Business Services Industry
MAIR Holdings, Inc. Reports Fiscal 2005 First Quarter Results
Business Wire, July 28, 2004
MINNEAPOLIS & ST. PAUL, Minn. -- MAIR Holdings, Inc. (Nasdaq:MAIR) today reported earnings of $2.9 million for the fiscal 2005 first quarter ended June 30, 2004 compared to earnings of $3.5 million in the comparable fiscal 2004 period. On a per-share basis, the fiscal 2005 first quarter results equal earnings of $0.14 per share compared with $0.17 per share in the comparable fiscal 2004 period. The Company's first quarter results exceeded First Call current consensus estimates of $0.05 per share.
"The return to profitability in the first quarter was a result of solid operating performance," said Paul Foley, MAIR Holdings president and chief executive officer. "We continue to examine new opportunities for growth and expansion", Foley continued. "We believe the current environment favors an experienced, service-oriented operator with proven cost-controls and a strong cash position with which to act on those opportunities."
The removal of six Saab model A aircraft from the fleet year over year and the temporary grounding of five Avro RJ85s were the primary reasons that led to a decrease in operating income to $2.6 million in the first quarter of fiscal 2005 compared to $4.7 million reported in the first quarter of fiscal 2004. All Avro RJ85s were returned to service by June 2004. Operating revenue for the first quarter decreased 3.8% to $109.7 million compared with $114.0 million the same quarter a year ago. Operating expenses for the first quarter decreased 2.0% to $107.1 million compared with $109.3 million the same quarter a year ago. The Company is insulated from higher fuel prices as a result of its operating contracts with Northwest Airlines.
Non-operating income decreased to $0.4 million during the current fiscal quarter from $3.0 million in the first quarter of fiscal 2004. Last year the Company received $2.6 million related to government reimbursements of security costs under the Emergency Wartime Supplemental Appropriations Act. During the current quarter, the Company reduced its provision for income taxes by $1.2 million as a result of a final settlement of an Internal Revenue Service audit.
QUARTERLY CONFERENCE CALL
MAIR Holdings will conduct a live webcast to discuss its fiscal 2005 first quarter earnings today at 9:30 AM (CDT). The webcast will be available through the MAIR Holdings' web site at www.mairholdings.com under the "Investor" link.
ABOUT THE COMPANY
MAIR Holdings' primary business units are its regional airline subsidiary Mesaba Aviation, Inc., d/b/a Mesaba Airlines, and its regional airline subsidiary Big Sky Transportation Co., d/b/a Big Sky Airlines. MAIR Holdings, Inc. is traded under the symbol MAIR on the NASDAQ National Market. More information about MAIR Holdings is available on the Internet at www.mairholdings.com.
Mesaba Aviation operates as a Northwest Jet Airlink and Airlink partner under service agreements with Northwest Airlines. Currently, the airline serves 109 cities in 30 states and Canada from Northwest's and Mesaba Aviation's three major hubs: Detroit, Minneapolis/St. Paul and Memphis. Mesaba Aviation operates an advanced fleet of regional jet and jet-prop aircraft, consisting of the 69 passenger Avro RJ85 and the 30-34 passenger Saab SF340. Mesaba Aviation maintains a web site at www.mesaba.com.
Big Sky serves 19 cities in Montana, North Dakota, Washington and Idaho using 12 Fairchild Metro III/23, 19 seat aircraft. Big Sky is based in Billings, Montana and has codeshare agreements with Northwest Airlines, Alaska Airlines and America West Airlines. Big Sky is a provider of air service under the Essential Air Service program administered by the Department of Transportation. Big Sky maintains a web site at www.bigskyair.com.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements that are based on the best information currently available to management. These forward-looking statements are intended to be subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual developments will be those anticipated by MAIR Holdings, Inc. Actual results could differ materially from those projected because of a number of factors, some of which MAIR Holdings, Inc. cannot predict or control. For a discussion of some of these factors, please see the 'Cautionary Note Regarding Forward-Looking Statements' and 'Risk Factors Relating to the Company and the Airline Industry' in the company's Annual Report on Form 10-K for the year ended March 31, 2004.
MAIR Holdings, Inc.
Consolidated Condensed Statements of Operations
(unaudited - in thousands, except per share information)
Quarter Ended
June 30
---------------------------------
Favorable
2004 2003 (Unfavorable)
--------- --------- -------------
Operating revenues
Passenger $100,968 $106,762
Freight and other 8,731 7,271
--------- ---------
Total revenues 109,699 114,033 -3.8%
--------- ---------
Operating expenses
Wages and benefits 35,300 35,228
Aircraft fuel 5,111 5,717
Aircraft maintenance 20,426 18,380
Aircraft rents 25,032 26,778
Landing fees 1,769 1,765
Insurance and taxes 2,073 2,827
Depreciation and amortization 3,753 4,499
Administrative and other 13,637 14,096
--------- ---------
Total operating expenses 107,101 109,290 2.0%
--------- ---------
Operating income 2,598 4,743 -45.2%
Nonoperating income, net 367 2,979
--------- ---------
Income before income taxes 2,965 7,722 -61.6%
Provision for income taxes 58 4,216
--------- ---------
Net income $2,907 $3,506 -17.1%
========= =========
Earnings per common share - basic $0.14 $0.17
Earnings per common share -
diluted $0.14 $0.17
Weighted average shares - basic 20,452 20,321
Weighted average shares - diluted 20,976 20,322
MAIR Holdings, Inc
Consolidated Condensed Balance Sheets
(unaudited - in thousands)
June 30 March 31
2004 2004
--------- ---------
Assets
Cash and cash equivalents $50,513 $54,561
Short term investments 69,168 67,285
Other current assets 57,090 53,947
Net property and equipment 39,347 39,722
Long term investments 34,082 38,084
Other assets, net 13,108 13,721
--------- ---------
Total assets $263,308 $267,320
========= =========
Liabilities and Shareholders' Equity
Current liabilities $69,668 $76,057
Other liabilities and deferred credits 5,889 6,334
Shareholders' equity 187,751 184,929
--------- ---------
Total liabilities and shareholders' equity $263,308 $267,320
========= =========
MAIR Holdings, Inc
Selected Operating Statistics By Operating Entity
(unaudited)
Quarter Ended June 30
---------------------------------
Favorable
2004 2003 (Unfavorable)
---------------------------------
Mesaba Aviation, Inc.
Passengers 1,396,338 1,451,280 -3.8%
ASMs (000's) 714,716 714,550 0.0%
RPMs (000's) 480,199 437,286 9.8%
Load Factor 67.2% 61.2% 6.0 pts
Departures 50,421 56,015 -10.0%
Revenue per ASM (cents) 14.8 15.4 -3.9%
Cost per ASM (cents) 14.5 14.6 0.7%
Big Sky Transportation Co.
Passengers 21,174 27,877 -24.0%
ASMs (000's) 15,241 21,582 -29.4%
RPMs (000's) 5,491 7,319 -25.0%
Load Factor 36.0% 33.9% 2.1 pts
Departures 4,888 6,804 -28.2%
Revenue per ASM (cents) 23.7 19.3 22.8%
Cost per ASM (cents) 30.5 22.4 -36.2%
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