Mail Stop 3561
July 20, 2006
Andrew C. Levy
Managing Director and Secretary
Allegiant Travel Company
3301 N. Buffalo Drive, Suite B-9
Las Vegas, Nevada 89129
Re: Allegiant Travel Company
Amendment No. 1 to Registration Statement on Form S-1
Filed on July 5, 2006
File No. 333-134145
Dear Mr. Levy:
We have reviewed your amended filing and have the following
comments. Where indicated, we think you should revise your
document
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Cover page
1. Please state that the selling shareholders are deemed
underwriters
to the extent the underwriters purchase shares from the selling
shareholders to cover overallotments.
Risk Factors, page 12
Our maintenance costs will increase as our fleet ages, page 14
2. Please disclose the average age of an aircraft based on
industry
standards. For example, since FAA regulations require additional
maintenance inspections for older aircraft, please describe the
age
of an "older aircraft" to help investors assess the risk.
Use of Proceeds, page 29
3. To the extent you incur a commitment or obligation in
connection
with your current negotiations to purchase a leased aircraft,
please
revise disclosure accordingly.
Selected Financial and Operating Data, page 32
4. We note that while you have most recently disclosed EBITDA as a
measure of operating performance, you have provided a
reconciliation
of EBITDA to cash flows from operations, which is consistent with
the
presentation of EBITDA as a measure of liquidity. As such, we
believe you should revise your document to provide a
reconciliation
of EBITDA to net income or loss. Please refer to the guidance
provided in question number 15 of our June 13, 2003 release titled
"Frequently Asked Questions Regarding the Use of Non-GAAP
Financial
Measures."
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Other (Income) Expense, page 49
5. We have reviewed your response to our prior comment number 20.
However, we do not believe that your amended disclosures fully
address the concerns raised in our prior comment. Given the
significance of the "gain on fuel derivatives" recognized in
fiscal
year 2004 (relative to net income and relative to the gains
recognized in fiscal years 2003 and 2004), please disclose the
underlying factors which contributed to the materiality of the
gain
recognized in fiscal year 2004. For example, please disclose
whether
the size of the gain recognized was a result of the quantity or
notional value of outstanding derivative contracts, greater
fluctuations in the underlying(s) being hedged by your derivative
contracts, or other factors. Your amended disclosures should be
as
detailed as necessary to provide a clear understanding with regard
to
the factors contributing to the materiality of the recognized
gain.
Financial Statements
General
6. We note that prior to the completion of your offering, you
intend
to convert from a limited liability company to a corporation. We
also note that in connection with your conversion, your
outstanding
shares of preferred stock will be exchanged for shares of common
stock. As such, please present pro forma tax and earnings per
share
data on the face of your statements of operations for the latest
fiscal year and any interim period presented, giving effect to
both
the tax implications associated with converting from a limited
liability company to a corporation and the conversion of your
preferred shares to common shares. A pro forma balance sheet
should
also be presented alongside the historical balance sheet as of the
latest period presented in your registration statement, giving
effect
to the conversion of your preferred stock and the tax adjustments
associated with your reorganization.
Consolidated Statements of Shareholders`/Members` Equity (Deficit)
and
Comprehensive Income, page F-5
7. Per your statement of shareholders` equity, it appears that you
issued warrants valued at approximately $329,000 during the
quarter
ended March 31, 2006. However, it does not appear that you have
discussed the issuance of these warrants elsewhere in your
document.
As such, please disclose i) the transaction that resulted in the
issuance of the aforementioned warrants, ii) whether the warrants
were issued to an employee(s), a related party, or an unrelated
third
party, iii) the number of warrants that you issued during the
quarter, iv) the exercise price(s) of the warrants, and v) how you
have valued the warrants, including the assumptions that you used.
Notes to Consolidated Financial Statements
Short-term Investments, page F-10
8. We note that although you have disclosed the cost and market
value
of your short-term investments as of March 31, 2006, you have not
disclosed information regarding their contractual maturities. As
such, please expand your disclosures to provide information about
the
maturity of your short-term investments held at March 31, 2006.
Refer to the requirements of paragraph 20 of SFAS No. 115.
Employee Benefit Plans
Share Option Program, page F-22
9. We have reviewed your response to our prior comment number 42,
but
we do not believe that your response fully addresses the concerns
raised in our prior comment. While you have discussed the factors
considered by your Board of Directors when determining the fair
value
of your common shares issued in August of 2003, your response does
not discuss the use of a valuation methodology or technique, such
as
those described in the AICPA Auditing and Accounting Practice Aid
"Valuation of Privately-Held-Company Equity Securities Issued as
Compensation." As such, please describe in detail the methodology
and assumptions used by your Board of Directors to determine the
fair
value of your common shares on the date that these common shares
were
issued. In addition, tell us why management chose not to obtain a
contemporaneous valuation of your common shares from an
independent
valuation specialist at the issuance date. If a full valuation
analysis was not performed at the time that your common shares
were
issued, we believe a retrospective valuation should be performed
at
this time. In addition, please discuss in MD&A the factors
considered, significant assumptions and valuation method utilized
at
each valuation date. Furthermore, we believe that you should
specifically disclose the factors that contributed to the increase
in
the fair value of your common shares from $0.10 per share in
August
of 2003 to $3.50 in February of 2005 and to $4.50 in September of
2005.
10. Please discuss in MD&A how the exercise prices of your options
and warrants issued during fiscal years 2005 and 2006 compare to
the
expected public offering price of your common shares. Your
expanded
disclosures should include the following:
* A discussion of the significant factors, assumptions, and
methodologies used in determining the fair value of your common
shares on the dates that your options and warrants were issued.
* A discussion in MD&A of each significant factor contributing to
the
difference between the fair value of your common shares as of the
dates of your option and warrant issuances and your expected
public
offering price.
* A discussion in MD&A of the valuation alternative selected for
use
by the Board of Directors when your options and warrants were
issued,
and an explanation of why management chose not to obtain a
contemporaneous valuation of your common shares by an independent
valuation specialist.
Please refer to the guidance outlined in paragraph182 of the AICPA
Audit and Accounting Practice Aid "Valuation of Privately-Held-
Company Equity Securities Issued as Compensation."
**********
Closing
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Jeffrey Sears at (202) 551-3302 or Michael
Fay
at (202) 551-3812, if you have questions regarding comments on the
financial statements and related matters. Please contact Johanna
Losert at (202) 551-3325 or me at (202) 551-3454 with any other
questions.
Sincerely,
Sara Kalin
Legal Branch Chief
cc: Via Facsimile: (404) 233-2188
Mr. Robert Goldberg, Esq.
Ellis Funk, P.C.
Andrew Levy
Allegiant Travel Company
July 20, 2006
Page 5