Hawaiian Airlines reports $26M profit in Q1 2015

Hawaiian Airlines reports $26M profit in Q1 2015

Hawaiian Airlines reports $26M profit in Q1 2015

The FINANCIAL -- Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc. on April 23 reported its financial results for the first quarter of 2015.

GAAP net income of $25.9 million or $0.40 per diluted share.
Adjusted net income, reflecting economic fuel expense and excluding loss on extinguishment of debt, of $24.7 million or $0.38 per diluted share, an increase of $25.6 million or $0.40 cents per diluted share year-over-year.
Adjusted pre-tax margin of 7.4% compared to (0.2)% in the prior year period.
Unrestricted cash, cash equivalents and short-term investments of $488 million.
Lowered leverage ratio to 3.6x.
The board of directors approved a share repurchase program authorizing the Company to buy back up to $100 million of its common stock.

"Producing these record results for the seasonally weak first quarter demonstrates the growing strength of our business," said Mark Dunkerley, Hawaiian Airlines president and chief executive officer.  "Low fuel prices and strong demand across our network combined to more than offset the impact of a strengthening U.S. dollar, declining fuel surcharges in some markets and an increase in industry capacity between North America and Hawai'i.  Reflecting this performance we have announced a $100 million share repurchase program today.  As always, our employees are at the forefront of our successes.  Their performance makes our financial success possible and they have my undying thanks."

Liquidity and Capital Resources

As of March 31, 2015 the Company had:

Unrestricted cash, cash equivalents and short-term investments of $488 million.

Outstanding debt and capital lease obligations of approximately $962 million consisting of the following:

$693 million outstanding under secured loan agreements to finance a portion of the purchase price for 11 Airbus A330-200 aircraft.
$132 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.
$100 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.
$29 million outstanding under floating rate notes to finance the acquisition of two Boeing 767-300 ER aircraft.
$8 million of outstanding Convertible Senior Notes.

In the first quarter, the Company repurchased $63 million (principal balance) of convertible notes outstanding.  Repurchases to date have totaled $78 million (principal balance) or 91%, thereby eliminating the need to issue 10 million shares when the notes may have otherwise converted to common stock, according to Hawaiian Airlines.

First Quarter 2015 Highlights

Product and loyalty

Introduced the first of its 18 refurbished Boeing 717 aircraft with a comprehensive interior retrofit and a standard consistent layout of 128 seats in March 2015. The refurbishment will provide more seats for the peak demand period and eliminate operational complexity arising from different seat counts. To date, seven aircraft have completed the refurbishment program with all remaining Boeing 717 aircraft in the Company's fleet expected to be retrofitted by the end of the year.

Fleet and financing

Added one new A330-200 aircraft under lease financing.

Second Quarter and Full Year 2015 Outlook

The table below summarizes the Company's expectations for the second quarter ending June 30, 2015 and full year ending December 31, 2015, expressed as an expected percentage change compared to the results for the quarter ended June 30, 2014 or the year ended December 31, 2014 (the historical results for which are presented for reference).