Spirit Airlines Announces Record Second Quarter 2014 Results: Second Quarter 2014 Adjusted Net Income Increases 45.2 Percent to $66.5 Million

MIRAMAR, Fla., July 29, 2014 (GLOBE NEWSWIRE) — Spirit Airlines, Inc. (Nasdaq:SAVE) today reported second quarter 2014 financial results.

Adjusted net income for the second quarter 2014 increased 45.2 percent to $66.5 million ($0.91 per diluted share) compared to $45.8 million ($0.63 per diluted share) for the second quarter 20131. GAAP net income for the second quarter 2014 was $64.8 million ($0.88 per diluted share) compared to $42.1 million ($0.58 per diluted share) in the second quarter 2013.

For the second quarter 2014, Spirit achieved an adjusted pre-tax margin of 21.3 percent compared to 17.8 percent over the same period in 20131. On a GAAP basis, pre-tax margin for the second quarter 2014 was 20.8 percent compared to 16.4 percent in the second quarter 2013.

Spirit ended the second quarter 2014 with $567.2 million in unrestricted cash.

Spirit’s return on invested capital (before taxes and excluding special items) for the twelve months ended June 30, 2014 was 32.0 percent. See “Calculation for Return on Invested Capital” table below for more details.
“The Spirit team delivered another strong quarter. While growing our capacity 17.2 percent year over year, we grew our top line 22.6 percent year over year,” said Ben Baldanza, Spirit’s Chief Executive Officer. “Our efforts to drive operational excellence have produced material improvements in controllable components of our cost structure which contributed to the 3.5 percentage point year-over-year increase in our Adjusted Operating Margin. I want to thank all our team members that contributed to these excellent results. A few months ago, we launched a series of initiatives aimed at better aligning our customers’ expectations with the Spirit business model. We are very encouraged at the early results of this effort, and the Bare Fare™ plus Frill Control™ messaging is resonating well with customers as they see the benefit of only paying for what they truly value. As we continue down this path, we expect ever increasing alignment to a business model that provides the lowest total fares and the highest consumer choice all while maintaining our commitment to deliver value to our customers and to our shareholders.”

Revenue Performance

For the second quarter 2014, Spirit’s total operating revenue was $499.3 million, an increase of 22.6 percent compared to the second quarter 2013. The increase was driven by our growth in flight volume, higher load factors, and higher operating yields.

Total revenue per available seat mile (“RASM”) for the second quarter 2014 was 12.46 cents, an increase of 4.6 percent compared to the second quarter 2013. The calendar shift of Easter occurring in April this year compared to March in 2013 contributed to the strong second quarter 2014 results.

Passenger flight segment (“PFS”) volume for the second quarter 2014 grew 14.7 percent year over year, and the Company’s load factor for the second quarter 2014 increased 1.8 points year over year to 87.5 percent. Total revenue per PFS for the second quarter 2014 increased 6.8 percent year over year to $139.90.

Cost Performance

Total operating expenses for the second quarter 2014 increased 15.7 percent year over year to $394.2 million on a capacity increase of 17.2 percent.

Spirit reported second quarter 2014 cost per available seat mile excluding special items and fuel (“Adjusted CASM ex-fuel”) of 5.95 cents, a decrease of 0.8 percent compared to the same period last year. The primary driver of the decrease was lower passenger re-accommodation expense (recorded within Other operating expense) per ASM as a result of improved operational reliability. The Company also benefited from lower aircraft rent per ASM. These benefits were partially offset by higher depreciation and amortization expense and increased salary, wages, and benefits, as well as higher maintenance, material, and repairs expense per ASM.

Selected Balance Sheet and Cash Flow Items

As of June 30, 2014, Spirit had $567.2 million in unrestricted cash and cash equivalents. For the six months ended June 30, 2014, Spirit incurred capital expenditures of $7.4 million, paid $94.0 million in pre-delivery deposits for future deliveries of aircraft, net of refunds, and recorded an increase of $14.3 million in maintenance deposits, net of reimbursements.

Fleet

In the second quarter 2014, Spirit took delivery of one new A320 aircraft, ending the quarter with 57 aircraft in its fleet. The Company has eight more new A320 aircraft scheduled for delivery by year-end 2014.

Second Quarter 2014 and Other Current Highlights

• Added/announced new service between (service start date):

- Minneapolis-St. Paul and Houston (5/1/14)2 - Minneapolis-St. Paul and Baltimore/Washington (5/1/14)2 - Chicago O’Hare and Oakland/San Francisco (5/1/14) - Minneapolis-St. Paul and Detroit (5/22/14)2 - Chicago O’Hare and Baltimore/Washington (5/22/14)2 - Chicago O’Hare and Portland, OR (5/22/14)2 - Fort Lauderdale and New Orleans (8/1/14) - Houston and New Orleans (8/1/14) - Houston and Atlanta (8/1/14) - Kansas City and Chicago (8/7/14) - Kansas City and Dallas/Fort Worth (8/7/14) - Kansas City and Detroit (8/7/14) - Kansas City and Las Vegas (8/7/14) - Kansas City and Houston (8/8/14) - Fort Lauderdale and Houston (9/3/14) - Houston and San Diego (9/3/14) - Boston and West Palm Beach (11/21/14)2 - Latrobe/Pittsburgh and Fort Myers (12/18/14)2 - Latrobe/Pittsburgh and Tampa (12/19/14)2

• Maintained its commitment to offer low fares to its valued customers; average ticket revenue per passenger flight segment for the second quarter 2014 was $84.75 with total revenue per passenger flight segment of $139.90.

Investors are encouraged to read the Company’s periodic and current reports filed with or furnished to the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, for additional information regarding the Company.

Conference Call/Webcast Detail

Spirit will conduct a conference call to discuss these results today, July 29, 2014, at 10:00 a.m. ET. A live audio webcast of the conference call will be available to the public on a listen-only basis at http://ir.spirit.com. An archive of the webcast will be available under Webcasts & Presentations for 60 days.