Available borrowing capacity of $70 million under Hawaiian’s Revolving Credit Facility.

·                  Outstanding debt and capital lease obligations of approximately $763 million consisting of the following:

·                  $361 million outstanding under secured loan agreements to finance a portion of the purchase price for six Airbus A330-200 aircraft.

·                  $159 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.

·                  $112 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.

·                  $55 million of outstanding floating rate notes issued in conjunction with the acquisition of three Boeing 767-300 ER aircraft.

·                  $76 million of outstanding Convertible Senior Notes.

 


 

Business Highlights

 

Operational

·                  Ranked #1 nationally for on-time performance for the months of June and July 2013 by the U.S. Department of Transportation Air Travel Consumer Report.

·                  Exceeded our internal on-time performance goals for the third quarter.

 

Fleet and financing

·                  Returned one Boeing 767-300 aircraft at the end of its lease term.

·                  Took delivery of one ATR42-500 twin-turboprop aircraft to inaugurate new service to Moloka‘i and Lana‘i.

 

Product

·                  Enhanced our inflight experience on our Boeing 767-300 aircraft by becoming the only U.S. carrier to offer the Apple iPad mini as a replacement for the prior portable entertainment system.

 

New routes and increased frequencies

·                  Honolulu to Taipei, Taiwan three times weekly service launched July 9, 2013.

·                  Announced the reintroduction of daily non-stop service from Honolulu to Oakland beginning in January 2014, an increase from four times weekly.  Also, announced seasonal service, during the summer of 2014, between Oakland and Kona, three times weekly and Oakland and Lihu‘e, four times weekly.

·                  Announced seasonal service, during the summer of 2014 between Los Angeles and Kona, three times weekly and Los Angeles and Lihu‘e, four times weekly.

 

Fourth Quarter 2013 Outlook

 

The table below summarizes the Company’s expectations for the quarter ending December 31, 2013, expressed as an expected percentage change compared to the results for the quarter ended December 31, 2012, as applicable (the results for which are presented for reference).

 

 

 

Fourth
Quarter
2012

 

 

 

 

 

 

 

 

Item

 

 

Guidance

 

 

 

 

 

 

 

Cost per ASM Excluding Fuel (cents)

 

7.63

 

Up 2% to up 5%

 

Passenger Revenue Per ASM (cents)

 

11.02

 

Up 2.5% to up 5.5%

 

Operating Revenue Per ASM (cents)

 

12.30

 

Up 2.5% to up 5.5%

 

ASMs (millions)

 

4,006.8

 

Up 3.5% to up 5.5%

 

Gallons of jet fuel consumed (millions)

 

54.5

 

Flat to up 2%

 

 

2


 

Investor Conference Call

 

Hawaiian Holdings’ quarterly earnings conference call is scheduled to begin today (October 22, 2013) at 4:30 p.m. Eastern Time (USA).  The conference call will be broadcast live over the Internet. Investors may listen to the live audio webcast on the investor relations section of the Company’s website at www.HawaiianAirlines.com. For those who are not available for the live webcast, the call will be archived for 90 days on Hawaiian’s investor website.

 

About Hawaiian Airlines

 

Hawaiian Airlines has led all U.S. carriers in on-time performance for each of the past nine years (2004-2012) as reported by the U.S. Department of Transportation. Consumer surveys by Condé Nast Traveler, Travel + Leisure and Zagat have all ranked Hawaiian the highest of all domestic airlines serving Hawai‘i.

 

Now in its 84th year of continuous service, Hawaiian is Hawai‘i’s biggest and longest-serving airline, as well as the largest provider of passenger air service from its primary visitor markets on the U.S. mainland. Hawaiian offers non-stop service to Hawai‘i from more U.S. gateway cities (11) than any other airline, along with service from Japan, South Korea, Taiwan, Australia, New Zealand, American Samoa, and Tahiti. New non-stop service will begin between Honolulu and Beijing, China in April 2014, subject to government approvals. Hawaiian also provides approximately 160 jet flights daily between the Hawaiian Islands.

 

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (NASDAQ: HA). Additional information is available at HawaiianAirlines.com. Follow updates on Twitter about Hawaiian (@HawaiianAir) and its special fare offers (@HawaiianFares), and become a fan on its Facebook page (Hawaiian Airlines).

 

-more-

 

3


 

Forward-Looking Statements

 

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to certain current and future events and financial performance.  Such forward-looking statements include, without limitation, statements by our CEO relating to the Company’s financial performance, industry capacity between the US West Coast and Hawaii, the Company’s new international routes, the operating environment, and the strengthening of the US dollar against our major foreign currencies; statements regarding the addition of new aircraft, new routes and increased frequencies; the Company’s expectations regarding cost per available seat mile excluding fuel, passenger revenue per available seat mile, operating revenue per available seat mile, available seat miles and gallons of jet fuel consumed, each for the quarter ending December 31, 2013; and statements as to other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing.  Words such as “expects,” “anticipates,” “projects,” “intends,” “plans,” “believes,” “estimates,” variations of such words, and similar expressions are also intended to identify such forward-looking statements.  These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and assumptions relating to the Company’s operations and business environment, all of which may cause the Company’s actual results to be materially different from any future results, expressed or implied, in these forward-looking statements.  These risks and uncertainties include, without limitation, the Company’s ability to accurately forecast quarter and year-end results; economic volatility; the price and availability of aircraft fuel; fluctuations in demand for transportation in the markets in which the Company operates; the Company’s dependence on tourist travel; foreign currency exchange rate fluctuations; and the Company’s ability to implement its growth strategy and related cost reduction goals.

 

The risks, uncertainties and assumptions referred to above that could cause the Company’s results to differ materially from the results expressed or implied by such forward-looking statements also include the risks, uncertainties and assumptions discussed from time to time in the Company’s other public filings and public announcements, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and the Company’s Quarterly Reports on Form 10-Q, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission.  All forward-looking statements included in this document are based on information available to the Company on the date hereof.  The Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.

 

4


 

Table 1.

Hawaiian Holdings, Inc.

Consolidated Statements of Operations

(in thousands, except for per share data) (unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

% Change

 

2013

 

2012

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Passenger

 

$

543,315

 

$

497,243

 

9.3

%

$

1,464,715

 

$

1,326,306

 

10.4

%

Other

 

55,983

 

52,079

 

7.5

%

159,265

 

143,061

 

11.3

%

Total

 

599,298

 

549,322

 

9.1

%

1,623,980

 

1,469,367

 

10.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Aircraft fuel, including taxes and delivery

 

181,334

 

165,762

 

9.4

%

525,046

 

456,545

 

15.0

%

Wages and benefits

 

112,150

 

93,438

 

20.0

%

318,269

 

280,261

 

13.6

%

Aircraft rent

 

27,575

 

25,626

 

7.6

%

81,879

 

73,712

 

11.1

%

Maintenance materials and repairs

 

51,705

 

44,150

 

17.1

%

160,000

 

137,271

 

16.6

%

Aircraft and passenger servicing

 

31,080

 

28,859

 

7.7

%

89,367

 

74,859

 

19.4

%

Commissions and other selling

 

32,288

 

31,028

 

4.1

%

98,285

 

89,055

 

10.4

%

Depreciation and amortization

 

22,092

 

22,983

 

(3.9

)%

60,993

 

63,687

 

(4.2

)%

Other rentals and landing fees

 

21,996

 

22,520

 

(2.3

)%

60,773

 

63,486

 

(4.3

)%

Other

 

44,644

 

40,023

 

11.5

%

129,469

 

113,330

 

14.2

%

Total

 

524,864

 

474,389

 

10.6

%

1,524,081

 

1,352,206

 

12.7

%

Operating Income

 

74,434

 

74,933

 

 

 

99,899

 

117,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense and amortization of debt discounts and issuance costs

 

(13,479

)

(11,975

)

 

 

(37,019

)

(31,745

)

 

 

Interest income

 

173

 

96

 

 

 

426

 

477

 

 

 

Capitalized interest

 

3,005

 

2,579

 

 

 

9,336

 

7,328

 

 

 

Gains (Losses) on fuel derivatives

 

2,536

 

6,508

 

 

 

(10,931

)

(2,495

)

 

 

Other, net

 

749

 

1,662

 

 

 

(3,457

)

1,245

 

 

 

Total

 

(7,016

)

(1,130

)

 

 

(41,645

)

(25,190

)

 

 

Income Before Income Taxes

 

67,418

 

73,803

 

 

 

58,254

 

91,971

 

 

 

Income tax expense

 

26,814

 

28,320

 

 

 

23,479

 

35,326

 

 

 

Net Income

 

$

40,604

 

$

45,483

 

 

 

$

34,775

 

$

56,645

 

 

 

Net Income Per Common Stock Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.78

 

$

0.88

 

 

 

$

0.67

 

$

1.11

 

 

 

Diluted

 

$

0.76

 

$

0.86

 

 

 

$

0.65

 

$

1.08

 

 

 

Weighted Average Number of Common Stock Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

52,303

 

51,444

 

 

 

51,994

 

51,246

 

 

 

Diluted

 

53,512

 

52,623

 

 

 

53,160

 

52,463

 

 

 

 

5


 

Table 2.

Hawaiian Holdings, Inc.

Selected Statistical Data (unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

% Change

 

2013

 

2012

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scheduled Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passenger miles (RPM) (a)

 

3,668.5

 

3,367.6

 

8.9

%

10,279.7

 

8,923.1

 

15.2

%

Available seat miles (ASM) (a)

 

4,406.5

 

4,041.9

 

9.0

%

12,578.3

 

10,662.5

 

18.0

%

Passenger revenue per RPM (Yield)

 

14.81

¢

14.77

¢

0.3

%

14.25

¢

14.86

¢

(4.1

)%

Passenger load factor (RPM/ASM)

 

83.3

%

83.3

%

—

pt.

81.7

%

83.7

%

(2.0

)pt.

Passenger revenue per ASM (PRASM)

 

12.33

¢

12.30

¢

0.2

%

11.64

¢

12.44

¢

(6.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passenger miles (RPM) (a)

 

3,675.2

 

3,376.3

 

8.9

%

10,294.8

 

8,938.5

 

15.2

%

Available seat miles (ASM) (a)

 

4,415.1

 

4,052.2

 

9.0

%

12,596.8

 

10,680.6

 

17.9

%

Passenger load factor (RPM/ASM)

 

83.2

%

83.3

%

(0.1

)pt.

81.7

%

83.7

%

(2.0

)pt.

Operating revenue per ASM (RASM)

 

13.57

¢

13.56

¢

0.1

%

12.89

¢

13.76

¢

(6.3

)%

Operating cost per ASM (CASM)

 

11.89

¢

11.71

¢

1.5

%

12.10

¢

12.66

¢

(4.4

)%

CASM excluding aircraft fuel (b)

 

7.78

¢

7.62

¢

2.1

%

7.93

¢

8.39

¢

(5.5

)%

Gallons of jet fuel consumed (a)

 

59.3

 

54.5

 

8.7

%

169.8

 

145.0

 

17.1

%

Average cost per gallon of jet fuel (actual) (c)

 

$

3.06

 

$

3.04

 

0.7

%

$

3.09

 

$

3.15

 

(1.9

)%

Economic fuel cost per gallon (c)(d)

 

$

3.12

 

$

3.07

 

1.6

%

$

3.16

 

$

3.18

 

(0.6

)%

 

(a)         In millions.

(b)         See Table 4 for reconciliations of operating expenses excluding aircraft fuel.

(c)          Includes applicable taxes and fees.

(d)         See Table 3 for a reconciliation of economic fuel costs.

 

Table 3.

Hawaiian Holdings, Inc.

Economic Fuel Expense

(in thousands, except per-gallon amounts) (unaudited)

 

The Company believes that economic fuel expense is the best measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period.  The Company defines economic fuel expense as GAAP fuel expense plus (gains)/losses realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period.

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

% Change

 

2013

 

2012

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aircraft fuel expense, including taxes and delivery

 

$

181,334

 

$

165,762

 

9.4

%

$

525,046

 

$

456,545

 

15.0

%

Realized losses on settlement of fuel derivative contracts

 

3,790

 

1,589

 

138.5

%

11,226

 

4,318

 

160.0

%

Economic fuel expense

 

$

185,124

 

$

167,351

 

10.6

%

$

536,272

 

$

460,863

 

16.4

%

Fuel gallons consumed

 

59,265

 

54,535

 

8.7

%

169,824

 

145,006

 

17.1

%

Economic fuel cost per gallon

 

$

3.12

 

$

3.07

 

1.6

%

$

3.16

 

$

3.18

 

(0.6

)%

 

6


 

Table 4.

Hawaiian Holdings, Inc.

Non-GAAP Financial Reconciliation

(in thousands, except per-share data) (unaudited)

 

The Company evaluates its financial performance utilizing various GAAP and non-GAAP financial measures, including, net income, diluted net income per share, CASM, PRASM, RASM and Passenger Revenue per RPM.  Pursuant to Regulation G, the Company has included the following reconciliation of reported non-GAAP financial measures to comparable financial measures reported on a GAAP basis.  The Company believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management’s performance excluding the effects of a significant cost item over which management has limited influence.

 

 

 

Three months ended September 30,

 

NIne months ended September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

Net income

 

Diluted net
income
per share

 

Net income

 

Diluted net
income
per share

 

Net income

 

Diluted net
income
per share

 

Net income

 

Diluted net
income
per share

 

As reported - GAAP

 

$

40,604

 

$

0.76

 

$

45,483

 

$

0.86

 

$

34,775

 

$

0.65

 

$

56,645

 

$

1.08

 

Add: unrealized gains on fuel derivative contracts, net of tax

 

(3,796

)

(0.07

)

(4,858

)

(0.09

)

(177

)

—

 

(1,094

)

(0.02

)

Reflecting economic fuel expense

 

$

36,808

 

$

0.69

 

$

40,625

 

$

0.77

 

$

34,598

 

$

0.65

 

$

55,551

 

$

1.06

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

GAAP operating expenses

 

$

524.8

 

$

474.4

 

$

1,524.1

 

$

1,352.2

 

Less: aircraft fuel, including taxes and delivery

 

(181.3

)

(165.8

)

(525.1

)

(456.5

)

Adjusted operating expense - excluding aircraft fuel

 

$

343.5

 

$

308.6

 

$

999.0

 

$

895.7

 

 

 

 

 

 

 

 

 

 

 

Available Seat Miles

 

4,415.1

 

4,052.2

 

12,596.8

 

10,680.6

 

 

 

 

 

 

 

 

 

 

 

CASM - GAAP

 

11.89

¢

11.71

¢

12.10

¢

12.66

¢

Less: aircraft fuel

 

(4.11

)

(4.09

)

(4.17

)

(4.27

)

CASM - excluding aircraft fuel

 

7.78

¢

7.62

¢

7.93

¢

8.39

¢

 

7


 

Table 5.

Hawaiian Holdings, Inc.

Fuel Derivative Contract Summary(unaudited)

As of October 11, 2013

 

 

 

Weighted Average Contract Price

 

Percentage of
Projected Fuel
Requirements
Hedged

 

Fuel Barrels
Hedged

 

 

 

Cap

 

Floor

 

 

 

 

 

Fourth Quarter 2013

 

 

 

 

 

 

 

 

 

(per barrel)

 

 

 

 

 

 

 

 

 

Brent Call Options

 

$

114.58

 

N/A

 

33

%

443,000

 

Brent Collars

 

$

110.83

 

$

87.50

 

18

%

240,000

 

Total

 

 

 

 

 

51

%

683,000

 

 

 

 

 

 

 

 

 

 

 

First Quarter 2014

 

 

 

 

 

 

 

 

 

(per barrel)

 

 

 

 

 

 

 

 

 

Brent Call Options

 

$

112.54

 

N/A

 

40

%

558,000

 

Brent Collars

 

$

109.64

 

$

84.29

 

7

%

105,000

 

Total

 

 

 

 

 

47

%

663,000

 

 

 

 

 

 

 

 

 

 

 

Second Quarter 2014

 

 

 

 

 

 

 

 

 

(per barrel)

 

 

 

 

 

 

 

 

 

Brent Call Options

 

$

110.47

 

N/A

 

19

%

279,000

 

Brent Collars

 

$

110.23

 

$

82.38

 

15

%

216,000

 

Total

 

 

 

 

 

34

%

495,000

 

 

 

 

 

 

 

 

 

 

 

Third Quarter 2014

 

 

 

 

 

 

 

 

 

(per barrel)

 

 

 

 

 

 

 

 

 

Brent Call Options

 

$

107.80

 

N/A

 

11

%

163,000

 

Brent Collars

 

$

107.51

 

$

82.78

 

9

%

135,000

 

Total

 

 

 

 

 

20

%

298,000

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarter 2014

 

 

 

 

 

 

 

 

 

(per barrel)

 

 

 

 

 

 

 

 

 

Brent Call Options

 

$

104.92

 

N/A

 

9

%

135,000

 

Brent Collars

 

$

106.52

 

$

82.50

 

4

%

65,000

 

Total

 

 

 

 

 

13

%

200,000

 

 

8


 

Table 6.

Hawaiian Holdings, Inc.

Foreign Exchange Forward Contract Summary (unaudited)

As of October 11, 2013

 

 

 

Japanese Yen

 

Australian Dollar

 

Korean Won

 

New Zealand Dollar

 

Quarter of Settlement

 

Weighted Average
Forward Contract
Price

 

Percentage of
Projected Foreign
Denominated JPY
Sales Hedged

 

Weighted Average
Forward Contract
Price

 

Percentage of
Projected Foreign
Denominated AUD
Sales Hedged

 

Weighted Average
Forward Contract
Price

 

Percentage of
Projected Foreign
Denominated KRW
Sales Hedged

 

Weighted Average
Forward Contract
Price

 

Percentage of
Projected Foreign
Denominated NZD
Sales Hedged

 

 

 

(in USD|JPY)

 

 

 

(in AUD|USD)

 

 

 

(in USD|KRW)

 

 

 

(in NZD|USD)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarter 2013

 

¥

96.05

 

63

%

AUD

0.9606

 

57

%

₩

1,124

 

15

%

NZD

0.8075

 

48

%

First Quarter 2014

 

¥

95.56

 

56

%

AUD

0.9550

 

47

%

₩

1,131

 

20

%

NZD

0.8018

 

30

%

Second Quarter 2014

 

¥

99.46

 

39

%

AUD

0.9322

 

38

%

₩

1,134

 

19

%

NZD

0.7915

 

24

%

Third Quarter 2014

 

¥

99.56

 

29

%

AUD

0.9059

 

31

%

₩

1,141

 

13

%

NZD

0.7762

 

18

%

Fourth Quarter 2014

 

¥

98.20

 

19

%

AUD

0.9016

 

21

%

 

 

 

 

 

 

 

 

 

 

First Quarter 2015

 

¥

97.56

 

13

%

AUD

0.9012

 

15

%

 

 

 

 

 

 

 

 

 

 

 

9