Mesa Air Group Reports First Quarter Fiscal 2025 Results
PHOENIX, May 19, 2025 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) ("Mesa" or the "Company") today reported first quarter fiscal 2025 financial and operating results.
First Quarter Fiscal 2025 Update:
- Total operating revenues of $103.2 million
- Pre-tax loss of $116.3 million, net loss of $114.6 million, or $(2.77) per diluted share
- Adjusted net loss1 of $4.0 million2 excludes a $112.4 million loss related to the impairment and loss on sale of aircraft
- Adjusted EBITDAR1 of $12.6 million
- Operated at a 100.00% controllable completion factor3
- Scheduled utilization for the quarter of 8.9 block hours per day
"Mesa continued to have strong operational performance during the December 2024 quarter," said Jonathan Ornstein, Mesa Chairman and CEO. "We are pleased to have flown a 100% controllable completion factor for United. We continued to make financial progress and generated positive adjusted EBITDA and adjusted EBITDAR for the fifth consecutive quarter, highlighting improving operating profitability as we continued to wind down our CRJ operations."
"Working closely with United's network planning group, Mesa anticipates block hour utilization will be 9.8 in the June quarter, up from 9.4 in the March quarter, and 8.9 in the December quarter."
First Quarter Fiscal 2025 Details
Total operating revenues in Q1 2025 were $103.2 million, lower by $15.5 million, or 13.1%, compared to $118.8 million for Q1 2024. Contract revenue was $80.7 million, lower by $20.4 million, or 20.2%, compared to $101.1 million in Q1 2024. These decreases were driven by the reduction in contractual aircraft with United Airlines, Inc. ("United"), the reduction in DHL revenue due to the wind-down of the FSA, and higher deferred revenue. These decreases were partially offset by higher E-175 block-hour rates.
Pass-through revenue increased by $4.9 million, or 27.6%, driven primarily by higher pass-through maintenance expense. Mesa's Q1 2025 results include, per GAAP, the deferral of $5.6 million of revenue, versus the recognition of $3.0 million of previously deferred revenue in Q1 2024. The remaining deferred revenue balance of $15.3 million will be recognized as flights are completed over the remaining term of the United contract.
Total operating expenses in Q1 2025 were $214.0 million, an increase of $46.8 million, or 30.0%, versus Q1 2024. Compared to Q1 2024, the increase primarily reflects a net loss on asset sales during the quarter of $46.7 million and asset impairment costs that were $25.3 million higher. These increases were partially offset by flight operations expense that decreased by $16.5 million, or 31.9%, due to fewer contracted aircraft and decreases in pilot training costs. Depreciation and amortization expense also decreased $5.3 million, or 40.0%, compared to Q1 2024, primarily due to the retirement and sale of CRJ aircraft and engines.
Mesa's Q1 2025 results reflect a net loss of $114.6 million, or $(2.77) per diluted share, compared to a net loss of $57.9 million, or $(1.41) per diluted share, for Q1 2024. Mesa's Q1 2025 adjusted net loss was $4.0 million, or $(0.10) per diluted share, versus an adjusted net loss of $21.8 million, or $(0.53) per diluted share, in Q1 2024.
Mesa's adjusted EBITDA1 for Q1 2025 was $11.0 million, compared to adjusted EBITDA of $5.0 million for Q1 2024. Adjusted EBITDAR was $12.6 million for Q1 2025, compared to adjusted EBITDAR of $6.3 million for Q1 2024.
First Quarter Fiscal 2025 Operating Performance
Operationally, the Company reported a controllable completion factor of 100.00% for United during Q1 2025. This is compared to a controllable completion factor of 99.92% for United during Q1 2024. Controllable completion factor excludes cancellations due to weather and air traffic control.
For Q1 2025, the Company operated 62 large (70/76 seats) jets under its CPA with United, comprising 54 E-175s and eight CRJ-900s.
Balance Sheet and Liquidity
Mesa ended the December 2024 quarter with $40.0 million in unrestricted cash and cash equivalents. As of December 31, 2024, the Company had $230.6 million in total debt, secured primarily with aircraft and engines, compared to a balance of $481.0 million as of December 31, 2023. During the quarter, the Company paid $79.8 million in debt, of which $69.0 million which was related to the sale of E175 aircraft.
As of March 31, 2025, Mesa had $54.1 million in unrestricted cash and cash equivalents. Based on the most recent appraisal value of spare parts, Mesa had $12.4 million in available credit under its United facility, subject to approval.
Form 10-Q
The Company is working diligently to complete the Form 10-Q for the period ended March 31, 2025 and plans to file it as soon as possible.
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 82 cities in 32 states, the District of Columbia, Cuba, and Mexico. As of March 31, 2025, Mesa operated a fleet of 60 aircraft, with approximately 238 daily departures. The Company had approximately 1,650 employees. Mesa operates all its flights as United Express pursuant to the terms of a capacity purchase agreement entered into with United Airlines, Inc.
Important Cautions Regarding Forward-Looking Statements
This Press Release includes information that constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate", "estimate", "expect", "project", "plan", "intend", "believe", "may", "might", "will", "should", "can have", "likely" and similar expressions are used to identify forward-looking statements. These forward-looking statements are based on the Company's current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to the Company. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. A variety of factors could cause actual events and results to differ materially from those expressed in or contemplated by the forward-looking statements. These factors include, without limitation, the ability to complete the proposed merger with Republic on the proposed terms or on the anticipated timeline, or at all, including the risks and uncertainties related to securing the necessary stockholder approval and satisfaction of other closing conditions to consummate the proposed transaction, the Company's ability to respond in a timely and satisfactory matter to the inquiries by Nasdaq, the Company's ability to regain compliance with Listing Rule, the Company's ability to become current with its reports with the SEC, and the risk that the completion and filing of the Form 10-Q will take longer than expected. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to the Company's filings with the SEC, including the risk factors contained in its most recent Annual Report on Form 10-K and the Company's other subsequent filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.
Contact:
Mesa Air Group, Inc.
Media
[email protected]
Investor Relations
[email protected]
MESA AIR GROUP, INC.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(In thousands, except per share amounts) (Unaudited)
| Three months ended December 31, | ||||||
| 2024 | 2023 | |||||
| Operating revenues: | ||||||
| Contract revenue | $ | 80,678 | $ | 101,100 | ||
| Pass-through and other revenue | 22,555 | 17,677 | ||||
| Total operating revenues | 103,233 | 118,777 | ||||
| Operating expenses: | ||||||
| Flight operations | 35,273 | 51,818 | ||||
| Maintenance | 46,527 | 48,627 | ||||
| Aircraft rent | 1,616 | 1,204 | ||||
| General and administrative | 9,519 | 12,009 | ||||
| Depreciation and amortization | 7,979 | 13,293 | ||||
| Asset impairment | 65,665 | 40,384 | ||||
| Loss on sale of assets | 46,691 | 386 | ||||
| (Gain) on extinguishment of debt | — | (2,954 | ) | |||
| Other operating expenses | 760 | 2,458 | ||||
| Total operating expenses | 214,030 | 167,225 | ||||
| Operating income/(loss) | (110,797 | ) | (48,448 | ) | ||
| Other income (expense), net: | ||||||
| Interest expense | (7,064 | ) | (11,160 | ) | ||
| Interest income | 17 | 14 | ||||
| Unrealized gain/(loss) on investments, net | (42 | ) | 2,451 | |||
| Gain on debt forgiveness | 4,500 | — | ||||
| Other income, net | (2,900 | ) | 157 | |||
| Total other expense, net | (5,489 | ) | (8,538 | ) | ||
| Income (loss) before taxes | (116,286 | ) | (56,986 | ) | ||
| Income tax expense (benefit) | (1,728 | ) | 864 | |||
| Net income (loss) | $ | (114,558 | ) | $ | (57,850 | ) |
| Net income (loss) per share attributable to common shareholders | ||||||
| Basic | $ | (2.77 | ) | $ | (1.41 | ) |
| Diluted | $ | (2.77 | ) | $ | (1.41 | ) |
| Weighted-average common shares outstanding | ||||||
| Basic | 41,332 | 40,940 | ||||
| Diluted | 41,332 | 40,940 | ||||
MESA AIR GROUP, INC.
Consolidated Balance Sheets
(In thousands) (Unaudited)
| December 31, 2024 | September 30, 2024 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 39,980 | $ | 15,621 | ||||
| Restricted cash | 3,004 | 3,009 | ||||||
| Receivables, net | 5,250 | 5,263 | ||||||
| Expendable parts and supplies, net | 29,172 | 28,272 | ||||||
| Assets held for sale | 80,723 | 5,741 | ||||||
| Prepaid expenses and other current assets | 2,577 | 3,371 | ||||||
| Total current assets | 160,706 | 61,277 | ||||||
| Property and equipment, net | 203,567 | 426,351 | ||||||
| Lease and equipment deposits | 524 | 1,289 | ||||||
| Operating lease right-of-use assets | 6,588 | 7,231 | ||||||
| Deferred heavy maintenance, net | 5,351 | 6,396 | ||||||
| Assets held for sale | — | 86,605 | ||||||
| Other assets | 6,829 | 7,709 | ||||||
| TOTAL ASSETS | $ | 383,565 | $ | 596,858 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of long-term debt and finance leases | $ | 143,275 | $ | 50,455 | ||||
| Current portion of deferred revenue | 4,955 | 3,932 | ||||||
| Current maturities of operating leases | 1,430 | 1,681 | ||||||
| Accounts payable | 60,932 | 72,096 | ||||||
| Accrued compensation | 6,705 | 12,797 | ||||||
| Customer deposits | 962 | 1,189 | ||||||
| Other accrued expenses | 34,819 | 32,308 | ||||||
| Total current liabilities | 253,078 | 174,458 | ||||||
| NONCURRENT LIABILITIES: | ||||||||
| Long-term debt and finance leases, excluding current portion | 83,786 | 259,816 | ||||||
| Noncurrent operating lease liabilities | 6,484 | 6,863 | ||||||
| Deferred credits | 2,036 | 3,020 | ||||||
| Deferred income taxes | 5,214 | 8,173 | ||||||
| Deferred revenue, net of current portion | 10,329 | 5,707 | ||||||
| Other noncurrent liabilities | 26,675 | 28,579 | ||||||
| Total noncurrent liabilities | 134,524 | 312,158 | ||||||
| Total liabilities | 387,602 | 486,616 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock of no par value and additional paid-in capital, 125,000,000 shares authorized; 41,331,719 (2025) and 41,331,719 (2024) shares issued and outstanding, 4,899,497 (2025) and 4,899,497 (2024) warrants issued and outstanding | 272,655 | 272,376 | ||||||
| Accumulated deficit | (276,692 | ) | (162,134 | ) | ||||
| Total stockholders' equity | (4,037 | ) | 110,242 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 383,565 | $ | 596,858 | ||||
MESA AIR GROUP, INC.
Operating Highlights
(Unaudited)
| Three months ended | |||||||||
| December 31, | |||||||||
| 2024 | 2023 | Change | |||||||
| Available seat miles (thousands) | 873,214 | 1,026,800 | (15.0 | )% | |||||
| Block hours | 39,035 | 46,658 | (16.3 | )% | |||||
| Average stage length (miles) | 549 | 535 | 2.6 | % | |||||
| Departures | 21,351 | 26,254 | (18.7 | )% | |||||
| Passengers | 1,303,641 | 1,608,170 | (18.9 | )% | |||||
| Controllable completion factor* | |||||||||
| United | 100.00 | % | 99.92 | % | 0.1 | % | |||
| Total completion factor** | |||||||||
| United | 99.55 | % | 99.20 | % | 0.4 | % | |||
*Controllable completion factor excludes cancellations due to weather and air traffic control
**Total completion factor includes all cancellations
Reconciliation 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 months ended December 31, 2024 and December 31, 2023. 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.
Reconciliation of GAAP versus non-GAAP Disclosures
(In thousands) (Unaudited)
| Three Months Ended December 31, 2024 | Three Months Ended December 31, 2023 | ||||||||||||||||||||||||
| Income (Loss) Before Taxes | Income Tax (Expense) Benefit | Net Income (Loss) | Net Income (Loss) per Diluted Share | Income (Loss) Before Taxes | Income Tax (Expense) Benefit | Net Income (Loss) | Net Income (Loss) per Diluted Share | ||||||||||||||||||
| GAAP income (loss) | $ | (116,286 | ) | $ | 1,728 | $ | (114,558 | ) | $ | (2.77 | ) | $ | (56,986 | ) | $ | (864 | ) | $ | (57,850 | ) | $ | (1.41 | ) | ||
| Adjustments(1)(2)(3)(4)(5)(6)(7)(8)(9) | 112,266 | (1,668 | ) | 110,598 | $ | 2.68 | 37,640 | (1,566 | ) | 36,074 | $ | 0.88 | |||||||||||||
| Adjusted income (loss) | (4,020 | ) | 60 | (3,960 | ) | $ | (0.10 | ) | (19,346 | ) | (2,430 | ) | (21,776 | ) | $ | (0.53 | ) | ||||||||
| Interest expense | 7,064 | 11,160 | |||||||||||||||||||||||
| Interest income | (17 | ) | (14 | ) | |||||||||||||||||||||
| Depreciation and amortization | 7,979 | 13,293 | |||||||||||||||||||||||
| Adjusted EBITDA | 11,006 | 5,093 | |||||||||||||||||||||||
| Aircraft rent | 1,616 | 1,204 | |||||||||||||||||||||||
| Adjusted EBITDAR | $ | 12,622 | $ | 6,297 | |||||||||||||||||||||
(1) $3.0 million gain on extinguishment of debt during the three months ended December 31, 2023.
(2) $0.1 million loss and $2.5 million gain resulting from changes in the fair value of the Company's investments in equity securities during the three months ended December 31, 2024 and 2023, respectively.
(3) $4.9 million and $40.4 million impairment loss related to held for sale assets during the three months ended December 31, 2024 and 2023, respectively.
(4) $0.7 million and $2.0 million in third party costs associated with significant, non-recurring transactions during the three months ended December 31, 2024 and 2023, respectively.
(5) $0.7 million and $0.3 million loss on deferred financing costs related to the retirement of debts during the three months ended December 31, 2024 and 2023, respectively.
(6) $46.7 million and $0.4 million net loss on the sale of assets during the three months ended December 31, 2024 and 2023, respectively.
(7) $2.9 million loss on the write off of interest related to the sale of aircraft during the three months ended December 31, 2024.
(8) $60.7 million impairment loss related to the write down of net book value of certain aircraft during the three months ended December 31, 2024.
(9) $4.5 million gain on forgiveness of debt during the three months ended December 31, 2024.
Source: Mesa Air Group, Inc.
______________________________________
1 See Reconciliation of GAAP versus non-GAAP Disclosures
2 Adjusted net loss primarily excludes $46.7 million of net losses on asset sales and $65.7 million in asset impairment
3 Excludes cancellations due to weather and air traffic control
