Mesa Air Group has reported third-quarter fiscal 2021 financial and operating results.
Highlights for the quarter (3-months ended June 30, 2021):
Pre-tax income of $5.8 million, net income of $4.3 million or $0.11 per diluted share1Took delivery of the last four E175LLs for a total of 80 E175s with United85,162 block hours, up 169.3% year-over-year and 15.2% above last quarterLeased 6 additional, 12 total CRJ-700s to GoJet with 8 scheduled for future deliverySubsequent to quarter-end, invested in second electric aircraft company, Heart Aerospace (“Heart”)Mesa's Q3 2021 results reflect net income of $4.3 million, or $0.11 per diluted share, compared to net income of $3.4 million, or $0.10 per diluted share for Q3 2020.
Mesa's Adjusted EBITDA1 for Q3 2021 was $35.3 million, compared to $35.9 million in Q3 2020, and Adjusted EBITDAR1 for Q3 2021 was $44.9 million, compared to $51.5 million in Q3 2020.
Jonathan Ornstein, Chairman and CEO, said, “We had a strong quarter as a result of the rebound in air traffic that led to a sharp increase in block hours compared to the prior year period, as well as last quarter. This time last year we faced a more difficult environment due to the pandemic that led to a significant reduction in air travel. I am proud of our team’s ability to work through these challenges, as evidenced by our fiscal third quarter results. While travel demand remains below pre-pandemic levels and supply chain disruptions have compounded the challenges we face in the current environment, we continue to press forward.” He continued, “We are also committed to ushering in the next generation of sustainable air travel. This is already beginning with new ventures such as our recent one with Heart Aerospace.”
Brad Rich, Mesa’s Chief Operating Officer, added, “During the quarter, we saw a 15.2% sequential increase in block hours. Daily aircraft utilization for the month of June increased 67.4% to 8.7 hours versus 5.2 hours a year ago. We remain focused on operational performance and continuing to provide flexibility to our partners. We are also committed to maintaining a safe and healthy environment for our employees and passengers.”
June quarter financial results:
Total operating revenue increased by $52.1 million, or 71.2%, to $125.2 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020. Contract Revenue increased by $38.0 million, or 53.0%, to $109.7 million primarily as a result of the increased block hours due to the ongoing industry recovery from COVID-19. Pass-through and other revenue increased during the three months ended June 30, 2021 by $14.1 million to $15.5 million primarily due to increased pass-through maintenance on the E175 fleet.
Total operating expense increased by $52.9 million, or 91.4%, to $110.8 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020. The increase is primarily due to a substantial increase in block hours compared to the prior year period, which was impacted by the COVID-19 pandemic and associated lockdowns, as well as increased maintenance costs. Specifically, flight operations expense increased in the three months ended June 30, 2021 due to additional crew costs associated with more flying and training, and maintenance expense increased primarily due to additional C-checks in preparation for the anticipated increase in summer flying.
Fleet:
Substantially all of the Company’s operating revenue in the three months ended June 30, 2021 was derived from operations associated with American and United Capacity Purchase Agreements and DHL Flight Services Agreement. For the three months ended June 30, 2021, 51% of the Company’s total revenue was derived from United, 45% from American, and 4% from DHL and other sources.
Below is Mesa’s 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) | |
| Actual | Actual | Actual | Forecast | Forecast | Forecast | ||
| E-175 – UA | 72 | 76 | 80 | 80 | 80 | 80 | |
| CRJ-700 – UA | 8 | - | - | - | - | - | |
| CRJ-900 AA | 54 | 45 | 45 | 45 | 44 | 42 | |
| 737-400F – DHL | 2 | 2 | 2 | 2 | 2 | 2 | |
| Sub-total | 136 | 123 | 127 | 127 | 126 | 124 | |
| Leased / Spares Support | |||||||
| CRJ-700 Leased | - | 5 | 12 | 16 | 20 | 20 | |
| CRJ-700 to be Leased to Third Party | 12 | 15 | 8 | 4 | - | - | |
| CRJ-900 Spares/Storage/For Sale | 10 | 19 | 19 | 19 | 20 | 22 | |
| 737-400F Spares Support | - | - | - | 1 | 1 | 1 | |
| CRJ-200 Storage | 1 | 1 | 1 | 1 | 1 | 1 | |
| Total Fleet | 159 | 163 | 167 | 168 | 168 | 168 | |
Liquidity and Capital Resources:
1Reconciliation of GAAP versus Non-GAAP Disclosures
(In thousands, except for per diluted share) (Unaudited)
| Three Months Ended | Three Months Ended | |||||||||
| Income Before Taxes | Income Tax (Expense)/ Benefit | Net Income | Net Income per Diluted Share | Income Before Taxes | Income Tax (Expense)/ Benefit | Net Income | Net Income per Diluted Share | |||
| GAAP Income | 3,419 | |||||||||
| Interest Expense | 8,627 | 10,368 | ||||||||
| Interest Income | (82) | (1) | ||||||||
| Depreciation and Amortization | 20,933 | 20,635 | ||||||||
| Adjusted EBITDA | 35,279 | 35,938 | ||||||||
| Aircraft Rent | 9,648 | 15,582 | ||||||||
| Adjusted EBITDAR | 44,927 | 51,520 | ||||||||
| Nine Months Ended | Nine Months Ended | |||||||||
| Income Before Taxes | Income Tax (Expense)/ Benefit | Net Income | Net Income per Diluted Share | Income Before Taxes | Income Tax (Expense)/ Benefit | Net Income | Net Income per Diluted Share | |||
| GAAP Income | (8,236) | 22,448 | (6,359) | 16,089 | ||||||
| Adjustments (1)(2) | 3,558 | (900) | 2,658 | - | - | - | - | |||
| Adjusted Income | 35,877 | (9,136) | 26,741 | 22,448 | (6,359) | 16,089 | ||||
| Interest Expense | 26,464 | 34,668 | ||||||||
| Interest Income | (287) | (95) | ||||||||
| Depreciation and Amortization | 62,108 | 61,656 | ||||||||
| Adjusted EBITDA | 124,162 | 118,677 | ||||||||
| Aircraft Rent | 29,688 | 39,196 | ||||||||
| Adjusted EBITDAR | 153,850 | 157,873 | ||||||||
(1) Includes lease termination expense of
(2) Includes adjustment for gain on extinguishment of debt of
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