Rocky Mountain Investment Club

[bliz82]

This was never answered on the BLTA board so I post it here if anyone has any real discussion. It's all in black and white from the DOT about needing 1/4th of their operating expenses plus startup costs (which now appear they can get by on less than $2M) but that means they still need $16M to start with their main business plan of building to 5 round-trips/wk. Either DOT will have to give in (unlikely) or BLTA will have to tone down their plan and thus the eps outlook. Assuming BLTA is really going to fly my best guess is they will have to cut their plan about 40% and by the summer of 2009 their eps will be in the .03 range. So take an industry avg pe in the 15-20 range and you get .45 to .60 for the pps by early to mid 2009. Nice if they can pull this off without any issues but nothing spectacular. The other issue that is still uncertain is that some of that $11M they have on hand is not readily available at startup (Preston Capital, warrants). We'll see what the final resolution from the DOT is on that.

BLTA post (updated above to include less start-up costs)
Maybe someone can answer me why they think BLTA has sufficient funds to meet the DOT demands. According to the DOT's response from 11/6 (page 5), BLTA needs 1/4 of their forecast operating expenses which is $58,952,208 according to pro-forma projections plus start-up costs. That's $14,738,052 plus start-up costs which I used an additional $5 million (could this be less?) for a total of nearly $20 million. So from what I see on the latest response from BLTA they added additional funds of about $2 million but at $11.2 million they're still well short.

Now this is based building up to 5 round-trips per week directly from BLTA's pro-forma. Now I thought they could trim back their goals early on but then the net revenues generated don't support a much higher price than where we're at now (for example the one roundtrip per week with 17.3M in operating costs for the first year and a net profit of $2.8M.) However, when you run the EPS on those numbers and all the shares O/S at that time (near 300M) the eps is only .009. The EPS on a net income of $14.6M looks much better (nearly .05). But they need more money to start with this plan imo.

I'm interested in hearing from those that feel the funds are there even though the DOT specifically states they need more the way I read the DOT response. The EPS numbers just aren't that exciting for the next 12 months without these higher revs of the 5 flight scenario. Thoughts??? Tks

Look at page 5
http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetail&o=09000064803611cd