RENO, Nev., Feb. 19 /PRNewswire/ -- Reno Air, Inc.
(Nasdaq: RENO; PCX: RNO) today reported that in the fourth quarter ended
December 31, 1997 it had a net loss of $12.4 million, or $1.17 per share of
common stock (basic and diluted) compared to a loss of $6.3 million, or $0.61
per share, in the fourth quarter of 1996. For the year ended December 31,
1997, Reno Air reported a net loss of $12.3 million, or $1.18 per common
share, compared to a profit of $2.0 million, or $0.19 per share assuming
dilution in 1996.
Separately, Reno Air announced the election of Joseph R. O'Gorman, most
recently a senior executive of United Airlines, as its chairman, president and
chief executive officer.
Operating Revenues
Operating revenues increased 7.3 percent to $91.6 million during the
fourth quarter of 1997 compared to $85.4 million during the fourth quarter of
1996. This increase was driven by a 15.6 percent increase in passenger yield
per revenue mile to 11.8 cents in the fourth quarter of 1997 from 10.2 cents
in the comparable quarter last year. Annual operating revenues increased 9.7
percent to $383.9 million compared to $349.9 million in 1996.
The fourth quarter load factor was 62.0 percent, a decrease of 5.3 points
from the fourth quarter of 1996. The 1997 annual load factor declined 0.9
percentage points from last year to 66.5. Both the fourth quarter revenue and
load factor were negatively impacted by problems related to implementation of
a new passenger reservation system.
Operating Expenses
Operating cost per available seat mile increased to 8.87 cents in the
fourth quarter of 1997 compared to 7.96 cents during the same quarter of 1996.
Unit operating expenses in the fourth quarter continued higher than last year,
primarily due to increases in maintenance costs, installation of a new
reservations system, and increases in labor costs resulting from increases in
salaries due to a more competitive labor market and from the addition of
personnel. These were partially offset by lower costs of fuel and insurance.
Reno Air also announced the termination of its Revolving Line of Credit
Loan Agreement with U.S. Bank of Nevada and that the bank had agreed to waive
through the third quarter of 1998 compliance with certain financial covenants
of its $2.5 million mortgage loan on the Company's maintenance hanger. The
Company had never drawn and had no plans to draw upon the line of credit that
it had maintained with U.S. Bank of Nevada.
The Company indicated that its balance sheet and cash position had
substantially improved in 1997 as a result of the successful conclusion of its
private placement of preferred stock in October of 1997.
Separately, the Company announced that it declared a dividend of $0.5625
per share on its Series A Cumulative Convertible Exchangeable Preferred Stock.
This dividend will be paid on March 15, 1998 to holders of record of preferred
shares at the close of business on March 5, 1998.
Reno Air currently serves 22 cities with over 200 peak daily scheduled
departures. The carrier's state-of-the-art fleet of 30 MD-80 and MD-90 jets
has an average age of less than seven years. Reno Air offers everyday low
fares, its own award-winning frequent flyer program, QQuick Miles(TM),
American Airlines(R) AAdvantage(R) miles, advance seat assignments, a spacious
first class cabin, "EZtrip(TM)" ticketless travel, and full participation in
all major computer reservation systems.
Reno Air, Inc.
Statements of Operations
For the Years and Quarters Ended December 31, 1997 and 1996
(in thousands of dollars, except earnings (loss) per share)
1997 1996
Year 4th Quarter Year 4th Quarter
(audited) (unaudited) (audited)(unaudited)
OPERATING REVENUES:
Passenger $ 360,973 $ 85,628 $ 330,861 $ 79,005
Other 22,951 6,009 19,023 6,423
Total operating revenues 383,924 91,637 349,884 85,428
OPERATING EXPENSES:
Salaries, wages and benefits 67,675 17,547 53,989 13,403
Aircraft fuel and oil 68,490 16,704 66,806 18,537
Aircraft leases 68,908 16,769 61,322 16,609
Maintenance 38,860 14,061 26,190 6,484
Handling, landing and
airport fees 39,218 9,745 35,192 9,559
Advertising, sales and
distribution 28,790 6,816 30,244 6,898
Commissions 20,341 4,759 19,402 4,521
Facility leases 14,098 3,843 11,206 2,886
Insurance 6,057 1,338 7,671 1,813
Communications 5,663 1,564 4,699 1,453
Depreciation and amortization 10,310 2,998 6,447 2,471
Other 26,163 7,315 24,232 6,661
Total operating expenses 394,573 103,459 347,400 91,295
OPERATING INCOME (LOSS) (10,649) (11,822) 2,484 (5,867)
NONOPERATING INCOME (EXPENSE):
Interest expense (5,473) (1,666) (4,348) (1,505)
Interest income 2,480 923 3,013 785
Gains on sales of fixed assets 2,429 1,150 1,125 --
Other, net (414) (236) (243) 320
Total nonoperating
income (expense) (978) 171 (453) (400)
NET INCOME (LOSS) BEFORE
INCOME TAXES & PREFERRED
STOCK DIVIDENDS (11,627) (11,651) 2,031 (6,267)
INCOME TAX PROVISION -- -- -- --
NET INCOME (LOSS) BEFORE
PREFERRED STOCK DIVIDENDS (11,627) (11,651) 2,031 (6,267)
PREFERRED STOCK DIVIDENDS 718 718 -- --
NET INCOME (LOSS) APPLICABLE
TO COMMON STOCK $ (12,345) $ (12,369) $ 2,031 $ (6,267)
EARNINGS (LOSS) PER COMMON SHARE
AND POTENTIAL COMMON SHARE:
Earnings (loss) per
common share $ (1.18) $ (1.17) $ 0.20 $ (0.61)
Earnings (loss) per common
share - assuming dilution $ (1.18) $ (1.17) $ 0.19 $ (0.61)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES AND POTENTIAL COMMON
SHARES OUTSTANDING:
Basic earnings (loss)
per share 10,472,992 10,542,075 10,239,957 10,330,600
Diluted earnings (loss)
per share 10,472,992 10,542,075 10,863,872 10,330,600
Reno Air, Inc.
Selected Operating Statistics
For the Years and Quarters Ended December 31, 1997 and 1996
1997 1996
Year 4th Quarter Year 4th Quarter
OPERATING STATISTICS:
Revenue passenger miles
(RPMs - in thousands) 3,124,312 722,908 3,035,169 771,810
Available seat miles
(ASMs - in thousands) 4,698,332 1,165,751 4,503,363 1,147,115
Load factor (percent) 66.50 62.01 67.40 67.28
Revenue passengers 5,530,454 1,334,343 5,161,009 1,374,821
Average passenger stage
length (in miles) 565 542 588 561
Average aircraft stage
length (in miles) 510 490 536 521
Yield per RPM (cents) 11.55 11.84 10.90 10.24
Passenger revenue per ASM (cents) 7.68 7.35 7.35 6.89
Operating cost per ASM (cents) 8.40 8.87 7.71 7.96
Break-even load factor (percent) 68.77 70.97 66.99 72.62
Average fuel cost per gallon $ 0.75 $ 0.73 $ 0.77 $ 0.85
SOURCE Reno Air, Inc.
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Related links:
http://www.renoair.com
CONTACT:
Reno Air Corporate Communications,
702-954-5000, Evening- Weekend, 888-396-0817
CNOC: http://www.prnewswire.com or fax, 800-758-5804, ext.
740075
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