Hoping to raise between $10.2 million and $11.8 million in net proceeds with an initial public offering of 1,150,000 shares at $12 per share, Gulfstream International Group expects to use the funds to acquire additional aircraft, refinance existing aircraft, and as working capital. Some $3.3 million will be used to redeem its 12 percent subordinated debentures. Another 2.039 million shares are already owned by investors which are valued at $4.18 per share. When the IPO is complete there will be 3.039 million shares outstanding. Consequently, investors will suffer an immediate dilution based on its current net tangible book value as of March 31, 2007.
In 2006, it made $1,236, up 44.2 percent from its 2005 results, on revenues from the airline and flight academy of $105,000, up 14.2 percent. During the first 2007 quarter net income was $1,658, down 8.6 percent, on total revenues of $29,226, up 6.8 percent from the year-ago period. During the first quarter, it flew 74,900 available seat miles, up 4.9 percent from Q1 2006, on a 0.2 percent revenue passenger mile increase to 45,309. Load factor dropped 3.9 percent to 60.4 from the year-ago period. Average yield rose 5.3 percent to 0.610 cents. Its average fare rose 6.9 percent to $120.65. The company currently has $11.6 million of debt, in addition to $6.3 million in lease payments per year. Under risk factors it pointed to DayJet’s soon-to-be-launched, per-seat-on-demand operation, saying the airline, which serves DayJet’s focus area in Florida, could lose passengers to the new business model in addition to being forced to lower fares in order to compete.
Gulfstream is the holding company for Gulfstream International Airlines and Gulfstream Training Academy based in Fort Lauderdale. It currently operates a fleet of 27 Beech 1900Ds and eight Embraer (ERJ) Brasilias to 11 destinations in Florida and the Bahamas. It also operates code-sharing flights for Continental (CAL), its principal partner, and United (UAUA), Northwest (NWA) and Panama-based Copa Airlines (COPA). In addition, it offers charter flights throughout its region, including to Cuba.Gulfstream currently operates four to five daily round trips under charter agreements associated with our Cuba operations and two to three daily round trip flights to Andros Island under an agreement with a government subcontractor. Begun in 1988 as a charter operator, in 1990 it added scheduled operations between Miami and the Bahamas.
Over 60 percent of revenue is derived from local point-to-point with the balance connecting traffic for the Bahamas. Continental operations provide 20 percent of the airline’s revenue. For United, it connects Tampa passengers to Miami, Key West, Ft. Lauderdale, Orlando, Grand Bahama Island and Nassau, Bahamas. Its Northwest operation connects passengers at Tampa to Miami, Key West, Ft. Lauderdale and Nassau. In addition, it connects Copa passengers at Miami to Orlando, Tampa, Key West, Gainesville, Nassau and Freeport.