ExpressJet Holdings, Inc. today reported fourth quarter net income of
$27.9 million, or $0.51 diluted earnings per share, an increase of 25
percent over the prior- year period, as the company continued to maintain
its strong operating performance and cost controls, and expanded its
regional jet fleet.
The results mark ExpressJet`s eleventh consecutive quarter of improved
earnings. For the full year ended Dec. 31, 2003, net income increased to
$108.2 million, or $1.80 diluted earnings per share, a 28 percent
improvement over 2002 results.
“These solid operational and financial performances are the result of our
employees` continued dedication to delivering excellent customer service
while controlling costs,” said ExpressJet President and CEO Jim Ream.
“During the year, we added 13 percent more flights to our network,
achieved a 20 percent increase in block hours, and maintained excellent
operations despite several very challenging events.”
Fourth quarter operating revenue increased 20 percent to $340.9 million,
compared with $284.0 million in the fourth quarter of 2002. Compared with
the same period last year, capacity grew by 39 percent to 2.3 billion
available seat miles with block hours increasing 29 percent to
approximately 160,000 block hours. Revenue passenger miles were up 51
percent, resulting in a 5.7 point year-over-year increase in load factor
to 70 percent. The company also achieved a 99.8 percent controllable
completion factor during the fourth quarter, which excludes cancellations
due to weather and air traffic control. ExpressJet`s overall completion
rate for the quarter was 98.1 percent.
ExpressJet`s operating cost per available seat mile decreased 14 percent
in the fourth quarter, as the company continued to exploit the efficiency
of its all jet fleet, with almost 100 percent commonality from the engines
to the flight deck.
During 2003, ExpressJet accepted 36 deliveries of Embraer`s new extended-
range ERJ-145XR, a 50-seat regional jet capable of flights of 1,500 miles.
Six of those airplanes were delivered during the fourth quarter of 2003.
The new jets and their longer-range capabilities contributed to the
increased average flight length of 518 miles in the fourth quarter,
compared with 432 miles for the same period in 2002. Additionally, during
the quarter, ExpressJet began serving five new destinations: Ciudad del
Carmen, Mexico; Manzanillo, Mexico; Puerto Vallarta, Mexico; Sarasota,
Florida; and Freeport, Bahamas and announced new service between Cleveland
Hopkins International Airport and Northwest Arkansas Regional Airport,
which is expected to begin in April 2004.
ExpressJet`s fourth quarter 2003 operating income reflected a 13.7 percent
operating margin, as compared with an operating margin of 13.5 percent for
fourth quarter 2002. The 13.7 percent operating margin included the
benefits of cost savings and $2.5 million in performance incentive
ExpressJet ended the fourth quarter with $193.1 million in cash, including
$3.2 million in restricted cash, which is $72.2 million more than the
prior year`s $120.9 million. During the quarter, the company made a
principal payment of $26.6 million on its note payable to Continental
Airlines, reducing the outstanding balance to $193.2 million.
For the full year ended Dec. 31, 2003, ExpressJet`s operating income
reflected a 13.9 percent operating margin, as compared with an operating
margin of 13.6 percent for the full year ended Dec. 31, 2002. Total
incentive payments earned by ExpressJet in 2003 were $12.9 million.
For the full year of 2003, ExpressJet`s quarterly results consistently
exceeded the operating margin band of 8.5 percent to 11.5 percent
contemplated in the company`s capacity purchase agreement with Continental
Airlines, leading to a total rebate of $30.1 million to Continental, as
compared to $14.7 million rebate made during 2002.
Capital expenditures for the full year 2003 totaled $47.3 million (net of
sales of fixed assets and parts), compared with $29.1 million (net of
sales of fixed assets and parts related to turboprop retirements) for
2002. ExpressJet anticipates capital expenditures of approximately $44.0
million in 2004.
ExpressJet will conduct a telephone briefing to discuss its fourth quarter
and year-end results with the financial community today at noon CST/1:00
p.m. EST. A live webcast of this briefing will be available online at
expressjet.com - investor relations.
ExpressJet Airlines, Air Transport World`s 2003 Regional Airline of the
Year, operates as Continental Express, the regional jet affiliate of
Continental Airlines. With service to 130 destinations in the United
States, Canada, Mexico and the Caribbean, Continental Express operates all
of Continental`s regional jet service from its hubs in Houston, New
York/Newark and Cleveland. Continental Express offers customers efficient
service and comfortable leather seating, along with advance seat
assignments and OnePass frequent flyer miles that can be redeemed on
Continental and partner airlines. ExpressJet Airlines employs 6,100 people
and is owned by ExpressJet Holdings, Inc. For more information, visit