UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
Or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of April 28, 2022, the registrant had
TABLE OF CONTENTS
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans, and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as "future," "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "will," "would," “should,” "could," "can," "may," and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 filed with the Securities and Exchange Commission on December 10, 2021. Unless otherwise stated, references to particular years, quarters, months, or periods refer to our fiscal years ended September 30 and the associated quarters, months, and periods of those fiscal years. Each of the terms "the Company," "Mesa Airlines," "Mesa," "we," "us" and "our" as used herein refers collectively to Mesa Air Group, Inc. and its wholly owned subsidiaries, unless otherwise stated. We do not assume any obligation to revise or update any forward-looking statements.
The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include:
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public health epidemics or pandemics such as COVID-19; |
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the severity, magnitude, and duration of the COVID-19 pandemic, including impacts of the pandemic and of business’ and governments’ responses to the pandemic on our operations and personnel, and on demand for air travel; |
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the supply and retention of qualified airline pilots and mechanics; |
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the volatility of pilot and mechanic attrition; |
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dependence on, and changes to, or non-renewal of, our capacity purchase and flight services agreements; |
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failure to meet certain operational performance targets in our capacity purchase and flight services agreements, which could result in termination of those agreements; |
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increases in our labor costs; |
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reduced utilization (the percentage derived from dividing (i) the number of block hours actually flown during a given month under a particular capacity purchase agreement by (ii) the maximum number of block hours that could be flown during such month under the particular capacity purchase agreement) under our capacity purchase agreements; |
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the direct operation of regional jets by our major partners; |
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the financial strength of our major partners and their ability to successfully manage their businesses through the unprecedented decline in air travel attributable to the COVID-19 pandemic or any other public health epidemic; |
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limitations on our ability to expand regional flying within the flight systems of our major partners and those of other major airlines; |
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our significant amount of debt and other contractual obligations; |
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our compliance with ongoing financial covenants under our credit facilities; and |
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our ability to keep costs low and execute our growth strategies. |
Additionally, the risks, uncertainties and other factors set forth above or otherwise referred to in the reports we have filed with the SEC may be further amplified by the global impact of the COVID-19 pandemic. While we may elect to update these forward-looking statements at some point in the future, whether as a result of any new information, future events, or otherwise, we have no current intention of doing so except to the extent required by applicable law.
1
Part I – Financial Information
Item 1. Financial Statements
MESA AIR GROUP, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts) (Unaudited)
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March 31, |
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September 30, |
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2022 |
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2021 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Receivables, net |
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Expendable parts and supplies, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Lease and equipment deposits |
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Operating lease right-of-use assets |
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Deferred heavy maintenance, net |
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Assets held for sale |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Current portion of long-term debt and finance leases |
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$ |
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$ |
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Current portion of deferred revenue |
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Current maturities of operating leases |
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Accounts payable |
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Accrued compensation |
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Other accrued expenses |
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Total current liabilities |
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Noncurrent liabilities: |
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Long-term debt and finance leases, excluding current portion |
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Noncurrent operating lease liabilities |
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Deferred credits |
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Deferred income taxes |
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Deferred revenue, net of current portion |
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Other noncurrent liabilities |
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Total noncurrent liabilities |
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Total liabilities |
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Commitments and contingencies (Note 16) |
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Stockholders' equity: |
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Preferred stock of no par value, |
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Common stock of no par value and additional paid-in capital, (2021) shares issued and outstanding, |
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Retained earnings |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See accompanying notes to these condensed consolidated financial statements.
2
MESA AIR GROUP, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(In thousands, except per share amounts) (Unaudited)
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Three Months Ended March 31, |
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Six Months Ended March 31, |
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2022 |
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2021 |
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2022 |
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2021 |
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Operating revenues: |
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Contract revenue |
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$ |
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$ |
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$ |
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$ |
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Pass-through and other revenue |
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Total operating revenues |
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Operating expenses: |
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Flight operations |
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Maintenance |
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Aircraft rent |
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General and administrative |
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Depreciation and amortization |
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Lease termination |
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— |
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— |
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Impairment of assets held for sale |
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— |
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Other operating expenses |
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Government grant recognition |
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— |
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— |
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Total operating expenses |
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Operating income (loss) |
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Other income (expense), net: |
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Interest expense |
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( |
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( |
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( |
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Interest income |
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Loss on investments, net |
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( |
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— |
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( |
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— |
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Other income (expense), net |
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( |
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( |
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( |
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Total other expense, net |
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( |
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( |
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( |
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Income (loss) before taxes |
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( |
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( |
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Income tax expense (benefit) |
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( |
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( |
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Net income (loss) and comprehensive income (loss) |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Net income (loss) per share attributable to |
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common shareholders |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Weighted-average common shares outstanding |
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Basic |
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Diluted |
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See accompanying notes to these condensed consolidated financial statements.
3
MESA AIR GROUP, INC.
Condensed Consolidated Statements of Stockholders' Equity
(In thousands, except share amounts) (Unaudited)
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Six Months Ended March 31, 2021 |
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Common |
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Stock and |
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Additional |
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Number of |
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Number of |
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Paid-In |
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Retained |
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Shares |
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Warrants |
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Capital |
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Earnings |
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Total |
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Balance at September 30, 2020 |
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— |
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$ |
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$ |
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$ |
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Stock compensation expense |
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— |
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— |
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— |
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Repurchased shares |
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( |
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— |
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( |
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— |
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Restricted shares issued |
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— |
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— |
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— |
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— |
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Issuance of warrants, net of issuance costs |
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— |
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— |
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Net income |
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— |
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— |
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— |
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Balance at December 31, 2020 |
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$ |
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$ |
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$ |
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Stock compensation expense |
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— |
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— |
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— |
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Repurchased shares |
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( |
) |
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— |
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( |
) |
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— |
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( |
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Restricted shares issued |
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— |
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— |
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— |
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— |
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Employee share purchases |
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— |
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— |
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Net income |
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— |
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— |
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— |
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Balance at March 31, 2021 |
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$ |
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$ |
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$ |
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Six Months Ended March 31, 2022 |
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Common |
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Stock and |
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Additional |
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Number of |
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Number of |
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Paid-In |
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Retained |
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Shares |
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Warrants |
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Capital |
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Earnings |
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Total |
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Balance at September 30, 2021 |
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$ |
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$ |
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$ |
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Stock compensation expense |
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— |
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— |
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— |
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Repurchased shares |
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( |
) |
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— |
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( |
) |
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— |
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( |
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Restricted shares issued |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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( |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
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Stock compensation expense |
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— |
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— |
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— |
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Repurchased shares |
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( |
) |
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— |
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( |
) |
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— |
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( |
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Restricted shares issued |
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— |
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— |
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— |
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— |
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Employee share purchases |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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( |
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Balance at March 31, 2022 |
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$ |
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$ |
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$ |
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See accompanying notes to these condensed consolidated financial statements.
4
MESA AIR GROUP, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
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Six Months Ended March 31, |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net income (loss) |
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$ |
( |
) |
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