Second Quarter 2017 Fully Diluted Earnings per Share of $2.94

LAS VEGAS, July 26, 2017 (GLOBE NEWSWIRE) --  Allegiant Travel Company (NASDAQ:ALGT) today reported the following financial results for the second quarter 2017, as well as comparisons to the prior year:

	Three Months Ended  June 30,									Six Months Ended  June 30,
Unaudited		2017			2016		Change				2017			2016		Change
Total operating revenue (millions)	$	400.6		$	344.9		16.2	%		$	776.5		$	693.5		12.0	%
Operating income (millions)	$	85.2		$	104.5		(18.5	)%		$	158.1		$	225.6		(29.9	)%
Net income (millions)	$	48.5		$	60.8		(20.3	)%		$	90.1		$	132.8		(32.2	)%
Diluted earnings per share	$	2.94		$	3.68		(20.1	)%		$	5.43		$	7.97		(31.9	)%
Return on capital employed*											18.2	%		25.2	%

 * - see appendix for calculation, represents twelve months ended June 30

“I am pleased to announce we had our 58^th consecutive profitable quarter," stated Maurice J. Gallagher Jr., chairman and CEO of Allegiant Travel Company. "I am also pleased with our 21.3 percent operating margin during this transition time for the company. We are well into the wind down of our MD-80 fleet. We have taken delivery of our first four new 186 seat A320 aircraft from Airbus as of July 26th. We expect to place into service another ten Airbus aircraft including six more new A320s throughout the remainder of 2017. We also signed an agreement to acquire an additional 13 used A320s which we announced in June 2017. This was the last transaction needed to solidify the plan to retire all the MD-80s by the end of 2019.  Thank you to all of our team members for another successful quarter."

 Notable highlights        

• Airbus growth - In June, announced the lease arrangement of 13 used A320 aircraft to be delivered in 2017 and 2018. Will take the company to 92 committed Airbus either in service or for future delivery
• Network growth - As of June 30, 2017 the company is operating 382 routes versus 342 at the same time last year
• New routes - Announced 28 new routes expected to begin in the third and fourth quarters of 2017
  • Includes new cities of Milwaukee, Wisconsin; Norfolk, Virginia; and Gulfport, Mississippi
• Shareholder returns - $92 million was returned through a combination of the recurring dividend paid in June 2017 and share repurchases during the quarter. The company:
  • Will pay a dividend of $0.70 per share on September 5, 2017 to shareholders of record as of August 18, 2017
  • Returned $84 million to shareholders through the repurchase of 589,000 open market shares in the quarter. This was the highest dollar amount spent in share repurchases for one quarter in the history of the company
  • The Board of Directors increased the share repurchase authorization to $100 million

 Second quarter 2017 revenue

• TRASM results - Second quarter TRASM increased 3.1 percent
  • Impact of Easter shift into April this year benefited the quarter contributing approximately 1.5 percentage points of TRASM
• New markets (markets operating less than one year) were approximately thirteen percent of ASMs for the second quarter which is similar to last year

 Third quarter 2017 revenue trends

• TRASM guidance - Third quarter TRASM is expected to be between negative .5 and positive 1.5 percent versus the third quarter last year
  • Increased MD-80 spares, which limits the ability to grow peak period flying, is expected to cost the third quarter one percentage point of TRASM
  • Off peak flying is expected to be almost 26 percent of ASMs for the third quarter, versus approximately 22 percent last year

Second quarter cost trends

• Second quarter CASM ex fuel increased 13.2 percent versus the same period last year driven by:
  • New pilot agreement - Added six percentage points
  • Elimination of the credit card surcharge - Added four percentage points
      • In January 2017, we discontinued our credit card surcharge, which had previously been applied as a reduction to sales and marketing expense
  • Irregular operations - Added two percentage points 

Third quarter 2017 cost trends

• Third quarter 2017 CASM ex fuel is expected to increase between sixteen and eighteen percent versus the same period last year, driven by:
  • New pilot agreement - Expected to add three percentage points
  • Incremental depreciation on Airbus aircraft - Expected to add three percentage points
  • Elimination of credit card surcharge - Expected to add three percentage points
  • Transition costs - Cost related to the fleet transition such as reduced ASMs through less utilization of MD-80s and other operational inefficiencies driven by the move to an all Airbus fleet is expected to add five percentage points 

Full year 2017 cost trends

• Full year 2017 CASM ex fuel is expected to remain up between ten and twelve percent, consistent with prior guidance
• Maintenance and repairs expense is expected to remain between $100 and $110 thousand per in-service aircraft per month for full year 2017, consistent with prior guidance
• Total ownership expense per aircraft per month - Full year 2017 ownership expense per in-service aircraft per month is expected to remain between $125 and $135 thousand, consistent with prior guidance 

Balance sheet activity and full year 2017 trends

• Full year CAPEX guidance (Excluding Airbus deferred heavy maintenance) is expected to be $525 million, consistent with prior guidance
• Raised $113 million in debt proceeds during the second quarter
  • Currently have five unencumbered Airbus aircraft

Guidance, subject to revision
		3Q17
Estimated TRASM year-over-year change		(0.5) to 1.5%
Fixed fee and other revenue guidance		3Q17
Fixed fee and other revenue (millions)		$17 to $19
Capacity guidance
System	3Q17	4Q17	FY17
Departure year-over-year growth	4 to 8%	7 to 11%
ASM year-over-year growth	3 to 7%	9 to 13%	9 to 11%
Scheduled
Departure year-over-year growth	4 to 8%	7 to 11%
ASM year-over-year growth	3 to 7%	9 to 13%	9 to 11%
Cost guidance	3Q17		FY17
CASM ex fuel* – year-over-year change	16 to 18%		10 to 12%
CAPEX guidance			FY17
Capital expenditures (millions)			$	525
Capitalized Airbus deferred heavy maintenance (millions) **			$	30
Aircraft leasing arrangement (millions) ***			$	150

 * - CASM ex fuel – cost per available seat mile excluding fuel expense
** - Not included in capital expenditure total
*** - Not included in capital expenditure total, present value of leases over lease term

Aircraft fleet plan by end of period
Aircraft - (seats per AC)		1Q17		2Q17		3Q17		YE17
MD-80 (166 seats)		47		45		40		37
757 (215 seats)		2		2		2		—
A319 (156 seats)		19		20		21		22
A320 (177/186 seats)		17		21		25		29
Total		85		88		88		88

Aircraft listed in table above include only in-service aircraft, planned retirements and future aircraft under contract (subject to change)

Allegiant Travel Company will host a conference call with analysts at 4:30 p.m. ET Wednesday, July 26, 2017 to discuss its second quarter 2017 financial results. A live broadcast of the conference call will be available via the Company’s Investor Relations website homepage at http://ir.allegiantair.com. The webcast will also be archived in the “Events & Presentations” section of the website.

Allegiant^®

Las Vegas-based Allegiant (NASDAQ:ALGT) is focused on linking travelers in small cities to world-class leisure destinations. The airline offers industry-low fares on an all-jet fleet while also offering other travel-related products such as hotel rooms and rental cars. All can be purchased only through the company website, Allegiant.com. Beginning with one aircraft and one route in 1999, the company has grown to more than 85 aircraft and 350 routes across the country with base airfares less than half the cost of the average domestic roundtrip ticket. For downloadable press kit, including photos, visit: http://gofly.us/iiFa303wrtF.

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in this press release that are not historical facts are forward-looking statements. These forward-looking statements are only estimates or predictions based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include our statements regarding future unit revenue, future operating expense, ASM growth, departure growth, fixed-fee and other revenues, expected capital expenditures, number of contracted aircraft to be placed in service in the future, timing of aircraft retirements, as well as other information concerning future results of operations, business strategies, financing plans, industry environment and potential growth opportunities. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," “guidance,” "anticipate," "intend," "plan," "estimate", “project”, “hope” or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov . These risk factors include, without limitation, an accident involving, or problems with, our aircraft, our reliance on our automated systems, limitation on growth as we transition to a single fleet type, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed , the effect of economic conditions on leisure travel, debt covenants and balances, the ability to finance aircraft under contract, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the possible loss of key personnel, economic and other conditions in markets in which we operate, governmental regulation, increases in maintenance costs and cyclical and seasonal fluctuations in our operating results.

Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.

Detailed financial information follows: 

Allegiant Travel Company Consolidated Statements of Income (in thousands, except per share amounts) (Unaudited)
	Three Months Ended June 30,										Percent
		2017					2016				change
OPERATING REVENUE:
Scheduled service revenue	$		220,615			$		189,122			16.7
Ancillary revenue:
Air-related charges		145,405					128,713				13.0
Third party products		14,304					11,965				19.5
Total ancillary revenue		159,709					140,678				13.5
Fixed fee contract revenue		11,029					6,706				64.5
Other revenue		9,261					8,345				11.0
Total operating revenue		400,614					344,851				16.2
OPERATING EXPENSES:
Aircraft fuel		85,387					60,005				42.3
Salary and benefits		92,221					68,553				34.5
Station operations		38,998					33,328				17.0
Maintenance and repairs		28,645					29,261				(2.1	)
Depreciation and amortization		30,129					25,396				18.6
Sales and marketing		12,861					5,317				141.9
Aircraft lease rentals		2,400					219				NM
Other		24,777					18,296				35.4
Total operating expense		315,418					240,375				31.2
OPERATING INCOME		85,196					104,476				(18.5	)
OTHER (INCOME) EXPENSE:
Interest income		(1,475		)			(710		)		107.7
Interest expense		8,889					7,390				20.3
Other, net		(493		)			(300		)		64.3
Total other (income) expense		6,921					6,380				8.5
INCOME BEFORE INCOME TAXES		78,275					98,096				(20.2	)
PROVISION FOR INCOME TAXES		29,800					37,249				(20.0	)
NET INCOME	$		48,475			$		60,847			(20.3	)
Earnings per share to common shareholders (1):
Basic	$	2.94				$	3.69				(20.3	)
Diluted	$	2.94				$	3.68				(20.1	)
Weighted average shares outstanding used in computing earnings per share to common shareholders (1):
Basic		16,198					16,420				(1.4	)
Diluted		16,220					16,442				(1.4	)

NM - Not meaningful
(1) The Company's unvested restricted stock awards are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock. The Basic and Diluted earnings per share for the periods presented reflect the two-class method mandated by accounting guidance for the calculation of earnings per share. The two-class method adjusts both the net income and the shares used in the calculation. Application of the two-class method did not have a significant impact on the Basic and Diluted earnings per share for the periods presented.

 

Allegiant Travel Company Operating Statistics (Unaudited)
	Three Months Ended June 30,								Percent
	2017				2016				change*
OPERATING STATISTICS
Total system statistics:
Passengers	3,306,193				2,878,460				14.9
Revenue passenger miles (RPMs) (thousands)	2,958,808				2,665,753				11.0
Available seat miles (ASMs) (thousands)	3,584,209				3,178,904				12.7
Load factor	82.6		%		83.9		%		(1.3	)
Operating expense per ASM (CASM) (cents)***	8.80				7.56				16.4
Fuel expense per ASM (cents)***	2.38				1.89				25.9
Operating CASM, excluding fuel (cents)	6.42				5.67				13.2
ASMs per gallon of fuel	71.9				72.0				(0.1	)
Departures	24,721				20,969				17.9
Block hours	56,056				48,506				15.6
Average stage length (miles)	866				893				(3.0	)
Average number of operating aircraft during period	85.3				83.8				1.8
Average block hours per aircraft per day	7.2				6.4				12.5
Full-time equivalent employees at end of period	3,628				3,228				12.4
Fuel gallons consumed (thousands)	49,858				44,153				12.9
Average fuel cost per gallon***	$	1.71			$	1.36			25.7
Scheduled service statistics:
Passengers	3,266,789				2,850,112				14.6
Revenue passenger miles (RPMs) (thousands)	2,903,257				2,626,770				10.5
Available seat miles (ASMs) (thousands)	3,436,872				3,072,135				11.9
Load factor	84.5		%		85.5		%		(1.0	)
Departures	23,609				20,171				17.0
Block hours	53,632				46,763				14.7
Total scheduled service revenue per ASM (TRASM) (cents)**	11.07				10.74				3.1
Average fare - scheduled service	$	67.54			$	66.36			1.8
Average fare - ancillary air-related charges	$	44.51			$	45.16			(1.4	)
Average fare - ancillary third party products	$	4.38			$	4.20			4.3
Average fare - total	$	116.43			$	115.72			0.6
Average stage length (miles)	869				897				(3.1	)
Fuel gallons consumed (thousands)	47,821				42,698				12.0
Average fuel cost per gallon***	$	1.70			$	1.36			25.0
Percent of sales through website during period	95.1		%		93.9		%		1.2

* Except load factor and percent of sales through website, which is percentage point change.
** Various components of this measurement do not have a direct correlation to ASMs. These figures are provided on a per ASM basis to facilitate comparison with airlines reporting revenues on a per ASM basis.
*** Includes effect of $8.3 million fuel tax refunds in the second quarter of 2016.

Allegiant Travel Company Consolidated Statements of Income  (in thousands, except per share amounts) (Unaudited)
	Six Months Ended June 30,										Percent
		2017					2016				change
OPERATING REVENUE:
Scheduled service revenue	$		432,713			$		390,728			10.7
Ancillary revenue:
Air-related charges		276,970					249,643				10.9
Third party products		27,046					23,223				16.5
Total ancillary revenue		304,016					272,866				11.4
Fixed fee contract revenue		22,289					13,507				65.0
Other revenue		17,434					16,366				6.5
Total operating revenue		776,452					693,467				12.0
OPERATING EXPENSES:
Aircraft fuel		170,049					113,663				49.6
Salary and benefits		188,519					137,761				36.8
Station operations		70,830					64,061				10.6
Maintenance and repairs		58,740					55,753				5.4
Depreciation and amortization		60,678					50,081				21.2
Sales and marketing		22,859					11,125				105.5
Aircraft lease rentals		2,564					452				NM
Other		44,129					34,968				26.2
Total operating expense		618,368					467,864				32.2
OPERATING INCOME		158,084					225,603				(29.9	)
OTHER (INCOME) EXPENSE:
Interest income		(2,739		)			(1,321		)		107.3
Interest expense		17,291					14,629				18.2
Other, net		(854		)			(663		)		28.8
Total other (income) expense		13,698					12,645				8.3
INCOME BEFORE INCOME TAXES		144,386					212,958				(32.2	)
PROVISION FOR INCOME TAXES		54,279					80,131				(32.3	)
NET INCOME		90,107					132,827				(32.2	)
Earnings per share to common shareholders (1):
Basic	$	5.44				$	7.98				(31.8	)
Diluted	$	5.43				$	7.97				(31.9	)
Weighted average shares outstanding used in computing earnings per share to common shareholders (1):
Basic		16,290					16,549				(1.6	)
Diluted		16,317					16,574				(1.6	)

NM - Not meaningful
(1) The Company's unvested restricted stock awards are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock. The Basic and Diluted earnings per share for the periods presented reflect the two-class method mandated by accounting guidance for the calculation of earnings per share. The two-class method adjusts both the net income and shares used in the calculation. Application of the two-class method did not have a significant impact on the Basic and Diluted earnings per share for the periods presented. 

Allegiant Travel Company Operating Statistics  (Unaudited)
	Six Months Ended June 30,								Percent
	2017				2016				change*
OPERATING STATISTICS
Total system statistics:
Passengers	6,187,441				5,471,367				13.1
Revenue passenger miles (RPMs) (thousands)	5,667,306				5,185,903				9.3
Available seat miles (ASMs) (thousands)	6,961,046				6,180,289				12.6
Load factor	81.4		%		83.9		%		(2.5	)
Operating expense per ASM (CASM) (cents)***	8.88				7.57				17.3
Fuel expense per ASM (cents)***	2.44				1.84				32.6
Operating CASM, excluding fuel (cents)	6.44				5.73				12.4
ASMs per gallon of fuel	72.0				72.1				(0.1	)
Departures	47,016				39,887				17.9
Block hours	109,249				94,776				15.3
Average stage length (miles)	883				913				(3.3	)
Average number of operating aircraft during period	85.0				83.0				2.4
Average block hours per aircraft per day	7.1				6.3				12.7
Full-time equivalent employees at end of period	3,628				3,228				12.4
Fuel gallons consumed (thousands)	96,708				85,676				12.9
Average fuel cost per gallon***	$	1.76			$	1.33			32.3
Scheduled service statistics:
Passengers	6,112,269				5,417,421				12.8
Revenue passenger miles (RPMs) (thousands)	5,565,191				5,110,323				8.9
Available seat miles (ASMs) (thousands)	6,674,035				5,970,086				11.8
Load factor	83.4		%		85.6		%		(2.2	)
Departures	44,857				38,346				17.0
Block hours	104,507				91,326				14.4
Total scheduled service revenue per ASM (TRASM) (cents)**	11.04				11.11				(0.6	)
Average fare - scheduled service	$	70.80			$	72.12			(1.8	)
Average fare - ancillary air-related charges	$	45.31			$	46.08			(1.7	)
Average fare - ancillary third party products	$	4.42			$	4.29			3.0
Average fare - total	$	120.53			$	122.49			(1.6	)
Average stage length (miles)	887				917				(3.3	)
Fuel gallons consumed (thousands)	92,713				82,852				11.9
Average fuel cost per gallon***	$	1.75			$	1.33			31.6
Percent of sales through website during period	94.2		%		94.1		%		0.1

* Except load factor and percent of sales through website, which is percentage point change.
** Various components of this measurement do not have a direct correlation to ASMs. These figures are provided on a per ASM basis to facilitate comparison with airlines reporting revenues on a per ASM basis.
*** Includes effect of $8.3 million fuel tax refunds in the second quarter of 2016.

Summary Balance Sheet 

(millions)	6/30/2017				12/31/2016				Change
	(unaudited)
Unrestricted cash
Cash and cash equivalents	$	20.0			$	64.7			(69.1	)%
Short-term investments	323.1				269.3				20.0
Long-term investments	159.8				124.8				28.0
Total unrestricted cash	502.9				458.8				9.6
Debt
Current maturities of long-term debt, net of related costs	101.3				86.2				17.5
Long-term debt, net of current maturities and related costs	776.2				722.0				7.5
Total debt	877.5				808.2				8.6
Total Allegiant Travel Company shareholders’ equity	$	459.5			$	473.6			(3.0	)%

Summary Cash Flow 

	Six Months Ended June 30,
Unaudited (millions)	2017				2016				Change
Cash provided by operating activities	$	263.1			$	256.1			2.7	%
Purchase of property and equipment, including capitalized interest*	(182.3		)		(105.2		)		73.3
Repurchase of common stock	(84.9		)		(63.3		)		34.1
Cash dividends paid to shareholders	(23.2		)		(44.4		)		(47.7	)
Proceeds from the issuance of long-term debt	134.5				28.0				380.4
Principal payments on long-term debt	(64.9		)		(39.2		)		65.6

* Includes aircraft pre-delivery deposits.

 

Appendix A Additional Financial Information (Unaudited)
	Twelve Months Ended June 30,
Return on capital calculation (millions)	2017				2016
Net income attributable to Allegiant Travel Company	$	176.9			$	234.0
Income tax	100.5				138.0
Interest expense	31.5				27.3
Less interest income	(4.4		)		(2.2		)
	304.5				397.1
Interest income	4.4				2.2
Tax rate	36.2		%		37.1		%
Numerator	197.1				251.2
Total assets as of prior June 30	1,449.0				1,319.5
Less current liabilities as of prior June 30	443.2				386.3
Plus short term debt as of prior June 30	80.1				65.2
Denominator	1,085.9				998.4
Return on capital employed	18.2		%		25.2		%

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