HOUSTON, May 6 /PRNewswire-FirstCall/ -- ExpressJet Holdings, Inc.
(NYSE: XJT) today reported a first quarter loss, excluding special
items, of $10.6 million or $0.62 per share versus $22.8 million or
$4.45 for the same period in 2008. These results represent
continued improvement from the restructuring efforts ExpressJet
undertook beginning mid-2008 due to record-breaking fuel prices and
its amended capacity purchase agreement with Continental Airlines.
Including special items, ExpressJet reported a first quarter loss
of $11.4 million or $0.67 per share. "During this quarter we were
able to maintain our cash position while keeping active in our
securities repurchase program. This achievement emphasizes our
focus on improving the balance sheet during the current tough,
economic conditions while still providing some of the best customer
service in the industry," said Jim Ream, President and Chief
Executive Officer. Ream added, "We also continue to be pleased with
our charter operation as it experienced reasonable growth in both
our customer base and revenues despite the challenging obstacles
created by the economic recession." Operational Overview Scheduled
Flying Under its agreement with Continental, ExpressJet flew
157,606 block hours operating 214 aircraft. This represents a 9.5%
decrease over block hours flown during first quarter 2008. The
Continental Express average aircraft utilization during the quarter
totaled 8.18 hours per day versus 9.33 hours per day during first
quarter 2008. These operating metrics closely align with the
airline industry trend of decreased passenger demand due to the
global economic recession. As ExpressJet is paid for hours flown
under its amended capacity purchase agreement with Continental, its
results will continue to reflect macroeconomic factors impacting
the airline industry. In first quarter 2009, ExpressJet generated
1.7 billion revenue passenger miles on 2.4 billion available seat
miles producing a load factor of 71.6% within the Continental
Express network. Corporate Aviation ExpressJet increased revenues
26.6% year-over-year, excluding fuel because it is treated as a
pass-through expense. ExpressJet's fleet within the Corporate
Aviation division consisted of six 41-seat aircraft and 24 50-seat
aircraft, totaling an operating fleet of 30 aircraft. All Flying
ExpressJet operated 244 aircraft during first quarter 2009 compared
to 274 aircraft during first quarter 2008. Aviation Services Added
three stations to its aviation services division bringing the total
to 31 stations ground handled by ExpressJet for Continental and
other operators. Through these third-party agreements, ExpressJet
handled 18,269 aircraft turns during the first quarter 2009.
Financial Overview ExpressJet generated $169.7 million in revenue
during the three months ended March 31, 2009. Under the amended
capacity purchase agreement, Continental paid ExpressJet $144.2
million in block hour revenue and pass-through expense
reimbursements. Revenue earned during the first quarter in the
corporate aviation division totaled $16.1 million and first quarter
revenue from aviation services totaled $9.5 million. During the
quarter, ExpressJet continued to benefit from the cost cutting
performed during the second half of 2008 in response to
record-breaking fuel prices and its amended capacity purchase
agreement with Continental. However, ExpressJet continues to see
wage pressure from the increasing seniority of its workforce given
capacity reductions across the industry. ExpressJet ended the first
quarter 2009 with $117.1 million in cash, cash equivalents and
short-term investments. The cash balance included $22.4 million in
restricted cash and $37.6 million in short-term investments after
sales and accounting adjustments to impair the value of these
assets. During the quarter, ExpressJet monetized $4.2 million face
value in auction rate securities and realized $3.6 million on the
sale. ExpressJet also entered into an agreement with Citigroup
Global Markets, Inc. for a $5 million revolving line of credit
secured by the auction rate securities sold to ExpressJet by
Citigroup. ExpressJet intends to continue monitoring the auction
rate securities market to attempt to monetize the assets at or near
face value and initiated litigation against Royal Bank of Canada
related to such investments brokered by the firm. ExpressJet also
closed the sale of its Miami Composite facility, American
Composites, LLC, and related real estate during the quarter for
approximately $5.5 million in proceeds. ExpressJet spent
approximately $4 million under its previously announced securities
repurchase program to buy back 2.6 million shares, including 2.4
million shares in privately negotiated transactions, and $1,837,000
par value of its 11.25% Secured Convertible Notes due 2023. The
total remaining in the program, after accounting for repurchases
made during first quarter 2009, is approximately $6.1 million. The
company expects any future purchases of the notes or stock to be
made from time to time in the open market or in privately
negotiated transactions. After accounting for the debt repurchases
made during the quarter, the outstanding balance on ExpressJet's
11.25% Secured Convertible Notes due 2023 is $59 million. This
balance represents the par value due to noteholders when the notes
become due August 1, 2023. Capital expenditures totaled $1.3
million during the quarter compared to $2.8 million during the
first quarter 2008. ExpressJet plans to spend between $3 and $4
million during the remainder of 2009 to meet operational
requirements. The company will review its first quarter 2009
results on Wednesday, May 6, 2009 at 10:00 a.m. EDT (9:00 a.m.
CDT). A live webcast of the call will be available at
http://www.expressjet.com/. To access the conference call by phone,
dial (866) 638-3022 approximately 10 minutes prior to the scheduled
start time and ask to join the ExpressJet call. International
callers should dial (630) 691-2765. Corporate Background ExpressJet
Holdings operates several divisions designed to leverage the
management experience, efficiencies and economies of scale present
in its subsidiaries, including ExpressJet Airlines, Inc. and
ExpressJet Services, LLC. ExpressJet Airlines serves 128 scheduled
destinations in North America and the Caribbean with approximately
1,050 departures per day. Operations include a capacity purchase
agreement for Continental; providing clients customized 41-seat and
50-seat charter options (http://www.expressjet.com/charter); and
supplying third-party aviation and ground handling services. For
more information, visit http://www.expressjet.com/. This release
contains forward-looking statements. Statements including words
such as "believes," "intends," "plans," "anticipates, "estimates,"
"projects," "expects" or similar expressions represent
forward-looking statements that are based on the Company's
expectations in light of facts known by management on the date of
this release. Specifically, statements regarding ExpressJet's
future results of operations, operating costs, business prospects,
growth and capital expenditures, including plans with respect to
its fleet, are forward-looking statements. The forward-looking
statements in this release reflect the Company's plans, assumptions
and expectations about future events and are subject to
uncertainties, many of which are outside ExpressJet's control.
Important factors that could cause actual results to differ
materially from the expectations expressed or implied in the
forward-looking statements include known and unknown risks. The
five key areas of the known risks that could significantly impact
the company's revenues, operating results and capacity include:
operations under the Company's capacity purchase agreement with
Continental Airlines, Inc. may no longer be profitable; charter
operations and other aviation services may affect ExpressJet's
ability to operate profitably; rising costs, a global, economic
recession and the highly competitive nature of the airline
industry; the profile of the Company's current shareholders; and
regulations, including listing regulations for publicly traded
companies, and other factors. For further discussions of these
risks and others, please see the sections entitled "Risk Factors",
as well as other sections, of ExpressJet's filings with the
Securities and Exchange Commission. The events described in the
forward-looking statements might not occur or might occur to a
materially different extent than described in this release.
ExpressJet undertakes no duty to update or revise any of
forward-looking statements, whether as a result of new information,
future events or otherwise. EXPRESSJET HOLDINGS, INC. AND
SUBSIDIARIES FINANCIAL SUMMARY (In thousands, except per share
data) Three Months Ended March 31, 2008 Increase/ 2009 (as
restated)(2) (Decrease) Operating Revenue Passenger $144,188
$423,327 (65.9%) Corporate aviation 16,050 13,702 17.1% Ground
handling and other 9,471 11,139 (15.0%) 169,709 448,168 (62.1%)
Operating Expenses: Wages, salaries and related costs 79,675
114,605 (30.5%) Maintenance, materials and repairs 38,802 55,646
(30.3%) Other rentals and landing fees 12,895 29,687 (56.6%)
Depreciation and amortization 7,704 8,638 (10.8%) Outside services
7,595 16,719 (54.6%) Aircraft rentals 5,472 86,758 (93.7%) Aircraft
fuel and related taxes 3,221 97,986 (96.7%) Ground handling 3,105
26,011 (88.1%) Marketing and distribution 1,325 11,891 (88.9%)
Other operating expenses 20,931 35,210 (40.6%) 180,725 483,151
(62.6%) Operating Loss (11,016) (34,983) (68.5%) Nonoperating
Income / (Expense): Impairment charges on investments - (13,661) nm
Amortization of debt discount(2) (780) (7,078) (89.0%) Interest
expense (2,029) (2,355) (13.8%) Interest income 348 2,363 (85.3%)
Capitalized interest 62 400 (84.5%) Equity investments loss, net
(377) (685) (45.0%) Other, net (85) 80 nm (2,861) (20,936) (86.3%)
Loss before Income Taxes (13,877) (55,919) (75.2%) Income Tax
Benefit 2,473 20,223 (87.8%) Net Loss $(11,404) $(35,696) (68.1%)
Basic and Diluted Loss per Common Share $(0.67) $(6.96) (90.4%)
Shares Used in Computing Basic and Diluted Loss per Common Share
17,031 5,128 nm EXPRESSJET HOLDINGS, INC. AND SUBSIDIARIES
PRELIMINARY STATISTICS Continental Corporate Three Months Ended
March 31, 2009 Express Aviation Revenue Passenger Miles (millions)
1,709 Available Seat Miles (ASM) (millions) 2,386 Passenger Load
Factor 71.6 % Block Hours 157,606 3,231 Departures 81,058 Three
Months Ended March 31, Non-GAAP Financial Measures 2008 2009 (as
restated)(2) Net Income Reconciliation: Net loss $(11,404)
$(35,696) Adjustments for special items / (gains): Add: Realized
loss from impairment charge on investments(1) - 8,470 Add: Realized
loss from amortization of debt discount(2) 780 4,388 Net loss
excluding special items(3) $(10,624) $(22,838) Earnings / (Loss)
Per Share Reconciliation: Diluted loss per share $(0.67) $(6.96)
Adjustments for special items / (gains) 0.05 2.51 Diluted loss per
share, excluding special items(3) $(0.62) $(4.45) (1) In February
2008, we invested in $65 million of auction rate security
investments which are classified as available-for-sale securities
and reflected at fair value. During first quarter 2008, auctions
for ARS failed. As we could not predict when the market would
recover and needed to avail ourselves the flexibility to sell our
ARS, we evaluated and classified, in accordance with accounting
guidance, our ARS as current assets and recognized a realized loss,
net of taxes, of $8.5 million. (2) Effective January 1, 2009,
ExpressJet adopted Financial Accounting Standards Board's Staff
Position No. APB 14-1, "Accounting for Convertible Debt Instruments
that May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)", which clarifies the accounting for convertible debt
instruments that may be settled in cash (including partial cash
settlements) upon conversion. The financial statements for the
three months ended March 31, 2008 were adjusted to reflect an
additional $4.4 million, net of taxes, in amortization of debt
discount as a result of the adoption of this standard. In 2008, we
recorded $27.8 million in debt discount related to the refinancing
of our convertible notes. During the first quarter of 2009, we
recognized $0.8 million in amortization of the debt discount
recorded in 2008. (3) By excluding special items, these financial
measures provide management and investors the ability to measure
and monitor ExpressJet's performance on a consistent year-over-year
basis. DATASOURCE: ExpressJet Holdings, Inc. CONTACT: Kristy
Nicholas, Investor Relations of ExpressJet Holdings, Inc.,
+1-832-353-1409 Web Site: http://www.expressjet.com/
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