EX-99.1 3 j0210_ex99d1.htm EX-99.1

EXHIBIT 99.1

 

NEWS RELEASE

 

For Further Information Contact:

Michael J. Kraupp

Vice President Finance and Assistant Treasurer

Telephone:  (435) 634-3212

Fax:  (435) 634-3205

 

FOR IMMEDIATE RELEASE:  April 30, 2003

 

SKYWEST ANNOUNCES FIRST QUARTER 2003 EARNINGS

 

St. George, Utah - SkyWest, Inc., (NASDAQ: SKYW) today reported net income of $13.3 million for the quarter ended March 31, 2003, or $0.23 per diluted share, compared to $15.7 million of income (before cumulative effect of change in accounting principle) or $0.27 per diluted share for the same period last year.  Operating revenues increased 18.9% to $207.4 million for the first quarter of 2003, compared to $174.3 million for the first quarter of 2002.  The items of most significance affecting the first quarter of 2003 are outlined below.

 

Total operating revenues for the first quarter of 2003 increased primarily as a result of a 34.5% increase in available seat miles, offset by a 15.4% reduction in yield per revenue passenger mile.  Operating revenues for the first quarter of 2003 were also positively affected by  the Company’s achievement of  a 99.2% controllable completion factor and an actual completion factor of  97.6% of scheduled flights.  Because  the Company has not completed  negotiations with its major partners with respect to  its fee-for-departure rates for the calendar 2003 year, the Company  has recorded revenues for the first quarter of 2003 based on a prior period’s approved rates, reduced to reflect management’s current estimate of the results of these negotiations.

 

Total operating expenses for the first quarter of 2003, excluding fuel charges  (which are reimbursable by the Company’s major partners), increased approximately 14% from the same quarter of 2002,  primarily as a result of a 34.5% increase in available seat miles.  Total operating expenses for the first quarter of 2003 increased at a slower rate than available seat miles, primarily because the Company experienced a lower volume of maintenance overhauls and other maintenance-related expenses.  Additionally, the results reflect the impact of aggressive cost reduction initiatives implemented by the Company during the first quarter of 2003.

 

Total available seat miles  for the first quarter of 2003 increased 34.5% from the first quarter of 2002, primarily as a result of the Company increasing its fleet size to 161 aircraft as of March 31, 2003, from 131 aircraft as of March 31, 2002.  During the first quarter of 2003 the Company took delivery of 13 new regional jet aircraft and retired one turboprop aircraft.  Additionally, due to scheduled reductions in departures, resulting largely from  the war in Iraq and the associated decrease in demand, management has reduced its available seat mile estimates for the second quarter of 2003  from a previously estimated amount of 1.463  billion to 1.407  billion.  Management anticipates that the Company will return to normal scheduled departures for the third and fourth quarters of 2003, resulting in available seat mile production of 1.602 billion and 1.645 billion for those  quarters, respectively.

 

At March 31, 2003 the Company had $488.4 million in cash, marketable securities and deposits on aircraft, compared to $536.8 million as of December 31, 2002.  The decrease is primarily the result of rent payments for

 

 

aircraft of approximately $64.7 million, capital expenditures for engine overhauls on its turboprop fleet, rotable spare parts purchases and the acquisition of regional jet aircraft. The Company also had $315.6 million in long-term debt at March 31, 2003, compared to $125.4 million as of December 31, 2002.  The Company’s debt position changed primarily as a result of acquiring $236.8 million in new regional jet aircraft, which were  financed with $202.9 million of long-term debt and $33.9 million of the Company’s cash.

 

This press release and information on SkyWest can be accessed at www.skywest.com. Statements in this press release which are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass SkyWest’s beliefs, expectations, hopes or intentions regarding future events. Words such as “expects,” “intends,” “believes,” “anticipates,” “should” and “likely” also 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 SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statement. Actual results could differ materially from those anticipated for a number of reasons, including, among others: developments associated with the bankruptcy proceedings involving United Airlines, Inc.; ongoing negotiations between SkyWest and its major partners regarding their code-sharing arrangements; variations in market and economic conditions; and other unanticipated factors. Risk factors, cautionary statements and other conditions which could cause actual results to differ from SkyWest’s current expectations are contained in SkyWest’s filings with the Securities and Exchange Commission, including SkyWest’s Annual Report on Form 10-K.

 

SkyWest, Inc., is a holding company of SkyWest Airlines, Inc., the nation’s largest independently operated regional airline, and is based in St. George, Utah.  SkyWest operates as United Express and Delta Connection under marketing agreements with United Airlines and Delta Air Lines, respectively.  SkyWest serves 101 cities with over 1,000 daily departures in 29 states and two Canadian provinces.  This press release, as well as past releases can be accessed on the SkyWest Internet site at: http://www.skywest.com.

 

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SKYWEST, INC.

Unaudited Financial and Operating Highlights

 

 

 

Three Months Ended
March 31,

 

 

 

Financial Highlights

 

2003

 

2002

 

% Change

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

207,362

 

$

174,346

 

18.9

 

Operating expenses

 

187,213

 

151,890

 

23.3

 

Operating income

 

20,149

 

22,456

 

(10.3

)

Other income, net

 

1,655

 

3,209

 

(48.4

)

Income before income taxes

 

21,804

 

25,665

 

(15.0

)

Income before cumulative effect of change in accounting principle, net of taxes

 

13,300

 

15,656

 

(15.0

)

Cumulative effect of change in accounting principle, net

 

—

 

8,589

 

(100.0

)

Net income

 

$

13,300

 

$

24,245

 

(45.1

)

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

Income before cumulative effect of change in accounting principle

 

$

0.23

 

$

0.28

 

(17.9

)

Cumulative effect of change in accounting principle, net of tax

 

—

 

0.15

 

(100.0

)

Basic earnings per share

 

$

0.23

 

$

0.43

 

(46.5

)

Diluted earnings per share:

 

 

 

 

 

 

 

Income before cumulative effect of change in accounting principle

 

$

0.23

 

$

0.27

 

(14.8

)

Cumulative effect of change in accounting principle, net of tax

 

—

 

0.15

 

(100.0

)

Diluted earnings per share

 

$

0.23

 

$

0.42

 

(45.2

)

Weighted average common shares:

 

 

 

 

 

 

 

Basic

 

57,641

 

56,939

 

 

 

Diluted

 

57,649

 

57,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
March 31,

 

 

 

Operating Highlights

 

2003

 

2002

 

% Change

 

 

 

 

 

 

 

 

 

Passengers carried

 

2,271,171

 

1,870,141

 

21.4

 

Revenue passenger miles (000)

 

895,876

 

637,605

 

40.5

 

Available seat miles (000)

 

1,305,854

 

971,110

 

34.5

 

Passenger load factor

 

68.6

%

65.7

%

2.9

 pts

Passenger breakeven load factor

 

62.4

%

57.3

%

5.1

 pts

Yield per revenue passenger mile

 

$

0.230

 

$

0.272

 

(15.4

)

Revenue per available seat mile

 

$

0.159

 

$

0.180

 

(11.7

)

Cost per available seat mile

 

$

0.144

 

$

0.156

 

(7.7

)

Average passenger trip length

 

394

 

341

 

15.5

 

 

SKYWEST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars and Shares in Thousands, Except per Share Amounts)

(Unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2003

 

2002

 

 

 

 

 

 

 

Operating revenues:

 

 

 

 

 

Passenger

 

$

205,818

 

$

173,215

 

Freight and other

 

1,544

 

1,131

 

 

 

207,362

 

174,346

 

Operating expenses:

 

 

 

 

 

Flying operations

 

104,847

 

76,301

 

Customer service

 

34,147

 

30,541

 

Maintenance

 

16,264

 

19,706

 

Depreciation and amortization

 

16,358

 

12,423

 

General and administrative

 

10,850

 

9,638

 

Promotion and sales

 

4,747

 

3,281

 

 

 

187,213

 

151,890

 

Operating income

 

20,149

 

22,456

 

Other income (expense):

 

 

 

 

 

Interest income

 

2,919

 

3,261

 

Interest expense

 

(1,264

)

(52

)

 

 

1,655

 

3,209

 

Income before income taxes

 

21,804

 

25,665

 

Provision for income taxes

 

8,504

 

10,009

 

Income before cumulative effect of change in accounting principle

 

13,300

 

15,656

 

Cumulative effect of change in accounting principle, net of taxes of $5,492

 

—

 

8,589

 

Net income

 

$

13,300

 

$

24,245

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

Income before cumulative effect of change in accounting principle

 

$

0.23

 

$

0.28

 

Cumulative effect of change in accounting principle, net of tax

 

—

 

0.15

 

Basic earnings per share

 

$

0.23

 

$

0.43

 

Diluted earnings per share:

 

 

 

 

 

Income before cumulative effect of change in accounting principle

 

$

0.23

 

$

0.27

 

Cumulative effect of change in accounting principle, net of tax

 

—

 

0.15

 

Diluted earnings per share

 

$

0.23

 

$

0.42

 

Weighted average common shares:

 

 

 

 

 

Basic

 

57,641

 

56,939

 

Diluted

 

57,649

 

57,530