Results highlight operating progress of recent
initiatives
NEW
YORK, Aug. 14, 2023 /PRNewswire/ -- Wheels Up
Experience Inc. (NYSE:UP) today announced financial results for the
second quarter, which ended June 30,
2023.
Second Quarter 2023 Highlights
- Revenue decreased $90 million
year-over-year to $335 million
- Net loss increased year-over-year to $161 million, driven by a $70 million non-cash goodwill impairment
charge
- Adjusted EBITDA improved slightly year-over-year to a loss of
$40 million
"The actions we have taken to improve our operations are
translating to a better experience for our customers and an
improved financial performance for the company," said CFO and
Interim CEO Todd Smith. "Our on-time
performance and reliability are showing marked improvement while
our Adjusted Contribution margin and Adjusted EBITDA are at the
best levels in almost two years, reflecting our focus on our
network strengths as well as significant cost reductions and
process improvements. We still have more work to do, but I am
extremely encouraged by this quarter's performance."
"We are continuing to engage with strategic and financial
partners around the path forward and look forward to sharing more
information in the days ahead. Meanwhile, we are continuing to
provide exceptional service and experiences to our customers, who
are reaping the benefits of our continued focus on operations."
Announcement Details
- Company received a short-term capital infusion from Delta Air
Lines, which is actively engaged with the company as it pursues
strategic options.
- Member program changes launched in June focus flying in regions
where Wheels Up has a significant network density. Company expects
those programs to comprise over 50% of flying by the end of the
year and drive continued improvement in Adjusted Contribution
margin next year.
- Pursuant to a non-binding letter of intent, Wheels Up expects
to divest non-core aircraft management business to Airshare, a
well-respected operator in the United
States with a complementary business.
- Licensed Avianis fleet management software to Portside, which
will serve the existing base of customers, market to prospective
customers and develop new features on the platform. Wheels Up has
retained the intellectual property associated with Avianis and will
continue to use it for its 1P fleet.
Financial and Operating Highlights
|
As of June
30,
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
|
Active
Members(1)
|
11,639
|
|
12,667
|
|
(8) %
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
(In thousands,
except Active Users, Live Flight Legs and Flight revenue
per
Live Flight Leg)
|
2023
|
|
2022
|
|
%
Change
|
|
Active
Users(1)
|
12,549
|
|
13,119
|
|
(4) %
|
|
Live Flight
Legs(1)
|
18,137
|
|
21,705
|
|
(16) %
|
|
Flight revenue per Live
Flight Leg
|
12,973
|
|
13,088
|
|
(1) %
|
|
Revenue
|
$
335,062
|
|
$
425,512
|
|
(21) %
|
|
Net loss
|
$
(160,593)
|
|
$
(92,760)
|
|
(73) %
|
|
Adjusted
EBITDA(1)
|
$
(40,303)
|
|
$
(46,889)
|
|
14 %
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
(In
thousands)
|
2023
|
|
2022
|
|
%
Change
|
|
Revenue
|
$
686,874
|
|
$
751,147
|
|
(9) %
|
|
Net loss
|
$
(261,459)
|
|
$
(181,800)
|
|
44 %
|
|
Adjusted
EBITDA(1)
|
$
(89,218)
|
|
$
(96,317)
|
|
7 %
|
|
|
|
(1)
|
For information
regarding Wheels Up's use and definition of this measure see
"Definitions of Key Operating Metrics and Non-GAAP Financial
Measures" and "Reconciliations of Non-GAAP Financial Measures"
sections herein.
|
For the second quarter:
- Active Members decreased 8% year-over-year to 11,639 offset by
a higher mix of Core members, in line with our conscious efforts
toward more profitable flying.
- Active Users decreased 4% year-over-year to 12,549.
- Live Flight Legs decreased 16% year-over-year to 18,137
reflecting our efforts to focus on profitable flying.
- Flight revenue per Live Flight Leg was relatively consistent
year-over-year.
- Revenue decreased 21% year-over-year primarily driven by
reduced flight revenue and reduced aircraft sales.
- Net loss increased by $67.8
million year-over-year primarily drive by the $70.0 million non-cash goodwill impairment charge
recognized during the quarter.
- Adjusted EBITDA loss decreased by $6.6
million to $40.3 million,
reflecting the impact of the March
2023 Restructuring Plan, our operational efficiency
initiatives and other spend-reduction efforts.
About Wheels Up
Wheels Up is a leading provider of on-demand private aviation in
the U.S. and one of the largest private aviation companies in the
world. Wheels Up offers a complete global aviation solution with a
large, modern and diverse fleet, backed by an uncompromising
commitment to safety and service. Customers can access membership
programs, charter, aircraft management services and whole aircraft
sales, as well as unique commercial travel benefits through a
strategic partnership with Delta Air Lines. Wheels Up also offers
freight, safety and security solutions and managed services to
individuals, industry, government and civil organizations.
Wheels Up is guided by the mission to connect private flyers to
aircraft, and one another, through an open platform that seamlessly
enables life's most important experiences. Powered by a global
private aviation marketplace connecting its base of approximately
12,000 members and customers to a network of approximately 1,500
safety-vetted and verified private aircraft, Wheels Up is widening
the aperture of private travel for millions of consumers globally.
With the Wheels Up mobile app and website, members and customers
have the digital convenience to search, book and fly.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of the federal securities laws. Forward-looking
statements are predictions, projections and other statements about
future events that are based on current expectations and
assumptions and, as a result, are subject to known and unknown
risks, uncertainties, assumptions and other important factors, many
of which are outside of the control of Wheels Up Experience Inc.
("Wheels Up", or "we", "us", or "our"), that could cause actual
results to differ materially from the results discussed in the
forward-looking statements. These forward-looking statements
include, but are not limited to, statements regarding the
expectations, hopes, beliefs, intentions or strategies of Wheels Up
regarding the future, including, without limitation, statements
regarding: (i) Wheels Up's ability to continue as a going concern,
(ii) the expected impact of any potential acquisitions or
divestitures, investments, financings, restructurings or other
strategic transactions involving Wheels Up or its subsidiaries or
affiliates, including realizing any anticipated benefits relating
to any such transactions and any potential impacts on the trading
prices and trading market for Wheels Up's Class A common stock, par
value $0.0001 per share; (iii) Wheels
Up's liquidity, future cash flows, measures intended to increase
Wheels Up's operational efficiency and certain restrictions related
to its debt obligations; (iv) the impact of Wheels Up's cost
reduction efforts on its business and results of operations,
including the timing and magnitude of such expected reductions and
any associated expenses in relation to liquidity levels and working
capital needs; (v) Wheels Up's ability to perform under its
contractual obligations and maintain or establish relationships
with third-party vendors and suppliers; (vi) the degree of market
acceptance and adoption of Wheels Up's products and services,
including member program changes implemented in June 2023; (vii) the size, demands and growth
potential of the markets for Wheels Up's products and services and
Wheels Up's ability to serve those markets; (viii) Wheels Up's
ability to compete with other companies engaged in the private
aviation industry and to attract and retain customers; and (ix)
general economic and geopolitical conditions, including due to
fluctuations in interest rates, inflation, foreign currencies,
consumer and business spending decisions, and general levels of
economic activity. In addition, any statements that refer to
projections, forecasts, or other characterizations of future events
or circumstances, including any underlying assumptions, are
forward-looking statements. The words "anticipate," "believe,"
continue," "could," "estimate," "expect," "intend," "may," "might,"
"plan," "possible," "potential," "predict," "project," "should,"
"strive," "would" and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that statement is not forward-looking. These forward-looking
statements are subject to a number of risks, uncertainties and
assumptions that could cause actual events and results to differ
materially from those contained in such forward-looking statements,
including those described in our Annual Report on Form 10-K for the
year ended December 31, 2022 filed
with the SEC by Wheels Up on March 31,
2023 and Wheels Up's other filings with the SEC. Moreover,
we operate in a very competitive and rapidly changing environment.
New risks and uncertainties arise from time to time, and it is
impossible for us to predict these events or how they may affect
us. You are cautioned not to place undue reliance upon any
forward-looking statements, which speak only as of the date made,
and Wheels Up undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information,
changes in expectations, future events or otherwise. Although we
believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required
by law, we do not intend to update any of these forward-looking
statements after the date of this press release or to conform these
statements to actual results or revised expectations.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures
such as Adjusted EBITDA, Adjusted Contribution and Adjusted
Contribution Margin. These non-GAAP financial measures are an
addition, and not a substitute for or superior to, measures of
financial performance prepared in accordance with generally
accepted accounting principles in the
United States of America ("GAAP") and should not be
considered as an alternative to net income (loss), operating income
(loss) or any other performance measures derived in accordance with
GAAP. Definitions and reconciliations of non-GAAP financial
measures to their most comparable GAAP counterparts are included in
the "Definitions of Non-GAAP Financial Measures" and
"Reconciliations of Non-GAAP Financial Measures" sections,
respectively, in this press release. Wheels Up believes that these
non-GAAP financial measures of financial results provide useful
supplemental information to investors about Wheels Up. However,
there are a number of limitations related to the use of these
non-GAAP financial measures and their nearest GAAP equivalents,
including that they exclude significant expenses that are required
by GAAP to be recorded in Wheels Up's financial measures. In
addition, other companies may calculate non-GAAP financial measures
differently, or may use other measures to calculate their financial
performance, and therefore, Wheels Up's non-GAAP financial measures
may not be directly comparable to similarly titled measures of
other companies. Additionally, to the extent that forward-looking
non-GAAP financial measures are provided, they are presented on a
non-GAAP basis without reconciliations of such forward-looking
non-GAAP financial measures due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations.
For more information on these non-GAAP financial measures, see
the sections titled "Definitions of Key Operating Metrics,"
"Definitions of Non-GAAP Financial Measures" and "Reconciliations
of Non-GAAP Financial Measures" included at the end of this
earnings press release.
|
WHEELS UP EXPERIENCE
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited, in
thousands, except share data)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
151,828
|
|
$
585,881
|
|
Accounts receivable,
net
|
85,352
|
|
112,383
|
|
Other
receivables
|
3,872
|
|
5,524
|
|
Parts and supplies
inventories, net
|
23,423
|
|
29,000
|
|
Aircraft
inventory
|
5,383
|
|
24,826
|
|
Aircraft held for
sale
|
12,388
|
|
8,952
|
|
Prepaid
expenses
|
53,626
|
|
39,715
|
|
Other current
assets
|
14,001
|
|
13,338
|
|
Total current
assets
|
349,873
|
|
819,619
|
|
Property and equipment,
net
|
401,021
|
|
394,559
|
|
Operating lease
right-of-use assets
|
91,409
|
|
106,735
|
|
Goodwill
|
282,133
|
|
348,118
|
|
Intangible assets,
net
|
130,588
|
|
141,765
|
|
Other non-current
assets
|
131,147
|
|
112,429
|
|
Total
assets
|
$
1,386,171
|
|
$
1,923,225
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current maturities of
long-term debt
|
$
26,504
|
|
$
27,006
|
|
Accounts
payable
|
52,110
|
|
43,166
|
|
Accrued
expenses
|
115,864
|
|
148,945
|
|
Deferred revenue,
current
|
828,607
|
|
1,075,133
|
|
Other current
liabilities
|
47,632
|
|
49,968
|
|
Total current
liabilities
|
1,070,717
|
|
1,344,218
|
|
Long-term debt,
net
|
210,051
|
|
226,234
|
|
Operating lease
liabilities, non-current
|
71,323
|
|
82,755
|
|
Warrant
liability
|
5
|
|
751
|
|
Other non-current
liabilities
|
21,256
|
|
17,347
|
|
Total
liabilities
|
1,373,352
|
|
1,671,305
|
|
|
|
|
|
Equity:
|
|
|
|
|
Common Stock, $0.0001
par value; 250,000,000 authorized; 25,622,496 and
25,198,298 shares issued and 25,357,196 and 24,933,857 common
shares
outstanding as of June 30, 2023 and December 31, 2022,
respectively
|
3
|
|
3
|
|
Additional paid-in
capital
|
1,563,672
|
|
1,545,530
|
|
Accumulated
deficit
|
(1,537,332)
|
|
(1,275,873)
|
|
Accumulated other
comprehensive loss
|
(5,834)
|
|
(10,053)
|
|
Treasury stock, at
cost, 265,300 and 264,441 shares, respectively
|
(7,690)
|
|
(7,687)
|
|
Total Wheels Up
Experience Inc. stockholders' equity
|
12,819
|
|
251,920
|
|
Non-controlling
interests
|
—
|
|
—
|
|
Total
equity
|
12,819
|
|
251,920
|
|
Total liabilities
and equity
|
$
1,386,171
|
|
$
1,923,225
|
|
WHEELS UP EXPERIENCE
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in
thousands except share and per share data)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenue
|
$
335,062
|
|
$
425,512
|
|
$
686,874
|
|
$
751,147
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
327,903
|
|
408,898
|
|
681,694
|
|
741,656
|
|
Technology and
development
|
14,430
|
|
14,606
|
|
30,303
|
|
25,797
|
|
Sales and
marketing
|
23,149
|
|
33,688
|
|
48,952
|
|
56,931
|
|
General and
administrative
|
40,065
|
|
46,973
|
|
79,481
|
|
85,877
|
|
Depreciation and
amortization
|
15,123
|
|
16,134
|
|
29,568
|
|
30,362
|
|
Gain on sale of
aircraft held for sale
|
(2,621)
|
|
(663)
|
|
(3,487)
|
|
(2,634)
|
|
Impairment of
goodwill
|
70,000
|
|
—
|
|
70,000
|
|
—
|
|
Total costs and
expenses
|
488,049
|
|
519,636
|
|
936,511
|
|
937,989
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(152,987)
|
|
(94,124)
|
|
(249,637)
|
|
(186,842)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Loss on extinguishment
of debt
|
(870)
|
|
—
|
|
(870)
|
|
—
|
|
Change in fair value
of warrant liability
|
621
|
|
2,129
|
|
746
|
|
5,760
|
|
Interest
income
|
1,865
|
|
405
|
|
5,686
|
|
482
|
|
Interest
expense
|
(7,658)
|
|
—
|
|
(15,777)
|
|
—
|
|
Other expense,
net
|
(1,580)
|
|
(850)
|
|
(1,435)
|
|
(880)
|
|
Total other income
(expense)
|
(7,622)
|
|
1,684
|
|
(11,650)
|
|
5,362
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(160,609)
|
|
(92,440)
|
|
(261,287)
|
|
(181,480)
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
16
|
|
(320)
|
|
(172)
|
|
(320)
|
|
|
|
|
|
|
|
|
|
Net
loss
|
(160,593)
|
|
(92,760)
|
|
(261,459)
|
|
(181,800)
|
|
Less: Net loss
attributable to non-controlling interests
|
—
|
|
—
|
|
—
|
|
(387)
|
|
Net loss
attributable to Wheels Up Experience Inc.
|
$
(160,593)
|
|
$
(92,760)
|
|
$
(261,459)
|
|
$
(181,413)
|
|
|
|
|
|
|
|
|
|
Net loss per share
of Common Stock
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(6.28)
|
|
$
(3.80)
|
|
$
(10.27)
|
|
$
(7.42)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares of Common Stock
outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
25,570,200
|
|
24,408,604
|
|
25,446,199
|
|
24,434,744
|
|
WHEELS UP EXPERIENCE
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
|
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
Cash flows from
operating activities
|
|
|
|
|
Net loss
|
$
(261,459)
|
|
$
(181,800)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
29,568
|
|
30,362
|
|
Equity-based
compensation
|
18,142
|
|
43,335
|
|
Amortization of
deferred financing costs and debt discount
|
1,124
|
|
—
|
|
Change in fair value of
warrant liability
|
(746)
|
|
(5,760)
|
|
Gain on sale of
aircraft held for sale
|
(3,487)
|
|
(2,634)
|
|
Loss on extinguishment
of debt
|
870
|
|
—
|
|
Impairment of
goodwill
|
70,000
|
|
—
|
|
Other
|
1,519
|
|
200
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
27,698
|
|
(17,394)
|
|
Parts and supplies
inventories
|
5,637
|
|
(2,754)
|
|
Aircraft
inventory
|
(2,008)
|
|
(30,464)
|
|
Prepaid
expenses
|
(14,499)
|
|
(9,442)
|
|
Other non-current
assets
|
(16,420)
|
|
(27,496)
|
|
Accounts
payable
|
9,166
|
|
9,345
|
|
Accrued
expenses
|
(32,393)
|
|
(6,979)
|
|
Deferred
revenue
|
(248,358)
|
|
67,391
|
|
Other assets and
liabilities
|
3,976
|
|
(6,085)
|
|
Net cash used in
operating activities
|
(411,670)
|
|
(140,175)
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Purchases of property
and equipment
|
(12,201)
|
|
(76,464)
|
|
Purchases of aircraft
held for sale
|
(961)
|
|
(43,774)
|
|
Proceeds from sale of
aircraft held for sale, net
|
24,981
|
|
27,135
|
|
Acquisitions of
businesses, net of cash acquired
|
22
|
|
(75,093)
|
|
Capitalized software
development costs
|
(12,924)
|
|
(12,901)
|
|
Other
|
172
|
|
—
|
|
Net cash used in
investing activities
|
(911)
|
|
(181,097)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Purchase of shares for
treasury
|
(3)
|
|
(6,689)
|
|
Repayments of
long-term debt
|
(18,680)
|
|
—
|
|
Net cash used in
financing activities
|
(18,683)
|
|
(6,689)
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(540)
|
|
(4,345)
|
|
|
|
|
|
Net decrease in
cash, cash equivalents and restricted cash
|
(431,804)
|
|
(332,306)
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
620,153
|
|
786,722
|
|
Cash, cash
equivalents and restricted, cash end of period
|
$
188,349
|
|
$
454,416
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
Cash paid for
interest
|
$
16,097
|
|
$
—
|
Definitions of Key Operating Metrics
Active Members. We define Active Members as the
number of Connect, Core, and Business membership accounts that
generated membership revenue in a given period and are active as of
the end of the reporting period. We use Active Members to assess
the adoption of our premium offerings which is a key factor in our
penetration of the market in which we operate and a key driver of
membership and flight revenue.
Active Users. We define Active Users as Active
Members and jet card holders as of the reporting date plus unique
non-member consumers who completed a revenue generating flight at
least once in the given quarter and excludes wholesale flight
activity. While a unique consumer can complete multiple revenue
generating flights on our platform in a given period, that unique
user is counted as only one Active User. We use Active Users to
assess the adoption of our platform and frequency of transactions,
which are key factors in our penetration of the market in which we
operate and our growth in revenue.
Live Flight Legs. We define Live Flight Legs as the
number of completed one-way revenue generating flight legs in a
given period. The metric excludes empty repositioning legs and
owner legs related to aircraft under management. We believe Live
Flight Legs are a useful metric to measure the scale and usage of
our platform, and our growth in flight revenue.
Definitions of Non-GAAP Financial Measures
Adjusted EBITDA. We calculate Adjusted EBITDA as net
income (loss) adjusted for (i) interest income (expense), (ii)
income tax expense, (iii) depreciation and amortization, (iv)
equity-based compensation expense, (v) acquisition and integration
related expenses and (vi) other items not indicative of our ongoing
operating performance, including but not limited to, restructuring
charges.
We include Adjusted EBITDA because it is a supplemental measure
used by our management team for assessing operating performance.
Adjusted EBITDA is used in conjunction with bonus program target
achievement determinations, strategic internal planning, annual
budgeting, allocating resources and making operating decisions. In
addition, Adjusted EBITDA provides useful information for
historical period-to-period comparisons of our business, as it
removes the effect of certain non-cash expenses and variable
amounts.
Adjusted Contribution and Adjusted Contribution Margin.
We calculate Adjusted Contribution as gross profit (loss) excluding
depreciation and amortization and adjusted further for (i)
equity-based compensation included in cost of revenue, (ii)
acquisition and integration expense included in cost of revenue,
(iii) restructuring expense in cost of revenue and (iv) other items
included in cost of revenue that are not indicative of our ongoing
operating performance. Adjusted Contribution Margin is calculated
by dividing Adjusted Contribution by total revenue.
We include Adjusted Contribution and Adjusted Contribution
Margin as supplemental measures for assessing operating
performance. Adjusted Contribution and Adjusted Contribution Margin
are used to understand our ability to achieve profitability over
time through scale and leveraging costs. In addition, Adjusted
Contribution and Adjusted Contribution Margin provides useful
information for historical period-to-period comparisons of our
business and to identify trends.
Reconciliations of Non-GAAP Financial Measures
Adjusted EBITDA
The following table reconciles Adjusted EBITDA to net loss,
which is the most directly comparable GAAP measure (in
thousands):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net
loss
|
$ (160,593)
|
|
$
(92,760)
|
|
$
(261,459)
|
|
$ (181,800)
|
|
Add back
(deduct)
|
|
|
|
|
|
|
|
|
Interest
expense
|
7,658
|
|
—
|
|
15,777
|
|
—
|
|
Interest
income
|
(1,865)
|
|
(405)
|
|
(5,686)
|
|
(482)
|
|
Income tax
expense
|
(16)
|
|
320
|
|
172
|
|
320
|
|
Other expense,
net
|
1,580
|
|
850
|
|
1,435
|
|
880
|
|
Depreciation and
amortization
|
15,123
|
|
16,134
|
|
29,568
|
|
30,362
|
|
Change in fair value of
warrant liability
|
(621)
|
|
(2,129)
|
|
(746)
|
|
(5,760)
|
|
Equity-based
compensation expense
|
6,604
|
|
20,781
|
|
18,142
|
|
43,335
|
|
Acquisition and
integration expenses(1)
|
74
|
|
7,511
|
|
2,108
|
|
11,345
|
|
Restructuring
charges(2)
|
8,201
|
|
2,809
|
|
18,692
|
|
5,483
|
|
Atlanta Member
Operations Center set-up expense(3)
|
9,170
|
|
—
|
|
16,130
|
|
—
|
|
Certificate
consolidation expense(4)
|
4,873
|
|
—
|
|
7,520
|
|
—
|
|
Impairment of
goodwill(5)
|
70,000
|
|
—
|
|
70,000
|
|
—
|
|
Other(5)
|
(491)
|
|
—
|
|
(871)
|
|
—
|
|
Adjusted
EBITDA
|
$
(40,303)
|
|
$
(46,889)
|
|
$
(89,218)
|
|
$
(96,317)
|
|
__________________
|
|
(1)
|
Consists of expenses
incurred associated with acquisitions, as well as
integration-related charges incurred within one year of acquisition
date primarily related to system conversions, re-branding costs and
fees paid to external advisors.
|
|
(2)
|
For the three and six
months ended June 30, 2023, includes restructuring charges related
to the Restructuring Plan and related strategic business
initiatives implemented in the first quarter of 2023, as well as
expenses incurred during the second quarter of 2023 to support
significant changes to our member programs and certain aspects of
our operations, primarily consisting of consultancy fees associated
with designing and implementing changes to our member programs, and
severance and recruiting expenses associated with executive
transitions. For the three and six months ended June 30, 2022,
includes restructuring charges for employee separation programs
following strategic business decisions.
|
|
(3)
|
Consists of expenses
associated with establishing the Atlanta Member Operations Center
and its operations primarily including redundant operating expenses
during the transition period, relocation expenses for employees and
costs associated with onboarding new employees. The Atlanta Member
Operations Center began operating on May 15, 2023.
|
|
(4)
|
Consists of expenses
incurred to execute consolidation of our FAA operating certificates
primarily including pilot training and retention programs and
consultancy fees associated with planning and implementing the
consolidation process.
|
|
(5)
|
Represents non-cash
impairment charge related to goodwill recognized in the second
quarter of 2023. See Note 1, Summary of Business and Significant
Accounting Policies of the Notes to Condensed Consolidated
Financial Statements included herein.
|
|
(6)
|
Includes collections of
certain aged receivables which were added back to Net Loss in the
reconciliation presented for the twelve months ended December 31,
2022.
|
|
Refer to "Supplemental
Expense Information" below, for further information
|
Adjusted Contribution and Adjusted Contribution
Margin
The following table reconciles Adjusted Contribution to gross
profit (loss), which is the most directly comparable GAAP measure
(in thousands):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenue
|
$
335,062
|
|
$
425,512
|
|
$
686,874
|
|
$
751,147
|
|
Less: Cost of
revenue
|
(327,903)
|
|
(408,898)
|
|
(681,694)
|
|
(741,656)
|
|
Less: Depreciation and
amortization
|
(15,123)
|
|
(16,134)
|
|
(29,568)
|
|
(30,362)
|
|
Gross profit
(loss)
|
(7,964)
|
|
480
|
|
(24,388)
|
|
(20,871)
|
|
Gross margin
|
(2.4) %
|
|
0.1 %
|
|
(3.6) %
|
|
(2.8) %
|
|
Add
back:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
15,123
|
|
16,134
|
|
29,568
|
|
30,362
|
|
Equity-based
compensation expense in cost of revenue
|
1,092
|
|
3,307
|
|
2,271
|
|
7,739
|
|
Restructuring expense
in cost of revenue(1)
|
—
|
|
—
|
|
755
|
|
—
|
|
Atlanta Member
Operations Center set-up expense in cost of
revenue(2)
|
7,999
|
|
—
|
|
11,798
|
|
—
|
|
Certificate
consolidation expense in cost of revenue(3)
|
1,840
|
|
—
|
|
4,441
|
|
—
|
|
Adjusted
Contribution
|
$
18,090
|
|
$
19,921
|
|
$
24,445
|
|
$
17,230
|
|
Adjusted
Contribution Margin
|
5.4 %
|
|
4.7 %
|
|
3.6 %
|
|
2.3 %
|
|
__________________
|
|
(1)
|
For the six months
ended June 30, 2023, includes restructuring charges related to the
Restructuring Plan and other strategic business
initiatives.
|
|
(2)
|
Consists of expenses
associated with establishing the Atlanta Member Operations Center
and its operations primarily including redundant operating expenses
during the transition period, relocation expenses for employees and
costs associated with onboarding new employees. The Atlanta Member
Operations Center began operating on May 15, 2023.
|
|
(3)
|
Consists of expenses
incurred to execute consolidation of our FAA operating certificates
primarily including pilot training and retention programs and
consultancy fees associated with planning and implementing the
consolidation process.
|
Supplemental Revenue Information
|
(In
thousands)
|
Three Months Ended
June 30,
|
|
Change
in
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
Membership
|
$
21,478
|
|
$
24,020
|
|
$
(2,542)
|
|
(11) %
|
|
Flight
|
235,284
|
|
284,071
|
|
(48,787)
|
|
(17) %
|
|
Aircraft
management
|
48,502
|
|
60,718
|
|
(12,216)
|
|
(20) %
|
|
Other
|
29,798
|
|
56,703
|
|
(26,905)
|
|
(47) %
|
|
Total
|
$
335,062
|
|
$
425,512
|
|
$
(90,450)
|
|
(21) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Six Months Ended
June 30,
|
|
Change
in
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
Membership
|
$
43,158
|
|
$
44,667
|
|
$
(1,509)
|
|
(3) %
|
|
Flight
|
467,046
|
|
520,434
|
|
(53,388)
|
|
(10) %
|
|
Aircraft
management
|
112,196
|
|
121,224
|
|
(9,028)
|
|
(7) %
|
|
Other
|
64,474
|
|
64,822
|
|
(348)
|
|
(1) %
|
|
Total
|
$
686,874
|
|
$
751,147
|
|
$
(64,273)
|
|
(9) %
|
Supplemental Expense Information
|
Three Months Ended
June 30, 2023
|
|
Cost of
revenue
|
|
Technology and
development
|
|
Sales and
marketing
|
|
General and
administrative
|
|
Total
|
|
Equity-based
compensation expense
|
$
1,092
|
|
$
673
|
|
$
641
|
|
$
4,198
|
|
$
6,604
|
|
Acquisition and
integration expenses
|
—
|
|
—
|
|
—
|
|
74
|
|
74
|
|
Restructuring
charges
|
—
|
|
—
|
|
—
|
|
8,202
|
|
8,201
|
|
Atlanta Member
Operations Center set-up expense
|
7,999
|
|
201
|
|
—
|
|
970
|
|
9,170
|
|
Certificate
consolidation expense
|
1,840
|
|
—
|
|
—
|
|
3,033
|
|
4,873
|
|
Other
|
—
|
|
—
|
|
—
|
|
(491)
|
|
(491)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2023
|
|
Cost of
revenue
|
|
Technology and
development
|
|
Sales and
marketing
|
|
General and
administrative
|
|
Total
|
|
Equity-based
compensation expense
|
$
2,271
|
|
$
1,157
|
|
$
1,341
|
|
$
13,373
|
|
$
18,142
|
|
Acquisition and
integration expenses
|
—
|
|
53
|
|
134
|
|
1,921
|
|
2,108
|
|
Restructuring
charges
|
755
|
|
2,299
|
|
2,058
|
|
13,581
|
|
18,692
|
|
Atlanta Member
Operations Center set-up expense
|
11,798
|
|
201
|
|
—
|
|
4,131
|
|
16,130
|
|
Certificate
consolidation expense
|
4,441
|
|
—
|
|
—
|
|
3,079
|
|
7,520
|
|
Other
|
—
|
|
—
|
|
—
|
|
(871)
|
|
(871)
|
|
Three Months Ended
June 30, 2022
|
|
Cost of
revenue
|
|
Technology and
development
|
|
Sales and
marketing
|
|
General and
administrative
|
|
Total
|
|
Equity-based
compensation expense
|
$
3,307
|
|
$
655
|
|
$
2,857
|
|
$
13,962
|
|
$
20,781
|
|
Acquisition and
integration expense
|
—
|
|
—
|
|
—
|
|
7,511
|
|
7,511
|
|
Restructuring
charges
|
—
|
|
—
|
|
—
|
|
2,809
|
|
2,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2022
|
|
Cost of
revenue
|
|
Technology and
development
|
|
Sales and
marketing
|
|
General and
administrative
|
|
Total
|
|
Equity-based
compensation expense
|
$
7,739
|
|
$
1,296
|
|
$
5,558
|
|
$
28,742
|
|
$
43,335
|
|
Acquisition and
integration expense
|
—
|
|
—
|
|
—
|
|
11,345
|
|
11,345
|
|
Restructuring
charges
|
—
|
|
—
|
|
—
|
|
5,483
|
|
5,483
|
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SOURCE Wheels Up
