Replies to post #11376 on Keeping It Simple

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-Deutsche Bank Upgrades Mesa Air Group to Buy From Hold; Price Target is $15
7:28 AM ET, 05/11/2021 - MT Newswires


07:28 AM EDT, 05/11/2021 (MT Newswires) -- (MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Current PPS on MESA is 10.67

Target price would be a gain of 40.58%

Interesting point of fact - Look at Marketsmith weekly, and fundamentals then compare that to other airlines

Note number of funds, P/E, Cash flow, Q over Q earnings and sales.

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9. Mesa Air Group, Inc. (NASDAQ: MESA)
Number of Hedge Fund Holders: 20

https://finance.yahoo.com/news/10-best-airline-stocks-buy-135238160.html

Mesa Air Group, Inc. (NASDAQ: MESA) is the holding company for Mesa Airlines, Inc. The latter is a provider of regional air carrier services with American and United Airlines. As of last year, the company had a fleet of 146 aircraft and 373 daily departures to 102 cities in the US and Mexico. It ranks 9th on our list of the best airline stocks to invest in. On June 8th, Mesa Air Group, Inc. (NASDAQ: MESA) reported 28,264 block hours in the previous month, showcasing a 134% increase year over year in light of more passengers boarding flights to travel because of industry recovery in the aftermath of COVID-19. The company also received a Buy rating from Deutsche Bank in May, with a $15 price target. Mesa Air Group, Inc. (NASDAQ: MESA) reported first-quarter EPS of $0.36 versus estimates of -$0.06, and revenue of $150.37 million. The company also has a gross profit margin of 15.78% and a forward PE ratio of 11.29. The stock gained 42.04% in the past 6 months and 45.41% year to date.

By the end of the first quarter of 2021, 20 hedge funds out of the 866 tracked by Insider Monkey for the quarter held stakes in Mesa Air Group, Inc. (NASDAQ: MESA). The total value of their stakes was roughly $69.6 million. This is compared to 14 hedge funds holding stakes in the company worth about $48.1 million. Like Delta Air Lines, Inc. (NYSE: DAL), United Airlines Holdings Inc. (NASDAQ: UAL), and American Airlines Group Inc. (NASDAQ: AAL), Mesa Air Group, Inc. (NASDAQ: MESA) is one of the best airline stocks to invest in.

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MESA

a 'down to pull the spread in' stock

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Mesa to Invest in Heart Aerospace and Orders 100 All-Electric Aircraft
Mesa Air Group, Inc.

Tue, July 13, 2021, 5:00 AM


PHOENIX, July 13, 2021 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today announces that it has made an investment in electric aircraft company, Heart Aerospace (“Heart”), a company that plans to be the first to produce the world’s first electric nineteen-seat ES-19 aircraft, alongside Breakthrough Energy Ventures and United Airlines Ventures. Subject to certain terms, Mesa also plans to add 100 ES-19 aircraft to its regional fleet, revolutionizing air service to small markets as one of the first network air carriers to help decarbonize air travel through the use of electric aircraft. This announcement expands on the efforts that Mesa has made in the emerging transition to electric-powered flight with airlines such as United Airlines – first with the announcement of an investment in Archer Aviation and its eVTOL aircraft, and now with the ES-19, a fully electric nineteen-seat regional aircraft.

“As we continue to explore opportunities in electric aviation, we are excited to expand our efforts to reduce the reliance on fossil fuels in the airline industry and are proud to work with Heart to launch the world’s first electric regional aircraft. Mesa intends to continue its expansion through the introduction of revolutionary technology that benefits our passengers and the environment. We are delighted to take this important step in the de-carbonization of air travel through our co-investment with Breakthrough Energy Ventures and United Airlines Ventures in Heart”, said Jonathan Ornstein, Chairman and Chief Executive Officer. “These technological innovations are good for the environment, will expand the national transportation system, and provide significant growth opportunities for Mesa. We look forward to reconnecting with communities and passengers we previously served.”

Anders Forslund, CEO of Heart, added, “Having Mesa as a partner will be an invaluable asset for us. They know the business of operating nineteen-seaters like few others, and they bring unique operational insights that we feed directly into the design of our plane. Mesa has decades of experience in operating nineteen-seaters, so we do not need to reinvent the wheel. We couldn’t be more excited about reconnecting America together with Mesa.”

Mesa was the world’s largest operator of 19-seat aircraft and has unparalleled expertise in connecting smaller communities to the national transportation system. Over the past 30 years, as the economics of operating 19-seat aircraft became uneconomic, operators exited markets and practically all 19 seat aircraft have been withdrawn from commercial service. For example, Farmington, New Mexico, a rural community bordering the Navajo Nation, previously had over 30 daily departures to 7 destinations. Today, Farmington has no scheduled passenger service. The reduced operating costs of the ES-19 aircraft hold the promise of revitalizing travel options that are currently not economically viable with traditional aircraft. Hundreds of communities will benefit from new or enhanced service, and hundreds of thousands of passengers can once again look forward to safe and reliable air transportation, with the added benefit of flying on an environmentally friendly zero-emissions aircraft.

Heart Aerospace aims to be the first to build electric aircraft for commercial passenger service. This 19 seater aircraft, the ES-19, is driven entirely by electric motors and batteries and is expected to have a range of approximately 250 miles. Based in Göteborg, Sweden, Heart Aerospace anticipates delivering the first ES-19 for commercial use by 2026. Importantly, due to the differences between turbine-powered aircraft and electric aircraft, the passenger experience onboard the ES-19 will be significantly improved over aircraft of the past. The ES-19 aircraft is quieter than its turboprop counterparts, with less vibration and noise. The low noise at taxi, take-off, and landing improves the experience not just for passengers, but also for those who live close to airports.

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MESA

9 p/e, 3.10 cash flow, positive earnings, increase fund ownership and
the stock sucks.

5th day on the 200 day



PPS trending below the 20 day. 20 day trending below the 50 day.
That's no bueno. That needs to shift.

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MESA cpps 8.85

Sixth day of riding 200d after dropping below the 50d
7.50 open gap

50 pink 200 blue
200d has to break to fill that gap



50d blue 20d pink - beautiful example of a flipped trend - especially if the both drop below the 200


20d blue 5 day pink - need pink above blue to reset direction (buy signal)

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MESA - reports tonight

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Mesa Air Group Reports Third Quarter Fiscal 2021 Results
4:05 PM ET, 08/09/2021 - GlobeNewswire
PHOENIX, Aug. 09, 2021 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported third quarter fiscal 2021 financial and operating results.

Highlights for the quarter (3-months ended June 30, 2021):

Pre-tax income of $5.8 million, net income of $4.3 million or $0.11 per diluted share

Took delivery of the last four E175LLs for a total of 80 E175s with United

85,162 block hours, up 169.3% year-over-year and 15.2% above last quarter

Leased 6 additional, 12 total CRJ-700s to GoJet with 8 scheduled for future delivery

Subsequent to quarter-end, invested in second electric aircraft company, Heart Aerospace (“Heart”)

Mesa's Q3 2021 results reflect net income of $4.3 million, or $0.11 per diluted share, compared to net income of $3.4 million, or $0.10 per diluted share for Q3 2020.

Mesa's Q3 2021 pre-tax income was $5.8 million, compared to $4.9 million for Q3 2020.

Mesa’s Q3 2021 results include, per GAAP, the deferral of $1.9 million of revenue, all of which was billed and paid by American and United during the quarter and will be recognized over the remaining terms of the contracts.

Mesa's Adjusted EBITDA for Q3 2021 was $35.3 million, compared to $35.9 million in Q3 2020, and Adjusted EBITDA for Q3 2021 was $44.9 million, compared to $51.5 million in Q3 2020.

Jonathan Ornstein, Chairman and CEO, said, “We had a strong quarter as a result of the rebound in air traffic that led to a sharp increase in block hours compared to the prior year period, as well as last quarter. This time last year we faced a more difficult environment due to the pandemic that led to a significant reduction in air travel. I am proud of our team’s ability to work through these challenges, as evidenced by our fiscal third quarter results. While travel demand remains below pre-pandemic levels and supply chain disruptions have compounded the challenges we face in the current environment, we continue to press forward.” He continued, “We are also committed to ushering in the next generation of sustainable air travel. This is already beginning with new ventures such as our recent one with Heart Aerospace.”

Brad Rich, Mesa’s Chief Operating Officer, added, “During the quarter, we saw a 15.2% sequential increase in block hours. Daily aircraft utilization for the month of June increased 67.4% to 8.7 hours versus 5.2 hours a year ago. We remain focused on operational performance and continuing to provide flexibility to our partners. We are also committed to maintaining a safe and healthy environment for our employees and passengers.”

June quarter financial results:

Total operating revenue increased by $52.1 million, or 71.2%, to $125.2 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.

Contract Revenue increased by $38.0 million, or 53.0%, to $109.7 million primarily as a result of the increased block hours due to the ongoing industry recovery from COVID-19.

Pass-through and other revenue increased during the three months ended June 30, 2021 by $14.1 million to $15.5 million primarily due to increased pass-through maintenance on the E175 fleet.

Total operating expense increased by $52.9 million, or 91.4%, to $110.8 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020. The increase is primarily due to a substantial increase in block hours compared to the prior year period, which was impacted by the COVID-19 pandemic and associated lockdowns, as well as increased maintenance costs. Specifically, flight operations expense increased in the three months ended June 30, 2021 due to additional crew costs associated with more flying and training, and maintenance expense increased primarily due to additional C-checks in preparation for the anticipated increase in summer flying.

Fleet:

Substantially all of the Company’s operating revenue in the three months ended June 30, 2021 was derived from operations associated with American and United Capacity Purchase Agreements and DHL Flight Services Agreement. For the three months ended June 30, 2021, 51% of the Company’s total revenue was derived from United, 45% from American, and 4% from DHL and other sources.

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MESA gap up on 2/9/21 @ 7.50

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Mesa gap 7.50 2/9/21 Filled

nts: 5.51 11/23/20
4.40 11/13/20

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Mesa

gap fill &
2nd build target
cp's 3,2,2,2,3,.5,.5,.5,2,2 to
5,3,3,3,5,1,1,1,3,3

That brought Mesa's P/E down to 7, with 220 funds, 3.10 cash flow, never once went negative sales, or eps, during covid.

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Mesa Air Group Becomes First Scheduled Airline to Launch Drone Delivery Business in the U.S. in Partnership with Flirtey
Thu, October 21, 2021,

RENO, Nev., Oct. 21, 2021 /PRNewswire/ -- Mesa Air Group, Inc. (NASDAQ: MESA), has signed an agreement with aerospace technology company Flirtey to order 4 delivery drones, with an option to order an additional 500 aircraft. The agreement marks Mesa becoming the first scheduled airline to launch drone delivery in the U.S.

Drone Delivery is Now a Reality // Mesa and Flirtey
Mesa and Flirtey are initially focusing on the last-mile food delivery industry, enabling Mesa to expand beyond the global airlines market and into the global food service market. The immediate goal of the partnership is to conduct commercial drone deliveries in the last-mile food and beverage market in the U.S. The parties plan to expand the drone delivery service in the U.S. and New Zealand.

With this agreement, Flirtey, the aircraft designer and manufacturer, is supplying it's best-in-class technology including the Flirtey Eagle, an electric powered, advanced drone that conducts precision delivery to homes and businesses, and Flirtey's autonomous software platform that conducts autonomous flight operations, for Mesa to operate commercial drone delivery.

The partnership will prioritize operational excellence and data collection, enabling rapid expansion with Mesa's operational experience as a leading regional air carrier with approximately 450 daily departures across the U.S. and Flirtey's technical experience having conducted over 6,000 drone delivery flights in the U.S. with its technology protected by over 1,000 patents claims issued and pending in the U.S. and worldwide. Flirtey recently expanded production of delivery drones to meet growing demand. Flirtey's aircraft are made in USA.

"Mesa is excited to partner with Flirtey to become the first scheduled airline to launch drone delivery in the U.S. Drone delivery is a huge market and it's here now. This is the future of small package last mile delivery," said Mesa Chairman and CEO Jonathan Ornstein.

"Flirtey is excited to partner with Mesa to operationalize our best-in-class drone delivery aircraft and autonomous software platform. With Mesa's operational excellence, we look forward to rapidly expanding drone delivery focusing on the trillion dollar last-mile food delivery market," said Flirtey Founder and CEO Matthew Sweeny.

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 114 cities in 39 states, the District of Columbia, the Bahamas, Canada, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As of January 31st, 2021, Mesa operated a fleet of 160 aircraft with approximately 393 daily departures and 3,700 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc., United Airlines, Inc., and DHL.

About Flirtey
Flirtey is an aerospace technology company and U.S. drone delivery manufacturer that sells full-stack drone delivery hardware and software systems. Flirtey is the pioneer of the commercial drone delivery industry, with a mission to save lives and improve lifestyles by making delivery instant for everyone. The company first made history in 2015 when it conducted the first ever FAA-approved drone delivery. In the years that followed, Flirtey has gone on to become the first company to perform an autonomous drone delivery to a home, the first company to perform a commercial drone delivery, and the first company to pioneer AED drone delivery in the U.S. Flirtey has worked alongside NASA, the City of Reno, Johns Hopkins University School of Medicine, emergency medical services provider REMSA, and various commercial partners to create the best-in-class drone delivery system for last-mile delivery. Learn more at www.flirtey.com.

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MESA +12.4%

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MESA

Reports Q4 (Sep) loss of $(0.06) per share, excluding non-recurring items, $0.18 worse than the S&P Capital IQ Consensus of $0.12; revenues rose 21.1% year/year to $130.78 mln vs the $150.65 mln S&P Capital IQ Consensus.Co says "The rapid contraction and expansion of demand has been taxing for the industry and 2021 has proven to be a difficult year as a result. Due to the timing of regular and deferred maintenance events, the supply of labor, and fluctuating prices in the supply chain, exiting Covid is proving to be more challenging than entering it. While we fared better than most majors and regionals, we were not immune to these challenges and we are expecting these issues that are currently impacting our costs to spill-over through the next two quarters."
------------------------------------------------------------------------

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Mesa

Deutsche Bank analyst Michael Linenberg downgraded Mesa Air Group Inc (NASDAQ: MESA) to Hold from Buy and lowered the price target to (an upside of 20.7%), from $15.

Linenberg says the company faces higher than average cost pressures in two areas for at least the next two quarters: training/staffing due to increased turnover and elevated maintenance expense primarily due to more expensive spare part support driven by supply chain constraints.

As a result, he now expects Mesa to post quarterly losses for the next two quarters.

Raymond James analyst Savanthi Syth maintained an Outperform ratings on the shares and lowered the price target to $12.5 (an upside of 115.5%) from $13.

Recently, Mesa Air Group reported a Q4 net loss of $(7.5) million, or $(0.21) per share, compared to a net income of $11.4 million a year ago.

Q4 Revenue was $130.8 million (+21.1% year-over-year), reflecting an increase in block hour volumes for its major partners.

Operating income was $5.09 million (-78.7% Y/Y), and margin stood at 3.9% compared to 22.1% a year ago.

Adjusted EBITDA was $25.8 million, compared to $44.6 million in Q4 2020.

Q4 Block Hours were 94,868 (+64.6% Y/Y), Available Seat Miles increased 62.2% Y/Y, Passengers +97.4% Y/Y, and Total Completion Factor American 97.34% and United 98.06%.

Mesa ended the quarter at $120.5 million in unrestricted cash and equivalents and had $670.3 million in total debt secured primarily with aircraft and engines.

Mesa reported a total completion factor of 97.3% for American and 98.1% for United during 4Q21.

Price Action: MESA shares are trading lower by 17.9% at $5.82 during the market session on Friday.

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Mesa Air Group Reports First Quarter Fiscal 2022 Results
Mesa Air Group, Inc.
Wed, February 9, 2022, 2:01 PM·12 min read

(Sell yourself, MESA - Someone should just buy you!)

PHOENIX, Feb. 09, 2022 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported first quarter fiscal 2022 financial and operating results.

Financial Summary:

Q1 pre-tax loss of $18.4 million, net loss of $14.3 million or $(0.40) per diluted share.

Q1 adjusted net loss1 of $9.3 million or $(0.26) per diluted share.

Fiscal Year Q1 Results:

Mesa’s Q1 FY22 results reflect a net loss of $14.3 million, or $(0.40) per diluted share, compared to net income of $14.1 million, or $0.39 per diluted share for Q1 FY21. Mesa’s Q1 FY22 adjusted net loss1 of $9.3 million was down compared to net income of $13.2 million in Q1 FY21. We can attribute this $22.5 million decrease to the impacts related to Covid, such as cancelled flights, a catch up in deferred heavy maintenance expense, and a spike in sick-related absence rates. Mesa also did not recognize any PSP funds as an offset to operating expenses during Q1 2022, compared to an $11.3 million reduction in Q1 2021.

Jonathan Ornstein, Chairman and CEO, said, “Mesa’s results reflect the impact of Covid to our quarter’s operations and financials. Its effect on this quarter was significant and unlike anything we have seen in twenty years. This was further impacted by elevated pilot attrition as the major and national airlines have accelerated hiring. Looking ahead, we are cautiously optimistic that we are already seeing a decrease in Covid-related absence rates. Managing through the challenges of pilot attrition in our core regional operation remains our team’s top priority.

Outside of our core regional operation, we continue to move forward with some of our important strategic initiatives. We are taking delivery of our third 737-400F aircraft this month. We also remain invested in electric aircraft companies Archer Aviation and Heart Aerospace as we look to position Mesa to be the regional airline leader in decarbonization and electric aircraft. Going forward, our strategy is to selectively look for other opportunities in aviation related, green technologies to ensure a leadership role in this area.”

Fiscal Q1 details:

Revenue in Q1 2022 was $147.8 million, a decrease of $2.6 million (1.7%) from $150.4 million for Q1 2021. While contract revenue increased $9.7 million due to more flying on all fleets relative to the prior period, this increase was offset by fewer aircraft flown for American. There was also a decrease in pass through and other revenue of $12.4 million primarily due to a decrease in pass-through maintenance expense. Mesa’s Q1 2022 results include, per GAAP, the recognition of $4.2 million of previously deferred revenue, versus the deferral of $5.2 million of revenue in Q1 2021. The remaining deferred revenue balance will be recognized as flights are completed over the remaining terms of the contracts.

Mesa’s Adjusted EBITDA1 for Q1 2022 was $17.0 million, compared to $47.4 million in Q1 2021, and Adjusted EBITDAR1 was $26.6 million for Q1 2022, compared to $57.5 million in Q1 2021.

Operationally, the Company ran a controllable completion factor of 97.2% for American and 98.3% for United during Q1 2022. This is compared to a controllable completion factor of 99.8% for American and 100.0% for United during Q1 2021. This excludes cancellations due to weather and air traffic control.

With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 95.8% for American and 97.6% for United during Q1 2022. This is compared to a total completion factor of 98.3% for American and 99.4% for United during Q1 2021.

1 See Reconciliation of non-GAAP financial measures

Liquidity and Capital Resources:

Mesa ended the quarter at $102.3 million in unrestricted cash and equivalents. As of December 31, 2021, the Company had $678.6 million in total debt secured primarily with aircraft and engines.

Fleet:

For the three months ended December 31, 2021, 49% of the Company’s total revenue was derived from our contracts with United, 45% from American, 1% from DHL, and 5% from leases of aircraft to a third party.

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MESA 3.41

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Mesa's sell of 18 aircraft to United

Entry into a Material Definitive Agreement.

https://www.sec.gov/ix?doc=/Archives/edgar/data/810332/000156459022033552/mesa-8k_20221005.htm


On September 27, 2022, Mesa Air Group, Inc. (the “Company”), its wholly owned subsidiary, Mesa Airlines (“Mesa”), and United Airlines, Inc. (“United”) entered into an Aircraft Purchase Agreement (the “Purchase Agreement”), which provides for the sale of 18 CRJ-700 aircraft owned by Mesa to United. The Company expects the net proceeds from the sale of such aircraft will be approximately $50,000,000.



The Purchase Agreement provides that each aircraft will be delivered “as is, where is” subject to and with the benefit of a related lease agreement. Under the terms of the Purchase Agreement, the Company is providing customary representations and warranties for a transaction of this type including authorization, no conflicts, validity of agreement, regulatory matters, good and marketable title, airworthiness, no liens, aircraft records, manufacturer warranties, and no brokers’ fees. United has agreed to deposit a specified sum per aircraft with FAA counsel, to be applied toward the purchase of each aircraft. The closing of the sale of each aircraft is subject to certain customary closing conditions, including the execution of mutually acceptable sale and lease assignment and assumption documentation, and United’s satisfactory inspection of the aircraft. The Purchase Agreement provides for a downward adjustment in the purchase price based on a formula set forth therein if the closing date in respect of an aircraft occurs after January 31, 2023.

The foregoing descriptions of the Purchase Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the full text of the Purchase Agreement, which will be filed as an exhibit to the Company’s Form 10-K for the fiscal year ended September 30, 2022.

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MESA

20 day 1.38
50 day 1.69
200 day 2.91

[eastunder]

You, MESA, are interesting today. Are you shifting? Is it finally time?

POS alert.

Current pps 1.365
50 day at 1.43 and you wicked it
20 day at 1.33

[eastunder]

MESA 1.07

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MESA 12/29 latest to report
No news on UAL agreement
No volume to indicate anything yet
Watching for any type of volume changes





12/12 delays report
12/29 at latest plans to report

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MESA Filed just now: 2022-12-28

https://www.sec.gov/ix?doc=/Archives/edgar/data/810332/000119312522313736/d411968d8k.htm

On December 22, 2022, Mesa Air Group, Inc. (the “Company”) and its wholly owned subsidiaries, Mesa Airlines, Inc. (“Mesa”) and Mesa Air Group Airline Inventory Management, L.L.C., entered into a Modification and Waiver Agreement (the “Modification Agreement”) with the United States Department of the Treasury (the “Treasury”) and The Bank of New York Mellon, as Administrative Agent and Collateral Agent (the “Bank of New York”). The Modification Agreement provides for the amendment of the Loan and Guarantee Agreement, dated as of October 30, 2020 (as theretofore amended, the “Loan Agreement”), among Mesa, as Borrower, the Company, as a Guarantor, the Guarantors party thereto from time to time, the Treasury, and the Bank of New York. The amended terms include, among others, the following: (i) a modification of the Collateral Coverage Ratio covenant with respect to amounts on deposit in the Eligible Receivables Account and the Collateral Coverage Ratio covenant, effective through the maturity date of the Loan Agreement; and (ii) a waiver of the Collateral Coverage Ratio covenant requirement with respect to the release of liens on Collateral. The Modification Agreement also imposes certain obligations on the Company in connection with its sale of Collateral subject to the Loan Agreement and certain lien release obligations on the Treasury with respect to such sales. Capitalized terms used herein but not otherwise defined have the meanings assigned to such terms in the Loan Agreement.

The foregoing description of the Modification Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, which we expect to file as an exhibit to our Quarterly Report on Form 10-Q for the quarterly period ending December 31, 2022.

____________________________________________________________________

The original from 10-30-20

https://www.sec.gov/ix?doc=/Archives/edgar/data/810332/000156459020049697/mesa-8k_20201030.htm

On October 30, 2020 (the “Closing Date”), Mesa Air Group, Inc. (“the Company”) entered into a Loan and Guarantee Agreement, dated as of the Closing Date (the “Loan Agreement”), by and among the Company, as a guarantor, its subsidiaries Mesa Airlines, Inc., as borrower (“Mesa Airlines”), and Mesa Air Group Inventory Management, L.L.C., as a guarantor (“Mesa Air Group Inventory Management”), the other guarantors party thereto from time to time, the United States Department of the Treasury (“Treasury”), and the Bank of New York Mellon as Administrative and Collateral Agent under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

The Loan Agreement provides for a secured term loan facility of up to $200.0 million that matures on October 30, 2025 (the “Maturity Date”). On the Closing Date, the Company borrowed $43.0 million of this commitment and may, at its option, borrower up to an additional $157.0 million in a subsequent borrowing by no later than December 15, 2020. All borrowings under the Loan Agreement will bear interest at an annual rate based on Adjusted LIBO (as defined in the Loan Agreement) plus 3.5%. Accrued interest on the loans is payable in arrears on the first business day following the 14th day of each March, June, September and December (beginning with December 15, 2020), and on the Maturity Date. Interest will be paid by increasing the principal amount of the loan by the amount of such interest due on an interest payment date, unless Mesa Airlines elects to pay interest in cash at least 30 days prior to each applicable interest payment date. The borrower obligations are guaranteed by the Company and Mesa Air Group Inventory Management. The proceeds may be used for general corporate purposes and operating expenses, to the extent permitted by the CARES Act.

All advances under the Loan Agreement will be in the form of term loans, all of which will mature and be due and payable in a single installment on the Maturity Date. Voluntary prepayments of loans under the Loan Agreement may be made, in whole or in part, by Mesa Airlines, without premium or penalty, at any time and from time to time. Amounts prepaid may not be reborrowed. Mandatory prepayments of loans under the Loan Agreement are required, without premium or penalty, to the extent necessary to comply with covenants described below, certain dispositions of the Collateral (defined below), certain debt issuances secured by liens on the Collateral and certain insurance payments related to the Collateral. In addition, if a “change of control” (as defined in the Loan Agreement) occurs with respect to Mesa Airlines, Mesa Airlines will be required to repay the loans outstanding under the Loan Agreement.

On the Closing Date, the obligations of Mesa Airlines under the Loan Agreement are secured by certain aircraft, aircraft engines, accounts receivable, ground service equipment and tooling (collectively, the “Collateral”). Subject to certain conditions, Mesa Airlines is permitted to release Collateral under the Loan Agreement from time to time in its discretion.

The Loan Agreement requires the Company, under certain circumstances, including within ten (10) business days prior to the last business day of March and September of each year, beginning March 2021, to appraise the value of the Collateral and recalculate the collateral coverage ratio. If the calculated collateral coverage ratio is less than 1.6 to 1.0, Mesa Airlines will be required either to provide additional Collateral (which may include cash collateral) to secure its obligations under the Loan Agreement or repay the term loans under the Loan Agreement, in such amounts that the recalculated collateral coverage ratio, after giving effect to any such additional Collateral or repayment, is at least 1.6 to 1.0. Based on the appraisal submitted by Mesa Airlines in connection with the execution of the Loan Agreement, the appraised value of the Collateral is presently in excess of the 2.0 to 1.0 initial collateral coverage ratio necessary to access the amount under the Loan Agreement.

The Loan Agreement contains two financial covenants, a minimum collateral coverage ratio and a minimum liquidity level. The Loan Agreement also contains customary negative and affirmative covenants for credit facilities of this type, including, among others: (a) limitations on dividends and distributions; (b) limitations on the creation of certain liens; (c) restrictions on certain dispositions, investments and acquisitions; (d) limitations on transactions with affiliates; (e) restrictions on fundamental changes to the business, and (f) restrictions on lobbying activities. Additionally, the Company is required to comply with the relevant provisions of the CARES Act, including limits on employment level reductions after September 30, 2020, restrictions on dividends and stock buybacks, limitations on executive compensation, and requirements to maintain certain levels of scheduled service.

The Loan Agreement provides for customary events of default, including, among others, the failure to pay principal, interest or other amounts payable under the Credit Agreement, failure to comply with certain covenants, material misrepresentations, cross defaults to other material indebtedness, any lien securing the collateral ceasing to be valid, certain insolvency and receivership events affecting the Company or its material subsidiaries and judgments in excess of $14.0 million in the aggregate being rendered against the Company or its material subsidiaries.

Warrant Agreement and Warrants

In connection with the Loan Agreement and as partial compensation to Treasury for the provision of financial assistance under the Loan Agreement, the Company is obligated to issue warrants (each a “Warrant” and, collectively, the “Warrants”) to Treasury to purchase shares (the “Warrant Shares”) of the Company’s common stock, no par value (the “Common Stock”), at an exercise price of $3.98 per share (the “Exercise Price”), which was the closing price of the Common Stock on The Nasdaq Stock Market on April 9, 2020. The Warrants will be issued pursuant to the terms of a Warrant Agreement entered into by the Company and Treasury on October 30, 2020 (the “Warrant Agreement”). The exercise price and number of Warrant Shares issuable under the Warrants are subject to adjustment as a result of anti-dilution provisions contained in the Warrants for certain stock issuances, dividends, and other corporate actions.

On the closing date, the Company issued a Warrant to Treasury to purchase 1,080,402 Warrant Shares. Upon the subsequent borrowing under the Loan Agreement, the Company will issue to Treasury an additional Warrant to purchase a number of Warrant Shares determined by the quotient of (a) the product of the amount principal amount of the subsequent borrowing, multiplied by 0.1, divided by (b) the Exercise Price.

The Warrants are freely transferable, subject to applicable securities laws, and do not have any voting rights. The Warrant Agreement also provides for certain registration rights. The right to purchase Warrant Shares under each Warrant expires on the fifth anniversary of the date of issuance of such Warrant. The Warrants will be exercisable either through net share settlement or net cash settlement, at the Company’s option.

The Warrants are being issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). Any issuance of Common Stock upon exercise of the Warrants will be exempt as an exchange by the Company exclusively with its security holders eligible for exemption under Section 3(a)(9) of the Securities Act.

The foregoing descriptions do not purport to be complete and are qualified in their entirety by reference to each of the Loan Agreement, Warrant Agreement and Form of Warrant, copies of which will be filed with the Company's periodic reports.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 above under the caption “Secured Loan Agreement” is incorporated by reference herein to the extent responsive to Item 2.03.

Item 3.02

Unregistered Sales of Equity Securities.

The information provided in Item 1.01 above under the caption “Warrant Agreement and Warrants” is incorporated by reference herein to the extent responsive to Item 3.02.

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MESA cpps $1.61
Today's Change
$0.26(+19.26%)

Today's Volume
728KAbove Avg

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MESA - Too much too soon?

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MESA 3.05 reports 2/9 A



Golden cross 50 over 200 in process But lagging- (Track 200 currently 2.20 & 50 @ 1.79)



20 already crossed over 200 Jan 25th

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Mesa Air Group Reports First Quarter Fiscal 2023 Results
Mesa Air Group, Inc.

Thu, February 9, 2023 at 2:00 PM MST·

https://finance.yahoo.com/news/mesa-air-group-reports-first-210000108.html

PHOENIX, Feb. 09, 2023 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported first quarter fiscal 2023 financial and operating results.

Fiscal First Quarter Update:

Total operating revenues of $147.2 million

Pre-tax loss of $10.0 million, net loss of $9.1 million or $(0.25) per diluted share

Adjusted net loss1 of $4.3 million or $(0.12) per diluted share

Adjusted net loss excludes a $3.7 million impairment related to intangible assets and $1.7 million related to investments in equity securities

As previously reported, closed on United Airlines, American Airlines, and aircraft-related transactions

Subsequent to quarter end, closed sale of 8 remaining CRJ-550s to United Airlines

Jonathan Ornstein, Chairman and CEO, said, “The first quarter was an important one for Mesa, as we executed several key agreements that will materially enhance our operational and financial position and alleviate significant issues that we have faced. While block hour production continued to be challenged by the industry-wide pilot shortage during the quarter, we believe all the pieces are in place to begin restoring capacity across our fleets. We are preparing for the transition of our CRJ-900 operation to United next month. Our pilot pipeline continues to strengthen and pilot attrition has remained significantly lower since we have enhanced our payscales and expanded our participation in the Aviate program with United.”

Fiscal First Quarter Details:

Total operating revenues in Q1 2023 were $147.2 million, a decrease of $0.6 million (0.4%) from $147.8 million for Q1 2022. Contract revenue decreased $8.4 million, or 6.2%. These decreases were driven by lower block hours, offset by increased block-hour revenue for new pilot payscales. Mesa’s Q1 2023 results include, per GAAP, the recognition of $5.3 million, versus the recognition of $4.2 million of previously deferred revenue in Q1 2022. The remaining deferred revenue balance of $18.8 million will be recognized as flights are completed over the remaining terms of the contracts.

Mesa’s Adjusted EBITDA1 for Q1 2023 was $21.8 million, compared to $17.0 million in Q1 2022, and Adjusted EBITDAR1 was $25.9 million for Q1 2023, compared to $26.6 million in Q1 2022.

Mesa’s Q1 2023 results reflect a net loss of $9.1 million, or $(0.25) per diluted share, compared to a net loss of $14.3 million, or $(0.40) per diluted share for Q1 2022. Mesa’s Q1 2023 adjusted net loss1 was $4.3 million, or $(0.12) per diluted share, versus an adjusted net loss1 of $9.3 million, or $(0.26) per diluted share, in Q1 2022. The year over year increase in adjusted net income of $5.0 million was primarily due to increased block-hour revenue for new pilot payscales and lower maintenance, D&A, and aircraft rent expenses, partially offset by higher expenses for flight operations due to increased costs for training and employee wages.

Operationally, the Company ran a controllable completion factor of 99.4% for American and 99.9% for United during Q1 2023. This is compared to a controllable completion factor of 97.7% for American and 98.3% for United during Q1 2022. This excludes cancellations due to weather and air traffic control.

With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 97.9% for American and 99.2% for United during Q1 2023. This is compared to a total completion factor of 95.8% for American and 95.8% for United during Q1 2022.

For Q1 2023, 50% of the Company’s total revenue was derived from our contracts with United, 45% from American, 3% from DHL, and 2% from leases of aircraft to a third party.

1 See Reconciliation of non-GAAP financial measures

Balance Sheet and Cash Flow:

Mesa ended the quarter at $56.1 million in unrestricted cash and equivalents. As of December 31, 2022, the Company had $701.3 million in total debt secured primarily with aircraft and engines. This amount includes $64.2 million corresponding to the reclassification from operating lease to finance lease on 15 CRJ-900s. Additionally, we borrowed $25.5 million in the form of a term loan from United, of which $15 million is forgivable upon the meeting of certain performance criteria.

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Five days in the life of MESA

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MESA:

$2.25 Today's Change $0.14(+6.64%)

Today's Volume 263.4KAbove Avg.

10-Day Average Volume 158,442

Volume
Today's volume is on track to be heavier than usual, with 262,860 shares having traded so far. The On Balance Volume indicator (OBV) is bearish. The slope of the indicator is negative and suggests that there is a lack of buying interest.

[eastunder]

Mesa Air Group Reports Second Quarter Fiscal 2023 Results
May 09, 2023 17:34 ET | Source: Mesa Air Group, Inc.

https://www.globenewswire.com/news-release/2023/05/09/2665098/0/en/Mesa-Air-Group-Reports-Second-Quarter-Fiscal-2023-Results.html

PHOENIX, May 09, 2023 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today reported second quarter fiscal 2023 financial and operating results.

Fiscal Second Quarter Update:

Total operating revenues of $121.8 million
Pre-tax loss of $37.2 million, net loss of $35.1 million or $(0.88) per diluted share
Adjusted net loss1 of $21.3 million or $(0.53) per diluted share
Adjusted net loss excludes $13.8 million primarily related to impairment of assets held for sale
Initiated CRJ-900 transition to United Airlines in March, with last American Airlines flight operated April 3rd
Experiencing pilot attrition below pre-COVID levels
Reduced debt by approximately $80 million primarily with proceeds from asset sales
Jonathan Ornstein, Chairman and CEO, said, “While our financial results reflect the ongoing transition of CRJ flying to United, we believe these actions will prove to be the right long-term strategic decision for the company. We began operating CRJ-900 flights for United Airlines in March, representing the culmination of months of diligent preparation and coordination between Mesa and United teams. We have already started to realize significantly improved pilot retention and attraction as a result of our expanded agreement with United. While we were ultimately more conservative in the timing of our transition than we had projected through second-quarter end, we have now transitioned 24 CRJ-900s.”

Fiscal Second Quarter Details:

Total operating revenues in Q2 2023 were $121.8 million, a decrease of $1.4 million, or 1.1%, from $123.2 million for Q2 2022. Contract revenue decreased $8.2 million, or 7.3%. These decreases were driven by deferred revenue and lower block hours, partially offset by higher United block-hour rates for new pilot payscales. Pass-through revenue, driven by maintenance and property taxes, increased by $6.8 million. Mesa’s Q2 2023 results include, per GAAP, the deferral of $5.7 million, versus the recognition of $0.8 million of previously deferred revenue in Q2 2022. The remaining deferred revenue balance of $24.5 million will be recognized as flights are completed over the remaining term of the United contract.

Total operating expenses in Q2 2023 were $148.7 million, a decrease of $19.3 million, or 11.5%, versus Q2 2022. This decrease was primarily due to $22.7 million lower non-cash impairment of assets held for sale versus Q2 2022, an $8.6 million decrease in aircraft rent attributable to the reclassification from operating lease to finance lease for certain CRJ-900s, and a $4.2 million decrease in depreciation primarily driven by the lower depreciable base from the CRJ-900 asset impairment charge in Q4 2022. The decrease was partially offset by a $12.4 million increase in flight operations expense to $54.8 million, reflecting higher pilot pay scales and increased training costs as we continue to drive pilot throughput, as well as a $5.7 million increase in general and administrative expense, reflecting higher pass-through property tax costs. Total adjusted operating expenses, excluding one-time items, were $132 million, an increase of 2.7% compared to the prior year period.

Mesa’s Q2 2023 results reflect a net loss of $35.1 million, or $(0.88) per diluted share, compared to a net loss of $42.8 million, or $(1.19) per diluted share for Q2 2022. Mesa’s Q2 2023 adjusted net loss1 was $21.3 million, or $(0.53) per diluted share, versus an adjusted net loss1 of $10.3 million, or $(0.29) per diluted share, in Q2 2022.

Mesa’s Adjusted EBITDA1 for Q2 2023 was $7.1 million, compared to $15.8 million in Q2 2022, and Adjusted EBITDAR1 was $7.9 million for Q2 2023, compared to $25.2 million in Q2 2022.

Operationally, the Company reported a controllable completion factor of 99.6% for United and 99.8% for American during Q2 2023. This is compared to a controllable completion factor of 96.7% for United and 96.8% for American during Q2 2022. This excludes cancellations due to weather and air traffic control.

With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 98.5% for United and 94.7% for American during Q2 2023. This is compared to a total completion factor of 93.7% for United and 93.5% for American during Q2 2022.

For Q2 2023, 55% of the Company’s total revenue was derived from our contracts with United, 40% from American, 4% from DHL, and 1% from leases of aircraft to a third party. Upon our completion of the transition of the American CRJ-900s to United, our contracted regional fleet will consist of 80 large (70/76 seats) jets, comprising a mix of E-175s and CRJ-900s. Additionally, we will continue to operate four 737-400/800s at DHL.

Balance Sheet and Cash Flow:

Mesa ended the quarter at $51.4 million in unrestricted cash and equivalents. As of March 31, 2023, the Company had $608.7 million in total debt secured primarily with aircraft and engines.

During the quarter, the Company closed on the sale of 4 of the 11 CRJ-900s agreed to be sold to a third-party. Mesa also sold to United the remaining eight CRJ-550s and ten out of the 30 engines previously agreed upon. Net proceeds from these transactions were used to pay down $52 million of debt. Additionally, we made $28 million of scheduled debt payments in the quarter.

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MESA down 25.73% (-.53) on earnings. (or do we call those losses?)

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MESA cpps 2.12

6/13

RB/10
7.5,3,3.5,3,0,.5/ 5.5,2,2,2,3,3,
2.5,7,6.5,7,.5,/ 4.5,8,8,8,7,7

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Mesa Air Group: Unattractive Or Speculative Buy?
Aug. 22, 2023 1:45 PM ETMesa Air Group, Inc. (MESA)AAL, UAL7 Comments

NTS: (Aug 22 pps was 1.52 at close CPPS on 9/25 close was .88 a 42% drop since written)

Dhierin Bechai
Investing Group Leader
https://seekingalpha.com/article/4630320-mesa-air-group-unattractive-or-speculative-buy

Summary
Mesa Air Group has experienced a significant decline in stock value due to continued pilot shortages and a transition period.
The company is still losing money despite transitioning to a profitable agreement with United Airlines.
Mesa Air Group is focused on reducing debt and improving liquidity through the sale of aircraft and engines.

In a previous report, I said that Mesa Air Group (NASDAQ:MESA) remained infused with risk, and it was not a buy due to an uncertain ramp up trajectory in the flights for United Airlines. Perhaps that was an understatement because the stock lost almost a third of its value since then. In this report, I will be revisiting the rating for Mesa Air Group and put a price target on the name.

A Turn Around Year For Mesa Air Group

I could spend various paragraphs discussing the most recent results, but right now the reality for Mesa is that despite transitioning from a loss-making capacity purchase agreement with American Airlines (AAL) to a profitable one for United Airlines (UAL), the business was still losing money.

Total contract revenues decreased by 20.6% on a 28.6% decrease in block hours. So, the contract revenue per block hour did improve by around 11% excluding pass through revenues, which in some way shows the better revenue structure for the flight activity for United Airlines. The operating expenses increased by 15.5% or $20.737 million, but this was driven by $30.5 million in asset impairments. Excluding the asset impairment and gains on sale, the operating income would have dropped from a $213,000 profit to a $16.5 million loss, mostly reflecting lower contract revenues.

So, while initially the transition from flying for American Airlines to United Airlines was presented as swapping loss-making block hours for profitable ones, the reality is that due to the ramp up and a somewhat conservative scheduling from United, the business has become even more loss making. That is also driven by the continued pilot shortage. Perhaps the positive is that Mesa needs another 150 pilots to allow the company to get to the targeted utilization, which will generate margins of 7 to 10 percent, which the company expects to achieve in fiscal year 2024.

Mesa’s Focus On Debt And Liquidity

As Mesa transitions the business and improves utilization, the company has to rightsize in more than one aspect. Currently, the company has a surplus of 36 airplanes and has associated debts on the books. So, the key right now is to sell those assets, take out the associated debt and improve liquidity. The company has $48.3 million in cash and burns $13.8 million in operations quarterly. So, while the company won’t run out of cash imminently, it has to do something to keep liquidity at acceptable levels to run the business because the company also has $24 million maturing this year and $122.2 million maturing in the next fiscal year. So, the position is far from comfortable with $577.5 million in gross debt.

The company intends to sell aircraft and engines to improve liquidity and efficiency and reduce debt:

14 CRJ-900s will be sold, saving the company $3 million per quarter.
15 CRJ-900s are currently subject to negotiations, which will yield $2 million in savings per quarter.
Seven CRJ-900s are not subject of negotiations, but could result in $2 million in savings per quarter.
The sale of 12 engines held for sale will also result in $2 million in cost savings.
Overall, shaving excess capacity would result in $15 million in savings, but that is not the most important element, in my view, as these quarterly savings are largely non-cash. The important part is the debt reduction associated with the sales. The 14 CRJ-900s will reduce debt by $74.3 million and provide $18 million in cash. The debt reduction will be around 13% of the outstanding debt, while the cash would cover a quarter of the operational cash burn. We don’t know what the other 22 airplanes will do to the debt profile once sold, but scaling it to the 14 sold jets, it would mean $116.7 million in debt reduction and $28.3 million in cash. If we scale that to the quarterly savings, the numbers would be closer to $77.8 million and $18.9 million.

Is MESA Stock A Buy?

Mesa doesn’t quite sound attractive. The business has $48.3 million in cash, $13.8 million in operating cash burn and expected normalization of efficiency in FY2024. Apart from that, the company has $23.9 million in maturities in FY2023 and $122.2 million next year and one can really wonder where the money will be coming from since there is a negative cash flow and only $90 million in assets held for sale.

With FY2023 earnings in mind, Mesa Air Group stock without a doubt is a sell, but 2024 provides some upside with potentially even more upside in 2025. It should, however, be pointed out that the business needs to significantly increase its cash generation in the years to come. As it stands, by 2025, the company could actually be short of cash. However, it is not certain whether this will be the case as the company will be selling off assets, which could take out some principal maturities that are currently scheduled for 2025. Nevertheless, the Mesa Air Group stock does not seem attractive to buy at all.

Conclusion: Mesa Air Group Remains A High Risk Name

The only reason why one would or could consider buying Mesa Air Group is the upside it offers in the 2024-2025 timeframe and in that case buying the stock would be speculative. Just looking at this year’s expectations, the stock would be a sell, but we should point out that 2023 is a transition year and that transition will continue in 2024. Keeping the potential upside in mind as well as the challenges for the business, I would consider Mesa a hold for people looking to recover some of their losses.

[eastunder]

MESA

10-3-23

.83

Mesa Air (Nyse: MESA)

SEC, nasdaq, ShortSqueeze

Finviz, StockTA, Stoxline,