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Airport Van Operator SuperShuttle Plans to Go Public

June 11, 1998|JAMES F. PELTZ | TIMES STAFF WRITER

Hoping to pick up a financial cushion from Wall Street, van-ride operator SuperShuttle International Inc. plans to go public with a 3-million-share stock offering.

Phoenix-based SuperShuttle, whose blue-and-yellow passenger vans are familiar sights on Southland freeways, provides shared rides to and from 18 airports in 15 U.S. cities, including airports in Los Angeles, Burbank, Orange County and Ontario. Nine of the cities are served by company-owned operations, and six are franchises.

Indeed, SuperShuttle is one of the major van services in Southern California, but it has plenty of competition from the likes of Prime Time Shuttle and smaller operators.

Nonetheless, SuperShuttle's planned offering comes just as the Los Angeles Airport Commission is preparing to award exclusive shuttle concessions at Los Angeles International Airport, and a commission panel has recommended that SuperShuttle be one of only three operators to get them.

The full commission, which is trying to pare the number of vans competing at LAX to reduce traffic jams and improve air quality, is expected to take up the matter this month. But many of the 38 shuttle firms now serving LAX have lodged protests about the exclusive contracts.

SuperShuttle hopes to sell its stock for $8 to $10 a share, according to its prospectus filed with the Securities and Exchange Commission. At $9, the offering would raise $27 million, which the company would use to repay debt and for expansion plans. The company says it intends to add shuttle service at airports nationwide.

With about 800 vans, 13-year-old SuperShuttle figures it carried more than 7 million passengers last year. But the company wants to be much bigger, and to that end, it recently bought its franchises in Los Angeles, Orange County and Miami. However, the Los Angeles and Orange County purchases remain subject to approval by the California Public Utilities Commission, the filing said.

Assuming its franchise purchases had been made last year, SuperShuttle said it earned $2.4 million, or 34 cents per diluted share, on revenue of $75 million in 1997. So, at $9 a share, its new stock would carry a price-earnings multiple of 26.5 on trailing earnings, about the same as the benchmark Standard & Poor's 500 Index.

After the offering, more than 40% of the company's stock would still be owned by company insiders, including 17% owned by its 57-year-old chairman, Mitchell Rouse.

The stock's risks: Besides fierce competition, SuperShuttle said its driver turnover is high and any rise in fuel costs could erode profit. Also, the company is exploiting a current boom in the airline business, but its outlook could weaken if passenger traffic falls off.

Speaking of initial stock offerings, struggling railroad giant Union Pacific Corp. is selling 100% of its Overnite Corp. trucking unit to the public. Though the number of shares and estimated selling price haven't yet been announced, Overnite's prospectus said it hopes to raise about $550 million.

Overnite, which dates back to the Depression, has been owned by Union Pacific since 1986. But the railroad--hobbling badly with traffic problems in Southern California and elsewhere that stem from its purchase of the Southern Pacific Railroad--wants to unload Overnite to raise cash and focus on its core business.

Overnite itself struggled in the mid-1990s but began a turnaround two years ago when it hired Leo Suggs as chief executive. After losing an aggregate $66.6 million in 1995 and 1996, the trucker earned $4.3 million last year on revenue of $946 million.

Also:

* Envirotainer Inc., an Inglewood maker of temperature-controlled cargo containers for airlines, said it signed a contract to become the exclusive supplier of such equipment to the German carrier Lufthansa. The containers are used to protect such items as fine art, pharmaceuticals and perishables.

* Catalina Island's airport has reopened to general-aviation pilots after a week's closure to resurface the runway and taxiway. Officials expect the upgrade to draw considerably more private aircraft to the island.

* Las Vegas tourism officials unveiled a $5-million advertising campaign to prod more people to fly or drive to the gambling mecca this summer.

Times staff writer James F. Peltz can be reached at james.peltz@latimes.com.

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