-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nts7nLNvQG9q9I2HmkZfWdtvMRPO4FV/DFzylAaRHjCv2BwDlJks3vtA34+thXqn j9JY92rvjB2Elrn8AtQ5Eg== 0000353184-96-000013.txt : 19960816 0000353184-96-000013.hdr.sgml : 19960816 ACCESSION NUMBER: 0000353184-96-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIR TRANSPORTATION HOLDING CO INC CENTRAL INDEX KEY: 0000353184 STANDARD INDUSTRIAL CLASSIFICATION: AIR COURIER SERVICES [4513] IRS NUMBER: 521206400 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11720 FILM NUMBER: 96613357 BUSINESS ADDRESS: STREET 1: 3524 AIRPORT RD CITY: MAIDEN STATE: NC ZIP: 28650 BUSINESS PHONE: 7043772109 MAIL ADDRESS: STREET 1: P O BOX 488 CITY: DENVER STATE: NC ZIP: 28037 FORMER COMPANY: FORMER CONFORMED NAME: ATLANTA EXPRESS AIRLINE CORP DATE OF NAME CHANGE: 19840321 10-Q 1 DECEMBER 31, 1995 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 1996 Commission File Number 0-11720 AIR TRANSPORTATION HOLDING COMPANY, INC. (Exact name of registrant as specified in its charter) Delaware 52-1206400 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Post Office Box 488, Denver, North Carolina 28037 (Address of principal executive offices) (704) 377-2109 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 2,614,433 Common Shares, par value of $.25 per share were outstanding as of August 11, 1996. This filing contains 15 pages. The exhibit index is on page 14. AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Earnings for the three-month periods ended June 30, 1996 and 1995 (Unaudited) . . . . . . . . . . . . . . . . . . 3 Consolidated Balance Sheets at June 30, 1996 (Unaudited) and March 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Consolidated Statements of Cash Flows for the three-month periods ended June 30, 1996 and 1995 (Unaudited) . . . . . . . . . . . . . . . 5 Notes to Consolidated Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . .8-10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 11-13 Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Exhibits . . . . . . . . . . . . . . . . . . . . . . . 15 2 AIR TRANSPORTATION HOLDING COMPANY, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended June 30, 1996 1995 Operating Revenues: Cargo $ 4,373,682 4,552,417 Maintenance and other 3,749,925 3,361,365 8,123,607 7,913,782 Operating Expenses: Flight operations 2,888,850 2,882,515 Maintenance 3,440,989 3,396,410 General and administrative 1,066,954 960,021 Depreciation and amortization 117,764 125,745 7,514,557 7,364,691 Operating Income 609,050 549,091 Non-operating (Income) Expense: (Gain) loss on sale of asset & other (1,643) (262,922) Earnings Before Income Taxes 610,693 812,013 Provision For Income Taxes 205,334 292,464 Net Earnings $ 405,359 519,549 Weighted Average Shares 2,812,639 3,100,749 Net Earnings Per Common Share $ 0.14 0.17 See notes to consolidated financial statements.
3 AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
June 30, 1996 March 31, 1996 ASSETS (Unaudited) Current Assets: Cash and cash equivalents $ 576,392 2,213,841 Short term investments 2,818,267 1,889,819 Accounts receivable, net 2,628,633 3,133,670 Expendable parts and supplies 699,480 725,503 Prepaid expense and other 39,193 61,325 Deferred tax asset, net 433,527 440,000 Total Current Assets 7,195,492 8,464,158 Property and Equipment 3,296,919 3,248,834 Less accumulated depreciation (1,764,778) (1,678,980) 1,532,141 1,569,854 Excess Cost of Subsidiary - 33,834 Deferred Tax Asset, net - 27,838 Other 136,124 124,387 $ 8,863,757 10,220,071 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 100,399 1,003,081 Accrued liabilities 1,073,986 1,555,284 Income taxes 323,845 238,113 Current maturities of long-term debt 6,062 5,976 Total Current Liabilities 1,504,292 2,802,454 Long-Term Debt, Less Current Maturities 2,100 3,649 Stockholders' Equity: Preferred stock, $1 par value, authorized 10,000,000 shares, none issued - - Common stock, par value $.25; authorized 4,000,000 shares; 2,614,433 and 2,725,433 shares issued 653,608 681,358 Additional paid in capital 7,156,548 7,299,045 Deficit ( 452,791) ( 566,435) 7,357,365 7,413,968 $ 8,863,757 10,220,071 See notes to consolidated financial statements.
4 AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended June 30, 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 405,359 $ 519,549 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 117,765 125,745 Change in deferred tax asset 34,311 40,187 Charge in lieu of income taxes 15,837 120,560 Asset and liability changes which provided (used) cash: Accounts receivable 505,037 822,073 Parts and supplies 26,023 (9,904) Prepaid expense and other 10,395 9,189 Accounts payable (684,247) (1,474,735) Accrued expenses (481,299) (281,940) Income taxes payable 85,732 117,552 Total adjustments (370,446) (531,273) Net cash provided by (used in) operating activities 34,913 (11,724) CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (63,694) (68,450) Short term investments (928,448) (575,000) Net proceeds from disposal of equipment 1,643 263,157 Net cash used in investing activities (990,499) (380,293) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt (1,463) ( 387) Repurchase of common stock (466,965) (245,563) Exercise of stock options 5,000 4,000 Dividend (218,435) (200,615) Net cash used in financing activities (681,863) (442,565) NET DECREASE IN CASH & CASH EQUIVALENTS (1,637,449) (834,582) CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,213,841 3,380,885 CASH & CASH EQUIVALENTS AT END OF PERIOD $ 576,392 $ 2,546,303 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 281 $ 235 Income/Franchise taxes 72,855 9,070 See notes to consolidated financial statements.
5 AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) A. Financial Statements The Consolidated Balance Sheet as of June 30, 1996, the Consolidated Statements of Earnings for the three-month periods ended June 30, 1996 and 1995 and the Consolidated Statements of Cash Flows for the three-month periods ended June 30, 1996 and 1995 have been prepared by Air Transportation Holding Company,Inc. (the Company) without audit. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of June 30, 1996, and for prior periods presented, have been made. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended March 31, 1996. The results of operations for the period ended June 30 are not necessarily indicative of the operating results for the full year. B. Income Taxes The tax effect of temporary differences and net operating loss carryforwards that gave rise to the Company's deferred tax asset is broken down between current and noncurrent amounts in the accompanying June 30, 1996 and March 31, 1996 consolidated balance sheets. The Company has recorded a valuation allowance in order to reduce its deferred tax asset to an amount which is more likely than not to be realized. Changes in the valuation allowance, related to future utilization of net operating losses, reduced the provision for income taxes by $44,000 and $25,000, respectively, during the three-months ended June 30, 1996 and 1995. As of June 30, 1996, all of the valuation allowance of approximately $109,000 relates to potential benefits from post-acquisition carryforwards. Benefits derived from pre-acquisiion carryforwards, amounting to $16,000 and $121,000, respectively, during the three-months ended June 30, 1996 and 1995, have been credited directly to goodwill. 6 B. Income Taxes (cont'd) The income tax provisions for the three-months ended June 30, 1996 and 1995 differ from the federal statutory rate primarily as a result of state income taxes and reductions in the valuation allowance. The Company has federal net operating loss carryforwards available for tax return purposes of approximately $350,000, all of which expire in 1997. The potential utilization of certain of these carryforwards is subject to the separate return limitation rules pursuant to Treasury regulations. These carryforwards, to the extent realized, resulted in a reduction of goodwill, until goodwill was reduced to zero in the quarter ended June 30, 1996. C. Net Earnings Per Share Primary earnings per share has been compiled by dividing net earnings by weighted average number of common shares outstanding during each period. There was no difference between primary and fully diluted earnings per share. Shares issuable under employee stock options are considered common share equivalents and were included in the weighted average common shares as of June 30, 1996 and 1995. D. Reclassifications Certain reclassifications have been made in the 1995 financial statements to conform with the 1996 presentation. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations The Company's revenue is generated primarily through its air cargo subsidiaries, Mountain Air Cargo, Inc. (MAC) and CSA Air, Inc. (CSA), which are short-haul express air freight carriers flying nightly contracts for a major express delivery company out of 78 cities, principally located in 30 states in the eastern half of the United States and in Puerto Rico, Canada and the Virgin Islands. In 1993, the Company organized Mountain Aircraft Services, LLC (MAS) to engage in the sale of commercial aircraft parts and provide aircraft engine overhaul management and component repair services. Under the terms of its dry-lease service contracts (which currently cover approximately 97% of the revenue aircraft operated), the Company passes through to its customer certain cost components of its operations without markup. The cost of fuel, landing fees, outside maintenance, aircraft certification and conversion, parts and certain other direct operating costs are included in operating expenses and billed to the customer, as cargo and maintenance revenue. Consolidated revenue increased $210,000 (2.7%) to $8,124,000 for the three- month period ended June 30, 1996 compared to its equivalent 1995 period. The change in revenue primarily resulted from an increase in air freight service revenue. Operating expenses increased $150,000 (2.0%) to $7,515,000 for the three- month period ended June 30, 1996 compared to its equivalent 1995 period. The increase in operating expenses consisted of the following changes: cost of flight operations increased 6,000 (.2%); maintenance expense increased $45,000 (1.3%), primarily as a result of increased wages; depreciation decreased $8,000 (6.3%) as a result of decreased depreciation related to the sale of aircraft in 1995; general and administrative expense increased $107,000 (11.1%) as a result of increased staffing, cost associated with the Company's relocation of maintenance operations and increased insurance, employee benefits, salary and wage rates. 8 Results of Operations (cont'd) The $261,000 decrease in non-operating income reflects gain on sale and insurance proceeds from damage to Company-owned aircraft in fiscal 1995. Pretax earnings decreased $201,000 for the three-month period ended June 30, 1996 compared to 1995. The decrease was due to the above gain on disposal of Company-owned aircraft in 1995. The provision for income taxes for the three-month period ended June 30, 1996 decreased $87,000 (29.8%) compared to the 1995 period due to decreased taxable income. Liquidity and Capital Resources As of June 30, 1996 the Company's working capital amounted to $5,691,000, an increase of $29,000 compared to March 31, 1996. The net increase primarily resulted from profitable operations, as well as a $1,384,000 decrease in accounts payable and accrued liabilities, partially offset by a $505,000 decrease in accounts receivable and a $709,000 decrease in cash and short term investments. The Company's accounts receivable and inventory financing line provides credit in the aggregate of up to $2,250,000 to September 1996. The Company anticipates renewing the line of credit in 1996. Loans under the line of credit bear interest at the lender's prime rate. Substantially all of the Company's assets, excluding aircraft, have been pledged as collateral under this financing arrangement. As of June 30, 1996 the Company was in a net investment position against its credit line. Management believes that funds anticipated from operations and existing credit facilities will provide adequate cash flow to meet the Company's future financial needs. The respective three-month periods ended June 30, 1996 and 1995 resulted in the following changes in cash flow: operating activities provided $35,000 and used $12,000, investing activities used $990,000 and $380,000 and financing activities used $682,000 and $443,000. Net cash decreased $1,637,000 and $834,582 for the respective three-month periods ended June 30, 1996 and 1995. 9 Liquidity and Capital Resources (cont'd) Cash used in operating activities was $47,000 less for the three-months ended June 30, 1996 compared to the similar 1995 period. Cash used in investing activities for the three-months ended June 30, 1996 was approximately $610,000 more than the comparable period in 1995, principally due to purchase of short term investments. Cash used in financing activities was $239,000 more in the 1996 three-month period due the repurchase of common stock. During the quarter ended June 30, 1996 the Company repurchased 115,000 shares of its common stock at a total cost of $467,000. Pursuant to its previously announced stock repurchase program, $354,000 remains available for repurchase of common stock. The Company's relocation of its aircraft maintenance and repair operations to Kinston, North Carolina was primarily completed in early August 1996. Costs associated with the relocation are projected to reduce the Company's cash flow by approximately $500,000 in fiscal 1997. Other than the above relocation, there are currently no commitments for significant capital expenditures and none are anticipated during the current fiscal year. The Company paid a $.08 per share cash dividend in April 1996; no determination has been made whether additional dividends will be paid in the future. Impact of Inflation The Company believes the impact of inflation and changing prices on its revenues and earnings is not material since the major cost components of its operations, consisting principally of fuel, aircraft, crew and certain maintenance costs are passed through to its customer under current contract terms. 10 PART II -- OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits No. Description 3.1 Certificate of Incorporation, as amended, incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1994 3.2 By-laws of the Company, incorporated by reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1996. 4.1 Specimen Common Stock Certificate, incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1994 10.1 Aircraft Dry Lease and Service Agreement dated February 2, 1994 between Mountain Air Cargo, Inc. and Federal Express Corporation, incorporated by reference to Exhibit 10.13 to Amendment No. 1 on Form 10-Q/A to the Company's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 1993 10.2 Loan Agreement among NationsBank of North Carolina, N.A., the Company and its subsidiaries, dated January 17, 1995, incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the period ended December 31,1994 10.3 Aircraft Wet Lease Agreement dated April 1, 1994 between Mountain Air Cargo, Inc. and Federal Express Corporation, incorporated by reference to Exhibit 10.4 of Amendment No. 1 on Form 10-Q/Q to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1994 10.4 Adoption Agreement regarding the Company's Master 401(k) Plan and Trust, incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1993* 10.5 Form of options to purchase the following amounts of Common Stock issued by the Company to the following executive officers during the following fiscal years ended March 31:* Number of Shares Executive Officer 1993 1992 1991 J. Hugh Bingham 150,000 150,000 200,000 John J. Gioffre 100,000 100,000 125,000 William H. Simpson 200,000 200,000 300,000 incorporated by reference to Exhibit 10.8 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1993. 11 10.6 Premises and Facilities Lease dated November 16, 1995 between Global TransPark Foundation, Inc. and Mountain Air Cargo, Inc., incorporated by reference to Exhibit 10.5 to Amendment No. 1 on form 10-Q/A to the Company's Quarterly Report on Form 10-Q for the period ended December 31, 1995, 10.7 Employment Agreement dated January 1, 1996 between the Company, Mountain Air Cargo Inc., CSA Air Inc. and Mountain Aircraft Services, LLC and David Clark, incorporated by reference to Exhibit 10.7 to the Company's Annual Report Form 10-K for the fiscal year ended March 31, 1996.* 10.8 Employment Agreement dated January 1, 1996 between the Company, Mountain Air Cargo Inc. and Mountain Aircraft Services, LLC and William H. Simpson, incorporated by reference to Exhibit 10.8 to the Company's Annual Report Form 10-K for the fiscal year ended March 31, 1996.* 10.9 Employment Agreement dated January 1, 1996 between the Company, Mountain Air Cargo Inc. and Mountain Aircraft Services, LLC and John J. Gioffre, incorporated by reference to Exhibit 10.9 to the Company's Annual Report Form 10-K for the fiscal year ended March 31, 1996.* 10.10 Employment Agreement dated January 1, 1996 between the Company, Mountain Air Cargo Inc. and Mountain Aircraft Services, LLC and J. Hugh Bingham, incorporated by reference to Exhibit 10.10 to the Company's Annual Report Form 10-K for the fiscal year ended March 31, 1996.* 11.1 Computation of Primary and Fully Diluted Earnings per Common Share 21.1 List of subsidiaries of the Company, incorporated by reference to Exhibit 21.1 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1994 27.1 Financial Data Schedule (For SEC use only) _______________________ * Management compensatory plan or arrangement required to be filed as an exhibit to this report. b. Reports on form 8-K No Current Reports on Form 8-K were filed in the first quarter of the fiscal 1997. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AIR TRANSPORTATION HOLDING COMPANY, INC. (Registrant) Date: August 11, 1996 /s/ David Clark David Clark, Chief Executive Officer Date: August 11, 1996 /s/ John Gioffre John J. Gioffre, Vice President-Finance 13 AIR TRANSPORTATION HOLDING COMPANY, INC. EXHIBIT INDEX Exhibit PAGE 1.11 Computation of Primary and Fully Diluted Earnings Per Common Share........................... 15 14 EX-11 2 AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES Exhibit 11.1 Computation of Primary and Fully Diluted Earnings Per Common Share
Three Months Ended June 30, 1996 1995 NET EARNINGS $ 405,359 519,549 WEIGHTED AVERAGE COMMON SHARES: Primary: Weighted average shares outstanding 2,635,433 2,846,933 Dilutive stock options 178,432 253,816 2,813,865 3,100,749 Fully Diluted: Weighted average shares outstanding 2,635,433 2,846,933 Dilutive stock options 178,740 253,816 2,814,173 3,100,749 EARNINGS PER COMMON SHARE: Primary $ 0.14 0.17 Fully Diluted $ 0.14 0.17
15 EX-27 3
5 "This schedule contains summary financial information extracted from Air Transportation Holding Company, Inc. SEC Form 10-Q for period ended June 30, 1996 (identify specific financial statements) and is qualified in its entirety by reference to such financial statements." 3-MOS MAR-31-1997 JUN-30-1996 576392 2818267 2628633 0 699480 7195492 3296919 1764778 8863757 1504292 0 0 0 653608 0 8863757 8123607 8123607 0 7514557 (1643) 0 0 610693 205334 405359 0 0 0 405359 0.14 0.14
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