The Board of Directors of Small Cap Watch List member Pinnacle Airlines Corp. (PNCL) authorized a new share repurchase program to acquire up to $30 million of the Company’s outstanding common stock. If executed, the share count could be reduced by as much as 8%, and there doesn’t seem to be any reason not to execute on it. As the company noted:
Pinnacle holds $42.5 million face amount of unsecured claims against Northwest Airlines, and is evaluating options to monetize this non-core asset. Pinnacle’s Board of Directors may increase the amount authorized under the share repurchase program in future periods, depending on the Company’s working capital needs and its ability to monetize its remaining unsecured claims against Northwest.
In addition to the recent growth opportunities, Pinnacle’s low-risk strategy requires little in the way of capital expenditures. Over the last three years, Pinnacle has generated a cumulative $86 million in cash flow from operations and needed only $21 million for capital expenditures. As a result, it ended 2006 with $72 million in short-term investments and a relatively low (for an airline) $121 million in debt.