Tuesday, 15 December 2020

Mesa Air Group Reports Fourth Quarter and Full-Year Fiscal 2020 Results

 Mesa Air Group has reported fourth-quarter and full-year fiscal 2020 financial and operating results.

Fiscal 2020 Q4 Highlights

EPS of $0.32, Full Year $0.78
Year-end cash increased by $34.5 million to $99.4 million

Recent Updates

Amended capacity purchase agreement with American to operate 40 CRJ-900s for a five-year term
Commenced cargo operations for DHL with two Boeing 737-400F  
Added 10 new E175 aircraft to our United fleet in November and December
Entered into a $195 million loan under the CARES Act with the U.S. Treasury

Mesa’s Q4 2020 results reflect net income of $11.4 million, or $0.32 per diluted share, compared to net income of $12.2 million, or $0.35 per diluted share for Q4 2019. Mesa Q4 2020 results include, per GAAP, the deferral of $7.8 million of revenue, all of which was billed and paid by American and United during the quarter and will be recognized over the remaining terms of the contracts. Mesa’s Adjusted EBITDA1 for Q4 2020 was $44.6 million, compared to $50.8 million in Q4 2019, and Adjusted EBITDAR1 was $54.2 million for Q4 2020, compared to $61.9 million in Q4 2019. For Q4 2020 revenue was $108.0 million, a reduction of $79.8 million (42%) from $187.8 for Q4 2019 primarily due to the reduced flying as a result of COVID-19. During the quarter Mesa recognized $40.8 million as an offset to wages and salaries related to the previously announced Payroll Support Program Agreement (“PSP”), which required Mesa to retain all of its employees.

Operationally, the Company ran a 99.8% controllable completion factor, compared to 99.0% in Q4 2019, and a total completion factor of 98.2%, which primarily includes weather, close-in capacity reductions driven by reduced demand, and other uncontrollable cancellations, compared to 96.9% in Q4 2019.

Full Year

Mesa reported net income of $27.5 million, or $0.78 per diluted share for the 2020 fiscal year, compared to net income of $47.6 million, or $1.36 per diluted share for the 2019 fiscal year. Excluding special items for both periods, adjusted net income1 was $27.5 million or $0.78 per diluted share for the 2020 fiscal year, compared to $57.5 million or $1.64 per diluted share for the 2019 fiscal year. Mesa fiscal 2020 results include, per GAAP, the deferral of $23.8 million of revenue, all of which was billed and paid by American and United during the year and will be recognized over the remaining terms of the contracts. Mesa’s Adjusted EBITDA1 was $163.3 million in fiscal year 2020, compared to $208.7 million in fiscal year 2019 and Adjusted EBITDAR was $212.1 million in fiscal year 2020, compared to $260.9 million in fiscal year 2019. For fiscal year 2020, revenue was $545.1 million, a reduction of $178.3 million (25%) from $723.4 million for fiscal year 2019, primarily due to the reduced flying as a result of COVID-19. During the year, Mesa recognized $83.8 million as an offset to wages and salaries related to the previously announced Payroll Support Program Agreement (“PSP”), which required Mesa to retain all of its employees as of April 20, 2020.

Operationally, we ran a 99.9% controllable completion factor compared to 99.4% in 2019 and a 94.8% total completion factor, which includes weather, close-in capacity reductions driven by reduced demand, and other uncontrollable cancellations and flights, compared to 97.0% in 2019.

“Our industry was among the hardest hit by COVID-19 and the global impact that followed,” said Jonathan Ornstein, Chairman and Chief Executive Officer. “Despite a significant reduction in flying, we were able to find creative ways to reduce costs, operate profitably, generate positive cash-flow, and protect our employees from involuntary furloughs. We also entered the cargo market through our new agreement with DHL - diversifying our revenue sources and creating new opportunities for our company. I can’t thank our hardworking employees enough, their dedication and professionalism truly went above and beyond this year.”

Mike Lotz, President and Chief Financial Officer, continued, “Given the impact of the pandemic, our financial performance exceeded our early expectations. We also improved our liquidity and closed on a $195 million five-year loan under the CARES Act.”

“Despite the global pandemic, our employees showed up day after day to safely and efficiently keep our operation moving,” said Brad Rich, Executive Vice President and Chief Operating Officer. Our operational performance coupled with our low-cost model helped Mesa extend our relationship with American; flying 40 CRJ-900 aircraft for a five-year term. We also took delivery of 10 of our 20 new E175 aircraft for United and added two 737-400F cargo aircraft to our fleet operating for DHL.”




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