SkyHarbour(SKYH)2024-11-12 21:01Business Operations and Market Demand - The company operates a nationwide network of home basing hangar campuses for business aircraft, targeting markets with high hangar demand [130]. - The U.S. business aviation fleet's cumulative square footage increased by 50% from 2010 to 2021, with an 81% increase in larger private jets [131]. - The company aims to develop hangar campuses on long-term ground leases at airports serving metropolitan centers across the U.S. [134]. - The projected total project cost for properties in development is estimated between 626.8 million, with a total of 60 hangars planned [140]. - The company actively monitors key factors such as fuel prices and hangar rental rates that may impact demand for new leases [144]. Financial Performance - Rental revenue for the three months ended September 30, 2024, was approximately 2.5 million in the same period of 2023, primarily due to new operations at SJC and increased occupancy at BNA and OPF campuses [167]. - Total revenue for the nine months ended September 30, 2024, was approximately 4.8 million, or 90%, increase compared to the same period in 2023, attributed to the commencement of operations at the SJC hangar campus [174]. - Total expenses for the three months ended September 30, 2024, were 5.90 million in 2023, reflecting an increase of 3.9 million, or 76%, primarily due to increased ground lease expenses [175]. - General and administrative expenses for the three months ended September 30, 2024, were 3.56 million in 2023 [166]. Capital and Financing Activities - In October 2024, the company completed a private placement, raising approximately 31.8 million from the initial closing [183]. - The company has access to a 166.3 million in Senior Special Facility Revenue Bonds, with maturities ranging from 2036 to 2054, to finance various aviation facilities [191]. - The company plans to access the bond market opportunistically and may hedge against rising interest rates through strategies with high-quality counterparties [146]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2024, were 60.3 million as of December 31, 2023 [186]. - Restricted cash increased to 12.0 million as of December 31, 2023 [186]. - Cash and restricted cash increased to 36.8 million at the same time in 2023 [196]. - Net cash used in operating activities was approximately 0.4 million compared to the same period in 2023 [198]. - Net cash provided by investing activities was approximately 2.1 million for the same period in 2023, driven by a significant increase in proceeds from available-for-sale investments [200]. Expenses and Cost Management - Ground lease expenses for the nine months ended September 30, 2024, were 2.8 million in 2023, indicating a significant increase in operating lease expenses [145]. - The company expects to incur additional costs of 28 million for retrofitting hangar buildings due to significant design defects identified in independent peer reviews [151]. - General and administrative expenses for the nine months ended September 30, 2024, were approximately 3.3 million, or 30%, increase compared to the same period in 2023 [177]. - Operating expenses increased by approximately 1.0 million, or 30%, for the three months ended September 30, 2024, driven by increased salaries and corporate headcount [169]. Debt and Compliance - As of September 30, 2024, the company maintained a debt service coverage ratio of at least 1.25, in compliance with all debt covenants [193]. - Total lease payments due from 2024 to thereafter amount to 49,000 for finance leases [194]. - The company does not maintain any off-balance sheet arrangements, ensuring transparency in its financial obligations [196]. Growth Strategy - The company has funded SHC with over 50 million in new projects [153]. - The company plans to continue investing in its hangar campus development projects as part of its growth strategy [199].