Q3 2025 Mesa Air Group Inc Earnings Call
Will be in a listen-only mode and because of the pendency of the company's merger, there will not be an opportunity to ask questions on today's call. I will now turn the call over to the missa investor relations for our Safe Harbor statement. Please note that additional legal disclosures will be read at the end of the call. Following management remarks, please go ahead.
Good morning. Before we begin, please note that today's call can be forward-looking statements, including statements concerning the plan. Merger of the public Airways future revenues cost to sleep plan. These statements represent our prediction and expectations of future events but numerous risks and uncertainties, you cause actual results with different materially from those projected.
Information about these risks concern needs to be found. Our earnings press release issue this morning as well as our F of the SEC. Including our most recent informed 10K form 102 and the forms for filed on July 10th 2025, which remains subject to further update and revision. The information we are giving you on the call this morning. As today's date. We undertake no obligation to update the information, subsequently,
I would now like to turn the conference over to Jonathan Orin, basic chairman and CEO. Please go ahead. Jonathan
Thank you and good morning everyone. Welcome to mesa's earnings call for the third fiscal quarter ending June 30th 2025.
Today, I'll provide a very brief summary of our quarterly results which were filed earlier today, but I want to dedicate the majority of our time to update. Our plan merger with Republic Airways. As we've communicated, we believe the future of our business is best understood by looking at the strengths of the combined company and I want to provide our investors, really clear database picture of that future.
First, I would like to take a moment to thank all of our employees at Mesa for delivering on a great quarter. Your ability to continue to improve our operational performance and passenger. Net promoter scores all while preparing the company for a transformative mergers, a testament to your professionalism, hard work and dedication. I'm incredibly proud of what you have all accomplished.
Looking back on the third quarter makes as it results reflect the final stages of our strategic transition. We are now a single Fleet, operator of the Ember, 175 a move that is simplified, our operations and laid the foundation. For improved efficiency, our last crj Crews, initiated the ejet training in March and anticipated, the support Revenue flying by the end of August.
As a result of the efficiency gained from our single Fleet strategy and the benefit of being fully staffed. Since late last quarter year, we saw an increase of daily blocky. Realization of 15.4% year-over-year in the third quarter. Turning now, to our p&l from the third quarter total, operating revenues in Q3 2025 were 92.8 million, lower by 18 million or 16.3% compared to 1 1 0. 8, 2 3.
2024.
Contract Revenue was 69.9 million, lower by 25.7, million or 26.8% compared to 95.6 million in Q3 2024. These decreases were driven by the reduction in contractual aircraft was United. In addition, the disposition of certain Ember, 175 aircraft contributed to lower aircraft ownership Revenue,
Total operating expenses in Q3 2025, were 92.9 million a decrease of 26.9 million or 222.4 versus Q3 222.202 24. Compared to Q3 2024, the decreased primarily reflects flight operations, expense that was lower by 8.9 million or 19.6% due to fewer contracted aircraft. And it decreases in Pilot training costs and depreciation. And amortization expense, that was lower by 6.4 million or 65.3% primarily due to the retirement and sale of crj aircraft and engines. The decrease was also driven in part by 7.9 million lower asset impairment expense.
Mesa's Q3 2020 2025 results. Reflect net, income of 20.9 million or 50 cents per share per diluted share compared to a net loss of 19.9 million or a loss of 0.48 per diluted share for Q3 2024 Mason's. Q3 2025 adjusted. Net loss was
600,000 or loss of 0.01 cents per diluted share versus an adjusted. Net loss of 9.4 million or loss of 23 cents per diluted share in Q3 2024 our near Break Even adjusted. Net loss would have been a prophet in the third quarter. If not for the continuing costs related to crj900 aircraft and engines that have been agreed upon to be sold but have not yet closed.
1 million for Q3 2025 compared to i-bidder of 10.6 for Q3 2024.
makes the end of the quarter, June 2025, quarter with 4542.5 million in unrestricted, cash and cash equivalents
As of June 30th 2025, we had 113.7 million in total debt secure primarily with aircraft and engines compared to a balance of 36066.4 million. As of June 30th, 2024 reflecting our significant strides to enhance our balance sheet over the past year.
However, it's important to note that for several reasons. We believe our historical financial performance is not indicative of the trajectory of our new combined entity. We are creating
So let me turn to providing you. An update on the progress, we made on our merger with Republic Airways. We are delighted with this transaction as a result of months of hard work by everyone involved.
As the primary source document for the go forward business. The S4 filed on July 10th provides, a comprehensive. Look at the Strategic rationale and financial strength of the combined Airline. Let me remind you that this document remains subject to further, review and update and should not be relied upon until declared effective by the FCC.
First, let's talk about scale for calendar year 2025. The combined company is now expected to have 12-month, run rate, annual revenue of approximately 1.8 to 2 billion dollars,
Additionally, for the first 6 months of calendar year 2025 Republic has generated approximately 169 million in adjusted ebitda.
Mesa generated 14 million in IBA over the same 6-month period together. This is a total of 183 million. Our expectations is that this week. We will continue to see strong combined financial performance in the second half of the calendar year.
Moreover our combination creates a regional Airline Powerhouse. As of today, the combined companies have a single unified Fleet of over 300 Ember 170 and 175 aircraft.
Republic anticipates taking delivery of 9 e175 aircraft by the end of December 2025 and has an additional 26 aircraft on order for delivery late in 2026 through early 2028,
This enhanced scale will enable more efficient flying Fleet, efficiency, crew, resource, management, and most importantly, utility to our major airline customers.
I want to highlight the operational, excellence that Excellence. That underpins this numbers United. Excuse me, Republic's q1 2025 results were very strong fueled by the fact that the airline is now fully stacked for the first time since 2019 like Mesa. They are seeing a return to normal block, our production, a key indicator of both operational health and efficiency. That will be a Hallmark of the combined entity. As a result for public produced, 394.8 million and 4505.6 million in Revenue with adjusted ebit of 83.5 million, and 855.3 million in q1, and Q2 2025 respectively, at reconciliation of Republic's adjusted ibida, to the most comparable. Gaap measure is included in mesa's Q3 2025 earnings release.
Second, the merger will fundamentally transform. Mesa's existing balance sheet. As part of the transaction, Mesa will not contribute. Any debt to the combined, Airline all of mesa's existing secured and unsecured debt facilities will be settled at closing.
The proformer combined company is forecasted to have a strong liquidity position with an excess of 300 million in cash and liquidity Pro Foreman. Net debt is expected to be approximately 800 million. This is a game-changer for Mesa, creating a well, capitalized, airline in the financial strength to invest in our people, our Fleet, and our product, like never before.
Third, our Revenue model will be completely overhauled.
The Mesa business segments will enter into a brand new 10-year capacity. Purchase agreement with United Airlines upon merger, closing aligning with Republic's current successful, CPA structure. This provides a stable predictable and profitable Revenue stream for our operation within the larger combined entity.
when you combine this enhanced scale of fortified balance sheet, and a stable, long-term Revenue model,
To be the regional Airline of choice for our partners and passengers.
I cannot overstate my confidence in the Republic Airways management team. I've had the privilege of getting to know them intimately over the last 2 years and they are without a doubt the right team to lead our combined company in particular. I'd like to recognize Matt Costco, the president of the Republic. I have complete confidence that Matt will lead the mace integration and the entire Republic team are poised to take our combined business to new heights.
As we head to the second half of the calendar year, we are nearing the Finish Line on this transaction. For public Airways has already received the necessary approvals from its shareholders and the waiting period under the HSR act with respect to filings by Mason, Republic has expired. We remain on track to close the transaction in the second. Half of this calendar year. Pending the SEC, declaring our registration statement effective and approval of mesa's shareholders.
In summary while our third quarter results reflecting company. In transition our future is incredibly bright. The merger with Republic Airways is a transformative opportunity to create a new leader in the regional airline industry and we're more confident than ever. That this is the right path forward for Mesa and its stakeholders.
This concludes our remarks and the remainder of the call will consist of additional required. Safe. Harbour disclosures. Thank you for your time and your continued support.
Thank you, please open this earnings. Call script contains information that constitutes public statements within the media section, 27A of the Securities Act of 1933. As amended in section 21, you have the Securities Exchange Act of 1934 as amended for such as anticipate estimate, expects project plan. 10 believe May might will should can have likely in 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 risk and uncertainty a variety of factors that cause actual events and results of different materially from those expressed in or contemplated by the forward-looking statements. These factors include without limitations the ability to complete, the proposed, merger of the public and the proposed terms are on the anticipated timeline or at all, including the risks and certain needs related to carrying the necessary stock with approval and satisfaction from other closing conditions to continue to make the proposed transaction.
For additional information about factors that cause active results with different. Materially from those described in the forward, linking statement, please refer to the company's files, in the SEC, and clean the risk factors contained in the most recent annual report and form 10 day and the company's other subsequent filings with the SEC. The company undertakes. No, obligation to public update or revise any prolonging statements, whether the result of new information, future events or otherwise be sent to the extent required by applicable laws.
Participants as well. Solicitation Mason's directors and certain of executive officers, may be deemed to be participants of the solicitation of prose from Mason stockholders, with respect to the merger additional information regarding the identity of participants in the solicitation of proxies and description of the director, indirect interest in the pros from transaction by security Holdings or otherwise, we set forth in the proxy statement other materials, we filed the SEC connection with the pros transactions, when they become available.
No offer for solicitation.
Our space and statements relating to these Securities and filed the FCC. But is not yet become effective.
These Securities may not be sold, nor may offer to buy the exception. Prior to the time, the registration statement becomes effective and the information in this communication is for informational purposes only and is neither an offer to purchase nor simply participation of an offer to sell. Subscribe for or buy any Securities for or the solicitation of any Vote or approval in any jurisdiction pursuant to or in connection with the pros transactions or otherwise, or shall there be any sale issuance or transfer of Securities in any jurisdiction in contravention of applicable law?
No offer security shall be made except by means of a perspective seeing the requirements and section 10 of the Securities Act of 1933 as amended and otherwise in accordance with applicable law.
Additional information where to find it.
This communication relates to a proposed business combination between Mason and Republic in connection with the proposed business combination on July 10th, 2025 Mesa filed with the SEC and registration statement in Forum S4 form US 1 continued for preliminary proxy statement perspectives in Mesa and other documents related to the pro transactions.
The registration statement is not yet become effective.
After the registration statement is declared effective by the FCC Mesa will file with the FCC. A definitive process statement of respect and a Defender process date. And respect is will be mailed to stockholders in Mesa.
Investors and security holders in Mesa are urged to read the proxy statement, perspectives, and other documents that may be filed the FCC carefully. And in their entirety give, they will engage important information about the proposed transactions.
Investors and security holders. May obtain a free copy of the proxy State perspective and other documents when available that may files with the sec's website at www.c.com
In addition, these documents may be obtained from Mesa free of charge by directing requests to www.investor.com.
Thank you.
Thank you. This concludes today's call.