ALGT Q3 2020 Earnings

Call Details

• Call Title: Allegiant Travel Company Q3 2020 Earnings Call
• Date: October 28, 2020 at 8:30 PM UTC
• Management Team:
  • Sherry Wilson (Managing Director of Investor Relations)
  • Maury Gallagher (Chairman and Chief Executive Officer)
  • John Redmond (President)
  • Greg Anderson (EVP and Chief Financial Officer)
  • Scott Sheldon (EVP and Chief Operating Officer)
  • Scott DeAngelo (EVP and Chief Marketing Officer)
  • Drew Wells (VP of Revenue and Planning)

Call Summary

Financial Performance

• Third quarter revenue was down just more than 50% year-over-year while scheduled service ASMs were down 6.5% year-over-year.
• Daily bookings averaged just over $2.0M in Q3, which produced an actual cash burn of $1.3M per day versus expected cash burn of just over $1.0M per day.
• September was a cash flow breakeven month including debt service and payables, and Q3 excluding special items produced a break-even operating profit.
• Adjusted CASMX excluding special items and CARES benefits for the quarter was 6.25 cents per ASM versus 2019 full year CASMX of 6.5 cents per ASM.
• Year-to-date EBITDA excluding special items was slightly positive at $2M, and the company stated EBITDA remains positive at average daily bookings of around $2.7M or above.
• The company reported ending the quarter with net debt of $840M versus year-end 2019 net debt of $950M.

Guidance

• The company expects fourth quarter capacity to finish around 15% below last year.
• The company expects total operating cost in fourth quarter to be down closer to 25% versus prior year, assuming a fourth quarter fuel cost per gallon of $1.35.
• The company implied a total airline 'chasm' down 10% year-over-year in the fourth quarter under current assumptions.
• For the remaining three months of 2020, the company expects total CapEx including heavy maintenance to be roughly $130M, with 75% relating to the acquisition of five A320 aircraft.
• The company expects to end 2020 with gross debt of about $1.65B and net debt of roughly $875M based on current booking trends.
• The company expects 2021 CapEx including heavy maintenance to be approximately $125M, which includes $40M for two aircraft to be delivered in early 2021.