<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----- -----
Commission file number 1-8836
HAWAIIAN AIRLINES, INC.
(Exact Name of Registrant as Specified in Its Charter)
HAWAII 99-0042880
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3375 Koapaka Street, Suite G-350
Honolulu, Hawaii 96819
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (808) 835-3700
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. (X) Yes ( ) No
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. (X) Yes ( ) No
As of August 14, 1996, 26,409,421 shares of Common Stock were outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HAWAIIAN AIRLINES, INC.
CONDENSED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31
1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . $ 15,182 $ 5,389
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . 26,054 18,178
Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,150 7,648
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,344 1,344
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,818 5,804
---------- ----------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . 53,548 38,363
---------- ----------
Property and equipment, less accumulated depreciation and
amortization of $7,348 and $5,043 in 1996 and 1995, respectively . . . . . 41,511 41,391
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,154 8,336
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,047 6,217
Reorganization value in excess of amounts
allocable to identifiable assets, net ("Excess Reorganization Value"). . . 64,619 67,333
---------- ----------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 170,879 $ 161,640
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt. . . . . . . . . . . . . . . . . . . . . $ 4,895 $ 6,027
Current portion of capital lease obligations . . . . . . . . . . . . . . . 2,787 2,662
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,785 35,182
Air traffic liability. . . . . . . . . . . . . . . . . . . . . . . . . . . 23,430 30,461
Accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,150 15,730
---------- ----------
TOTAL CURRENT LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . 69,047 90,062
---------- ----------
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,931 5,523
Capital lease obligations. . . . . . . . . . . . . . . . . . . . . . . . . . 8,676 10,102
Other liabilities and deferred credits . . . . . . . . . . . . . . . . . . . 29,308 26,775
SHAREHOLDERS' EQUITY:
Common and Special Preferred Stock . . . . . . . . . . . . . . . . . . . . 269 94
Capital in excess of par value . . . . . . . . . . . . . . . . . . . . . . 58,873 41,193
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,646 900
Unearned compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . - (182)
Minimum pension liability. . . . . . . . . . . . . . . . . . . . . . . . . (1,170) (1,170)
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,701) (11,657)
---------- ----------
SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . 49,917 29,178
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . . $ 170,879 $ 161,640
---------- ----------
---------- ----------
</TABLE>
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<PAGE>
.
HAWAIIAN AIRLINES, INC.
CONDENSED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -----------------------------
1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Passenger . . . . . . . . . . . . . . . . . . . . . $ 81,398 $ 73,671 $ 161,209 $ 139,272
Charter . . . . . . . . . . . . . . . . . . . . . . 6,966 5,180 13,937 8,747
Cargo . . . . . . . . . . . . . . . . . . . . . . . 5,061 4,577 9,874 8,538
Other . . . . . . . . . . . . . . . . . . . . . . . 2,584 2,036 5,051 4,415
--------- ---------- ---------- ----------
TOTAL. . . . . . . . . . . . . . . . . . . . . . 96,009 85,464 190,071 160,972
--------- ---------- ---------- ----------
OPERATING EXPENSES:
Flying operations . . . . . . . . . . . . . . . . . 30,264 25,572 59,579 49,861
Maintenance . . . . . . . . . . . . . . . . . . . . 19,673 19,524 39,728 37,305
Passenger service . . . . . . . . . . . . . . . . . 10,613 9,787 21,151 19,055
Aircraft and traffic servicing. . . . . . . . . . . 14,076 13,447 28,591 26,989
Promotion and sales . . . . . . . . . . . . . . . . 11,589 10,827 23,209 21,025
General and administrative. . . . . . . . . . . . . 4,767 4,033 10,530 8,064
Depreciation and amortization . . . . . . . . . . . 1,923 1,843 3,783 3,669
Early retirement provision. . . . . . . . . . . . . - - - 2,000
--------- ---------- ---------- ----------
TOTAL. . . . . . . . . . . . . . . . . . . . . . 92,905 85,033 186,571 167,968
--------- ---------- ---------- ----------
OPERATING INCOME (LOSS). . . . . . . . . . . . . 3,104 431 3,500 (6,996)
--------- ---------- ---------- ----------
NONOPERATING INCOME (EXPENSE):
Interest expense, net. . . . . . . . . . . . . . . (963) (927) (1,919) (1,954)
Gain (loss) on disposition of equipment. . . . . . (336) (43) (328) 5
Other, net . . . . . . . . . . . . . . . . . . . . 8 88 (22) 200
--------- ---------- ---------- ----------
TOTAL . . . . . . . . . . . . . . . . . . . . . (1,291) (882) (2,269) (1,749)
--------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES
AND EXTRAORDINARY GAIN. . . . . . . . . . . . . . . 1,813 (451) 1,231 (8,745)
INCOME TAXES:
Currently payable. . . . . . . . . . . . . . . . . (25) - (25) -
Reduction to Excess Reorganization Value . . . . . (590) - (590) -
--------- ---------- ---------- ----------
TOTAL . . . . . . . . . . . . . . . . . . . . . (615) - (615) -
--------- ---------- ---------- ----------
NET INCOME (LOSS) BEFORE EXTRAORDINARY GAIN . . . . . . 1,198 (451) 616 (8,745)
EXTRAORDINARY GAIN, NET OF INCOME TAXES (Currently
Payable of $14, Reduction to Excess Reorganization
Value of $326). . . . . . . . . . . . . . . . . . . 340 - 340 -
--------- ---------- ---------- ----------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . $ 1,538 $ (451) $ 956 $ (8,745)
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
NET INCOME (LOSS) PER COMMON STOCK SHARE:
Before extraordinary gain . . . . . . . . . . . . . $ 0.04 $ (0.05) $ 0.03 $ (0.93)
Extraordinary gain, net of income taxes . . . . . . 0.01 - 0.01 -
--------- ---------- ---------- ----------
NET INCOME (LOSS) PER COMMON STOCK SHARE . . . . . . . . $ 0.05 $ (0.05) $ 0.04 $ (0.93)
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
WEIGHTED AVERAGE NUMBER OF COMMON STOCK SHARES
AND COMMON STOCK SHARE EQUIVALENTS . . . . . . . . . .
Primary . . . . . . . . . . . . . . . . . . . . . . 29,127 * 9,400 * 25,976 * 9,400 *
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
Fully Diluted . . . . . . . . . . . . . . . . . . . 29,199 * N/A * 26,257 * N/A *
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
</TABLE>
* Includes shares reserved for issuance under the consolidated Plan of
Reorganization dated September 21, 1993 as amended
-3-
<PAGE>
HAWAIIAN AIRLINES, INC.
CONDENSED STATEMENTS OF CASH FLOWS (IN THOUSANDS)(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------
1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . $ 956 $ (8,745)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . 3,783 3,796
Net periodic postretirement benefit cost. . . . . . . . . . . 1,134 1,752
Stock option compensation . . . . . . . . . . . . . . . . . . 964 -
Early retirement provision. . . . . . . . . . . . . . . . . . - 2,000
Loss (gain) from disposition of equipment . . . . . . . . . . 328 (5)
Income tax benefit recognized as a reduction to
Excess Reorganization Value . . . . . . . . . . . . 916 -
Extraordinary gain, net of income taxes currently payable . . (666) -
Increase in accounts receivable . . . . . . . . . . . . . . . (6,186) (4,440)
Decrease (increase) in inventories. . . . . . . . . . . . . . 498 (859)
Decrease in prepaid expenses. . . . . . . . . . . . . . . . . 1,167 792
Increase (decrease) in accounts payable . . . . . . . . . . . (57) 9,991
Increase (decrease) air traffic liability . . . . . . . . . . (7,031) 3,296
Decrease in accrued liabilities . . . . . . . . . . . . . . . (2,708) (2,670)
Other, net. . . . . . . . . . . . . . . . . . . . . . . . . . 3,132 4,048
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATIING ACTIVITIES . . . (3,770) 8,956
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment. . . . . . . . . . . . . . . (2,580) (5,074)
Net proceeds from disposition of equipment. . . . . . . . . . . 1,294 1,832
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . (1,286) (3,242)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock. . . . . . . . . . . . . . 17,782 -
Repurchase of common stock . . . . . . . . . . . . . . . . . . . (909) -
Issuance of long-term debt . . . . . . . . . . . . . . . . . . . 7,196 1,247
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . (7,919) (5,710)
Repayment of capital lease obligations . . . . . . . . . . . . . (1,301) (1,467)
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES. . . . . . 14,849 (5,930)
--------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . 9,793 (216)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD. . . . . . . . 5,389 3,501
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD . . . . . . . . . . $ 15,182 $ 3,285
--------- ---------
--------- ---------
</TABLE>
-4-
<PAGE>
HAWAIIAN AIRLINES, INC.
STATISTICAL DATA (IN THOUSANDS, EXCEPT AS OTHERWISE INDICATED) (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- ----------------------------
1996 1995 1996 1995
- ------------------------------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
SCHEDULED OPERATIONS:
Revenue passengers . . . . . . . . . . . 1,249 1,197 2,518 2,349
Revenue passenger miles . . . . . . . . 848,362 791,658 1,658,159 1,472,000
Available seat miles . . . . . . . . . . 1,133,041 1,034,221 2,245,566 1,973,764
Passenger load factor. . . . . . . . . . 74.9% 76.5% 73.8% 74.6%
Revenue ton miles . . . . . . . . . . . 100,162 91,460 194,762 168,464
Revenue plane miles. . . . . . . . . . . 4,819 4,314 9,500 8,270
Passenger revenue per passenger mile . . 9.6 c 9.3 c 9.7 c 9.5 c
OVERSEAS CHARTER OPERATIONS:
Revenue passengers . . . . . . . . . . . 46 37 93 62
Revenue passenger miles . . . . . . . . 125,660 100,442 255,472 169,710
Available seat miles . . . . . . . . . . 131,767 102,451 262,761 172,981
</TABLE>
-5-
<PAGE>
ITEM 1. (CONTINUED)
Hawaiian Airlines, Inc.
Notes to Condensed Financial Statements (Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements of Hawaiian Airlines,
Inc. ("Hawaiian Airlines" or the "Company") have been prepared in accordance
with generally accepted accounting principles for interim financial information
and the rules and regulations of the Securities and Exchange Commission (the
"SEC"). Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. However, in the opinion of management, the unaudited condensed
financial statements included in this report contain all adjustments necessary
for a fair presentation of the results of operations and cash flows for the
interim periods covered and the financial condition of Hawaiian Airlines as of
June 30, 1996 and December 31, 1995. All such adjustments are of a normal
recurring nature, unless otherwise disclosed in this Form 10-Q. The operating
results for the interim period are not necessarily indicative of the results to
be expected for the full fiscal year.
The accompanying financial statements should be read in conjunction with the
financial statements and the notes thereto contained in Hawaiian Airlines'
Annual Report on Form 10-K for the year ended December 31, 1995, as amended, and
the condensed financial statements and notes thereto in the Company's quarterly
report on SEC Form 10-Q for the quarter ended March 31, 1996, which are
incorporated herein by reference.
2. DEBT AND CAPITAL TRANSACTIONS
On April 29, 1996, the Company's credit facility provided by CIT Group/Credit
Finance, Inc. (the "Credit Facility") was amended to increase the borrowing
capacity thereunder from $8.15 million to $15.0 million. The $15.0 million
Credit Facility consists of two secured term loans and a secured revolving line
of credit including up to $6.0 million of letters of credit. The term loans are
in the amounts of $5.4 million and $1.3 million and will amortize in equal
installments over periods of 48 and 60 months, respectively. The outstanding
principal amounts of the term loans will become due and payable upon termination
of the Credit Facility. Available credit is subject to change determined by
recalculation of the borrowing base, repayments due under the term loans and
repayments arising from the disposition of, and other changes in, the related
collateral securing the Credit Facility. As of June 30, 1996, the total
remaining availability under the Credit Facility was $8.3 million, including
$5.9 million in letters of credit. The Credit Facility has an initial term of
three years from April 29, 1996, and renews automatically for successive terms
of two years each, unless terminated by either party on at least 60 days notice
prior to the end of the then-current term. The Company may terminate the Credit
Facility at any time, on 30 days notice and payment of certain early termination
fees during the initial term and without payment of termination fees during any
renewal term.
The Credit Facility is secured by a first lien on substantially all of the
Company's property, excluding the Company's owned and leased aircraft, the
Company's aircraft engines while installed on aircraft and certain security
deposits.
As required by the provider of the Credit Facility in connection with the
amendment thereof, on April 29, 1996, the Company exercised an option to
repurchase all of the shares of Common Stock owned by GPA Group plc and its
affiliate AeroUSA, Inc. (collectively the "GPA Companies") and repaid certain
secured
-6-
<PAGE>
and unsecured promissory notes held by the GPA Companies. The stock repurchase
price was $1.10 per share and the promissory notes were repaid at approximately
85.0% of the then carrying value of the notes, including any deferred costs and
other expenses owed. Based on 827,221 shares of Common Stock owned by the GPA
Companies and the carrying value of the notes as of such date, the Company paid
approximately $4.7 million to the GPA Companies to repurchase the shares and
repay the notes. These transactions resulted in an extraordinary gain, net of
estimated income taxes, of approximately $340,000. The payment to the GPA
Companies was funded by borrowings under the Credit Facility on April 29, 1996.
3. INCOME TAXES
Income tax expense is based on estimated annual effective tax rates which differ
from the federal statutory rate of 35.0%, primarily due to state income taxes
and certain nondeductible expenses. The estimated income tax benefit from the
expected utilization of net operating losses incurred prior to the Company's
emergence from Chapter 11 has been applied as a reduction to reorganization
value in excess of amounts allocable to identifiable assets.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
CURRENT STATUS
As of June 30, 1996, the Company's net working capital position had improved
significantly from December 31, 1995. As of June 30, 1996, the Company had a
net working capital deficit of $15.5 million, which represents a $36.2 million
improvement from the net working capital deficit of $51.7 million at December
31, 1995. As described above, at June 30, 1996, the total remaining
availability under the Credit Facility was $8.3 million, including $5.9 million
in letters of credit.
The Company's cash and cash equivalents as of June 30, 1996 was $9.8 million
greater than that at December 31, 1995, primarily due to a $20.0 million cash
investment by Airline Investors Partnership, L.P. ("AIP") through the purchase
of 18,181,818 shares of Common Stock and four shares of Series B Special
Preferred Stock (the "AIP Investment") consummated on January 31, 1996.
Accounts payable at June 30, 1996 was $11.4 million lower than at December 31,
1995, principally due to certain agreements and arrangements with American
Airlines, Inc. ("American"), which provided for, among other things, the
satisfaction of $10.0 million of previously deferred lease rents and maintenance
payments and interest thereon and the reimbursement of $250,000 of American's
fees and expenses in connection with the transaction through the issuance by the
Company to American of a $10.25 million promissory note secured by certain
assets of the Company. These positive changes to working capital were augmented
by a $7.9 million increase in accounts receivable and a $7.0 million decrease in
air traffic liability from December 31, 1995 to June 30, 1996.
CASH FLOWS
Cash and cash equivalents totaled $15.2 million at June 30, 1996, an increase of
$9.8 million from $5.4 million at December 31, 1995. Operating and investing
activities for the six month period ended June 30, 1996 used $7.4 million in
cash and cash equivalents. Financing activities for the six month period ended
June 30, 1996 provided $17.2 million in cash and cash equivalents. This was a
direct result of the $20.0
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<PAGE>
million AIP Investment described above and the Company borrowing an additional
$7.2 million through the Credit Facility during the six month period ended June
30, 1996. As noted above, $4.7 million of the funds from the Credit Facility
borrowings were used to repurchase shares of Common Stock from, and repay
approximately $4.5 million of long-term debt to, the GPA Companies at a 15.0%
discount. Further, the Company made principal payments of $5.4 million on its
other outstanding long-term debt and capital lease obligations during the
period.
The Company plans to make approximately $12.0 million of necessary capital
expenditures in the ordinary course of business during 1996. These expenditures
include the capitalized portions of two scheduled DC-9-50 maintenance checks (D-
checks) and certain JT8D engine overhauls. Also included are expenditures for
rotable equipment and ground equipment, software and related hardware,
facilities and certain other projects. The Company made approximately $2.6
million of these planned capital expenditures during the six months ended June
30, 1996.
RIGHTS AND INVESTOR OFFERINGS
The Company is currently conducting a rights offering and investor offering,
which potentially could result in the Company issuing up to 12,100,000
additional shares of Common Stock. The offerings are intended to permit the
Company's shareholders, other than AIP, to reduce the dilutive effect of the
AIP Investment on their equity investment in the Company and to raise additional
equity capital. The subscription price was established on August 1, 1996 at
$3.25 per share.
The Company has entered into stock purchase agreements with certain investors
pursuant to which the investors have severally agreed, subject to certain
conditions, to purchase from the Company 2,250,000 shares of Common Stock at the
$3.25 subscription price. In addition, the investors have agreed to purchase
from the Company at the $3.25 subscription price an amount of additional shares
necessary to generate a minimum of $25.0 million in gross proceeds from the
offerings. The investors have also been granted the right to acquire additional
shares subject to their availability.
The Company's capital resources have been increased substantially due to the
AIP Investment, the arrangements with American and the amendment of the
Credit Facility. Proceeds from the offerings referred to above will further
improve the Company's liquidity. It is anticipated that the combination of
the Company's improved liquidity and reduced operating costs will enable the
Company to make necessary capital expenditures, take advantage of prompt
payment discounts, avoid the need to provide early payment incentives to
wholesalers and eliminate the Company's historical dependence on ticket
discounting, thereby further improving yields, profitability and liquidity.
Nevertheless, the Company will continue to seek additional sources of
liquidity. If the Company is unsuccessful in obtaining additional sources of
liquidity, an adverse change in events and circumstances could result in the
Company being unable to meet its financial obligations after it exhausts its
current and foreseeable capital resources. No assurance can be given that
all conditions for successful completion of the offerings will occur or that
proceeds from the offerings will exceed $25.0 million. Further, no assurance
can be given that the Company will be able to obtain other sources of
liquidity.
-8-
<PAGE>
RESULTS OF OPERATIONS
During the quarter ended June 30, 1996, the Company generated operating and net
income of $3.1 million and $1.5 million, respectively, including a $340,000
extraordinary gain, net of estimated income taxes. This represents a $2.7
million improvement from second quarter 1995 operating income of $431,000 and a
$2.0 million improvement from the second quarter 1995 net loss of $451,000.
OPERATING REVENUES
The following table compares second quarter 1996 operating revenues to those in
second quarter 1995, in thousands, by service type:
Three Months Ended
June 30,
---------------------------- Increase
1996 1995 (Decrease)
------------------------------------------
Interisland:
Passenger . . . . . . . . . . $ 33,417 31,144 2,273
Charter . . . . . . . . . . . - 12 (12)
Cargo . . . . . . . . . . . . 1,325 1,734 (409)
Other . . . . . . . . . . . . 1,527 1,295 232
----------- ---------- ----------
36,269 34,185 2,084
----------- ---------- ----------
Transpacific ("Transpac"):
Passenger. . . . . . . . . 43,427 37,767 5,660
Cargo. . . . . . . . . . . 3,132 2,375 757
Other. . . . . . . . . . . 972 661 311
----------- ---------- ----------
47,531 40,803 6,728
----------- ---------- ----------
South Pacific ("Southpac"):
Passenger . . . . . . . . . 4,554 4,761 (207)
Cargo . . . . . . . . . . . 604 463 141
Other . . . . . . . . . . . 85 83 2
----------- ---------- ----------
5,243 5,307 (64)
----------- ---------- ----------
Overseas Charter:
Passenger . . . . . . . . . 6,966 5,169 1,797
----------- ---------- ----------
Total. . . . . . $ 96,009 $ 85,464 $ 10,545
----------- ---------- ----------
----------- ---------- ----------
-9-
<PAGE>
The following table compares applicable second quarter 1996 operating and
passenger revenue statistics to those in second quarter 1995, in thousands
except as otherwise indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
--------------------------------- INCREASE
1996 1995 (DECREASE) %
------------------------------------------------------------
<S> <C> <C> <C> <C>
Interisland:
Revenue passengers. . . . . . . . . . . 955 933 22 2.4
Revenue passenger miles . . . . . . . . 127,136 123,272 3,864 3.1
Available seat miles. . . . . . . . . . 240,757 232,380 8,377 3.6
Passenger load factor . . . . . . . . . 52.8% 53.0% (0.2) (0.5)
Yield . . . . . . . . . . . . . . . . . 26.3 c 25.3 c 1.0 c 4.0
Transpac:
Revenue passengers . . . . . . . . . . 279 248 31 12.5
Revenue passenger miles. . . . . . . . 680,692 624,251 56,441 9.0
Available seat miles . . . . . . . . . 823,510 737,325 86,185 11.7
Passenger load factor. . . . . . . . . 82.7% 84.7% (2.0) (2.4)
Yield. . . . . . . . . . . . . . . . . 6.4 c 6.0 c 0.4 c 6.7
Southpac:
Revenue passengers . . . . . . . . . . 15 16 (1) (6.3)
Revenue passenger miles. . . . . . . . 40,534 44,135 (3,601) (8.2)
Available seat miles . . . . . . . . . 68,774 64,516 4,258 6.6
Passenger load factor. . . . . . . . . 58.9% 68.4% (9.5) (13.8)
Yield . . . . . . . . . . . . . . . . 11.2 c 10.8 c 0.4 c 4.1
Overseas Charter:
Revenue passengers . . . . . . . . . . 46 37 9 24.3
Revenue passenger miles. . . . . . . . 125,660 100,442 25,218 25.1
Available seat miles . . . . . . . . . 131,767 102,451 29,316 28.6
</TABLE>
Operating revenues totaled $96.0 million during second quarter 1996, an increase
of $10.5 million or 12.3% over 1995 second quarter operating revenues of $85.5
million. Significant period to period variances were as follows:
- - Revenues from Interisland passenger service totaled $33.4 million during
second quarter 1996, an increase of $2.3 million or 7.3% from second
quarter 1995. Increases of 2.4% and 3.1% in Interisland revenue passengers
carried and revenue passenger miles, respectively, were complimented by an
increase in Interisland yield of 1.0 CENTS or 4.0%. Increases in revenue
passengers carried and revenue passenger miles were primarily caused by the
continued recovery of the Hawaii tourism market and increased frequencies
by the Company as evidenced by a 3.6% increase in available seat miles
period over period. Interisland yield in second quarter 1996 increased
compared to second quarter 1995 due to (1) the dilutional effects of
promotional fare ticket programs being less prevalent in 1996 as most
promotion tickets were sold in 1994 and used throughout 1995 and (2) the
Company maintaining and/or increasing certain Interisland fares;
- - Revenues from Transpac passenger operations amounted to $43.4 million
during second quarter 1996 compared to $37.8 million in second quarter
1995, an increase of $5.7 million or 15.0%. The
-10-
<PAGE>
Company experienced increases of 12.5% and 9.0% in revenue passengers
carried and revenue passenger miles, respectively. Similar to the
Interisland market, increased revenue passengers carried and revenue
passenger miles were a direct result of increased frequencies in the
Transpac market as denoted by the increase in Transpac available seat miles
of 11.7%. Transpac yield also increased by 0.4 CENTS or 6.7% in second
quarter 1996 as compared to second quarter 1995. Again, the increase in
yield was primarily caused by the effects of promotional fare ticket
programs being less prevalent in 1996 and general increases in certain
Transpac fare bases; and
- - Overseas charter revenues totaled $7.0 million in second quarter 1996,
representing an increase of $1.8 million or 34.8% from second quarter 1995.
The increase was due to the Company operating six charters per week in
second quarter 1996 versus, on average, four charters per week in second
quarter 1995 between Honolulu and Las Vegas.
On May 22, 1996, the Company entered into a cooperative marketing agreement with
Northwest Airlines, Inc. ("Northwest"), effective July 1, 1996, which provides
for extensive marketing cooperation, including a code sharing arrangement,
coordinated customer service and frequent flyer program cooperation. Under
the code sharing agreement, a Northwest flight code will appear in travel agent
computers on many of Hawaiian Airlines' flights between Honolulu and several of
the other Hawaiian islands. Northwest will coordinate its flight schedules to
Honolulu to provide convenient connections to the Company's Interisland flights.
Further, in June 1996, the Company entered into a code sharing agreement with
Mahalo Air, Inc. ("Mahalo"), pursuant to which the Company began placing its
flight code on Mahalo's five daily flights between Honolulu and Molokai and its
five daily flights between Honolulu and West Maui's Kapalua Airport starting
July 1, 1996. Pursuant to the agreement, the Company will also provide certain
airport services to Mahalo. While the Company believes that these agreements
will increase passenger revenues and enhance profitability, there can be no
assurance that these programs will be successful.
Prior to 1996, the airline industry was subject to a 10.0% excise tax on each
ticket sold (other than Transpac flights), a 6.25% cargo excise tax and a $6.00
international departure tax (including Transpac flights). These taxes lapsed on
January 1, 1996. On August 2, 1996, Congress passed legislation approving
reinstatement of these taxes, which is expected to be signed into law by
President Clinton. The taxes will be effective from seven days after the bill
is signed through December 31, 1996. If the excise taxes are reinstated, the
Company would either have to absorb the excise taxes, which would adversely
affect operating results, or raise ticket prices and cargo transportation fees
in order to offset the excise taxes. If the Company were to raise ticket prices
and cargo transportation fees, there is no assurance that the Company would be
able to maintain such increases or that operating results would not be adversely
affected by the increases.
-11-
<PAGE>
OPERATING EXPENSES
The following table compares operating expenses for second quarter 1996 with
second quarter 1995 by major category, in thousands of dollars:
<TABLE>
<CAPTION>
Three Months Ended
June 30,
--------------------------- Increase
1996 1995 (Decrease)
---------------------------------------------
<S> <C> <C> <C>
Wages and benefits . . . . . . . . . . . . . . . $ 26,968 $ 27,005 $ (37)
Aircraft fuel, including taxes and oil . . . . . 17,893 13,434 4,459
Maintenance materials and repairs. . . . . . . . 15,453 14,736 717
Purchased services . . . . . . . . . . . . . . . 5,446 5,033 413
Aircraft rentals . . . . . . . . . . . . . . . . 4,083 4,004 79
Sales commissions. . . . . . . . . . . . . . . . 3,445 3,103 342
Passenger food . . . . . . . . . . . . . . . . . 2,490 2,527 (37)
Advertising and promotion. . . . . . . . . . . . 2,539 2,016 523
Rentals other than aircraft and engines. . . . . 2,346 2,285 61
Landing fees . . . . . . . . . . . . . . . . . . 2,221 1,904 317
Depreciation and amortization. . . . . . . . . . 2,089 1,944 145
Reservation fees and services. . . . . . . . . . 1,993 1,887 106
Personnel expenses . . . . . . . . . . . . . . . 1,053 1,020 33
Insurance-hull and liability . . . . . . . . . . 995 970 25
Interrupted trips. . . . . . . . . . . . . . . . 699 372 327
Other. . . . . . . . . . . . . . . . . . . . . . 3,192 2,793 399
----------- ------------ ------------
Total . . . . . . . . . . . . . . . . . $ 92,905 $ 85,033 $ 7,872
----------- ------------ ------------
----------- ------------ ------------
</TABLE>
Operating expenses totaled $92.9 million in second quarter 1996, an increase of
$7.9 million or 9.3% over second quarter 1995. Significant period to period
variances were as follows:
- - The reduction in wages and benefits in second quarter 1996 versus second
quarter 1995 is primarily a result of a $963,000 reduction in estimated
workers' compensation expense due to favorable decreases in the Company's
workers' compensation claims and loss experience. This decrease was
partially offset by $862,000 of additional labor costs in second quarter
1996 over second quarter 1995 principally due to severance accruals and
increased crew expense from additional flight hours;
- - Aircraft fuel, including taxes and oil, increased by $4.5 million or 33.2%
quarter over quarter. The increase was principally due to (1) approximately
$1.0 million more in fuel taxes incurred in second quarter 1996 than second
quarter 1995 due to the Company becoming subject to an additional 4.3 CENTS
per gallon tax effective October 1, 1995; (2) $1.3 million in additional
fuel cost as the Company consumed approximately 1.8 million or 7.8% more
gallons of aircraft fuel in second quarter 1996 than in second quarter 1995
due to increased flying hours; and (3) $2.2 million in added fuel expense
as the average cost per gallon, excluding the 4.3 CENTS per gallon tax,
increased by 9.6 CENTS or 16.3%;
- - Maintenance materials and repairs increased $717,000 or 4.9% over 1995. In
second quarter 1996, the Company incurred approximately $1.7 million more
in DC-10-10 maintenance expense due to (1) $1.4 million additional
maintenance expense as a result of the Company utilizing eight DC-10-10
aircraft in second quarter 1996 versus seven DC-10-10 aircraft in second
quarter 1995 and (2) $346,000 of
-12-
<PAGE>
additional maintenance costs due to higher maintenance rates in second
quarter 1996. The increase was offset in part by decreased DC-9-50
maintenance expense of $931,000 as the Company's DC-9-50 fleet required
fewer service checks and airframe and engine maintenance in second quarter
1996 compared to second quarter 1995.
EXTRAORDINARY GAIN
As described above, during second quarter 1996, the Company paid approximately
$4.7 million to the GPA Companies to repurchase 827,221 shares of Common Stock
and to repay approximately $4.5 million of long-term debt at a 15.0% discount,
including any deferred costs and other expenses owed. These transactions
resulted in an extraordinary gain, net of estimated income taxes, of
approximately $340,000.
NEW ACCOUNTING PRONOUNCEMENTS
LONG-LIVED ASSETS
In March 1995, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards (the "SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed
Of." SFAS No. 121 requires that long-lived assets and certain identifiable
intangible assets held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. If the future cash flows expected to result from use of
the asset (undiscounted and without interest charges) are less than the carrying
amount of the asset, an impairment loss is recognized. Measurement of that loss
is based on the fair value of that asset. Generally, SFAS No. 121 also requires
that long-lived assets and certain identifiable intangible assets to be disposed
of be reported at the lower of the asset carrying amount or fair value, less
cost to sell.
The Company adopted the provisions of SFAS No. 121 on January 1, 1996. The
adoption of SFAS No. 121 did not have a material effect on the Company's
financial condition or results of operations.
STOCK-BASED COMPENSATION
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 establishes a new, fair value-based method of
accounting for stock-based compensation, but does not require an entity to adopt
the new method for purposes of preparing its basic financial statements. For
entities not adopting the new method, SFAS No. 123 requires footnote disclosure
of pro forma net income and earnings per share information as if the fair value-
based method had been adopted. The disclosure requirements of SFAS No. 123 are
effective for financial statements for fiscal years beginning after December 15,
1995. The Company will comply with the disclosure requirements of SFAS No. 123
in its 1996 financial statements.
-13-
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material developments in matters previously reported or reportable
events arising in the three months ended June 30, 1996 were noted.
ITEM 2. CHANGES IN SECURITIES
At the June 6, 1996 Annual Meeting of Shareholders of Hawaiian
Airlines, Inc., the shareholders approved (i) the conversion of the
outstanding shares of Class B Common Stock into a like number of
shares of Class A Common Stock and (ii) the Amendment to the Company's
Amended Articles of Incorporation to eliminate the Class B Common
Stock and to designate the Company's Class A Common Stock as "Common
Stock". The modification to the securities is in name only. All
other rights of the holders of Class A Common Stock remain the same
except in name.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
-14-
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the June 6, 1996 Annual Meeting of Shareholders of Hawaiian
Airlines, Inc., the following matters were voted upon:
DESCRIPTION VOTES
----------- -----
1. Election of Board of Directors
John W. Adams 24,471,386 For
164,462 Withheld
Todd G. Cole 24,467,189 For
168,659 Withheld
Richard F. Conway 24,469,616 For
166,232 Withheld
Robert G. Coo 24,470,132 For
165,716 Withheld
Carol A. Fukunaga 24,475,763 For
160,085 Withheld
William Boyce Lum 24,481,340 For
154,508 Withheld
Richard K. Matros 24,476,481 For
159,367 Withheld
Reno F. Morella 24,475,386 For
160,462 Withheld
Bruce R. Nobles 24,432,581 For
202,267 Withheld
Samson Poomaihealani 24,449,962 For
185,886 Withheld
Edward Z. Safady 24,475,361 For
160,487 Withheld
2. Approval of Amendment to the 23,529,042 For
Company's Amended Articles of 55,931 Against
Incorporation to reflect the 842,532 Abstain
Company's current address 208,343 Broker
Non-Votes
-15-
<PAGE>
3. Ratification of the conversion 20,504,088 For
of Class B Common Stock to Class 113,722 Against
A Common Stock and approval of 868,602 Abstain
Amendment to the Company's Amended 3,149,436 Broker
Articles of the Incorporation to Non-Votes
eliminate the Class B Common Stock
and to designate the Company's Class
A Common Stock as "Common Stock"
4. Approval of Amendment to the 23,605,576 For
Company's Amended Articles of 96,872 Against
Incorporation to eliminate provisions 933,400 Abstain
required by the Third Amended Plan None Broker
of Reorganization or Section 1123 Non-Votes
of the U.S. Bankruptcy Code
5. Approval of Amendment to the 20,349,422 For
Company's Amended Articles of 189,229 Against
Incorporation to eliminate 947,761 Abstain
preemptive rights 3,149,436 Broker
Non-Votes
6. Approval of Amendment to the 23,404,045 For
Company's Amended Articles of 339,889 Against
Incorporation to designate officer 891,624 Abstain
titles in the Bylaws and delete 290 Broker
officer qualifications Non-Votes
7. Approval of the 1996 Stock 20,356,350 For
Incentive Plan 233,171 Against
896,891 Abstain
3,149,436 Broker
Non-Votes
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 3 Certificate of Amendments of the Restated
Articles of Incorporation dated June 12,
1996, as filed July 10, 1996
-16-
<PAGE>
Exhibit 4 1996 Incentive Stock Plan, as amended*
Exhibit 11 Computation of Primary and Fully Diluted
Earnings Per Common Share
Exhibit 27 Financial Data Schedule
(b) Reports of Form 8-K
None
* Previously filed with the SEC as an exhibit to Amendment No. 1 to the
Company's Registration Statement on Form S-2 as filed July 12, 1996 (File No.
333-04817) and incorporated herein by reference.
-17-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HAWAIIAN AIRLINES, INC.
August 14, 1996 By /S/ JOHN L. GARIBALDI
-----------------------
John L. Garibaldi
Executive Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
<PAGE>
Exhibit 3
CERTIFICATE OF AMENDMENTS
OF THE
RESTATED ARTICLES OF INCORPORATION
OF
HAWAIIAN AIRLINES, INC.
HAWAIIAN AIRLINES, INC., a corporation organized under the laws of the
Territory of Hawaii and existing under the laws of the State of Hawaii, DOES
HEREBY CERTIFY:
FIRST: That as of March 15, 1996, the Board of Directors of the
Corporation adopted resolutions proposing and declaring advisable that the
Restated Articles of Incorporation of this Corporation (the "Restated Articles")
be amended as follows:
(A) that Article II be amended to read as follows:
"The location of the principal office of the Corporation
shall be in the City of Honolulu, Island of Oahu, State of
Hawaii, and the mailing address of the principal office of the
Corporation shall be 3375 Koapaka Street, Suite G-350, Honolulu,
Hawaii 96819, or such other mailing address as shall be specified
by an amendment to the Bylaws of the Corporation. The
Corporation may have such other offices within and without the
State of Hawaii as its business may from time to time require."
(B) that Article IV, Section C be amended to read as follows:
"C.The total number of shares of Preferred Stock which this
Corporation is authorized to issue is two million (2,000,000) shares
having a par value of $.01 each and which may be issued from time to
time in one or more series. Prior to or simultaneously with the
creation and/or issuance of any such series, the Board of Directors is
hereby authorized to fix the voting powers, designations, preferences
and participating, optional, relative or other special rights, and
qualifications, limitations or restrictions thereof to the full extent
permitted by the laws of the State of Hawaii, unless such voting
powers, designations, preferences, rights and qualifications,
limitations or restrictions thereof are otherwise established by these
Amended Articles of Incorporation; provided that, in no event shall
any shares, except shares of the Series A Junior Participating
Cumulative Preferred Stock, par value $.01 per share, be entitled to
more than one vote per share on any matters for which shareholder
approval is required. Unless otherwise provided in the resolution
creating a series, all shares of that series redeemed, repurchased or
otherwise reacquired, as well as shares of a series authorized but not
yet issued, shall thereupon, without further action by the Board of
Directors, be or become authorized but unissued shares subject to all
of the authority of the Board of Directors in this Article IV
provided."
(C) that Article IV, Section F be deleted in its entirety.
(D) that Article IV, Section D be amended to read as follows:
"D. No holder of the shares of any class of capital stock
or other securities of the Corporation shall have any preemptive
or preferential right of subscription for or to purchase any
shares of any class of stock or other securities of the
Corporation, whether now or hereafter authorized, other than such
right or rights, if any, and upon such terms and at such prices
as the Board of Directors, in its discretion, from time to time
may determine. The Board of Directors may issue shares of
capital stock or other securities without offering the same in
whole or part to the holders of the capital stock or any other
securities of the Corporation."
<PAGE>
(E) that the Designation of Preferred Stock be amended to add a
new Section 12 to read as follows:
"SECTION 12. PREEMPTIVE RIGHTS. No holder of shares of
Series A Preferred Stock shall have any preemptive or
preferential rights of subscription for or to purchase any shares
of any class of stock or other securities of the Corporation,
whether now or hereafter authorized, other than such right or
rights, if any, and upon such terms and at such prices as the
Board of Directors, in its discretion, from time to time may
determine. The Board of Directors may issue shares of any class
of stock or other securities without offering the same in whole
or in part to the stockholders of the Corporation."
(F) that Article VI be amended to read as follows:
"The officers of the Corporation shall consist of such
officers and assistant officers and agents as may be prescribed
by the Bylaws. The officers shall be elected or appointed, hold
office and may be removed, and shall have such qualifications,
as may be prescribed by the Bylaws. Any two or more offices may
be held by the same person, provided, however, that not less than
two (2) persons shall be officers.
All officers and agents of the Corporation, as between
themselves and the Corporation, shall have such authority and
perform such duties in the management of the Corporation as may
be prescribed by the Bylaws, or as may be determined by
resolution of the Board of Directors not inconsistent with the
Bylaws."
SECOND: That as of May 1, 1996, the Board of Directors of the
Corporation adopted resolutions proposing and declaring advisable that the
Restated Articles be amended as follows:
(A) that Article IV, Sections A and B be amended to read as
follows:
"A. The Corporation is authorized to issue two classes of
shares of capital stock, which shall be designated Common Stock
and Preferred Stock, respectively. The total number of shares of
capital stock which the Corporation is authorized to issue is
sixty-two million (62,000,000) shares.
B. (i) The total number of shares of Common Stock which
the Corporation shall have authority to issue is sixty million
(60,000,000) shares, and all such shares shall have a par value
of $.01 per share.
(ii) The Common Stock shall have all the voting rights
provided under the Hawaii Business Corporation Act for voting
common stock except as otherwise provided in these Restated
Articles of Incorporation.
(iii) The ownership or control of more than twenty-
five percent (25%) of the issued and outstanding voting capital
stock of the Corporation by persons who are not "citizens of the
United States" as defined in Section 102(a)(15) of the
Transportation Act (49 U.S.C. Section 40101, ET SEQ., the "Act")
is prohibited; provided, however, that such percentage shall be
deemed to be automatically increased or decreased from time to
time to that percentage of ownership which is then permissible by
persons who are not "citizens of the United States" under the Act
or under any successor or other law of the United States of
America which provides for the regulation of, or is otherwise
applicable to, the Corporation or its subsidiaries in their
business activities. As used in the preceding sentence, capital
stock of the Corporation means the Common Stock
2
<PAGE>
and any shares of Preferred Stock of the Corporation entitled to vote
on matters generally referred to the shareholders for a vote.
(iv) All shares of Common Stock shall rank equally
in the event of liquidation of the Corporation and shall be
entitled to any assets of the Corporation available for
distribution to shareholders after payment in full of any
preferential amount to which holders of Preferred Stock may be
entitled.
(v) Any certificates that represent shares of Class A
Common Stock and any documents that refer to shares of Class A
Common Stock shall for all purposes be deemed to represent and
refer to shares of Common Stock of the Company."
THIRD: That the foregoing amendments have been duly adopted in
accordance with the provisions of Section 415-59 of the Hawaii Business
Corporation Act by the affirmative vote of the holders of two-thirds of the
shares of the Corporation entitled to vote thereon at the annual meeting of
shareholders held on June 6, 1996, voting together as a single class.
The effective time of the amendments herein certified shall be June 6,
1996.
HAWAIIAN AIRLINES, INC.
By: /s/ Rae A. Capps
Print Name: Rae A. Capps
Title: Vice President, General Counsel
and Corporate Secretary
ATTEST:
By: /s/ Rae A. Capps
Print Name: Rae A. Capps
Title: Vice President, General Counsel
and Corporate Secretary
3
<PAGE>
Exhibit 11
HAWAIIAN AIRLINES, INC.
COMPUTATION OF PRIMARY AND FULLY DILUTED
NET INCOME PER COMMON SHARE
FOR THE THREE MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30, 1996
----------------------------
Fully
Primary Diluted
---------- ------------
<S> <C> <C>
Weighted average common shares outstanding. . . . . 27,018 * 27,018 *
Common shares issuable upon exercise of
outstanding warrants and stock options
(treasury stock method). . . . . . . . . . . . . 2,109 2,181
------- -------
Weighted average common shares and
common share equivalents. . . . . . . . . . . . 29,127 29,199
------- -------
------- -------
Net income before extraordinary gain. . . . . . . . $ 1,198 $ 1,198
Extraordinary gain, net of income taxes . . . . . . 340 340
------- -------
Net income for per share computations . . . . . . . $ 1,538 $ 1,538
------- -------
------- -------
Net income before extraordinary gain
per common share . . . . . . . . . . . . . . . . $ 0.04 $ 0.04
Extraordinary gain, net of income taxes
per common share . . . . . . . . . . . . . . . . 0.01 0.01
------- --------
Net income per common share . . . . . . . . . . . . $ 0.05 $ 0.05
------- --------
------- --------
</TABLE>
* Includes shares reserved for issuance under the consolidated Plan of
Reorganization dated September 21, 1993, as amended
<PAGE>
Exhibit 11 (continued)
HAWAIIAN AIRLINES, INC.
COMPUTATION OF PRIMARY AND FULLY DILUTED
NET INCOME PER COMMMON SHARE
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<TABLE>
Caption>
SIX MONTHS ENDED
JUNE 30, 1996
-------------------------
Fully
Primary Diluted
--------- ---------
<S> <C> <C>
Weighted average common shares outstanding . . . 24,203 * 24,203 *
Common shares issuable upon exercise of
outstanding warrants and stock options
(treasury stock method) . . . . . . . . . . . . 1,773 2,054
------- -------
Weighted average common shares and
common share equivalents . . . . . . . . . . 25,976 26,257
------- -------
------- -------
Net income before extraordinary gain . . . . . . . $ 616 $ 616
Extraordinary gain, net of income taxes. . . . . . 340 340
------- -------
Net income for per share computations. . . . . . . $ 956 $ 956
------- -------
------- -------
Net income before extraordinary gain
per common share. . . . . . . . . . . . . . . . $ 0.03 $ 0.03
Extraordinary gain, net of income taxes
per common share. . . . . . . . . . . . . . . . 0.01 0.01
------- -------
Net income per common share. . . . . . . . . . . . $ 0.04 $ 0.04
------- -------
------- -------
</TABLE>
* Includes shares reserved for issuance under the consolidated Plan of
Reorganization dated September 21, 1993, as amended
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 15,182
<SECURITIES> 0
<RECEIVABLES> 26,554
<ALLOWANCES> 500
<INVENTORY> 7,150
<CURRENT-ASSETS> 53,548
<PP&E> 48,859
<DEPRECIATION> 7,348
<TOTAL-ASSETS> 170,879
<CURRENT-LIABILITIES> 69,047
<BONDS> 22,607
0
0
<COMMON> 269
<OTHER-SE> 49,648
<TOTAL-LIABILITY-AND-EQUITY> 170,879
<SALES> 190,071
<TOTAL-REVENUES> 190,071
<CGS> 186,571
<TOTAL-COSTS> 186,571
<OTHER-EXPENSES> 350
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,919
<INCOME-PRETAX> 1,231
<INCOME-TAX> 615
<INCOME-CONTINUING> 616
<DISCONTINUED> 0
<EXTRAORDINARY> 340
<CHANGES> 0
<NET-INCOME> 956
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
