Spirit Airlines Increases Second Quarter Adjusted Net Income 35.4% While Lowering Average Base Fare per Flight Segment to $81.06

MIRAMAR, Fla., July 24, 2012 (GLOBE NEWSWIRE) — Spirit Airlines, Inc. (Nasdaq:SAVE) today reported second quarter 2012 financial results.

Net income, excluding special items, for the second quarter 2012 increased 35.4 percent to $35.3 million, or $0.49 per diluted share, as compared to pro forma second quarter 2011 net income.1 GAAP net income for second quarter 2012 was $34.6 million, or $0.48 per diluted share.

For the second quarter of 2012, the Company grew its operating margin, excluding special items, by 1.5 points to 16.3 percent as compared to second quarter 2011.1 Operating margin on a GAAP basis was 15.9 percent for the second quarter of 2012.

Adjusted EBITDAR margin for the second quarter 2012 was 27.6 percent, up 1.7 points year-over-year.

Spirit ended the second quarter 2012 with $415.0 million in unrestricted cash.
“We are proud to offer the lowest fares in our markets, which creates value for both our customers and our shareholders,” said Ben Baldanza, Spirit’s President and Chief Executive Officer. “We can do this today because of our defined cost advantage. And, as we grow and aggressively work to capture cost efficiencies, we are confident in our ability to lower our unit costs and expand our already significant competitive advantage.”

Revenue Performance

For the second quarter 2012, Spirit’s total operating revenue was $346.3 million, an increase of $70.4 million, or 25.5 percent, compared to second quarter 2011 on a capacity increase of 16.5 percent.

Total revenue per available seat mile (“RASM”) increased to 12.25 cents, up 7.7 percent compared to the second quarter 2011, driven by total operating yields which increased 9.1 percent year-over-year to 14.44 cents.

Passenger flight segment (“PFS”) volume grew 18.8 percent year-over-year in the second quarter 2012 with total revenue per PFS of $132.53, an increase of 5.7 percent as compared to the second quarter 2011. Spirit has continued its strategy to offer low base fares while increasing revenue from non-ticket sources. Average non-ticket revenue per PFS for the second quarter 2012 increased 18.6 percent year-over-year to $51.47 and average ticket revenue per PFS for the quarter decreased 1.1 percent year-over-year to $81.06.

Cost Performance

Total operating expenses in the second quarter 2012 were $291.2 million, up 20.9 percent compared to the same period in 2011, primarily due to expenses associated with increased flight volume. Other expense drivers included higher airport and crew-related costs as a result of network scope changes, and passenger re-accommodation costs associated with a greater percentage of flight cancellations.

Cost per available seat mile excluding special items and fuel (“Adjusted CASM ex-fuel”) for the second quarter 2012 was 6.05 cents, an increase of 11.8 percent year-over-year. Average stage length for the second quarter 2012 decreased 3.2 percent compared to the second quarter 2011, contributing an estimated 1.8 percentage points of the 11.8 percent year-over-year increase in Adjusted CASM ex-fuel. Other primary drivers of Adjusted CASM ex-fuel included start-up costs related to Spirit’s preventative seat maintenance program and passenger re-accommodation costs associated with flight cancellations.

Start-up costs related to the Company’s seat maintenance program were approx $3 million in the second quarter. The Company estimates it will incur additional start-up costs related to this program of about $4.5 million in the second half of 2012.

Selected Balance Sheet and Cash Flow Items

At the end of the second quarter 2012, Spirit had $415.0 million in unrestricted cash and cash equivalents and no restricted cash balance. As of June 30, 2012, the Company had no debt on its balance sheet and total shareholders’ equity of $527.3 million.

During the second quarter, the Company had capital expenditures of $9.4 million which included the purchase of one spare engine, paid $7.4 million in pre-delivery deposits (“PDPs”) for future deliveries of aircraft and spare engines, had $10.7 million of PDPs returned related to aircraft delivered in the quarter, and paid $11.8 million in maintenance reserves, net of reimbursements. In addition, during the second quarter, the Company paid $26.9 million to its pre-IPO stockholders under the terms of a Tax Receivable Agreement.

Fleet

Spirit took delivery of two A320s in the second quarter, ending the quarter with 42 aircraft in its fleet. Spirit expects to take delivery of two additional A320s before year-end 2012.