Originally Posted by
iahflyr
Let me be clear. Mesa did not report an operating profit. They reported an operating loss for the 1st quarter 2008 as they have for several quarters in a row now. Here is a copy of what I posted on another thread.
You are right. Creative accounting. They are accounting for a one time gain of 27.5 million dollars related to the Hawaiian lawsuit that Mesa lost. They posted a bond for $80 million, and only had to pay $52.5 million, so they are counting the 27.5 million dollars as a profit.
Gotta love Mesa. It's funny because they never included the $80 million dollars in any of their quarterly losses, but they can suddenly report this 27.5 million dollars as income.
The bottom line is Mesa has had an operating loss for many quarters in a row now, and the most important fact is their unrestricted cash position, which is down to only $55 million dollars. In the airline industry, cash is time. Therefore, Mesa does not have very much time. BTW, that $55 million was over 90 days ago (back when oil was still $100/barrel). My guess is their cash position is much lower than that. Now let's wait and see what happens with their Delta contract. The end is near.
Right on Bro!! although their accountants call it pro forma accounting!!!
PRO FORMA is a Latin Phrase that in the modern day business k-10 climate, suggests a free hand usage of a convoluted, intricate, and at times, unorthodox implementation of creative accounting. Such slight of hand methods were used to derive the makeovered earnings. EBITA, or Earnings before interest, tax and amortisation (EBITA) is what mesa used when they reported their earnings. It is similar to EBIT but strips out amortisation. Amortisation is always a non-cash item and therefore of limited interest to investors.
Amortisation is of less interest than depreciation (itself excluded from many measures) because it relates to intangible assets, and it cannot be used as even a rough proxy for replacement cost.
Mesa will continue to report utilizing pro forma, ebita, and yes, even pornography to explain its accounting practices, and I would be extremely wary and cautious about believing anything else other than this company will be out of business in a short while.