FORT LAUDERDALE, Fla.,
April 1, 2008 /PRNewswire-FirstCall/ -- Gulfstream
International Group, Inc. (Amex: GIA) announced today that it is filing a Form
12b-25, Notification of Late Filing, with the Securities and Exchange
Commission (SEC) relating to its Annual Report on Form 10-K for the year ended
December 31, 2007. This filing automatically extends the
March 31, 2008 filing
due date for up to 15 calendar days under SEC rules. Gulfstream expects to
file its Form 10-K with the SEC within this extension period.
Gulfstream also announced today its preliminary financial results for the
year ended December 31, 2007, which included the following highlights for the
year:
-- Revenue for 2007 was $112.3 million, or 6.7% higher than 2006;
-- Pre-tax operating loss for 2007 was $3.9 million, compared to pro forma
pre-tax income of $1.5 million for 2006;
-- Pre-tax operating loss for 2007 was approximately $1.1 million, after
excluding the following non-cash charges:
-- a goodwill impairment charge of $2,391,000 associated with the
Gulfstream Training Academy;
-- an increase of $200,000 in compensation expense in 2007 due to
accelerated vesting of stock options; and
-- a $174,000 loss due to the write-off of debt issuance costs related
to the redemption of subordinated debt prior to maturity; and
-- Net loss for 2007 was $3.1 million, or ($1.52 per diluted share)
compared to pro forma net income of $1.0 million for 2006, or $0.43 per
diluted share.
Airline operating results during 2007 were negatively impacted by:
-- a relentless rise in fuel prices;
-- an increased rate of pilot attrition amidst an industry-wide pilot
shortage, which contributed to pilot training costs that were more than
$1 million above 2006 levels; and
-- increased costs for flight operations, maintenance and passenger
service.
In October 2007, jet fuel prices began to increase significantly above the
prior-year level. By December 2007, the average price per gallon had risen to
$2.91, or 38.5% above the same month last year. Since December 31, 2007, crude
oil prices have continued to spike even higher reaching $111.80 per barrel
during March 2008. The current average jet fuel price is approximately $3.40
per gallon, which is approximately 67% higher than at this time last year.
In reaction to the operating results for 2007 and increased operating
costs, senior management led by David Hackett, President and Chief Executive
Officer, developed and began implementation of a revised business plan in
January 2008. The plan includes an aggressive cost reduction initiative to
mitigate as much as possible the effects of the increased price of jet fuel,
as well as to maintain operational reliability and lower our operating costs.
The revised business plan calls for:
-- raising several million dollars through the refinancing and/or sale of
certain aircraft and related parts inventory;
-- restructuring our route network to eliminate city pairs that are no
longer profitable in the present high fuel price environment, and to
redeploy assets to higher margin routes; and
-- cost reduction initiatives related to flight operations, maintenance,
passenger service and general and administrative;
Commenting on the Company's 2007 operating results and revised business
plan, David F. Hackett, President and Chief Executive Officer, stated, "These
are very difficult times for the airline industry, given the unprecedented
increases in jet fuel prices and a weakening economy. In response to theses
challenges, we are planning to reduce the complexity of our operations,
aggressively lower our operating expenses and improve liquidity by refinancing
or selling certain aircraft, all of which are necessary steps to assure the
long-term viability of the business."
About Gulfstream International Group, Inc.
Gulfstream International Group, Inc. is a holding company that operates
two independent subsidiaries: Gulfstream International Airlines, Inc.
("Gulfstream") and Gulfstream Training Academy, Inc. (the "Academy").
Gulfstream is a Fort Lauderdale, Florida-based commercial airline currently
operating more than 200 scheduled flights per day, serving twelve destinations
in Florida and ten destinations in the Bahamas. The Academy provides flight
training services to licensed commercial pilots. For more information on the
company, visit the company's website at http://www.gulfstreamair.com.
Special Note Regarding Forward-Looking Statements
In addition to historical information, this release contains forward-
looking statements. Gulfstream may, from time-to-time, make written or oral
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements relate to, among other things:
our business strategy; our value proposition; the market opportunity for our
services, including expected demand for our services; information regarding
the replacement, deployment, acquisition and financing of certain numbers and
types of aircraft, and projected expenses associated therewith; costs of
compliance with FAA regulations, Department of Homeland Security regulations
and other rules and acts of Congress; the ability to pass taxes, fuel costs,
inflation, and various expense to our customers; certain projected financial
obligations; our estimates regarding our capital requirements; and any of our
other plans, objectives, expectations and intentions contained in this release
that are not historical facts.
These statements, in addition to statements made in conjunction with the
words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate"
and similar expressions, are forward-looking statements. These statements
relate to future events or our future financial performance and only reflect
management's expectations and estimates. All forward-looking statements
included in this release are made as of the date hereof and are based on
information available to Gulfstream as of such date. The following is a list
of factors, among others, that could cause actual results to differ materially
from the forward-looking statements: changes to external competitive,
business, budgeting, fuel cost or supply, weather or economic conditions;
changes in our relationships with employees or code share partners;
availability and cost of funds for financing new aircraft and our ability to
profitably manage our existing fleet; adverse reaction and publicity that
might result from any accidents; the impact of current or future laws and
government investigations and regulations affecting the airline industry and
our operations; additional terrorist attacks; and consumer unwillingness to
incur greater costs for flights.
Gulfstream assumes no obligation to update any forward-looking statement.
Risk factors, cautionary statements and other conditions which could cause
actual results to differ from management's current expectations are contained
in Gulfstream's filings with the Securities and Exchange Commission, including
the section of Gulfstream's Registration Statement on Form S-1, as amended on
December 13, 2007, entitled "Risk Factors."
Results of Operations for 2006 and 2007
The table below presents unaudited results of operations for 2006 and
2007. Pro forma financial results for the year ended December 31, 2006 include
our results for the period from March 15, 2006 to December 31, 2006, combined
with the results of our predecessor from January 1, 2006 to March 14, 2006,
adjusted to give effect to our March 14, 2006 acquisition as though it had
occurred on January 1, 2006. As a result of the acquisition, the results of
operations of the predecessor are not comparable to the results of operations
of the successor. Such presentation does not comply with generally accepted
accounting principles and is being made solely to highlight changes in the
results of operations for the periods presented in the financial statements.
Percent
Year Ended December 31, Change
Pro Forma 2006 to
2006 2007 2007
Revenue
Airline passenger revenue $98,554 $104,230 5.8%
Academy, charter and other
revenue 6,705 8,066 20.3%
Total Revenue 105,259 112,296 6.7%
Operating Expenses
Flight operations 11,943 13,794 15.5%
Aircraft fuel 23,559 25,774 9.4%
Aircraft rent 6,191 6,430 3.9%
Maintenance 21,237 24,574 15.7%
Passenger service 22,171 23,312 5.1%
Promotion & sales 7,920 7,782 -1.7%
General and administrative 6,263 7,325 17.0%
Depreciation and amortization 3,431 3,761 9.6%
Goodwill impairment - 2,391
Operating Expenses 102,715 115,143 12.1%
Income (loss) from operations 2,544 (2,847)
Non-Operating Income and (Expense)
Interest (expense) (1,215) (1,146) -5.7%
Loss on Extinguishment of debt - (174)
Other income 174 227 30.5%
Non-Operating Income and (Expense) (1,041) (1,093) 5.0%
Income (loss) before taxes 1,503 (3,940)
Provision for income taxes 528 (834)
Income (loss) before minority interest 975 (3,106)
Minority interest (5) -
Net income (loss) $970 $(3,106)
Net income per share:
Basic $0.48 $(1.50)
Diluted $0.43 $(1.52)
Shares used in computing net income
per share:
Basic 2,006 2,075
Diluted 2,006 2,075
GULFSTREAM INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2005, 2006 and 2007
(In thousands, except per share data)
(Unaudited)
Predecessor Successor
Period from
Year January 1,
Ended to Year Ended
December 31, March 14, December 31,
2005 2006 2006 2007
Operating Revenues
Passenger revenue $87,983 $20,264 $78,290 $104,230
Academy, charter and other revenue 5,282 1,165 5,540 8,066
Total Operating Revenues 93,265 21,429 83,830 112,296
Operating Expenses
Flight operations 9,923 2,266 9,679 13,794
Aircraft fuel 20,544 4,203 19,356 25,774
Maintenance 17,220 3,843 17,394 24,574
Passenger and traffic service 20,390 4,798 17,373 23,312
Aircraft rent 6,827 1,300 4,891 6,430
Promotion and sales 7,530 1,561 6,359 7,782
General and administrative 7,067 1,269 4,951 7,325
Depreciation and amortization 2,355 503 2,726 3,761
Goodwill Impairment - - - 2,391
Total Operating Expenses 91,856 19,743 82,729 115,143
Operating income (loss) 1,409 1,686 1,101 (2,847)
Non-operating (expense) income
Interest expense (699) (158) (954) (1,146)
Interest Income 48 1 171 141
Gain on sale of equipment 132 - - -
Loss on extinguishment of debt - - - (174)
Other income (expense) 40 (6) 9 86
Total non-operating (expense) income (479) (163) (774) (1,093)
Income (loss) before provision for
income taxes and minority interest 930 1,523 327 (3,940)
Income tax provision (benefit) 230 523 137 (834)
Income (loss) before minority interest 700 1,000 190 (3,106)
Minority interest - - (5) -
Net income (loss) $700 $1,000 $185 $(3,106)
Net income (loss) per share:
Basic - - $0.11 $(1.50)
Diluted - - $0.08 $(1.52)
Shares used in calculating net income
per share:
Basic - - 1,681 2,075
Diluted - - 1,681 2,075
GULFSTREAM INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2006 and 2007
(In thousands)
(Unaudited)
2006 2007
(Restated)
Assets
Cash and cash equivalents $3,143 $3,938
Accounts receivable, net 3,384 2,910
Due From Related Entity 606 640
Expendable parts 1,549 1,951
Prepaid expenses 517 539
Total Current Assets 9,199 9,978
Property and Equipment
Flight equipment 18,165 23,855
Other property and equipment 756 1,533
Less - accumulated depreciation (2,804) (5,390)
Property and Equipment, net 16,117 19,998
Intangible assets, net 4,301 4,053
Goodwill 5,094 2,703
Deferred tax assets 472 1,509
Other assets 1,797 1,180
Total Assets $36,980 $39,421
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses $10,977 $15,869
Long-term debt - current portion 1,273 2,268
Engine return liability - current portion 3,060 2,800
Air traffic liability 1,351 1,270
Deferred tuition revenue 281 408
Total Current Liabilities 16,942 22,615
Long-term Liabilities
Long-term debt, net of current portion 6,250 6,415
Subordinated debentures, net of debt
issuance costs 3,273 -
Engine return liability, net of
current portion 2,490 990
Total Liabilities 28,955 30,020
Commitments and Contingencies
Minority Interest 5 -
Stockholders' Equity
Common stock 20 28
Additional paid-in capital 7,755 12,234
Common stock warrants 61 61
Retained earnings (deficit) 184 (2,922)
Total Stockholders' Equity 8,020 9,401
Total Liabilities & Stockholders' Equity $36,980 $39,421
Print This Page
Email This Page
Archives
Copyright Permissions
