PHOENIX, Feb. 10, 2020 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported first quarter fiscal 2020 financial and operating results.

Highlights

• Net income of $10.8 million or $0.31 per diluted share
  
  
• Controllable completion factor of 99.8% compared to 99.5% in Q1 2019
  
  
• Block hours increased 0.5% compared to Q1 2019

Mesa’s Q1 2020 results reflect net income of $10.8 million, or $0.31 per diluted share, compared to net income of $19.1 million, or $0.54 per diluted share for Q1 2019.  Mesa’s Q1 2020 pre-tax income was $14.3 million, compared to $25.0 million for Q1 2019.  In addition, Mesa’s EBITDA¹ for Q1 2020 was $47.4 million, compared to $58.2 million in Q1 2019 and EBITDAR¹ was $58.8 million, compared to $72.3 million in Q1 2019. The primary variance in pre-tax income from Q1 2019 to Q1 2020 was the anticipated increase in airframe and engine heavy maintenance of $10.7 million.

Operationally, the company ran a 99.8% controllable completion factor compared to 99.5% in Q1 2019. At United, the company operated at a 99.98% controllable completion factor in the quarter, taking only 6 cancels out of 33,876 scheduled flights compared to a 99.6% controllable completion factor in Q1 2019. At American, the company operated at a 99.5% controllable completion factor compared to a 99.2% controllable completion factor in Q1 2019. The company ran a 98.7% total completion factor, which includes weather and other uncontrollable cancellations, compared to 98.0% in Q1 2019. Mesa operated 115,562 block hours during Q1 2020, an increase of 0.5% from Q1 2019 of 115,000.

“We are pleased to see our operational performance continue to improve and we are on target to take delivery of 20 new E175s which begin in May 2020,” said Jonathan Ornstein, Chairman and Chief Executive Officer. “I would like to thank all of our employees for their hard work and dedication every day.”

“We continue to work closely with our partners to provide the highest level of customer service, reliability and on time performance,” said Brad Rich, Executive Vice President and Chief Operating Officer. “Since having access to the full complement of aircraft in our American Eagle operation, our performance has increased with November and December at a 99.7% controllable completion factor, January at 99.9% and February at 100% month-to-date.”

______________________________
¹ See Reconciliation of non-GAAP financial measures

Outlook

The company is providing the following guidance for Fiscal Year 2020 and 2021:

Block Hours, Scheduled Heavy Engine and Airframe Maintenance, Pass-through Maintenance Expense – Actual and Forecast (unaudited)

Block Hours
		Q1				Q2				Q3				Q4				Total
FY 2020 Actual / Guidance
Low			115,562				109,000				112,000				115,500				452,062
High			115,562				111,000				114,000				118,000				458,562
Scheduled Heavy Engine and Airframe Maintenance
		Q1				Q2				Q3				Q4				Total
FY 2020 Actual / Guidance
Low		$	14.8			$	20.0			$	7.0			$	7.0			$	48.8
High		$	14.8			$	23.0			$	10.0			$	10.0			$	57.8
Pass-through Maintenance Expense
		Q1				Q2				Q3				Q4				Total
FY 2020 Actual / Guidance		$	7.4			$	10.5			$	9.4			$	9.4			$	36.7

Fleet Count
			FY '20 Q1				FY '20 Q2				FY '20 Q3				FY '20 Q4					FY '21
			Qtr Ended				Qtr Ended				Qtr Ended				Qtr Ended					FY Ended
			Dec '19				Mar '20				Jun '20				Sep '20					Sep '21
Fleet Count	Partner		(Actual)				(Forecast)				(Forecast)				(Forecast)					(Forecast)
E-175	United			60				60				62				68					80
CRJ-900	American			60				59				59				59					59
CRJ-700	United			20				20				18				12					—
Total CPA				140				139				139				139					139
Non-CPA
CRJ-700	Leased			—				—				2				8					20
CRJ-900	Unassigned			4				5				5				5					5
CRJ-200	Unassigned			1				1				1				1					1
Total Fleet				145				145				147				153					165

Reconciliation of non-GAAP financial measures

Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa’s ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three months ended December 31, 2019 and the three months ended December 31, 2018. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company’s net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies.

Reconciliation of GAAP versus Non-GAAP Disclosures (unaudited)
(In thousands, except for per diluted share)

		Three months ended December 31, 2019
		Income Before Taxes				Income Tax (Expense)/Benefit				Net Income				Net Income per Diluted Share
GAAP Income			14,320				(3,535	)			10,785			$	0.31
Interest Expense			12,628
Interest Income			(58	)
Depreciation and Amortization			20,552
EBITDA			47,442
Aircraft Rent			11,329
EBITDAR			58,771

		Three months ended December 31, 2018
		Income Before Taxes				Income Tax (Expense)/Benefit				Net Income				Net Income per Diluted Share
GAAP Income			25,030				(5,949	)			19,081			$	0.54
Interest Expense			14,842
Interest Income			(156	)
Depreciation and Amortization			18,491
EBITDA			58,207
Aircraft Rent			14,119
EBITDAR			72,326

Mesa Air Group will host a conference call with analysts on Monday, February 10 at 4:30pm ET/1:30pm PT. The conference call number is 888-469-2054 (Passcode: Phoenix). The conference call can also be accessed live via the web by visiting https://edge.media-server.com/mmc/p/q4mi3ymq. A recorded version will be available on Mesa’s website approximately two hours after the call for approximately 14 days.

About Mesa Air Group, Inc.

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 147 cities in 47 states, the District of Columbia, Canada, Mexico, Cuba and the Bahamas. As of January 31^st, 2020, Mesa operated a fleet of 145 aircraft with an average of approximately 702 daily departures and 3,600 employees. Mesa operates all of its flights as either American Eagle or United Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc. and United Airlines, Inc.

Forward-Looking Statements

This news release contains forward looking statements, including, but not limited to, (i) the block hours, scheduled heavy engine and airframe maintenance, and pass-through maintenance expense forecast of Mesa for the second, third and fourth quarters of fiscal 2020, (ii) the fleet forecast for the second, third and fourth quarters of fiscal 2020 and year ended fiscal 2021, and (iii) delivery dates of the 20 E175s scheduled to begin in May 2020. These forward-looking statements are based on Mesa’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond Mesa’s control. Any forward-looking statement in this release speaks only as of the date of this release. Mesa undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

MESA AIR GROUP, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts) (Unaudited)

		Three Months Ended December 31,
		2019				2018
Operating revenues:
Contract revenue		$	171,800			$	170,449
Pass-through and other			12,236				7,707
Total operating revenues			184,036				178,156
Operating expenses:
Flight operations			52,644				53,245
Fuel			169				121
Maintenance			58,095				39,802
Aircraft rent			11,329				14,119
Aircraft and traffic servicing			1,064				934
General and administrative			12,996				12,214
Depreciation and amortization			20,552				18,491
Total operating expenses			156,849				138,926
Operating income			27,187				39,230
Other (expenses) income, net:
Interest expense			(12,628	)			(14,842	)
Interest income			58				156
Other (expense) income, net			(297	)			486
Total other (expense), net			(12,867	)			(14,200	)
Income before taxes			14,320				25,030
Income tax expense			3,535				5,949
Net income		$	10,785			$	19,081
Net income per share attributable to common shareholders
Basic		$	0.31			$	0.55
Diluted		$	0.31			$	0.54
Weighted-average common shares outstanding
Basic			35,023				34,518
Diluted			35,182				35,113

MESA AIR GROUP, INC.
Condensed Consolidated Balance Sheets
(In thousands, except shares) (Unaudited)

		December 31, 2019				September 30, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	57,763			$	68,855
Restricted cash			3,448				3,646
Receivables, net			24,121				23,080
Expendable parts and supplies, net			22,400				21,337
Prepaid expenses and other current assets			4,502				40,923
Total current assets			112,234				157,841
Property and equipment, net			1,261,267				1,273,585
Intangibles, net			9,157				9,532
Lease and equipment deposits			4,872				2,167
Operating Lease right-of-use assets			146,071				—
Other Assets			8,400				8,792
TOTAL ASSETS			1,542,001				1,451,917
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and financing leases		$	166,089			$	165,900
Current maturities of operating leases			37,674				—
Accounts payable			47,750				49,930
Accrued compensation			10,048				11,988
Other accrued expenses			34,350				28,888
Total current liabilities			295,911				256,706
NONCURRENT LIABILITIES:
Long-term debt and financing leases - excluding current portion			641,017				677,423
Noncurrent operating lease liabilities			95,992				—
Deferred credits			11,032				12,134
Deferred income taxes			58,506				55,303
Other noncurrent liabilities			1,352				24,483
Total noncurrent liabilities			807,899				769,343
Total liabilities			1,103,810				1,026,049
STOCKHOLDERS' EQUITY:
Preferred stock of no par value, 5,000,000 shares authorized; no shares issued and outstanding			—				—
Common stock of no par value and additional paid-in capital, 125,000,000 shares authorized; 33,039,126 (2020) and 31,413,287 (2019) shares issued and outstanding, and 1,988,472 (2020) and 3,600,953 (2019) warrants issued and outstanding			239,783				238,504
Retained earnings			198,408				187,364
Total stockholders' equity			438,191				425,868
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,542,001			$	1,451,917

Operating Highlights (unaudited)

		Three months ended
		December 31
		2019				2018				Change
Available Seat Miles (thousands)			2,735,386				2,708,899				1.0	%
Block Hours			115,562				115,000				0.5	%
Departures			62,725				61,534				1.9	%
Average Stage Length (miles)			573				578				-0.9	%
Passengers			3,697,138				3,620,115				2.1	%

Source: Mesa Air Group, Inc.

Mesa Air Group, Inc.
Investor Relations
Brian Gillman
Investor.Relations@mesa-air.com
(602) 685-4010

Source: Mesa Air Group, Inc.