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Hawaiian Holdings Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 25, 2012 09:06AM
Hawaiian Holdings Inc (HA) filed Quarterly Report for the period ended 2012-03-31. Hawaiian Hldgs has a market cap of $255.7 million; its shares were traded at around $5.05 with a P/E ratio of 7.4 and P/S ratio of 0.2. Hawaiian Hldgs had an annual average earning growth of 24.3% over the past 5 years.
Highlight of Business Operations:Under the Companys bank-issued credit card processing agreements, certain proceeds from advance ticket sales may be held back to serve as collateral to cover any possible chargebacks or other disputed charges that may occur. These holdbacks, which are included in restricted cash in the Companys unaudited Consolidated Balance Sheets, totaled $5.2 million at March 31, 2012 and $30.9 million at December 31, 2011. The agreement with the Companys largest credit card processor also contains financial triggers for additional holdbacks, which are based upon, among other things, the amount of unrestricted cash, level of debt service coverage and operating income measured quarterly on a trailing 12-month basis. As of March 31, 2012, there were no amounts subject to this holdback. As of December 31, 2011, the holdback was 25% of the applicable credit card air traffic liability. Under the terms of this credit card agreement, the level of credit card holdback is subject to adjustment based on actual performance relative to these specific triggers. Depending on the Companys performance relative to these financial triggers in the future, the holdback could incrementally increase to an amount up to 100% of the applicable credit card air traffic liability, which would also cause an increase in the level of restricted cash. If the Company is unable to obtain a waiver of, or otherwise mitigate the increase in restriction of cash, it could also cause a covenant violation under other debt or lease obligations and have a material adverse impact on the Company.
We recorded net income of $7.3 million, or $0.14 per diluted share, for the three months ended March 31, 2012, compared to $0.9 million, or $0.02 per diluted share in the prior-year period. Our improved performance is primarily the result of higher unit revenues (passenger revenue per available seat mile) and increased passenger yield. The increase in operating revenue was partially offset by a significant year-over-year increase in fuel prices from $2.82 per gallon in the three months ended March 31, 2011 to $3.27 per gallon in the three months ended March 31, 2012, including the effects of fuel derivatives settling in the period, and increases in other operating expenses due to the expansion of our fleet.
Operating revenue was $435.5 million for the three months ended March 31, 2012, a 19.1% increase over operating revenue of $365.6 million for the prior-year period, driven primarily by an increase in passenger revenue.
Passenger revenue increased $65.6 million or 20.2% for the three months ended March 31, 2012 as compared to the prior-year period, primarily due to increased yields on our North America and International routes, an increase in the number of aircraft in our fleet and the expansion of our longer haul International routes. The detail of these changes is described in the table below:
Other operating revenue increased by $4.2 million or 10.5% for the three months ended March 31, 2012 as compared to the prior-year period, primarily due to increased baggage revenue and an increase in cargo revenue due to the additional cargo capacity provided by the Airbus A330-200 aircraft.
Stocks Discussed: HA,