Gulfstream International Group, Inc. Announces Preliminary 2007 Financial Results and Plans to File Form 12b-25 to Extend Filing

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


DATASOURCE: Gulfstream International Group, Inc.



CONTACT:  Robert M. Brown, Chief Financial Officer of Gulfstream

International Group, Inc., [phone] x236



Web site:  http://www.gulfstreamair.com/ 

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