Great Lakes files 3rd Qtr SEC 10-Q report

[FloridaLarry]

They filed it. Slightly late, but maybe it fits under the SEC equivalent of the 15 minute rule.

Highlights (in this case, an oxymoron). 3rd Qtr (July-Sep 2015), they lost $2.993M on Operating Revenue of $9.691M. They now serve 22 airports, 14 of them EAS destinations plus 4 EAS hubs (the other end of the EAS flights). 65% of their revenue is from EAS operations.

The loan covenants cannot turn positive in the fourth Qtr, since they are based (in part) on trailing year numbers. But the picture overall remains a dismal outlook. Bumps in FO pay and retention bonuses for CAs appear to me to be too little, too late as solutions, but helpful operationally.

GLA continues in technical default on their borrowing from Callidus Capital Corporation, which automatically bumps the interest rate on their debt from 14% to 17% Callidus is a Canadian outfit, part of the Catalyst Capital Group, the second largest private equity firm in Canada. The flounder and managing partner of Catalyst is a gentleman named Newton Glassman, who has been described as a 'pit bull.'

Callidus self-describes the company as providing "innovative and creative funding solutions for companies unable to obtain funding from conventional lenders." (from Catalyst's web site). Good luck to 'em.

 

[bigD1031]

Callidus self-describes the company as providing "innovative and creative funding solutions for companies unable to obtain funding from conventional lenders." (from Catalyst's web site). Good luck to 'em.

That is probably the most PC way a corporation could come up with to say loan shark.

 

[somewhereupthere]

That is probably the most PC way a corporation could come up with to say loan shark.

Predatory lending at it's finest. Lotsa pre 2008 homeowners in the U.S. fell victim to these same loan sharks. Although if you're dumb enough to put yourself that far into debt, with those terms, you deserve to be preyed upon.

 

[Cessnaflyer]

The flounder.

So bad only a fish would invest in them.

 

[somewhereupthere]

So bad only a fish would invest in them.

What do you get when you cross a banker and a fish? A Loan Shark... HA! lolzzzz

 

[FloridaLarry]

So bad only a fish would invest in them.

Sounds like a fishy investment strategy. Bottom-feeders indeed. (insert rim-shot emoticon here).

 

[hook_dupin]

Highlights (in this case, an oxymoron). 3rd Qtr (July-Sep 2015), they lost $2.993M on Operating Revenue of $9.691M. They now serve 22 airports, 14 of them EAS destinations plus 4 EAS hubs (the other end of the EAS flights). 65% of their revenue is from EAS operations.

Their cash position is the alarm bell to me. They have $900K in cash and are losing $2M-$3M a quarter ...they will have to make a trip back to the dealer very soon. Book-wise, I see about $10M in assets that don't yet have loans out against them... So that's about three more quarters of operations.

When does Great Lakes finally declare bankruptcy? My bet is June 2016. The bigger question is "What will the bank do with a pile of B-1900s?"

 

[FloridaLarry]

Their cash position is the alarm bell to me. They have $900K in cash and are losing $2M-$3M a quarter ...they will have to make a trip back to the dealer very soon. Book-wise, I see about $10M in assets that don't yet have loans out against them... So that's about three more quarters of operations.

When does Great Lakes finally declare bankruptcy? My bet is June 2016. The bigger question is "What will the bank do with a pile of B-1900s?"

All GLA's borrowing is from one source, Calidus, and their assets (primarily the aircraft) are the surety, for all three notes

The lender will be stuck with a bunch of elderly B-1900-Ds. The since the primary markets for these are in 3rd world countries, the present currency exchange rates make them even harder to sell. They could sell them to someone and lease back those they need, but finding someone to do that could itself be tough. That lessor would eventually be stuck with even older Beeches. When Mesa got out of the 1900 business, it took between a year and two for Raytheon to unload that fleet. (Granted, other issues for Raytheon at the time.)

GLA has petitioned the FAA for relief from the 1,500 hour rule, but I don't see the FAA catching and running with this Hail-Mary pass.

 

[hook_dupin]

GLA has petitioned the FAA for relief from the 1,500 hour rule, but I don't see the FAA catching and running with this Hail-Mary pass.

Agree. Not enough people/communities are effected to make this politically feasible. I don't see a senator from a flat state on GL's side.

...I'm going to explore put option pricing today.

 

[Badger6]

Seems like if the FAA granted GLA relief from the 1,500 rule, then everyone would be asking for relief from the rule.

 

[Inverted]

Can the Ds not be converted to freight? AMF would buy those things in a heartbeat.

 

[milleR]

http://m.controller.com/ListingDetail/Index?industryName=CONTROLLER&listingId=1325841&categoryId=8

Not that this actually means much, but it's interesting.

 

[FloridaLarry]

http://m.controller.com/ListingDetail/Index?industryName=CONTROLLER&listingId=1325841&categoryId=8

Not that this actually means much, but it's interesting.

Generally speaking, GLA has very good maintenance and has kept its aging fleet in decent shape. This particular bird was originally a Mesa aircraft, moved to GLA when Mesa got out of the B-1900 business. Mesa had been the launch customer on the -Ds, and their fleet topped out at 118 airframes of the 439 -Ds Beech built, primarily assigned to their Air Midwest subsidiary

The market for used 1900-Ds is small third-world airlines and domestic freight carriers. A few may still be flying PAX in Alaska. Capacity vs cost has led most freight carriers to Metros and Beech 99s / 1900-Cs, with a bump to Brasilias if they need to haul more.

 

[alaskadrifter]

Generally speaking, GLA has very good maintenance and has kept its aging fleet in decent shape. This particular bird was originally a Mesa aircraft, moved to GLA when Mesa got out of the B-1900 business. Mesa had been the launch customer on the -Ds, and their fleet topped out at 118 airframes of the 439 -Ds Beech built, primarily assigned to their Air Midwest subsidiary

The market for used 1900-Ds is small third-world airlines and domestic freight carriers. A few may still be flying PAX in Alaska. Capacity vs cost has led most freight carriers to Metros and Beech 99s / 1900-Cs, with a bump to Brasilias if they need to haul more.

Ravn has some Ds, but they are supposed to be getting phased out over the next five years. Lots of C models up here though.

 

[gotWXdagain]

Odd, nobody really likes the D or finds the D useful.

 

[Skåning]

Odd, nobody really likes the D or finds the D useful.

What? I thought ladies love the D!

 

[FloridaLarry]

People who fly people have customers that like the -D. You can stand up (except over the wing root box), one of only two planes in this size category where you can (BAE Jetsream is the other). Which would you rather be strapped into as a pax: Metroliner or Beech?

For people who fly boxes, I guess it is two things: payload size vs their needs, and initial / operating cost of the aircraft. Larger engines drink more fuel. Plus older = cheaper to buy,

 

[z987k]

Odd, nobody really likes the D or finds the D useful.

From what I understand the D has less useful load than the C, uses more gas and the increase in MGTOW, which is paperwork only, is only available on the C model.

People who fly people have customers that like the -D. You can stand up (except over the wing root box), one of only two planes in this size category where you can (BAE Jetsream is the other). Which would you rather be strapped into as a pax: Metroliner or Beech?

For people who fly boxes, I guess it is two things: payload size vs their needs, and initial / operating cost of the aircraft. Larger engines drink more fuel. Plus older = cheaper to buy,

Metro all day so that I don't have to listen to the ridiculously high prop RPM on the beech for the entire flight.

 

[hook_dupin]

From what I understand the D has less useful load than the C, uses more gas and the increase in MGTOW, which is paperwork only, is only available on the C model.

For the right price, every airplane can be a value.

 

[Inverted]

They might not be able to carry as much as a C model but the current 1900 freight fleet is beyond aged, and somethings gotta replace them.


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