Source: Investing Published 01/21/2025, 15:15
PHOENIX – Mesa Air Group Inc. (NASDAQ: MESA), the parent company of Mesa Airlines, has received a notice of non-compliance with Nasdaq listing rules due to a delay in filing its annual report. The regional airline, currently valued at around $55 million, received a notice on January 15, 2025 from Nasdaq’s Listing Qualifications Division for failing to file its Form 10-K for the fiscal year ending September 30, 2024 on time. According to InvestingPro data, the company faces significant financial challenges.
with a worrisome debt load and a rapid cash burn rate.
The company explained that the filing delay is not due to any anticipated financial statement restatements or disagreements with auditors. The notice does not immediately impact trading of Mesa Air’s securities on the Nasdaq Capital Market. Mesa Air received 60 days from the date of receipt of the notice to submit a plan to regain compliance. If Nasdaq approves the plan, the company could have up to 180 days.
or until July 14, 2025, to file its delinquent annual report and regain compliance. InvestingPro’s analysis reveals that the company’s current ratio is 0.45, indicating potential liquidity challenges as short-term liabilities exceed liquid assets.
Mesa Air is working to complete and file its Form 10-K within the 60-day notice period and expects to meet Nasdaq’s compliance requirements. The announcement of the deficiency notice comes in accordance with Nasdaq Listing Rule 5810(b), which mandates immediate public disclosure.
Mesa Air Group Inc. headquarters in Phoenix, Arizona, and operates as a regional carrier, providing passenger service to several destinations across the United States, Cuba, and Mexico. As of the end of its last fiscal year, Mesa Air operated a fleet of 67 aircraft and maintained approximately 265 daily flights. The airline employs approximately 1,838 people and operates all flights under the United Express brand through a capacity purchase agreement with United Airlines. Despite recent challenges, the stock has shown resilience with a return of 38% over the past year.
although InvestingPro’s analysis suggests the company is still undervalued.
The information in this report is based on a press release from Mesa Air Group.
In other recent news, Mesa Air Group announced two major aircraft and airframe sales, raising a total of $248.1 million. The company sold eighteen Embraer ERJ 175 aircraft to United Airlines.
with eight sales completed and the rest expected by January 2025, bringing in an expected $229.1 million. Additionally, Mesa Air agreed to sell fifteen CRJ-900 airframes to an undisclosed party, with an expected return of $19.0 million.
These transactions come amid significant financial pressure on the company, highlighted by a debt-to-equity ratio of 2.74. The sales are vital, with Mesa Air reporting negative free cash flow of $12.59 million over the past twelve months. The proceeds from the sale of the CRJ-900 hulls are intended to be used to reduce the company’s loan with the U.S. Treasury.
The sale to United has already generated net proceeds of $35.8 million for Mesa Air after repayment of associated debt. Notably, the agreement with United includes leaseback provisions, allowing Mesa to lease the aircraft from United after the sale. These latest developments are part of the company’s strategic asset sales as it adapts to the evolving aviation market.
