Skywest, inc. announces first quarter 2022 profit
St. george, utah--(business wire)--skywest, inc. (nasdaq: skyw) (“skywest”) today reported financial and operating results for q1 2022, including net income of $18 million, or $0.35 per diluted share, compared to a net income of $36 million, or $0.71 per diluted share, for q1 2021. commenting on the results, chip childs, chief executive officer of skywest, said, “demand for our product remained strong during the first quarter and we were able to generate results slightly ahead of our expectations. we are pleased to have the liquidity and resources to position us for long-term success and to continue to invest in our fleet transition. we continue working through an imbalance of pilots, which is our current constraint in monetizing the exceptionally strong demand for our product. i want to thank our people for their creativity and flexibility as we navigate this transition.” financial results revenue was $735 million in q1 2022, up from $535 million in q1 2021, or 38%, as a result of skywest’s q1 2022 block hours on completed flights up 13% from q1 2021, with the remaining increase largely due to covid-19 revenue concessions given to our major airline partners in q1 2021. operating expenses were $683 million in q1 2022, up from $454 million in q1 2021, or 51%. the increase in operating expenses was primarily due to $193 million in payroll support program grants received from u.s. treasury reflected as an offset to q1 2021 operating expenses. salaries, wages and benefits were up $80 million from q1 2021 and maintenance costs were down $55 million from q1 2021. capital and liquidity skywest had $856 million in cash and marketable securities at march 31, 2022, similar to $860 million at december 31, 2021. total debt at march 31, 2022 was $3.2 billion, up from $3.1 billion at december 31, 2021, reflecting the financing of four new e175 aircraft delivered in q1 2022. capital expenditures during q1 2022 were $114 million for the purchase of the four e175s and other fixed assets. status update on previously announced agreements skywest is coordinating with its major airline partners to optimize the timing of upcoming fleet deliveries under previously announced agreements. the anticipated future delivery dates summarized below are based on currently available information and are subject to change. flying contract with american for 20 e175 aircraft 18 aircraft were delivered in 2021 and two deliveries are expected in q2 2022. seven aircraft were in scheduled service as of q1 2022 and 13 aircraft are expected to be placed into service by the end of 2022. flying contract with delta for 16 e175 aircraft 16 aircraft deliveries are anticipated in the second half of 2022. skywest anticipates financing the aircraft through debt. the 16 aircraft are expected to be placed into service by early 2023 flying contract with alaska for 11 e175 aircraft four aircraft were delivered in q1 2022, six deliveries are anticipated in q2 2022, and one delivery is expected in the first half of 2023. 10 aircraft are scheduled to be placed into service in 2022 and one aircraft in 2023. skywest anticipates financing the aircraft through debt. combined, skywest anticipates placing 47 e175 aircraft into service under these previously announced agreements by early 2023. as of march 31, 2022, 22 aircraft were delivered and 25 aircraft have deliveries scheduled through early 2023. about skywest skywest, inc. is the holding company for skywest airlines and skywest leasing, an aircraft leasing company. skywest airlines has a fleet of over 500 aircraft connecting passengers to over 230 destinations throughout north america. skywest airlines operates through partnerships with united airlines, delta air lines, american airlines and alaska airlines carrying more than 36 million passengers in 2021. skywest will host its conference call to discuss its first quarter 2022 results today, april 28, 2022, at 2:30 p.m. mountain time. the conference call number is 1-888-440-4038 for domestic callers, and 1-646-960-0861 for international callers. please call up to ten minutes in advance to ensure you are connected prior to the start of the call. the conference call will also be available live on the internet at https://events.q4inc.com/attendee/358010671.this press release and additional information regarding skywest, including access information for the digital rebroadcast of the first quarter 2022 results call, participation at investor conferences and investor presentations can be accessed at inc.skywest.com. forward looking-statements in addition to historical information, this release contains forward-looking statements within the meaning of the private securities litigation reform act of 1995. words such as “forecasts,” "expects," "intends," "believes," "anticipates," “estimates,” "should," "likely" and similar expressions identify forward-looking statements. such statements include, but are not limited to, statements about the impact of the covid-19 pandemic on skywest’s business, financial condition and results of operations, the scheduled aircraft deliveries for skywest in upcoming periods, including the return to pre-covid production levels and expected timing thereof, expected production levels in 2022 and associated staffing challenges, skywest’s coordination with major airline partners to optimize the delivery of aircraft under previously announced agreements, the expected terms, timing and benefits related to skywest’s leasing and joint venture transactions, as well as skywest’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts. all forward-looking statements included in this release are made as of the date hereof and are based on information available to skywest as of such date. skywest assumes no obligation to update any forward-looking statements unless required by law. readers should note that many factors could affect the future operating and financial results of skywest and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this release. these factors include, but are not limited to, uncertainties regarding the impact of the funding received under the u.s. treasury department’s payroll support programs on skywest’s business and operations, the continued uncertainty of the duration, scope and impact of covid-19, a further spread or worsening of covid-19, and other potential future outbreaks of infectious diseases or other health concerns, the consequences of the covid-19 pandemic to economic conditions, the travel industry and our major partners in general and the financial condition and operating results of skywest in particular, the prospects of entering into agreements with existing or other carriers to fly new aircraft, ongoing negotiations between skywest and its major partners regarding their contractual obligations, uncertainties regarding operation of new aircraft, the ability to attract and retain qualified pilots and related staffing challenges, the impact of regulatory issues such as pilot rest rules and qualification requirements, and the ability to obtain aircraft financing. actual operational and financial results of skywest will likely also vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of other reasons, including, in addition to those identified above: the existing global covid-19 pandemic and the outbreak of any other disease or similar public health threat that affects travel demand or travel behavior; the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel, including related to the duration and impact of the covid-19 pandemic, and related decreases in customer demand and spending; the financial stability of skywest’s major partners and any potential impact of their financial condition on the operations of skywest; uncertainty regarding ongoing hostility between russia and the ukraine and the related impacts on macroeconomic conditions and on the international operations of any of our major airline partners as a result of such conflict; fluctuations in flight schedules, which are determined by the major partners for whom skywest conducts flight operations; variations in market and economic conditions; significant aircraft lease and debt commitments; estimated useful life of long-lived assets, residual aircraft values and related impairment charges; labor relations and costs; the impact of global instability; rapidly fluctuating fuel costs, and potential fuel shortages; the impact of weather-related or other natural disasters on air travel and airline costs; aircraft deliveries; and other unanticipated factors. risk factors, cautionary statements and other conditions which could cause skywest’s actual results to differ materially from management’s current expectations are contained in skywest’s filings with the securities and exchange commission, including its most recent annual report on form 10-k, quarterly reports on form 10-q and current reports on form 8-k. additionally, the risks, uncertainties and other factors set forth above or otherwise referred to in the reports that the company files with the securities and exchange commission may be further amplified by the global impact of the covid-19 pandemic. skywest, inc. and subsidiaries condensed consolidated statements of income (dollars and shares in thousands, except per share amounts) (unaudited) three months ended march 31, 2022 2021 operating revenues: flying agreements $ 708,063 $ 511,191 lease, airport services and other 27,089 23,364 total operating revenues 735,152 534,555 operating expenses: salaries, wages and benefits 300,058 219,842 aircraft maintenance, materials and repairs 148,413 203,827 depreciation and amortization 102,745 109,597 aircraft fuel 25,090 19,194 airport-related expenses 19,205 24,448 aircraft rentals 15,996 15,490 payroll support grant — (193,173 ) other operating expenses 71,597 54,488 total operating expenses 683,104 453,713 operating income 52,048 80,842 other income (expense): interest income 425 284 interest expense (28,592 ) (31,354 ) other income, net 880 216 total other expense, net (27,287 ) (30,854 ) income before income taxes 24,761 49,988 provision for income taxes 7,027 14,088 net income $ 17,734 $ 35,900 basic earnings per share $ 0.35 $ 0.71 diluted earnings per share $ 0.35 $ 0.71 weighted average common shares: basic 50,480 50,286 diluted 50,708 50,727 skywest, inc. and subsidiaries summary of consolidated balance sheets (dollars in thousands) (unaudited) march 31, december 31, 2022 2021 cash and marketable securities $ 856,451 $ 860,410 other current assets 215,518 208,183 total current assets 1,071,969 1,068,593 property and equipment, net 5,399,307 5,373,635 deposits on aircraft 129,514 124,964 other long-term assets 548,168 558,755 total assets $ 7,148,958 $ 7,125,947 current portion, long-term debt $ 410,124 $ 391,798 other current liabilities 732,164 802,823 total current liabilities 1,142,288 1,194,621 long-term debt, net of current maturities 2,791,274 2,717,420 other long-term liabilities 925,681 946,392 stockholders' equity 2,289,715 2,267,514 total liabilities and stockholders' equity $ 7,148,958 $ 7,125,947 skywest, inc. and subsidiaries additional operational information (unaudited) skywest’s fleet in scheduled service or under contract by aircraft type: march 31, 2022 december 31, 2021 march 31, 2021 e175 aircraft 215 211 193 crj900 aircraft 44 44 40 crj700 aircraft 114 114 98 crj200 aircraft 140 140 137 total aircraft in service or under contract 513 509 468 as of march 31, 2022, skywest leased 34 crj700s and five crj900s to third parties (these aircraft are excluded from the table above). the e175 aircraft counts are based on delivery date. selected operational data: for the three months ended march 31, block hours by aircraft type: 2022 2021 % change e175s 146,177 128,498 13.8 % crj900s 25,855 24,006 7.7 % crj700s 67,878 63,095 7.6 % crj200s 71,083 60,583 17.3 % total block hours 310,993 276,182 12.6 % departures 176,211 154,894 13.8 % passengers carried 8,787,367 5,708,589 53.9 % adjusted flight completion 98.9 % 99.9 % (1.0) pts raw flight completion 96.2 % 97.3 % (1.1) pts passenger load factor 77.6 % 56.7 % 20.9 pts average trip length 515 540 (4.6) % adjusted flight completion percent excludes weather cancellations. raw flight completion includes weather cancellations.
