RENO, Nev., July 30 /PRNewswire/ -- Reno Air, Inc.
(Nasdaq: RENO; PCX: RNO) today reported a profit of $1.8 million for the
second quarter of 1998 before restructuring charges of $725,000. This results
in a net income of $1.04 million, or $.10 per share of common stock (basic and
diluted), compared to a net income of $0.2 million or $0.02 per share of
common stock, for the same quarter last year.
"The second quarter earnings -- almost five times that of last year, and a
significant turn-around from the $8.6 million loss in the first quarter -- is
a tribute to the hard work and dedication of the almost 2,000 Reno Air
employees," said CEO Joe O'Gorman
"These results do not indicate that our problems are solved, but we are
moving in the right direction and things are looking better," said O'Gorman.
After a management change in February, an action plan was put in place to
cut costs, schedule the airline more efficiently and improve the product and
service. This resulted in five station closings, the elimination of 15% of
the workforce, including 20% of management and administration and 5 of 11
officer-level positions. The fleet was reduced from 30 aircraft to 28 (going
to 27 in September), processes were streamlined, functions were consolidated,
and revenue accounting and the tour operation were outsourced.
During the second quarter, the airline saw substantial improvement in
on-time performance, aircraft appearance and customer service. On-time
arrivals improved to 87.7% in May surpassing the best of the major airlines in
that month according to the latest Department of Transportation statistics,
and June and July look to continue that performance. Reservations service
levels are also getting back to normal with 120 additional agents now on the
phones.
Operating revenues increased 1.4 percent to $98.8 million during the
second quarter of 1998 compared to $97.4 million during the second quarter of
1997. Yield improved by 5.3 percent over last year as a result of aggressive
price and inventory management and because of the reallocation of resources
into more profitable markets. The second quarter 1998 load factor was
66.8 percent, a decrease of 2.2 points from the second quarter of 1997.
Operating expenses decreased to $95.7 million in the second quarter of
1998 compared to $96.5 million for the same period of 1997.
Passenger unit revenues were up almost 2% over the prior year while unit
costs decreased by approximately 2%.
To the extent any of the information or comments are interpreted as
forward-looking statements within the meaning of the Securities Litigation
Reform Act, we caution that actual results may differ materially. Certain of
the factors that could impact future results are discussed in the company's
annual report on Form 10-K, under the heading "item 1 -- Cautionary
Statements.
Reno Air, Inc.
Statements of Operations and Selected Operating Statistics
For the Three Months Ended June 30, 1998 and 1997
(in thousands of dollars, except for earnings per share and as noted at the
Operating Statistics)
Three months ended 1998 vs. 1997 Actual
June 30, favorable (unfavorable)
1998 1997 Amount Percent
Operating revenues:
Passenger revenues:
Scheduled $87,490 $88,461 $(971) (1.1)
Track charter 6,682 3,007 3,675 122.2
Ad hoc charter, net 351 1,431 (1,080) (75.5)
Quick Escapes 1,404 1,808 (404) (22.3)
Cargo and mail 977 1,260 (283) (22.5)
Other 1,880 1,455 425 29.2
Total operating
revenues 98,784 97,422 1,362 1.4
Operating expenses:
Salaries, wages and
benefits 17,050 16,864 (186) (1.1)
Aircraft fuel and
oil 13,325 16,162 2,837 17.6
Aircraft leases 17,258 17,513 255 1.5
Aircraft maintenance 10,280 8,068 (2,212) (27.4)
Handling, landing
and airport fees 9,848 9,789 (59) (0.6)
Advertising, marketing
and sales 6,963 7,610 647 8.5
Commissions 4,963 5,063 100 2.0
Facility leases 3,679 3,500 (179) (5.1)
Insurance 1,452 1,390 (62) (4.5)
Communications 1,335 1,442 107 7.4
Depreciation 1,971 2,484 513 20.7
Restructuring charges 725 -- (725)
Other 6,875 6,592 (283) (4.3)
Total operating
expenses 95,724 96,477 753 0.8
Operating income 3,060 945 2,115 223.8
Nonoperating income
(expense):
Interest expense (1,468) (1,168) (300) (25.7)
Interest income 702 538 164 30.5
Other (445) (91) (354) (389.0)
Nonoperating income
(expense), net (1,211) (721) (490) (68.0)
Income before income
tax provision and
preferred stock
dividends 1,849 224 1,625 725.4
Income tax (expense)
benefit -- -- --
Net income before
preferred stock
dividends 1,849 224 1,625 725.4
Preferred stock
dividends 807 -- (807)
Net income applicable
to common stock $1,042 $224 $818 365.2
Income per common
share and potential
common share:
Basic $0.10 $0.02 $0.08 400.00
Diluted $0.10 $0.02 $0.08 400.00
Weighted average
common shares and
potential common
shares outstanding:
Basic 10,662,191 10,447,698 214,493 2.05
Diluted 10,963,673 10,767,081 196,592 1.83
Selected operating
statistics:
Revenue passenger
miles (RPMs, in
thousands) 784,660 802,508 (17,848) (2.2)
Available seat
miles (ASMs, in
thousands) 1,174,028 1,161,784 12,244 1.1
Load factor
(percent) 66.83 69.08 (2.24)
Passengers enplaned
(scheduled and
track charter) 1,340,100 1,404,943 (64,843) (4.6)
Yield (cents) 12.00 11.40 0.60 5.3
Unit Revenue (cents):
Passenger unit
revenue 8.02 7.87 0.15 1.9
Total unit revenues 8.41 8.39 0.03 0.3
Unit Cost (cents) 8.15 8.30 0.15 1.8
Breakeven load factor
after preferred stock
dividends (percent) 66.10 68.91 2.81 4.1
Weighted average number
of aircraft during the
period (a) 28 29
Average daily aircraft
utilization (revenue
block hours) 9.90 9.57 0.33 4.00
Block Hours 25,631 26,120 (488) (1.87)
Number of full-time
equivalent employees
(FTE) avg. for period 2,035 2,223 188 8.46
Average fuel cost per
gallon (excluding
into-plane
charges - cents) 61.27 71.21 9.94 13.96
(a) excludes one aircraft on lease to another company.
SOURCE Reno Air
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Related links:
http://www.renoair.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 740075
CONTACT:
Connie Huff of Reno Air Corporate
Communications, 702-954-5097, or evening/weekend, 888-396-0817
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