Gulfstream International Group, Inc. Issues Preliminary 2007 Results

Gulfstream International Group, which includes Gulfstream International Airlines and Gulfstream Training Academy, incurred a net loss for 2007 of $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. Gulfstream posted revenue of...

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Gulfstream International Group, which includes Gulfstream International Airlines and Gulfstream Training Academy, incurred a net loss for 2007 of $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.
Gulfstream posted revenue of $112.3 million for 2007, up 6.7 percent from the year-ago period but a $3.9 million pre-tax operating loss compared to pro forma pre-tax income of $1.5 million for 2006. The pre-tax operating loss for 2007 was approximately $1.1 million, after excluding 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
"These are very difficult times for the airline industry, given the unprecedented increases in jet fuel prices and a weakening economy,” said President and CEO David F. Hackett. “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."
The company also said 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 said airline operating results during 2007 were negatively impacted by fuel price, pilot attrition, which increased training costs by more than $1 million, and increased costs for flight operations, maintenance and passenger service.
The results prompted the company to implement a revised business plan in January calling for aggressive cost cutting to mitigate rising fuel costs. The plan calls for raising several million dollars through the refinancing and/or sale of certain aircraft and related parts inventory; restructuring its route network to eliminate city pairs that are no longer profitable with current fuel prices; redeploy assets to higher margin routes; and cost reduction initiatives related to flight operations, maintenance, passenger service and general and administrative costs.
Fort Lauderdale-based Gulfstream International Airlines, Inc. has more than 200 scheduled flights daily serving 12 destinations in Florida and 10 destinations in the Bahamas. Gulfstream Training Academy, Inc. provides flight training services to licensed commercial pilots.