Utah-based air carrier SkyWest to restate results

Thursday, Nov. 21, 2002 | 11:13 a.m.

SUN STAFF AND WIRE REPORTS

ST. GEORGE, Utah -- SkyWest Inc. announced Wednesday that its auditors have uncovered accounting irregularities in its books and that it will have to restate its financial results.

The company said in a press release that auditors KPMG LLP determined "certain revenue and expenses may have been inaccurately allocated among interim and fiscal year periods beginning in the quarter ended Sept. 30, 2001 and continuing through Sept. 30, 2002."

The parent company of St. George, Utah-based SkyWest Airlines said the revisions will result in "a downward restatement for full-year 2001 and a boost to earnings for the third quarter of 2002."

SkyWest said it was forced to postpone the release of its Form 10-Q for the third quarter ended Sept. 30.

The airline has a small presence in Las Vegas. Operating as Delta Air Lines' commuter Delta Connection, SkyWest averages one round trip a day between McCarran International Airport and Salt Lake City and one round-trip flight a week between Las Vegas and Dallas-Fort Worth International Airport.

Through September, SkyWest had flown 74,335 passengers to and from Las Vegas.

The airline uses twin-engine 50-passenger Canadair Regional Jets on its Las Vegas flights.

SkyWest said it recorded about $7.3 million of maintenance expense in the latest third quarter, but that the amount should have been attributed to the quarters ended Sept. 30, 2001, and Dec. 31, 2001.

SkyWest said the adjustments won't reduce aggregate net income or earnings per share for the five quarters under consideration because the issue was solely one of timing.

The company anticipates earnings for the latest third quarter will be adjusted to about 41 cents a share from 35 cents a share. Earnings for the nine months ended Sept. 30 will be adjusted to about $1.04 a share from 97 cents a share.

SkyWest said its previously reported earnings for the year ended Dec. 31, 2001, will be adjusted to about 90 cents a share from 99 cents a share.

Further adjustments are possible as a result of the re-audit, expected to take four weeks, the company said.

SkyWest shares were up 95 cents or 6.7 percent to $15.20 in trading this morning on the Nasdaq Stock Market.