SOAR Volato Group Inc

Improved Demand Mix Drove Higher Blended Yield and Aircraft Usage Revenue

Increased Size of Floating Fleet in FY 2023 to 24 HondaJet IIs

Expect Delivery of 10-14 New Aircraft in FY 2024

Volato Group, Inc. (NYSE American: SOAR) (“Volato” or the “Company”), a leading private aviation company and the largest HondaJet operator in the United States, today announced results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Financial Highlights

• Total revenue was $31.5 million
  • Aircraft sales revenue was $15.7 million
  • Aircraft usage revenue was $11.6 million
  • Managed services revenue was $4.2 million
• Net loss was $23.6 million, including the impact of a $13.4 million non-cash charge
• Adjusted EBITDA1 was a loss of $8.1 million

Full Year 2023 Financial Highlights

• Total revenue was $73.3 million
  • Aircraft sales revenue was $21.4 million
  • Aircraft usage revenue was $37.8 million
  • Managed services revenue was $14.1 million
• Net loss was $52.8 million, including the impact of a $13.4 million non-cash charge
• Adjusted EBITDA1 was a loss of $32.1 million

[1] Adjusted EBITDA is a non-GAAP measure. Please refer to the tables and related notes in this press release for a reconciliation and definition of non-GAAP financial measures.

Fourth Quarter and Full Year 2023 Operational Highlights

• Increased the size of our floating fleet to 24 HondaJet IIs with firm orders for 22 HondaJet IIs and 4 Gulfstream G280s to be delivered in 2024 and 2025
• Completed business combination resulting in public listing and raised over $40 million of total new capital in 2023
• Partnered with Banyan Air Services to expand maintenance capabilities in the Southeast for Volato’s growing fleet of HondaJets
• Launched Partner Benefits Program to provide Volato members with elevated luxury experiences
• Launched Volato Insider Program to drive additional non-owner demand
• Launched Vaunt app in Q4 2023 to efficiently monetize empty repositioning flights

Company Commentary

Matt Liotta, Co-Founder and Chief Executive Officer of Volato, commented, “2023 marked a successful year of executing on our strategic priorities, scaling our fleet, expanding market share, and continuing to demonstrate Volato’s exceptional value to customers. We expanded the size of our floating fleet to 24 HondaJets in 2023, increasing aircraft usage revenue by 162% year-over-year, and providing us with greater flexibility to meet growing customer demand. We are delivering higher and more efficient aircraft utilization through our suite of charter and jet card products, our new Partner Benefits Program, and our strategy for monetizing empty repositioning flights, all while diligently managing our cost base. These efforts helped improve Volato’s overall demand mix in 2023, with 48% of flight hours attributable to higher margin, non-owner flights, thus increasing our blended yield by 12% versus the prior year.

“Industry factors beyond our control – specifically aircraft delivery delays – put downward pressure on topline revenue in 2023. We are in close contact with our suppliers and partners and understand that production and supply chain issues are easing, providing us with good visibility into our 2024 and 2025 delivery pipeline. We expect continued fleet expansion will propel revenue and margin in several ways, including increased fractional sales and operating revenue, and more efficient aircraft utilization. We remain focused on growth and our path to profitability.”

Mark Heinen, Chief Financial Officer, commented, “Gross profit margins improved on a sequential basis through a disciplined approach to managing our cost base and pursuit of higher yielding non-owner flight hours over the course of 2023. The growth of our floating fleet delivered higher usage revenue, and we expect these trends to continue as we add new aircraft to the fleet throughout the year. We also anticipate an increase in plane sale revenues with the expected delivery of nine to eleven new jets in FY 2024, providing the business with momentum on our path to profitability.”

Key Metrics (financial metrics in thousands, except KPIs)

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2023

December 31, 2022

Change YoY

December 31, 2023

December 31, 2022

Change YoY

Financial Metrics:

 

 

 

Revenue:

 

 

 

 

 

 

Aircraft sales

15,733

25,930

(10,197)

21,443

67,695

(46,252)

Aircraft Usage

11,568

5,236

6,332

37,787

14,417

23,370

Managed aircraft

4,160

4,749

(589)

14,108

14,594

(486)

Total Revenue

31,461

35,915

(4,454)

73,338

96,706

(23,368)

Net Loss

23,636

3,094

20,542

52,822

9,367

(43,455)

Adjusted EBITDA

(8,112)

(2,588)

(5,524)

(32,142)

(8,985)

(23,157)

 

 

 

 

 

 

 

Key Performance Indicators (KPIs):

 

 

 

 

 

 

Total Flight Hours

3,504

1,712

+1,792

11,273

5,031

+6,242

Empty Percentage

37.9%

39.0%

(1.1%)

38.8%

39.6%

(0.8%)

Demand Mix

 

 

 

 

 

 

Owner

52%

67%

(15%)

51%

79%

(28%)

Non-Owner

48%

33%

+15%

49%

21%

+28%

Blended Yield

$5,348

$4,926

+$422

$5,187

$4,629

+$558

Floating Fleet

24

11

+13

24

11

+13

Light Jet Market Share

2.9%

1.3%

+1.6%

2.9%

1.3%

+1.6%

Net Promoter Score

88

N/A

N/A

88

N/A

N/A

Fourth Quarter and Full Year Financial Summary

Total revenue for the fourth quarter decreased 12% primarily due to lower aircraft sales. Aircraft usage revenue for the fourth quarter increased 121% as a result of an increase in the number of aircraft in our floating fleet. Total revenue for the full year decreased 24% primarily due to lower aircraft sales. Aircraft usage revenue increased 162% as a result of an increase in the number of aircraft in our floating fleet.

Net Loss for the fourth quarter increased $20.5 million primarily due to a $13.4 million non-cash charge related to the change in fair value of our forward purchase agreement and higher operating selling, general and administrative expenses from the growth in our business. Net loss for the full year increased $43.5 million primarily due to lower gross profit from lower aircraft sales, a $13.4 million non-cash charge related to the change in fair value of our forward purchase agreement and higher operating selling, general and administrative expenses from the growth in our business.

Adjusted EBITDA loss for the fourth quarter increased $5.5 million primarily due to lower aircraft sales and higher selling, general and administrative expenses from the growth in our business. Adjusted EBITDA loss for the full year increased $23.2 million primarily due to lower aircraft sales and higher selling, general and administrative expenses from the growth in our business.

The growth in our floating fleet increased fourth quarter 2023 flight hours 105% over the prior year and increased full year 2023 flight hours 124% over the prior year.

Demand mix continues to improve with 48% of flight hours by higher yielding non-owner flights, increasing the fourth quarter 2023 blended yield to $5,348, 9% higher than the prior year.

Balance Sheet and Liquidity

The Company ended the fourth quarter 2023 with $14.5 million of cash, and cash equivalents. The Company believes that it has sufficient cash to achieve profitability based on its forecasted aircraft sales and flight operations.

Conference Call

Volato will host a conference call to discuss its Fourth Quarter and Full Year 2023 results at 8:00 AM ET on March 26, 2024.

Interested parties can access the conference call by dialing (866) 605-1830 for toll free access or +1(215) 268-9881. The live call will also be available via webcast on Volato’s Investor Relations website: https://ir.flyvolato.com/.

A replay of the call will be available until April 25, 2024, and can be accessed by dialing (877) 660-6853 or (201) 612-7415 and using the Access ID: 13744837.

About Volato

Volato (NYSE American: SOAR) is a leader in private aviation, redefining luxury air travel through modern, efficient, and customer-designed solutions. Volato provides a fresh approach to fractional ownership, aircraft management, jet card, deposit and charter programs, all powered by advanced, proprietary mission control technology. Volato's fractional programs uniquely offer flexible hours and a revenue share for owners across the world’s largest fleet of HondaJets, which are optimized for missions of up to four passengers. For more information visit www.flyvolato.com.

All Volato Part 135 charter flights are operated by its DOT/FAA-authorized air carrier subsidiary (G C Aviation, Inc. d/b/a Volato) or by an approved vendor air carrier.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could" or "may" or other similar expressions. Forward-looking statements provide management's or the Board’s current expectations or predictions of future conditions, events, or results. All statements that address operating performance, events, or developments that may occur in the future are forward-looking statements, including statements regarding the challenges associated with executing our growth strategy, including expected deliveries of aircraft and related sales, and developing, marketing and consistently delivering high-quality services that meet customer expectations. All forward-looking statements speak only as of the date they are made and reflect the Company’s good faith beliefs, assumptions, and expectations, but they are not guarantees of future performance or events. Furthermore, Volato disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive, and regulatory factors, many of which are beyond Volato’s control, that are described in Volato’s periodic reports filed with the SEC including its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2023, and other factors that Volato may describe from time to time in other filings with the SEC. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

VOLATO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except par value amounts)

 

December 31,

2023

 

December 31, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash

$14,486

 

$5,777

Accounts receivable, net

2,990

 

1,880

Deposits

25,125

 

833

Prepaid expenses and other current assets

3,897

 

2,211

Total current assets

46,498

 

10,701

 

 

 

 

Property and equipment, net

846

 

348

Operating lease, right-of-use assets

1,278

 

1,574

Equity-method investment

154

 

1,159

Deposits

15,691

 

12,123

Forward purchase agreement

2,982

 

—

Restricted cash

2,237

 

2,102

Intangibles, net

1,391

 

1,615

Goodwill

635

 

635

Total assets

$71,712

 

$30,257

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$9,864

 

$3,663

Loan from related party

1,000

 

5,150

Convertible notes, net

—

 

18,844

Operating lease liability

326

 

283

Merger transaction costs payable in shares

4,250

 

—

Credit facility and other loans

19,340

 

57

Customer deposits and deferred revenue

12,857

 

2,163

Total current liabilities

47,637

 

30,160

 

 

 

 

Deferred income tax liability

305

 

305

Operating lease liability, non-current

965

 

1,291

Credit facility, non-current

8,054

 

4,170

Total liabilities

56,961

 

35,926

 

 

 

 

Shareholders’ equity (deficit):

 

 

 

Common Stock Class A, $0.0001 par value; 80,000,000 authorized; 28,043,449 and 11,268,877 shares issued and outstanding as of December 31, 2023 and 2022, respectively

3

 

1

Additional paid-in capital

78,410

 

5,185

Stock subscriptions receivable

—

 

(15)

Accumulated deficit

(63,662)

 

(10,840)

Total shareholders’ equity (deficit) attributable to Volato Group, Inc.

14,751

 

(5,669)

Total shareholders’ equity (deficit)

14,751

 

(5,669)

Total liabilities and shareholders’ equity (deficit)

71,712

 

$30,257

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share data)

 

For the Years Ended December 31,

 

2023

 

2022

Revenue

$73,338

 

$96,706

 

 

 

 

Costs and expenses:

 

 

 

Cost of revenue

82,025

 

94,280

Selling, general and administrative

28,822

 

11,611

Total costs and expenses

110,847

 

105,891

 

 

 

 

Loss from operations

(37,509)

 

(9,185)

 

 

 

 

Other income (expenses):

 

 

 

Gain from deconsolidation of investments

—

 

581

Gain from sale of consolidated entity

387

 

—

Gain from sale of equity-method investment

883

 

—

Other income

180

 

15

Loss from change in fair value forward purchase agreement

(13,403)

 

—

Interest expense, net

(3,358)

 

(866)

Other expenses

(15,311)

 

(270)

 

 

 

 

Loss before provision for income taxes

(52,820)

 

(9,455)

Provision for incomes taxes (benefit)

2

 

(55)

Net Loss before non-controlling interest

(52,822)

 

(9,400)

Less: Net Loss attributable to non-controlling interest

—

 

(33)

Net Loss attributable to Volato Group, Inc.

$(52,822)

 

$(9,367)

 

 

 

 

Basic and Diluted net loss per share

$(3.46)

 

$(0.83)

 

 

 

 

Weighted average common share outstanding:

 

 

 

Basic and diluted

15,245,004

 

11,268,879

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

 

For the Years ended December 31,

 

2023

 

2022

Operating activities:

 

 

 

Net Loss

(52,822)

 

(9,367)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

Depreciation and amortization expense

200

 

162

Stock compensation expense

82

 

17

Fair value of common stock issued to employees

94

 

—

Gain from sale of equity-method investments

(883)

 

(581)

Gain from sale of consolidated entity

(387)

 

—

Gain (loss) from equity-method investments

(22)

 

45

Deferred income tax benefit

 

 

(80)

Amortization right-of-use asset

296

 

—

Amortization of debt discount

183

 

42

Change in fair value forward purchase agreement

13,403

 

—

Changes in assets and liabilities:

 

 

 

Accounts receivable

(1,111)

 

(2,223)

Prepaid and other current assets

(1,642)

 

(1,586)

Deposits

(3,858)

 

(11,399)

Account payable and accrued liabilities

5,662

 

2,217

Operating lease liability

(283)

 

—

Customers’ deposits and deferred revenue

10,694

 

1,321

Net cash used in operating activities

(30,394)

 

(21,432)

Investing activities:

 

 

 

Cash payment for property and equipment

(637)

 

(259)

Proceeds from sale of interest in equity-method investment

4,235

 

6,575

Payment for acquisition of GCA

—

 

(1,850)

Payment for the purchase of equity-method investments

(2,328)

 

—

Proceeds from the sale of consolidated entity

506

 

—

Cash obtained from acquisition of GCA

—

 

679

Net cash provided by investing activities

1,776

 

5,145

Financing activities:

 

 

 

Proceeds from lines of credit

1,000

 

4,950

Repayments of lines of credit

—

 

(5,800)

Collection on subscription receivable

15

 

35

Proceeds from issuance of convertible notes

12,670

 

18,879

Purchase of forward purchase agreement

(18,911)

 

—

Proceeds from forward purchase agreement

2,525

 

—

Proceeds from other loans

—

 

4,500

Repayment on loans

(787)

 

(6)

Proceeds from business combination

19,081

 

—

Business combination closing costs

(2,359)

 

—

Proceeds from the sale of preferred stock

24,204

 

—

Proceeds from exercise of stock options

23

 

—

Net cash provided by financing activities

37,461

 

22,558

Net increase in cash

8,843

 

6,271

Cash and restricted cash, beginning of year

7,879

 

1,608

Cash and restricted cash, end of period

$16,722

 

$7,879

Supplemental disclosure of cash flow information:

 

 

 

Cash paid for interest

$2,268

 

$61

Cash paid for income taxes

—

 

—

Non-Cash Investing and Financing Activities:

 

 

 

Credit facility for the aircraft deposits

24,000

 

—

Conversion of line of credit to convertible note with related party

6,001

 

—

Original debt discount

230

 

—

Conversion of Preferred stock to common stock class A

62,565

 

—

Merger transaction cost payable in stock

4,250

 

—

Liabilities assumed in merger transaction unpaid at 12/31/2023

1,722

 

—

Initial recognition of right-of-use asset

—

 

1,612

Fair value adjustment to equity-method investment upon deconsolidation

—

 

34

Acquisition of vehicle – direct finance

—

 

63

Adjusted EBITDA

We calculate Adjusted EBITDA as net loss adjusted for (i) interest expense, net, (ii) provision for income taxes (benefit) (iii) depreciation and amortization, (iv) equity-based compensation expense, (v) acquisition, integration, and capital raise related expenses, and (v) other items not indicative of our ongoing operating performance. We include Adjusted EBITDA as a supplemental measure for assessing operating performance.

The following tables reconcile Adjusted EBITDA to net loss, which is the most directly comparable GAAP measure (in thousands):

 

Year Ended December 31,

Adjusted EBITDA

2023

 

2022

Net loss

$(52,822)

 

$(9,367)

Interest expense

3,358

 

866

Provision for income tax benefit (benefit)

2

 

(55)

Loss from change in fair value of forward purchase agreement

13,403

 

—

Depreciation and amortization

200

 

162

Equity-based compensation expense

82

 

17

Net loss attributable to non-controlling interest

—

 

(33)

Gain from deconsolidation of investments

—

 

(581)

Gain from sale of consolidated entity

(387)

 

—

Gain from sale of equity-method investment

(883)

 

—

Other income

(180)

 

(15)

Acquisition, integration, and capital raise related expenses(1)

167

 

21

Other items not indicative of our ongoing operating performance(2)

4,918

 

—

Adjusted EBITDA

$(32,142)

 

$(8,985)

(1) Represents non-capitalizable Business Combination expenses in 2023 and acquisition expenses associated with Gulf Coast Aviation in 2022.

(2) Represents costs incurred related to business realignment.

 

Fourth Quarter Ended December 31,

Adjusted EBITDA

2023

 

2022

Net loss

$(23,636)

 

$(3,094)

Interest expense

931

 

413

Provision for income tax benefit (benefit)

2

 

25

Loss from change in fair value of forward purchase agreement

13,403

 

—

Depreciation and amortization

24

 

41

Equity-based compensation expense

19

 

7

Net loss attributable to non-controlling interest

—

 

(33)

Other income

(22)

 

53

Acquisition, integration, and capital raise related expenses(1)

106

 

—

Other items not indicative of our ongoing operating performance(2)

1,061

 

—

Adjusted EBITDA

$(8,112)

 

$(2,588)

(1) Represents non-capitalizable Business Combination expenses in 2023.

(2) Represents costs incurred related to business realignment.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240325873030/en/

For Media: media@flyvolato.com

For Investors: investors@flyvolato.com