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Mesa Air Group Reports First Quarter Fiscal 2023 Results

PHOENIX, Feb. 09, 2023 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported first quarter fiscal 2023 financial and operating results.

Fiscal First Quarter Update:

  • Total operating revenues of $147.2 million
  • Pre-tax loss of $10.0 million, net loss of $9.1 million or $(0.25) per diluted share
  • Adjusted net loss1 of $4.3 million or $(0.12) per diluted share
  • Adjusted net loss excludes a $3.7 million impairment related to intangible assets and $1.7 million related to investments in equity securities
  • As previously reported, closed on United Airlines, American Airlines, and aircraft-related transactions
  • Subsequent to quarter end, closed sale of 8 remaining CRJ-550s to United Airlines

Jonathan Ornstein, Chairman and CEO, said, “The first quarter was an important one for Mesa, as we executed several key agreements that will materially enhance our operational and financial position and alleviate significant issues that we have faced. While block hour production continued to be challenged by the industry-wide pilot shortage during the quarter, we believe all the pieces are in place to begin restoring capacity across our fleets. We are preparing for the transition of our CRJ-900 operation to United next month. Our pilot pipeline continues to strengthen and pilot attrition has remained significantly lower since we have enhanced our payscales and expanded our participation in the Aviate program with United.”

Fiscal First Quarter Details:

Total operating revenues in Q1 2023 were $147.2 million, a decrease of $0.6 million (0.4%) from $147.8 million for Q1 2022. Contract revenue decreased $8.4 million, or 6.2%. These decreases were driven by lower block hours, offset by increased block-hour revenue for new pilot payscales. Mesa’s Q1 2023 results include, per GAAP, the recognition of $5.3 million, versus the recognition of $4.2 million of previously deferred revenue in Q1 2022. The remaining deferred revenue balance of $18.8 million will be recognized as flights are completed over the remaining terms of the contracts.

Mesa’s Adjusted EBITDA1 for Q1 2023 was $21.8 million, compared to $17.0 million in Q1 2022, and Adjusted EBITDAR1 was $25.9 million for Q1 2023, compared to $26.6 million in Q1 2022.

Mesa’s Q1 2023 results reflect a net loss of $9.1 million, or $(0.25) per diluted share, compared to a net loss of $14.3 million, or $(0.40) per diluted share for Q1 2022. Mesa’s Q1 2023 adjusted net loss1 was $4.3 million, or $(0.12) per diluted share, versus an adjusted net loss1 of $9.3 million, or $(0.26) per diluted share, in Q1 2022. The year over year increase in adjusted net income of $5.0 million was primarily due to increased block-hour revenue for new pilot payscales and lower maintenance, D&A, and aircraft rent expenses, partially offset by higher expenses for flight operations due to increased costs for training and employee wages.

Operationally, the Company ran a controllable completion factor of 99.4% for American and 99.9% for United during Q1 2023. This is compared to a controllable completion factor of 97.7% for American and 98.3% for United during Q1 2022. This excludes cancellations due to weather and air traffic control.

With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 97.9% for American and 99.2% for United during Q1 2023. This is compared to a total completion factor of 95.8% for American and 95.8% for United during Q1 2022.

For Q1 2023, 50% of the Company’s total revenue was derived from our contracts with United, 45% from American, 3% from DHL, and 2% from leases of aircraft to a third party.

1 See Reconciliation of non-GAAP financial measures 

Balance Sheet and Cash Flow:

Mesa ended the quarter at $56.1 million in unrestricted cash and equivalents. As of December 31, 2022, the Company had $701.3 million in total debt secured primarily with aircraft and engines. This amount includes $64.2 million corresponding to the reclassification from operating lease to finance lease on 15 CRJ-900s. Additionally, we borrowed $25.5 million in the form of a term loan from United, of which $15 million is forgivable upon the meeting of certain performance criteria.

Conference Call Details:

Mesa Air Group will host a conference call with analysts on February 9th at 4:30 pm EST. The conference call number is 888-469-2054 (Passcode: Phoenix (7463649)). The conference call can also be accessed live via the web by visiting

A recorded version will be available on Mesa's website approximately two hours after the call for approximately 14 days.

About Mesa Air Group, Inc.

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 106 cities in 42 states, the District of Columbia, the Bahamas, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As of December 31, 2022, Mesa operated or leased a fleet of 158 aircraft with approximately 293 daily departures and 2,500 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc. and United Airlines, Inc. and a flight service agreement with DHL.

Forward-Looking Statements

Certain statements contained in this press release that are not historical facts contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to the “safe harbor” created by those sections. Forward-looking statements can be identified by the use of words such as “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximate” or “plan,” or the negative of these words and phrases or similar words or phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. For more information on risk factors for Mesa Air Group, Inc.’s business, please refer to the periodic reports the Company files with the Securities and Exchange Commission from time to time. These forward-looking statements herein speak only as of the date of this press release and should not be relied upon as predictions of future events. Mesa Air Group, Inc. expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein, to reflect any change in Mesa Air Group, Inc.’s expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except as required by law.


Mesa Air Group, Inc.

Investor Relations
Doug Cooper


Consolidated Statements of Operations and Comprehensive (Loss) Income
(In thousands, except per share amounts) (Unaudited)

  Three Months Ended
December 31
   2022   2021 
Operating revenues:    
Contract revenue $128,450  $136,894 
Pass-through and other revenue  18,723   10,863 
Total operating revenues  147,174   147,757 
Operating expenses:    
Flight operations  58,320   47,598 
Maintenance  48,287   58,981 
Aircraft rent  4,083   9,586 
General and administrative  13,988   12,578 
Depreciation and amortization  15,203   21,028 
Impairment of assets  3,719    
Other operating expenses  1,126   1,972 
Total operating expenses  144,727   151,743 
Operating income (loss)  2,447   (3,986)
Other income (expense), net:    
Interest expense  (11,276)  (7,930)
Interest income  71   51 
Loss on investments, net  (1,679)  (6,462)
Other income (expense), net  417   (59)
Total other expense, net  (12,467)  (14,400)
Income (loss) before taxes  (10,020)  (18,386)
Income tax expense (benefit)  (930)  (4,112)
Net income (loss) $(9,090) $(14,274)
Net income (loss) per share attributable to common shareholders    
Basic $(0.25) $(0.40)
Diluted $(0.25) $(0.40)
Weighted-average common shares outstanding    
Basic  36,378   35,963 
Diluted  36,378   35,963 

Consolidated Balance Sheets
(In thousands, except shares) (Unaudited)

  December 31,
 September 30,
Cash and cash equivalents $56,077  $57,683 
Restricted cash  3,343   3,342 
Receivables, net  13,115   3,978 
Expendable parts and supplies, net  25,509   26,715 
Prepaid expenses and other current assets  3,953   6,616 
Total current assets  101,997   98,334 
Property and equipment, net  945,545   865,254 
Intangible assets, net     3,842 
Lease and equipment deposits  1,781   6,085 
Operating lease right-of-use assets  11,896   43,090 
Deferred heavy maintenance, net  10,311   9,707 
Assets held for sale  73,000   73,000 
Other assets  14,984   16,290 
TOTAL ASSETS $1,159,514  $1,115,602 
Current portion of long-term debt and finance leases $88,802  $97,218 
Current portion of deferred revenue  1,204   385 
Current maturities of operating leases  5,354   17,233 
Accounts payable  51,257   59,386 
Accrued compensation  9,097   11,255 
Other accrued expenses  30,561   29,000 
Total current liabilities  186,275   214,477 
Long-term debt and finance leases, excluding current portion  597,816   502,517 
Noncurrent operating lease liabilities  9,533   16,732 
Deferred credits  2,869   3,082 
Deferred income taxes  16,705   17,719 
Deferred revenue, net of current portion  17,607   23,682 
Other noncurrent liabilities  28,938   29,219 
Total noncurrent liabilities  673,468   592,951 
Total liabilities  859,743   807,428 
Preferred stock of no par value, 5,000,000 shares authorized; no shares issued and outstanding      
Common stock of no par value and additional paid-in capital, 125,000,000 shares authorized; 36,378,550 (2023) and 36,376,897 (2022) shares issued and outstanding, 4,899,497 (2023) and 4,899,497 (2021) warrants issued and outstanding  259,864   259,177 
Retained earnings  39,907   48,997 
Total stockholders' equity  299,771   308,174 

Operating Highlights (unaudited)

  Three months ended
  December 31
  2022  2021  Change 
Available seat miles (thousands) 1,175,745  2,104,621  -44.1%
Block hours 50,940  86,079  -40.8%
Average stage length (miles) 565  644  -12.3%
Departures 27,776  43,447  -36.1%
Passengers 1,746,376  2,693,468  -35.2%
Controllable completion factor*      
American 99.36% 97.17% 2.3%
United 99.96% 98.33% 1.7%
Total completion factor**      
American 97.85% 95.76% 2.2%
United 99.21% 97.58% 3.6%

*Controllable completion factor excludes cancellations due to weather and air traffic control
**Total completion factor includes all cancellations

1Reconciliation of non-GAAP financial measures

Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa's ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three and nine months ended December 31, 2022 and December 31, 2021. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company's net income or loss. Additionally, these calculations may not be comparable with similarly titled measures of other companies.

1Reconciliation of GAAP versus non-GAAP Disclosures
(In thousands, except for per diluted share) (Unaudited)

 Three Months Ended December 31, 2022 Three Months Ended December 31, 2021
/ Benefit
(Loss) per
/ Benefit
Income per
GAAP income (loss)












Adjustments(1)(2) 5,398  (589) 3,313 $0.13   6,462  (1,470) 4,992 $0.14 
Adjusted income         
(loss) (4,622) 341  (4,281)$(0.12)  (11,924) 2,642  (9,282)$(0.26)
Interest expense 11,276      7,930    
Interest income (71)     (51)   
Depreciation and amortization 15,203      21,028    
Adjusted EBITDA 21,786      16,983    
Aircraft rent 4,083      9,586    
Adjusted EBITDAR$25,869     $26,569    

(1)Includes adjustment for impairment charges of $3.7 million during our three months ended December 31, 2022, related to the intangible asset under the American CPA.
(2)Includes losses resulting from changes in the fair value of the Company's investments in equity securities of $1.7 million and $6.5 million for the three months ended December 31, 2022 and 2021, respectively.

Source: Mesa Air Group, Inc.

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