-----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, PGzpv63zdNKc/41nhV7TVup1xzjXsle6bh2v0F14/gxbwv0JQhftRkK/8WnRseoe M5CT/9eGkYmE473naN9xqw== 0000353184-97-000011.txt : 19970815 0000353184-97-000011.hdr.sgml : 19970815 ACCESSION NUMBER: 0000353184-97-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 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: 97660576 BUSINESS ADDRESS: STREET 1: 3524 AIRPORT RD CITY: MAIDEN STATE: NC ZIP: 28650 BUSINESS PHONE: 704648741X227 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 JUNE 30 1997 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, 1997 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. 2,650,653 Common Shares, par value of $.25 per share were outstanding as of August 11, 1997. 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, 1997 and 1996 (Unaudited) ............................... 3 Consolidated Balance sheets at June 30, 1997 (Unaudited) and March 31, 1997 ............................................ 4 Consolidated Statements of Cash Flows for the three-month periods ended June 30, 1997 and 1996 (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 AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended June 30, 1997 1996 Operating Revenues: Cargo $ 4,374,209 4,373,682 Maintenance 3,139,421 3,040,939 Aircraft services and other 645,450 644,069 8,159,080 8,058,690 Operating Expenses: Flight operations 3,015,056 2,888,850 Maintenance 3,429,576 3,440,989 General and administrative 1,016,867 1,024,742 Depreciation and amortization 107,013 117,764 Facility start-up and merger expense 125,764 42,212 7,694,276 7,514,557 Operating Income 464,804 544,133 Non-operating (Income) Expense: Investment income (79,507) (64,917) Deferred retirement obligation 420,083 - Gain on asset sale & other - (1,643) 340,576 (66,560) Earnings Before Income Taxes 124,228 610,693 Provision For Income Taxes 29,731 205,334 Net Earnings $ 94,497 405,359 Weighted Average Shares 2,790,938 2,812,639 Net Earnings Per Common Share $ 0.03 0.14 See notes to consolidated financial statements.
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
June 30, 1997 March 31,1997 ASSETS (Unaudited) Current Assets: Cash and equivalents $ 2,548,328 2,377,898 Short term investments 2,133,045 2,229,708 Accounts receivable, net 2,385,923 3,310,810 Expendable parts and supplies 1,106,483 1,069,206 Prepaid expense and other 67,998 119,828 Deferred tax asset, net 344,980 344,980 Total Current Assets 8,586,757 9,452,430 Property and Equipment 3,506,136 3,398,636 Less accumulated depreciation (2,038,033) (1,943,020) 1,468,103 1,455,616 Other 222,601 210,365 Total Assets $ 10,277,461 11,118,411 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 356,110 809,245 Accrued liabilities 1,123,395 1,665,046 Income taxes 268,667 389,916 Total Current Liabilities 1,748,172 2,864,207 Deferred Retirement Obligation 445,779 - Stockholders' Equity: Preferred stock, $1 par value, authorized 10,000,000 shares, none issued - - Common stock, par value $.25; authorized 4,000,000 shares; 2,651,421 and 2,651,433 shares issued 662,855 662,858 Additional paid in capital 7,126,249 7,126,294 Retained Earnings 294,406 465,052 8,083,510 8,254,204 Total Liabilities & Stockholders' Equity $ 10,277,461 11,118,411 See notes to consolidated financial statements.
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended June 30, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 94,497 405,359 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 107,013 117,765 Change in deferred tax asset - 34,311 Charge in lieu of income taxes - 15,837 Asset and liability changes which provided (used) cash: Accounts receivable 924,887 505,037 Parts and supplies (37,277) 26,023 Prepaid expense and other 39,594 10,395 Accounts payable (453,135) (685,710) Accrued expenses (541,651) (481,299) Deferred retirement obligation 445,779 - Income taxes payable (121,249) 85,732 Total adjustments 363,961 (371,909) Net cash provided by operating activities 458,458 33,450 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (119,500) (63,694) Purchase of short term investments (19,783) (928,448) Sale of short term investments 116,446 - Net proceeds from disposal of equipment - 1,643 Net cash used in investing activities (22,837) (990,499) CASH FLOWS FROM FINANCING ACTIVITIES: Payment of cash dividend (265,143) (218 435) Repurchase of common stock (48) (466,965) Proceeds from exercise of stock options - 5,000 Net cash used in financing activities (265,191) (680,400) NET INCREASE (DECREASE) IN CASH & EQUIVALENTS 170,430 (1,637,449) CASH & EQUIVALENTS AT BEGINNING OF PERIOD 2,377,898 2,213,841 CASH & EQUIVALENTS AT END OF PERIOD $ 2,548,328 576,392 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 45 281 Income/Franchise taxes 160,425 72,855 See notes to consolidated financial statements.
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) A. Financial Statements The Consolidated Balance Sheet as of June 30, 1997, the Consolidated Statements of Earnings for the three-month periods ended June 30, 1997 and 1996 and the Consolidated Statements of Cash Flows for the three- month periods ended June 30, 1997 and 1996 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, 1997, 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, 1997. 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 gave rise to the Company's deferred tax asset in the accompanying June 30, 1997 and March 31, 1997 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 $45,000, respectively, during the three-months ended June 30, 1997 and 1996. B. Income Taxes (cont'd) The income tax provisions for the three-months ended June 30, 1997 and 1996 differ from the federal statutory rate primarily as a result of state income taxes and reductions in the valuation allowance. The Company completed the utilization of all federal net operating loss carryforwards available for tax return purposes during the second quarter of fiscal 1997. These carryforwards, to the extent realized, resulted in a reduction of goodwill, until goodwill was reduced to zero in the quarter ended June 30, 1997. 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, 1997 and 1996. The Financial Accounting Standards Board has issued SFAS No. 128, "Earnings Per Share", which will revise the method for calculating earnings per share. This new standard will be effective for the Company's March 31, 1998 annual financial statements. Had the Company calculated earnings per share for the three months ended June 30, 1997 based on the provisions of this standard, basic earnings per share would have been $.04 and diluted earnings per share would have been $.03. D. Reclassifications Certain reclassifications have been made in the 1996 amounts to conform with the 1997 presentation. 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 81 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 98% 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 $100,000 (1.2%) to $8,159,000 for the three-month period ended June 30, 1997 compared to its equivalent 1996 period. The change in revenue primarily resulted from an increase in maintenance service revenue. Operating expenses increased $180,000 (2.4%) to $7,694,000 for the three- month period ended June 30, 1997 compared to its equivalent 1996 period. The increase in operating expenses consisted of the following changes: cost of flight operations increased $126,000 (4.4%) primarily as a result of additional costs associated with airport fees; maintenance expense decreased $11,000 (.3%); depreciation decreased $11,000 (9.1%) as a result of decreased depreciation related to the sale of aircraft in fiscal 1997; general and administrative expense decreased $8,000 (.8%) due to personnel changes and reduced profit sharing provision offsetting increased staffing; facility start-up and merger expense increased $84,000 (198.0%) due to costs associated with MAS's new FAA certified 145 repair shop and cost associated with merger discussions terminated in May 1997. Results of Operations (cont'd) The $407,000 increase in non-operating expense was principally due to a $420,000 provision to fulfill contractual benefits related to the death of the Company's Chairman and CEO. Pretax earnings decreased $486,000 for the three-month period ended June 30, 1997 compared to 1996. Approximately $66,000 of the decrease was due to costs related to the start-up of MAS's component repair shop and $420,000 to the above mentioned death benefit provision. The provision for income taxes for the three-month period ended June 30, 1997 decreased $176,000 compared to the 1996 period, primarily due to decreased taxable income. Liquidity and Capital Resources As of June 30, 1997 the Company's working capital amounted to $6,839,000, an increase of $250,000 compared to March 31, 1997. The net increase primarily resulted from profitable operations, as well as a $925,000 decrease in accounts receivable, offset by a $1,116,000 decrease in accounts payable, accrued liabilities and income taxes. The Company's accounts receivable and inventory financing line provides credit in the aggregate of up to $2,250,000 to September 1997. The Company anticipates renewing the line of credit upon expiration. 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, 1997 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, 1997 and 1996 resulted in the following changes in cash flow: operating activities provided $458,000 and $33,000, investing activities used $23,000 and $990,000 and financing activities used $265,000 and $680,000. Net cash increased $170,000 for the three-month period ended June 30, 1997 and decreased $1,637,000 for the 1996 period. Liquidity and Capital Resources (cont'd) Cash provided by operating activities was $425,000 more for the three-months ended June 30, 1997 compared to the similar 1996 period primarily due to reductions in accounts receivable. Cash used in investing activities for the three-months ended June 30, 1997 was approximately $968,000 less than the comparable period in 1996, principally due to purchase of short term investments in 1996. Cash used in financing activities was $415,000 less in the 1997 three-month period due to the repurchase of common stock in 1996. During the quarter ended June 30, 1997 the Company purchased 12 shares of its common stock. Pursuant to its previously announced stock repurchase program, $271,000 remains available for repurchase of common stock. Cost associated with the Company's start-up of an FAA approved 145 component repair facility which opened at Kinston, N.C. in June 1997 and professional fees related to terminated merger discussions amounted to $126,000 in the quarter ended June 30, 1997. Other than the $420,000 deferred retirement obligation related to the death of the Company's Chairman, there are currently no commitments for significant capital expenditures. The Company paid a $.10 per share cash dividend in June 1997. The Company's Board of Directors on August 7, 1997 adopted the policy to pay an annual cash dividend in the first quarter of each fiscal year, in an amount to be determined by the Board. 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. 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. 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. 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 14, 1997 ___________________________ Walter Clark, Chief Executive Officer Date: August 14, 1997 ___________________________ John J. Gioffre, Vice President-Finance 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 14, 1997 /s/ Walter Clark Walter Clark, Chief Executive Officer Date: August 14, 1997 /s/ John Gioffre John J. Gioffre, Vice President-Finance AIR TRANSPORTATION HOLDING COMPANY, INC. EXHIBIT INDEX Exhibit PAGE 1.11 Computation of Primary and Fully Diluted Earnings Per Common Share........................... 15 EX-11 2 AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES Exhibit 11.1 Computation for Primary and Fully Diluted Earnings Per Common Share
Three Months Ended June 30 1997 1996 NET EARNINGS $ 94,497 $407,260 WEIGHTED AVERAGE COMMON SHARES: Primary: Weighted average shares outstanding 2,651,432 2,635,433 Dilutive stock options 139,506 178,406 2,790,938 2,813,839 Fully Diluted: Weighted average shares outstanding 2,651,432 2,635,433 Dilutive stock options 140,491 178,740 2,791,923 2,814,173 NET EARNINGS PER COMMON SHARE: Primary $0.03 $0.14 Fully Diluted $0.03 $0.14
EX-27 3
5 "This schedule contains summary financial information extracted from Air Transportation Holding Company, Inc. SEC Form 10-K for period ended June 30, 1997 (identify specific financial statements) and is qualified in its entirety by reference to such financial statements." 3-MOS MAR-31-1998 JUN-30-1997 2548328 2133045 2385923 0 1106483 8586757 3506136 2038033 10277461 1748172 0 0 0 662855 0 10277461 8159080 8159080 0 7694276 340576 0 0 124228 29731 94497 0 0 0 94497 0.03 0.03
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