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Willy financials.
https://m.marketscreener.com/HARBOR-DIVERSIFIED-INC-10092973/news/HARBOR-DIVERSIFIED-MANAGEMENT-S-DISCUSSION-AND-ANALYSIS-OF-FINANCIAL-CONDITION-AND-RESULTS-OF-OPER-30908379/?fbclid=IwAR1Oq_DJuw7yFV68cHcv24dPrZ5esbqKJv4eN6HK IfQHO53FREjT9N1D7l8
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There is a lot of data in there but the necessary information for good decision making either isn’t there or -at least - I couldn’t find it. Seems to me what is needed is an answer to these questions:
1. What is the downsizing United is anticipating and the fleet reductions they have announced going to do to their scope? 2. How much of that scope will be flown by the CRJ-200? The E-175? 3. What does that translate into in terms of pilots that Air Wisconsin may need to furlough? And how long will they be out, because until the majors start hiring again Air Whiskey seniority progression/furloughed rehiring will be pretty much dependent upon Air Whiskey retirements? 4. How many United pilots will eventually be furloughed, and how long will they be out? And when United has eventually called all those people back, what will be their hiring mix between Aviate people and the military flyers - those that pulled their separation/retirement paperwork when COVID popped up as well as the 90 or so a month In the pipeline that will continue to become separation/retirement eligible every month before United and the other majors again start hiring? if you could find the answers to those questions it would REALLY be helpful for people making career decisions. |
Thanks for the link. FYI...here is the official SEC link https://www.sec.gov/cgi-bin/browse-e...&hidefilings=0
I think posting the link was invaluable as I have seen little if any communication about these issues. I am curious how ZW incurred a net loss of -$19.2M (largely driven by a operating loss of -$20.6M) in 2019 before corona. ZW had an operating loss of -$24.5M also in 2018. The economy was doing great in those years. If they can't operate at an operating profit in good years, how are they going to function in 2020-2021? In addition, the payroll expenses for 2019 were over $126M. The PPP and PSP Agreement (Cares Act, SBA) is only contributing around $60M in 2020 so far. How is ZW going to cover the shortfall? There are some other major areas of concern. I think this says it all: "We cannot be certain that Air Wisconsin’s operations will generate sufficient cash flow to make its required payments under its debt and other contractual arrangements. Air Wisconsin currently does not have sufficient liquidity to repay all of its outstanding debt in full if such debt were accelerated. If Air Wisconsin is unable to pay its debts as they come due, or is unable to obtain waivers for such payments, its secured lenders could foreclose on any of Air Wisconsin’s assets securing such debt. Additionally, a failure to pay Air Wisconsin’s aircraft, engine and other property leases, debt or other fixed cost obligations, or a breach of its other contractual obligations, could result in a variety of further adverse consequences, including the exercise of remedies by its creditors and lessors, such as acceleration. In such a situation, Air Wisconsin may not be able to cure its breach, fulfill its contractual obligations, make required lease payments or otherwise cover its fixed costs, which could have a material adverse effect on our business, results of operations and financial condition." --page 16 One positive in the 10-K--they said the IAD base is suppose to be operational again in August 2020. I also thought it was interesting they managed to get an effective tax rate of 1-3% depending on the year. I wish I had a 1-3% effective tax rate... |
Originally Posted by Flugkapitan
(Post 3090530)
Thanks for the link. FYI...here is the official SEC link https://www.sec.gov/cgi-bin/browse-e...&hidefilings=0
I think posting the link was invaluable as I have seen little if any communication about these issues. I am curious how ZW incurred a net loss of -$19.2M (largely driven by a operating loss of -$20.6M) in 2019 before corona. ZW had an operating loss of -$24.5M also in 2018. The economy was doing great in those years. If they can't operate at an operating profit in good years, how are they going to function in 2020-2021? In addition, the payroll expenses for 2019 were over $126M. The PPP and PSP Agreement (Cares Act, SBA) is only contributing around $60M in 2020 so far. How is ZW going to cover the shortfall? There are some other major areas of concern. I think this says it all: "We cannot be certain that Air Wisconsin’s operations will generate sufficient cash flow to make its required payments under its debt and other contractual arrangements. Air Wisconsin currently does not have sufficient liquidity to repay all of its outstanding debt in full if such debt were accelerated. If Air Wisconsin is unable to pay its debts as they come due, or is unable to obtain waivers for such payments, its secured lenders could foreclose on any of Air Wisconsin’s assets securing such debt. Additionally, a failure to pay Air Wisconsin’s aircraft, engine and other property leases, debt or other fixed cost obligations, or a breach of its other contractual obligations, could result in a variety of further adverse consequences, including the exercise of remedies by its creditors and lessors, such as acceleration. In such a situation, Air Wisconsin may not be able to cure its breach, fulfill its contractual obligations, make required lease payments or otherwise cover its fixed costs, which could have a material adverse effect on our business, results of operations and financial condition." --page 16 One positive in the 10-K--they said the IAD base is suppose to be operational again in August 2020. I also thought it was interesting they managed to get an effective tax rate of 1-3% depending on the year. I wish I had a 1-3% effective tax rate... |
Originally Posted by itsmytime
(Post 3090534)
agreed. I was surprised at a lot of what I read in there. I always heard AWAC was flush with cash. I read it as flights were resuming at IAD in August, not a base re-opening. Correct me if I’m wrong.
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Originally Posted by tonsterboy5
(Post 3090541)
just remember this symbol is only for the healthcare side of the parent company. They include zero information on the owners compensation. There can be a lot of ways to fudge numbers to get a loss
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Originally Posted by tonsterboy5
(Post 3090541)
just remember this symbol is only for the healthcare side of the parent company. They include zero information on the owners compensation. There can be a lot of ways to fudge numbers to get a loss
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Harbor Diversified is almost exclusively Air Wisconsin operations. The Therapeutics/"medical" side is "...a non-operating entity with no material assets." page 10
Percentage ownership is page 99, Executive compensation is page 97, BOD compensation is page 93. The operating losses "Loss from Operations" for 2018, 2019 are on page 57. The Net Income/Loss also on this page. The reason 2018 was also not a Net Loss is because they had a "Gain on extinguishment of debt" of $198M on page 57 and 59. It is a one-time gigantic boost. The company still has an operating loss year over year. The 2018 net income giant gain was essentially a one-time trick. At the end of 2019, there was only $69M in cash. That plus the PPP/ PSP (Cares Act, SBA loan, etc.) is the only cash available to run ZW in 2020. The way I see it they have 4 options: the owners listed on page 99 inject $M in cash, and/or there is a stock offering (unlikely--HRBR trades at $0.01-0.15 per share and is not listed on a major exchange), and/or they take out $M in loans from large banks, and/or ZW gets more money from the government. I will add that the CEO got a $300K bonus in 2019 (page 97) for those losses. Please help bring this to the attention of the ALPA reps. If enough of us are saying it, folks will hopefully do something about it. |
Originally Posted by Flugkapitan
(Post 3090857)
Harbor Diversified is almost exclusively Air Wisconsin operations. The Therapeutics/"medical" side is "...a non-operating entity with no material assets." page 10
Percentage ownership is page 99, Executive compensation is page 97, BOD compensation is page 93. The operating losses "Loss from Operations" for 2018, 2019 are on page 57. The Net Income/Loss also on this page. The reason 2018 was also not a Net Loss is because they had a "Gain on extinguishment of debt" of $198M on page 57 and 59. It is a one-time gigantic boost. The company still has an operating loss year over year. The 2018 net income giant gain was essentially a one-time trick. At the end of 2019, there was only $69M in cash. That plus the PPP/ PSP (Cares Act, SBA loan, etc.) is the only cash available to run ZW in 2020. The way I see it they have 4 options: the owners listed on page 99 inject $M in cash, and/or there is a stock offering (unlikely--HRBR trades at $0.01-0.15 per share and is not listed on a major exchange), and/or they take out $M in loans from large banks, and/or ZW gets more money from the government. I will add that the CEO got a $300K bonus in 2019 (page 97) for those losses. Please help bring this to the attention of the ALPA reps. If enough of us are saying it, folks will hopefully do something about it. |
Originally Posted by Flugkapitan
(Post 3090857)
folks will hopefully do something about it.
filler |
Originally Posted by itsmytime
(Post 3090534)
agreed. I was surprised at a lot of what I read in there. I always heard AWAC was flush with cash. I read it as flights were resuming at IAD in August, not a base re-opening. Correct me if I’m wrong.
Obviously not great that our income didn’t outpace our depreciation but it’s not like AWAC moved in the wrong direction with regards to total cash/year. Also something I noticed was AWAC bought up 9 more of their planes in March 2020 they now own that they were previously leasing, adding to expenses. This looks more like accounting wizardry than anything because it would make more sense to terminate leases in March with so many planes parked rather than outright buy them. I’m assuming they’re looking to incur greater depreciation this year to write off more taxes next. Also the leasers of the aircraft are a subsidiary of the same holding group so there’s no effective change to the bottom line. |
Originally Posted by BcULstDaBlodyWr
(Post 3091556)
Also something I noticed was AWAC bought up 9 more of their planes in March 2020 they now own that they were previously leasing, adding to expenses. This looks more like accounting wizardry than anything because it would make more sense to terminate leases in March with so many planes parked rather than outright buy them. I’m assuming they’re looking to incur greater depreciation this year to write off more taxes next. Also the leasers of the aircraft are a subsidiary of the same holding group so there’s no effective change to the bottom line.
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Reminds me of the Seinfeld episode about write offs.
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Again, who is your CEO. Nothing else to say.
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Originally Posted by pitchtrim
(Post 3091819)
Reminds me of the Seinfeld episode about write offs.
"No. But they do. And they're the ones writing it off!" |
Looking good
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Originally Posted by whiteneedles
(Post 3165300)
Sent from my SM-G970U using Tapatalk |
Originally Posted by EhV8R
(Post 3165837)
Didn't read the whole thing in it's entirety, but the whole spiel seems to be about how well AW was doing - based on its reports up until March 2020...
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Originally Posted by squib
(Post 3165924)
Then maybe read a bit further before commenting.
If I learned anything, it's that the company owning AW is listed as a dark/defunkt on the trading market. The link doesn't tell anyone anything they didn't already know about Air Wisconsin, and certainly doesn't give any relevant information as to where they stand in the current/future environment. Sent from my SM-G970U using Tapatalk |
https://secfilings.nasdaq.com/efxapi...HTM_TX67820_14
Current SEC Form 10Q filing An excerpt: We derive nearly all of our operating revenue from the United capacity purchase agreement because United is currently Air Wisconsin’s sole airline partner. United accounted for approximately 99.9% of our operating revenue for the six months ended June 30, 2020 and the year ended December 31, 2019, respectively. The termination or non-renewal of the United capacity purchase agreement would have a material adverse effect on our business, financial condition and results of operations. The United capacity purchase agreement expires in February 2023, unless United elects to exercise its option to extend the agreement for an additional period of no less than two years, but up to three years, in its discretion, in which case it expires between February 2025 and February 2026, unless United elects to exercise its second option to extend the agreement for a second additional two-year period, subject to mutual agreement on certain economic terms, in which case it expires between February 2027 and February 2028. United is also permitted, subject to certain conditions, including giving notice of 60 days or more, to terminate the agreement early in the event of Air Wisconsin’s material breach of the agreement, subject to Air Wisconsin’s right to cure. The United capacity purchase agreement is also subject to termination prior to expiration in various circumstances, including if Air Wisconsin’s controllable flight completion factor or departure performance falls below certain pre-determined levels, and in the event of a non-carrier-specific grounding of at least a specified number of Air Wisconsin’s aircraft, in each case for a specified period of time. Disputes between United and Air Wisconsin have arisen under the United capacity purchase agreement in the past and, while the prior disputes have been resolved, it is possible that new disputes may arise in the future. New disputes or disagreements with United could result in Air Wisconsin incurring negotiation or resolution costs or entering into litigation or other proceedings. Even if resolved in Air Wisconsin’s favor, the existence of a dispute could harm Air Wisconsin’s relationship with United. We cannot predict the outcome of a future dispute or disagreement with United. Air Wisconsin currently uses the systems, facilities and services of United to support a significant portion of its operations, including airport and terminal facilities and operations, information technology interface, ticketing and reservations, scheduling, dispatching interface, fuel purchasing and ground handling services. If United were to cease to maintain any of these systems, close any of these facilities, or no longer provide these services to Air Wisconsin, whether due to termination of the United capacity purchase agreement, a strike or other labor interruption by United personnel, bankruptcy or other financial hardship experienced by United, or for any other reason, Air Wisconsin may not be able to obtain access to alternative systems, facilities or services on terms and conditions as favorable as those it currently receives, or at all. Upon certain termination events described in the United capacity purchase agreement, United could require Air Wisconsin to sell or assign to United certain facilities and assets that Air Wisconsin uses in connection with the services it provides. As a result, in order to offer airline service after termination of the United capacity purchase agreement, Air Wisconsin may have to replace these facilities, assets and services. Air Wisconsin may be unable to arrange such replacements on satisfactory terms, or at all. If the United capacity purchase agreement were to be terminated or not renewed, our business would be significantly impacted, and it is unlikely we would have an immediate source of revenue or earnings to offset the financial impact. United is not under any obligation to extend or renew the United capacity purchase agreement with Air Wisconsin, whether on similar terms or at all. |
TL;DR: Every factor that effects the operation of an Airline might effect our financial performance.
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Originally Posted by Excargodog
(Post 3185492)
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Originally Posted by DarkSideMoon
(Post 3185564)
That sounds like pretty boilerplate language. The non-renewal of the sole contract the company has is an investment risk.
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HRBR stock rose 22% today as of 1130am CT and was over $1/share at one point. Anyone hear any news that would make this happen?
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New 10-K out today. Something in it might have gotten the OTC market excited.
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Originally Posted by BcULstDaBlodyWr
(Post 3214499)
HRBR stock rose 22% today as of 1130am CT and was over $1/share at one point. Anyone hear any news that would make this happen?
But this is interesting! |
Originally Posted by SuperFlier
(Post 3214796)
Wow...volume was 20x as well. I read through the 10k, nothing jumped out at me, but I’m not an expert in annual report analyzing.
But this is interesting! |
Originally Posted by groundlooper
(Post 3214805)
entirely speculative but maybe some insider info floating around about the 700/900 flying? It doesn't make sense to me that ZW would be hiring the way they are unless there's some news coming up, and that combined with the stock jump might be a good sign? I also probably have no clue what I'm talking about
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Time to bring back the guaranteed junior man calls on day 4!
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Originally Posted by Escargot
(Post 3214830)
United forum talking about major hiring going on and ending the LOAs for reduced hours. Pretty sure that's good news for all UAX carriers cause it implies lots of flying gonna happen.
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Originally Posted by Hedley
(Post 3214882)
Major hiring and good news for UAX carriers are both vague terms. The hiring numbers and rate will depend on both the domestic and international recovery, and what happens to UAX is yet to be announced to the worker bees. As United NB block hours increase, UAX can increase as well. Being that scope is maxed out, United could take back flying with the large delivery schedule through 2023, they could decide to keep the 50 seaters around for a while and beg for scope relief, or some combination of the two. Who United hires will also affect attrition at the regionals. They are pretty dedicated to the Aviate program and it appears that preferential hiring will go to former ExpressJet, Compass, and Trans States pilots. That could potentially slow movement down at the remaining regionals.
On the other hand, it seems that United fully understands the long term hiring challenge they're going to face. Older pilots are retiring in droves, and Kirby wants to expand big-time over the next 5-10 years. They'll need a reliable source of pilots, as many as they can get because they'll be competing with other big airlines. They're all in on the Aviate program and it would take a serious hit if another carrier just went away. It makes me skeptical that they'll be happy to kick AW to the curb unless they can't come close to competing on cost. If that were the case, AW would have already been let go in October like Xjet. What I think is a big question is why isn't GoJet in the Aviate program? |
The things I got from skimming the 10-K was a stock buy-back program and how Bartlett may have a controlling interest...I might have misread both but that could drive the OTC market apart from all the pilot or aviation specific things referenced here. Look to see if other airlines stocks: SKW, etc had similar volumes/moves today for some insight.
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Originally Posted by GA2Jets
(Post 3214892)
I'll be very interested to see what happens in regard to United and AW, considering Aviate. On the one hand, you have the tale of Xjet, Aviate didn't do much for them, although it was an extremely desperate circumstance.
On the other hand, it seems that United fully understands the long term hiring challenge they're going to face. Older pilots are retiring in droves, and Kirby wants to expand big-time over the next 5-10 years. They'll need a reliable source of pilots, as many as they can get because they'll be competing with other big airlines. They're all in on the Aviate program and it would take a serious hit if another carrier just went away. It makes me skeptical that they'll be happy to kick AW to the curb unless they can't come close to competing on cost. If that were the case, AW would have already been let go in October like Xjet. What I think is a big question is why isn't GoJet in the Aviate program? |
Originally Posted by Hedley
(Post 3214907)
Neither Aviate or a prior heavy investment did much for XJT. Don’t think that Mother U has any loyalty to any regional. If it’s better from either a cost or operational basis to let a regional go, they won’t skip a beat. Having said that, I really have no clue what their plans are. They could easily make GoJet an Aviate company since they are exclusive, expand Mesa since their pilots only fly one brand, retire a 50 seat fleet, replace the lift with United aircraft and dump a regional, etc. United is boxing themselves into a corner and ALPA knows it. They want to expand, however scope is maxed out, and like it or not, the 50 seaters are nearing the end of their service life. That means that the only available long term option is larger equipment operated by United pilots. The ball is in Kirby’s court and all we can do is watch.
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Originally Posted by GA2Jets
(Post 3214913)
I don't want to overestimate their loyalty to any regional, that's for sure. *However*, if they disrupt their pilot pipeline, that also works against their business interests, namely their ability to hire pilots regularly. Also, what Kirby said last year notwithstanding, he has said many times before that a strong regional network is key to their profitability. The only reason he got wishy washy on 50 seaters was...well...no one was travelling!
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Originally Posted by Hedley
(Post 3214923)
United will never have trouble attracting qualified pilots due to the pay rates. The issue is attracting people to support the regional feed. It is because of this that I see United changing what UAX looks like going forward. Your guess is as good as mine as to what that will be. You are right about the regional network being vital, but U-Alpa’s position is that UAX has all of the big rj’s that they’re going to get, the 50 seat fleet is aging and unpopular, and going forward, anything bigger than 50 seats will be flown by United pilots. Kirby does want to eliminate the single class 50 seat fleet and replace that with 175’s operated by the regionals. ALPA’s position is that he can have an unrestricted regional fleet as long as United pilots fly the planes, but we all know his answer to that. Time to pop some corn and see where this goes.
I wonder if UA won't go to Embraer and say here's a billion dollars, make a modern 145. AA would probably get in on it too tbh. |
Originally Posted by GA2Jets
(Post 3214929)
They might have trouble when they have to compete straight up with Southwest, Frontier, AA, DL and all the rest. Pay rates are good but not the only thing...
I wonder if UA won't go to Embraer and say here's a billion dollars, make a modern 145. AA would probably get in on it too tbh. I wonder if they could just knock a few feet off the cabin of a 170 and make it into a spacious 50 seater with good range? Call it the ERJ 150 |
Originally Posted by GA2Jets
(Post 3214929)
They might have trouble when they have to compete straight up with Southwest, Frontier, AA, DL and all the rest. Pay rates are good but not the only thing...
I wonder if UA won't go to Embraer and say here's a billion dollars, make a modern 145. AA would probably get in on it too tbh. |
Originally Posted by Hedley
(Post 3214951)
The rest of the industry is moving away from the 50 seaters too. The reason that UA doesn’t go to Embraer and ask for a new 50 seater is that they don’t want a 50 seater other than the 550. Prior to COVID, one of the things that Kirby talked about was how Delta was killing us in certain markets. They would send a 319 or 717 into our hubs while we sent rj’s into theirs. In order to compete with the companies that you list, United needs to offer a product that is at the very least, equal. Even a brand new 145 is inferior to what the competition is using. I also think that the 175 and 550 will most likely be flown by regional pilots long after the 50 seaters are eventually phased out. This will hopefully cause the surviving regionals to significantly up their pay at some point to attract pilots.
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Originally Posted by Mustang1962
(Post 3214988)
I’m not sure why a mainline pilot spends so much time in the regional forums. That said, I think your prognostications regarding the future of 50 seat regional flying is way off. Your initial misinterpretation of SK’s statement was just the beginning. Sure, the 50 seaters will eventually be phased out, but considering the way United is dumping money into the 145s right now, that phase out may be later than you think. C5 has gone from 35 of those planes to over 60 in just a few months. And they are pulling more out of the desert and completing C checks on several of those. Final plans are being reviewed for new interiors and WiFi to go along with the new paint jobs too. C5 isn’t paying for that work, United is!
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