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 millionPre-tax loss of $116.3 million, net loss of $114.6 million, or $(2.77) per diluted shareAdjusted net loss1 of $4.0 million2 excludes a $112.4 million loss related to the impairment and loss on sale of aircraftAdjusted EBITDAR1 of $12.6 millionOperated at a 100.00% controllable completion factor3Scheduled 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. 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 30,2024ASSETS 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 $596,858 MESA AIR GROUP, INC. Operating Highlights (Unaudited) Three months ended December 31, 2024 2023 ChangeAvailable seat miles (thousands) 873,214 1,026,800 (15.0)%Block hours 39,035 46,658 (16.3)%Average stage length (miles) 549 535 2.6%Departures 21,351 26,254 (18.7)%Passengers 1,303,641 1,608,170 (18.9)%Controllable completion factor* United 100.00% 99.92% 0.1%Total completion factor** United 99.55% 99.20% 0.4% *Controllable completion factor excludes cancellations due to weather and air traffic control**Total completion factor includes all cancellations Reconciliation of non-GAAP financial measures Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa's ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three months ended December 31, 2024 and December 31, 2023. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company's net income or loss. Additionally, these calculations may not be comparable with similarly titled measures of other companies. Reconciliation of GAAP versus non-GAAP Disclosures(In thousands) (Unaudited) Three Months Ended December 31, 2024 Three Months Ended December 31, 2023 Income (Loss) Before TaxesIncome Tax (Expense)BenefitNet Income (Loss)Net Income (Loss) per Diluted Share Income(Loss)Before TaxesIncome Tax (Expense)BenefitNet Income(Loss)Net Income (Loss)per Diluted ShareGAAP income (loss)$(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 Disclosures2 Adjusted net loss primarily excludes $46.7 million of net losses on asset sales and $65.7 million in asset impairment3 Excludes cancellations due to weather and air traffic control

Mesa Air Group Reports First Quarter Fiscal 2025 Results

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