Saturday, January 27, 2024
Mesa Air Group, Inc. (NASDAQ: MESA), also known as Mesa, has released its financial and operational results for the fourth quarter and full fiscal year of 2023.
Financial Highlights for the Fiscal Fourth Quarter:
Total operating revenues amounted to $114.4 million.
Pre-tax loss was $31.3 million, with a net loss of $28.3 million or $(0.69) per diluted share.
Adjusted net loss1 stood at $26.4 million2 or $(0.64) per diluted share.
Recent Developments Post Fourth Quarter:
Mesa entered into agreements with United Airlines, involving amendments to the CPA (Capacity Purchase Agreement) and credit agreements.
Block-hour rates in the CPA were raised, with a projected incremental revenue of approximately $63.5 million expected over the next twelve months.
The company successfully sold or entered into agreements to sell excess CRJ-900 aircraft and related engines, resulting in combined gross proceeds of $198.0 million. These proceeds have been and will be utilized to pay down $174.3 million in debt.
December block hours totaled 46,660, representing a 5% increase compared to the September quarter.Jonathan Ornstein, the Chairman and CEO, expressed optimism for 2024 despite the challenges faced in fiscal 2023. Mesa anticipates increased revenue and liquidity through enhanced operating and financial agreements with United, particularly highlighting the significant impact of the CPA rate increase. Block-hour production witnessed a 5% increase in the December quarter compared to the September quarter, driven by efforts to address pilot attrition, execute captain upgrades, and stabilize attrition levels.
In terms of fiscal fourth-quarter results, Mesa reported total operating revenues of $114.4 million, a 9.0% decrease from Q4 2022. Contract revenue dropped by 14.4%, primarily due to reduced CRJ-900 block hours and fewer contracted aircraft. Pass-through revenue, however, increased by 31.6% driven by higher pass-through maintenance expense. Mesa’s Q4 2023 results include the recognition of $1.7 million of previously deferred revenue, and the remaining deferred revenue balance of $21.0 million will be recognized over the remaining term of the United Airlines contract.
Total operating expenses for Q4 2023 were $134.6 million, a significant decrease of 48.6% from Q4 2022, mainly attributed to a $132.3 million asset impairment loss related to Mesa’s CRJ-900 fleet in Q4 2022. Adjusted operating expenses were $131.2 million, reflecting increases in maintenance and flight operations expenses, offset by decreases in aircraft rent and depreciation.
Mesa reported a net loss of $28.3 million for Q4 2023, compared to a net loss of $115.6 million for Q4 2022. Adjusted net loss for Q4 2023 was $26.4 million, or $(0.64) per diluted share, compared to an adjusted net loss of $13.5 million, or $(0.37) per diluted share, in Q4 2022.
In terms of operational performance, the controllable completion factor for United during Q4 2023 was 99.5%, slightly lower than 99.7% in Q4 2022. On-time performance for arrivals in Q4 2023 was 79.5%, compared to 79.0% in Q4 2022.
For the fiscal full year 2023, total operating revenues were $498.1 million, a decrease of 6.2% from fiscal full-year 2022. Contract revenue decreased by 12%, partially offset by increased pass-through revenue. Mesa reported a net loss of $120.1 million for fiscal full-year 2023, compared to a net loss of $182.7 million for fiscal full-year 2022.
Mesa ended the fourth quarter with $32.9 million in unrestricted cash and equivalents. Total debt stood at $538.3 million as of September 30, 2023, with scheduled debt payments, debt payments related to CRJ asset sales, and finance lease payments made during the quarter.
Notably, Mesa Air Group decided not to host a conference call to discuss the fourth quarter and full-year 2023 results.
Friday, April 26, 2024
Friday, April 26, 2024
