-----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, Lc4fLJi1wiYOJ8dJTEo8XZ+1+zJs/GcOgo0SvTPDS7IgpHhQ3+Yr+6dS55uSv9QW 9OzZdnp7bcqh/SsYGRsOpg== 0000950150-00-000412.txt : 20000512 0000950150-00-000412.hdr.sgml : 20000512 ACCESSION NUMBER: 0000950150-00-000412 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCURY AIR GROUP INC CENTRAL INDEX KEY: 0000052532 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS) [5172] IRS NUMBER: 111800515 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07134 FILM NUMBER: 625941 BUSINESS ADDRESS: STREET 1: 5456 MCCONNELL AVE CITY: LOS ANGELES STATE: CA ZIP: 90066 BUSINESS PHONE: 3106462994 FORMER COMPANY: FORMER CONFORMED NAME: IPM TECHNOLOGY INC DATE OF NAME CHANGE: 19891225 FORMER COMPANY: FORMER CONFORMED NAME: IDEAL PRECISION METER CO INC DATE OF NAME CHANGE: 19690911 FORMER COMPANY: FORMER CONFORMED NAME: PRECISION METER CO INC DATE OF NAME CHANGE: 19670906 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2000. [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition period from to Commission File No. 1-7134 MERCURY AIR GROUP, INC. (Exact name of registrant as specified in its charter) New York 11-1800515 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 5456 McConnell Avenue, Los Angeles, CA 90066 -------------------------------------- ----- (Address of principal executive offices) (Zip Code) (310) 827-2737 (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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Number of Shares Outstanding Title As of May 9, 2000 ----- ------------------- Common Stock, $.01 Par Value 6,472,955 2 MERCURY AIR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Unaudited)
MARCH 31, JUNE 30, 2000 1999 ------------- ------------- CURRENT ASSETS: Cash and cash equivalents $ 1,909,000 $ 4,797,000 Trade accounts receivable, net of allowance for doubtful accounts of $3,034,000 at 3/31/00 and $1,953,000 at 6/30/99 54,063,000 50,134,000 Notes receivable - current portion 555,000 555,000 Inventories, principally aviation fuel 2,990,000 1,892,000 Prepaid expenses and other current assets 4,500,000 2,603,000 ------------- ------------- Total current assets 64,017,000 59,981,000 CASH-RESTRICTED - 785,000 PROPERTY, EQUIPMENT AND LEASEHOLDS, net of accumulated depreciation and amortization of $41,821,000 at 3/31/00 and $35,787,000 at 6/30/99 59,334,000 56,110,000 NOTES RECEIVABLE 310,000 454,000 OTHER ASSETS (Note 9) 10,842,000 9,972,000 ------------- ------------- $ 134,503,000 $ 127,302,000 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 30,612,000 $ 21,312,000 Accrued expenses and other current liabilities 5,328,000 6,241,000 Current portion of long-term debt 6,368,000 6,806,000 ------------- ------------- Total current liabilities 42,308,000 34,359,000 LONG-TERM DEBT 39,559,000 44,285,000 DEFERRED INCOME TAXES 236,000 223,000 SENIOR SUBORDINATED NOTE (Note 9) 24,000,000 CONVERTIBLE SUBORDINATED DEBENTURES (Note 9) 19,852,000 COMMITMENTS AND CONTINGENCIES (Note 7) STOCKHOLDERS' EQUITY (Notes 4): Preferred Stock - $.01 par value; authorized 3,000,000 shares; no shares outstanding Common Stock - $ .01 par value; authorized 18,000,000 shares; outstanding 6,472,955 shares at 3/31/00; outstanding 6,641,175 shares at 6/30/99 64,000 66,000 Additional paid-in capital 19,486,000 19,873,000 Retained earnings 9,696,000 9,543,000 Cumulative translation adjustment (238,000) (237,000) Notes receivable from sale of stock (608,000) (662,000) ------------- ------------- Total stockholders' equity 28,400,000 28,583,000 ------------- ------------- $ 134,503,000 $ 127,302,000 ============= =============
3 MERCURY AIR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
NINE MONTHS ENDED THREE MONTHS ENDED MARCH 31, MARCH 31, ------------------------------------------------------------------------- 2000 1999 2000 1999 ------------- ------------- ------------- ------------- Sales and Revenues: Sales $ 185,074,000 $ 104,019,000 $ 69,788,000 $ 34,513,000 Service revenues 63,034,000 58,889,000 20,147,000 19,130,000 ------------- ------------- ------------- ------------- 248,108,000 162,908,000 89,935,000 53,643,000 ------------- ------------- ------------- ------------- Costs and Expenses: Cost of sales 162,525,000 82,784,000 62,236,000 26,870,000 Operating expenses 60,417,000 57,176,000 20,422,000 19,398,000 ------------- ------------- ------------- ------------- 222,942,000 139,960,000 82,658,000 46,268,000 ------------- ------------- ------------- ------------- Gross Margin (Excluding depreciation and amortization) 25,166,000 22,948,000 7,277,000 7,375,000 ------------- ------------- ------------- ------------- Expenses (Income): Selling, general and administrative 5,383,000 5,212,000 1,711,000 1,856,000 Provision for bad debts (Note 3) 4,562,000 1,354,000 3,634,000 452,000 Depreciation and amortization 7,157,000 5,819,000 2,395,000 2,128,000 Interest expense 4,465,000 3,125,000 1,669,000 1,100,000 Interest income (139,000) (154,000) (33,000) (39,000) ------------- ------------- ------------- ------------- 21,428,000 15,356,000 9,376,000 5,497,000 ------------- ------------- ------------- ------------- Income (Loss) Before Provision (Benefit) for Income Taxes 3,738,000 7,592,000 (2,099,000) 1,878,000 Provision (Benefit) for Income Taxes 1,459,000 2,962,000 (817,000) 734,000 ------------- ------------- ------------- ------------- Net Income (Loss) Before Extraordinary Item 2,279,000 4,630,000 (1,282,000) 1,144,000 Extraordinary Item (Note 9) (Less applicable income taxes of $625,000, $163,000, $0, $43,000) (979,000) (255,000) (68,000) ------------- ------------- ------------- ------------- Net Income (Loss) $ 1,300,000 $ 4,375,000 ($ 1,282,000) $ 1,076,000 ------------- ------------- ------------- ------------- Net Income (Loss) Per Common Share (Note 5): Basic: Before extraordinary item $ 0.35 $ 0.70 ($ 0.20) $ 0.17 Extraordinary item (0.15) (0.04) (0.01) ------------- ------------- ------------- ------------- Net income (Loss) $ 0.20 $ 0.66 ($ 0.20) $ 0.16 ------------- ------------- ------------- ------------- Diluted: Before extraordinary item $ 0.32 $ 0.52 ($ 0.20) $ 0.14 Extraordinary item (0.13) (0.02) (0.01) ------------- ------------- ------------- ------------- Net income (Loss) $ 0.19 $ 0.50 ($ 0.20) $ 0.13 ------------- ------------- ------------- -------------
4 MERCURY AIR GROUP, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)
NINE MONTHS ENDED MARCH 31, ------------------------------- 2000 1999 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,300,000 $ 4,375,000 Non-cash component of extraordinary charge 824,000 275,000 Adjustments to derive cash flow from Operating activities: Bad debt expense 4,562,000 1,354,000 Depreciation and amortization 7,157,000 5,819,000 Amortization of officers' loans 29,000 29,000 Changes in operating assets and liabilities: Trade and other accounts receivable (8,491,000) (5,230,000) Inventories (1,098,000) 62,000 Prepaid expenses and other current assets (1,897,000) (1,638,000) Accounts payable 9,300,000 761,000 Income taxes payable (373,000) Accrued expenses and other current liabilities (913,000) 760,000 ------------ ------------ Net cash provided by operating activities 10,773,000 6,194,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Reduction in restricted cash-tax exempt bond 785,000 7,248,000 (Increase) Decrease in notes receivable 144,000 (55,000) Addition to other assets (1,910,000) (80,000) Acquisition of businesses (3,100,000) (4,200,000) Additions to property, equipment and leaseholds (7,080,000) (13,110,000) ------------ ------------ Net cash used in investing activities (11,161,000) (10,197,000) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term debt 5,264,000 26,000,000 Reduction of long-term debt (10,428,000) (16,676,000) Reduction of note receivable from sale of stock 54,000 Reduction of convertible subordinated debentures (19,534,000) (4,682,000) Repurchase of common stock (1,856,000) (5,555,000) Proceeds from senior subordinated note 24,000,000 Proceeds from issuance of common stock 15,000 ------------ ------------ Net cash used in financing activities (2,500,000) (898,000) ------------ ------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (2,888,000) (4,901,000) CASH AND CASH EQUIVALENTS, beginning of period 4,797,000 7,836,000 ------------ ------------ CASH AND CASH EQUIVALENTS, end of period $ 1,909,000 $ 2,935,000 ============ ============ CASH PAID DURING THE PERIOD: Interest $ 5,132,000 $ 3,746,000 Income taxes $ 2,309,000 $ 3,172,000 SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Issuance of 124,224 shares of common stock for $ 1,000,000 acquisition of assets of Weather Data Conversion of 318 debentures into 43,590 shares of common stock $ 318,000 Issuance of note payable for the acquisition of assets of Jackson FBO $ 2,800,000
5 MERCURY AIR GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2000 (Unaudited) NOTE 1 - BASIS OF PRESENTATION: The accompanying unaudited financial statements reflect all adjustments (consisting of normal, recurring accruals only) which are necessary to fairly present the results for the interim periods. Such financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and therefore do not include all the information or footnotes necessary for a complete presentation. They should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended June 30, 1999 and the notes thereto. The results of operations for the nine months ended March 31, 2000 are not necessarily indicative of results for the full year. NOTE 2 - INCOME TAXES: Income taxes have been computed based on the estimated annual effective income tax rate for the respective years. NOTE 3 - PROVISION FOR BAD DEBTS: Charge to bad debt expense in the three months ended March 31, 2000 was $3,634,000 and included the write off of $2,700,000 of accounts receivable from Tower Air Inc., who filed chapter 11 Bankruptcy on February 29, 2000. The additional provision of $934,000 is based on significantly higher fuel prices during the current fiscal year which has increased the Company's risk of loss from certain airline accounts. Bad debt provision in future periods may continue to reflect higher risk of loss based on high fuel prices and potential bankruptcies and will depend upon actual experience. On May 1, 2000 Kitty Hawk, Inc. and related companies, fuel customers of the Company, filed for bankruptcy under Chapter 11. The potential write off of this receivable has been considered in evaluating the March 31, 2000 accounts receivable allowance. NOTE 4 - STOCKHOLDINGS' EQUITY: During the nine month period ended March 31, 2000, the Company repurchased 234,375 shares of its common stock at a cost of approximately $1,856,000, or an average price of $7.92 per share, which was charged to: Common Stock $2,000; Additional Paid In Capital $705,000; and Retained Earnings $1,149,000. 5 6 NOTE 5- EARNINGS PER SHARE: Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted income per share is computed by dividing net income by the weighted average number of common shares and common stock equivalents. Common stock equivalents include stock options, warrants and shares resulting from the assumed conversion of subordinated debentures, when dilutive. For the three months ended March 31, 2000, weighted average common and common equivalent shares exclude shares resulting from the assumed exercise of stock options and assumed conversion of debentures since the impact was anti-dilutive.
Nine Months Ended Three Months Ended March 31, 2000 March 31, 1999 March 31, 2000 ------------------------------------------------------------ ------------------------------ Diluted Basic Diluted Basic Diluted Basic ------------ ------------ ------------ ------------ ------------ ------------ Weighted average number of common shares outstanding during the period 6,601,000 6,601,000 6,665,000 6,665,000 6,483,000 6,483,000 Common stock equivalents resulting from the assumed exercise of stock options and warrants 405,000 -- 373,000 -- -- -- Common shares resulting from the assumed conversion of debentures 770,000 -- 3,536,000 -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Weighted average number of common and common equivalent shares outstanding during the period 7,776,000 6,601,000 10,574,000 6,665,000 6,483000 6,483,000 ============ ============ ============ ============ ============ ============ Net income (Loss) before Extraordinary item $ 2,279,000 $ 2,279,000 $ 4,630,000 $ 4,630,000 ($ 1,282,000) ($ 1,282.000) Interest expense, net of tax, on convertible debenture 183,000 -- 923,000 -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Adjusted income (Loss) before extraordinary item $ 2,462,000 $ 2,279,000 $ 5,553,000 $ 4,630,000 ($ 1,282,000) ($ 1,282,000) Extraordinary item (979,000) (979,000) (255,000) (255,000) -- -- ------------ ------------ ------------ ------------ ------------ ------------ Adjusted income (Loss) $ 1,483,000 $ 1,300,000 $ 5,298,000 $ 4,375,000 ($ 1,282,000) ($ 1,282,000) ------------ ------------ ------------ ------------ ------------ ------------ Common and common share equivalents 7,776,000 6,601,000 10,574,000 6,665,000 6,483,000 6,483,000 ============ ============ ============ ============ ============ ============ Earnings (loss) per share: Before extraordinary item $ .32 $ .35 $ .52 $ .70 ($ .20) ($ .20) Extraordinary item (.13) (.15) (.02) (.04) -- -- ------------ ------------ ------------ ------------ ------------ ------------ Net income (loss) $ .19 $ .20 $ .50 $ .66 ($ .20) ($ .20) ============ ============ ============ ============ ============ ============
Three Months Ended March 31, 1999 ----------------------------- Diluted Basic ------------ ------------ Weighted average number of common shares outstanding during the period 6,575,000 6,575,000 Common stock equivalents resulting from the assumed exercise of stock options and warrants 382,000 -- Common shares resulting from the assumed conversion of debentures 3,331,000 -- ------------ ------------ Weighted average number of common and common equivalent shares outstanding during the period 10,288,000 6,575,000 ============ ============ Net income (Loss) before Extraordinary item 1,144,000 1,144,000 Interest expense, net of tax, on convertible debenture 290,000 -- ------------ ------------ Adjusted income (Loss) before extraordinary item $ 1,434,000 $ 1,144,000 Extraordinary item (68,000) (68,000) ------------ ------------ Adjusted income (Loss) $ 1,366,000 $ 1,076,000 ------------ ------------ Common and common share equivalents 10,288,000 6,575,000 ============ ============ Earnings (loss) per share: Before extraordinary item $ .14 $ .17 Extraordinary item (.01) (.01) ------------ ------------ Net income (loss) $ .13 $ .16 ============ ============
6 7 NOTE 6 - COMPREHENSIVE INCOME: In June of 1997, the Financial Accounting Standards Board issued statement of Financial Accounting Standard No. 130 "Reporting Comprehensive Income." This statement, which the Company adopted in fiscal 1999, establishes standards for reporting and displaying comprehensive income and its components in a full set of financial statements. For the periods presented, adjustments to derive comprehensive income were insignificant . NOTE 7- LITIGATION: In connection with the Chapter 7 bankruptcy filing for Western Pacific Airlines, Inc. ("WPAI"), the Company received a letter dated August 25, 1999, from the bankruptcy trustee's attorneys making a formal demand for recovery of alleged preference payments of approximately $11.4 million. This amount represents cash received for payment of fuel and sales during the 90 days prior to WPAI's initial bankruptcy filing. The Company believes this claim is without merit and the entire amount is defensible based on the transaction 1) having been a substantially contemporaneous exchange for value, 2) being made in the ordinary course of business, and 3) involving an exchange for new value. Accordingly, the Company believes it will ultimately prevail and that no provision is required. In October, 1999, Mr. Rene Perez, formerly the president of RPA, notified the Company of certain alleged violations of his employment contract dated February 28, 1998 between the Company, RPA and Mr. Perez asserting among other things constructive termination. The Company subsequently filed a suit seeking declaratory relief regarding the employment contract in the United States District Court for Northern California ( San Francisco) in November 1999. The Company subsequently amended, on November 30, 1999, that suit as a result of its investigation seeking damages against Mr. Perez. This case has been transferred to the United States District court for the Southern District of New York (New York City) in March 27, 2000. Mr. Perez filed a lawsuit, which was filed in November 1999 and served in December 1999, in the Circuit Court of the 11th Judicial Circuit in Dade County, Florida seeking damages in excess of the jurisdictional limit. At this time, the Company believes that no provision is required. NOTE 8- SUBSEQUENT EVENT: On April 21, 2000, the Company acquired certain assets of an FBO located in Fort Wayne, Indiana (FWAS) for a cash consideration of $3,900,000. The Company borrowed from its acquisition line to fund the purchase. The purchase price was allocated primarily to Property, Equipment and Leaseholds and a portion to inventory. 7 8 NOTE 9 - SENIOR SUBORDINATED NOTE / EXTRAORDINARY ITEM: On September 10, 1999, the Company issued, in a private placement, $24,000,000 Senior Subordinated 12% Notes ("the Notes") due 2006 with detachable warrants to acquire 503,126 shares of the Company's common stock exercisable at $6.50 per share for seven years. Proceeds of the Notes were used to redeem the Company's 7 3/4% convertible subordinated debentures due February 1, 2006 at 104% of the principal amount plus accrued interest and pay expenses of the transaction as follows:
Principal balance of debentures redeemed $19,509,000 Redemption premium of 4% 780,000 Accrued interest 164,000 Placement fees, legal fees and other expenses of transaction capitalized as other assets 1,750,000 Cash received 1,797,000 ----------- Proceeds $24,000,000 ===========
The $1,750,000 of fees incurred are being amortized over the term of the Notes. As a result of this transaction the Company recorded an extraordinary charge of $979,000 net of a $625,000 tax benefit in the first quarter of fiscal 2000. The extraordinary charge includes the redemption premium of $780,000 plus write off of related capitalized fees of $824,000. NOTE 10 - ACQUISITIONS: On October 22, 1999, the Company acquired certain assets of Air Tulsa, Inc., an FBO located in Tulsa, Oklahoma. Assets acquired included refueling equipment and tank farms utilized in the FBO business, customer contracts, inventory, prepaid expenses and a sublease. Total consideration was $2.4 million in cash which the Company funded under its acquisition line. The agreement includes a second closing to occur within eighteen months to include the purchase of hangars, buildings and the leasehold for an additional cash consideration of $3.8 million. The Company's Senior lenders have agreed to fund the amount under the acquisition line. On October 5, 1999, the Company acquired certain FBO assets of Charleston Equities, Inc. for $700,000 cash. The purchase consolidated the leasehold at Charleston International Airport and includes the leasehold at John's Island Executive Airport. 8 9 NOTE 11 - SEGMENT REPORTING: The Company operates and reports it's activities through four principal units: 1) Fuel Sales and Services, which also includes RPA, 2) Fixed Based Operations, 3) Cargo Operations, and 4) Government Contract Services.
Government Fuel Sales Fixed Base Cargo Contract (Dollars in Thousands) and Services Operations Operations Services Total QUARTER ENDED MARCH 31, 2000 Revenues $ 56,794 $ 19,611 $ 7,633 $ 5,897 $ 89,935 Gross Margin 1,291 2,835 2,070 1,081 7,277 Depreciation and Amortization 310 1,157 772 156 2,395 Capital Expenditures 63 2,412 159 28 2,662 Segment Assets 55,849 27,450 32,807 18,397 134,503 QUARTER ENDED MARCH 31, 1999 Revenues $ 26,923 $ 13,393 $ 7,051 $ 6,276 $ 53,643 Gross Margin 2,096 3,129 951 1,199 7,375 Depreciation and Amortization 408 743 793 184 2,128 Capital Expenditures 1,067 2,899 79 (39) 4,006 Segment Assets 56,737 21,814 24,617 16,999 120,167 NINE MONTHS ENDED MARCH 31, 2000 Revenues $151,815 $ 52,485 $ 24,983 $ 18,825 $248,108 Gross Margin 4,764 8,283 8,380 3,739 25,166 Depreciation and Amortization 801 3,267 2,497 592 7,157 Capital Expenditures 126 6,209 669 76 7,080 Segment Assets 55,849 27,450 32,807 18,397 134,503 NINE MONTHS ENDED MARCH 31, 1999 Revenues $ 84,025 $ 39,990 $ 20,474 $ 18,419 $162,908 Gross Margin 6,402 9,190 3,576 3,780 22,948 Depreciation and Amortization 1,031 1,893 2,310 585 5,819 Capital Expenditures 2,310 9,503 933 364 13,110 Segment Assets 56,737 21,814 24,617 16,999 120,167
Gross margin is used as the measure of profit and loss for segment reporting purposes as it is viewed by key decision makers as the principal operating indicator in measuring segment profitability 9 10 ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS- COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2000 AND MARCH 31,1999 AND COMPARISON OF THE NINE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999. The following tables set forth, for the periods indicated, the revenues and gross margin for each of the Company's four operating units, as well as selected other financial statement date.
Nine Months Ended March 31, Three Months Ended March 31, ($ in millions) 2000 1999 2000 1999 Amount % of Total Amount % of Total Amount % of Total Amount % of Total Revenues Revenues Revenues Revenues Revenues: Fuel sales and services $151.8 61.2% $ 84.0 51.6% $ 56.8 63.1% $ 26.9 50.2% FBOs 52.5 21.1% 40.0 24.5% 19.6 21.8% 13.4 25.0% Cargo operations 25.0 10.1% 20.5 12.6% 7.6 8.5% 7.1 13.1% Government contract services 18.8 7.6% 18.4 11.3% 5.9 6.6% 6.3 11.7% ------ ------ ------ ------ ------ ------ ------ ------ Total Revenue $248.1 100.0% $162.9 100.0% $ 89.9 100.0% $ 53.6 100.0% ====== ====== ====== ====== ====== ====== ====== ====== Amount % of Unit Amount % of Unit Amount % of Unit Amount % of Unit Revenues Revenues Revenues Revenues Gross Margin (1): Fuel sales and services $ 4.8 3.1% $ 6.4 7.6% $ 1.3 2.3% $ 2.1 7.8% FBOs 8.3 15.8% 9.2 23.0% 2.8 14.5% 3.1 23.4% Cargo operations 8.4 33.5% 3.6 17.5% 2.1 27.1% 1.0 13.5% Government contract services 3.7 19.9% 3.8 20.5% 1.1 18.3% 1.2 19.1% ------ ------ ------ ------ ------ ------ ------ ------ Total Gross Margin $ 25.2 10.1% $ 22.9 14.1% $ 7.3 8.1% $ 7.4 13.7% ====== ====== ====== ====== ====== ====== ====== ====== Amount % of Total Amount % of Total Amount % of Total Amount % of Total Revenues Revenues Revenues Revenues Selling, general and administrative $ 5.4 2.2% $ 5.2 3.2% $ 1.7 1.9% $ 1.9 3.5% Provision for bad debts 4.6 1.8% 1.4 0.8% 3.6 4.0% 0.5 0.8% Depreciation and amortization 7.2 2.9% 5.8 3.6% 2.4 2.7% 2.1 4.0% Interest expense and other 4.3 1.7% 3.0 1.8% 1.6 1.8% 1.1 2.0% ------ ------ ------ ------ ------ ------ ------ ------ Income (loss) before income taxes 3.7 1.5% 7.6 4.7% (2.1) (2.3)% 1.9 3.5% Provision (benefit) for income taxes 1.5 0.6% 3.0 1.8% (0.8) (0.9)% 0.7 1.4% ------ ------ ------ ------ ------ ------ ------ ------ Net income (loss) before extraordinary item $ 2.3 0.9% $ 4.6 2.8% $ (1.3) (1.4)% $ 1.1 2.1% Extraordinary item (1.0) (0.4)% (0.2) (0.2)% - - (0.1) (0.1)% ------ ------ ------ ------ ------ ------ ------ ------ Net income (loss) $ 1.3 0.5% $ 4.4 2.7% $ (1.3) (1.4)% $ 1.1 2.0% ====== ====== ====== ====== ====== ====== ====== ======
(1) Gross margin as used here and throughout Management's Discussion excludes depreciation and amortization and selling, general and administrative expense. 10 11 THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO MARCH 31, 1999. Revenue increased by 67.7% to $89.9 million in the current period from $53.6 million a year ago primarily due to an increase in the price of fuel and partially due to an increase in the volume of fuel sold. Gross margin decreased 1.3% to $7.3 million in the current period from $7.4 million a year ago. Revenues from fuel sales and services represented 63.1% of total revenues in the current period compared to 50.2% of total revenues a year ago. Revenues from fuel sales and services increased 110.0% to $56.8 million from $26.9 million last year. The increase in revenues from fuel sales and services was due to an increase of 16.3% in the volume of fuel sold and an increase of 84.6% in the price of fuel . Gross margin from fuel sales and services decreased by 38.4% to $1.3 million in the current period from $2.1 million last year partly due to lower margins from fuel sales caused by rising prices and partly due to a loss of $427,000 from RPA in the current period compared with gross margin of $3,000 a year ago. Revenues and gross margin from fuel sales and services include the activities of Mercury's contract fueling business as well as revenues from RPA, its airline information software company. Revenue from RPA was $1,012,000 in the current period compared with $982,000 a year ago. In January 2000, the Company appointed a new Chief Executive Officer of RPA. Revenues from FBOs increased by 46.4% in the current period to $19.6 million from $13.4 million a year ago due to the addition of Tulsa, Charleston and John's Island locations and higher fuel prices in the period. Gross margin decreased 9.4% in the current period to $2.8 million from $3.1 million last year. The decrease was attributable to an increase in the price of fuel, some of which was not passed on to customers, resulting in lower per gallon fuel margins. Revenues from cargo operations in the current period increased 8.3% to $7.6 million from $7.1 million a year ago. This increase was due to an increase in space brokerage and cargo handling revenues at LAX. Gross margin from cargo operations in the current period increased 117.7% to $2.1 million from $1.0 million in the year ago period primarily due to increased space brokerage, higher cargo handling revenues and elimination of losses at the Miami cargo location, which was sold in fiscal 1999. Revenues from government contract services decreased 6.0% in the current period to $5.9 million from $6.3 million in the year ago period. The decrease in revenues from government contract services was due primarily to a reduction in the number of Weather Data contracts. Gross margin from government contract services decreased approximately 9.8% in the current period to $1.1 million from $1.2 million a year ago due to lower revenue. Selling, general and administrative expenses in the current period decreased 7.8% to $1.7 million from $1.9 million in last year's third quarter due primarily to lower compensation expense. Provision for bad debts increased by $3,182,000 in the current period to $3,634,000 from $452,000 in the year ago period due to a $2.7 million write off of Tower Air Inc's receivable, higher sales in the current period and greater exposure due to significantly higher fuel prices during the current fiscal year which has created a greater risk of loss due to potential bad debts related to certain airline accounts. Future periods may continue to be impacted by higher reserve requirements related to potential bankruptcies. On May 1, 2000 Kitty Hawk, Inc. and its related companies, fuel customers of the Company, filed for bankruptcy under Chapter 11. The potential write off of this receivable has been considered in evaluating the March 31, 2000 accounts receivable allowance. Depreciation and amortization expense increased 12.5% in the current period to $2.4 million from $ 2.1 million a year ago primarily due to the acquisition of the Tulsa FBO in October 1999 and various capital expenditures. Interest expense (net) increased 54.2% in the current period to $1.6 million from $1.1 million a year ago due to higher interest rates and higher average outstanding borrowings. Income tax (benefit) expense approximated 39.0% of pre-tax (loss) income in each period reflecting the expected effective annual income tax rate. 11 12 In last year's three month period, extraordinary item of $68,000 consists of a charge of $111,000 related to the cost of repurchasing convertible subordinated debentures in excess of par value and related bond issuance costs, net of a tax benefit of $43,000. NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO MARCH 31, 1999. Revenues increased 52.3% to $248.1 million in the current period from $162.9 million a year ago primarily due to an increase in the price of fuel and volume of fuel sold. Gross margin increased 9.7% to $ 25.2 million in the current period from $22.9 million a year ago due to an increase in gross margin from cargo operations, which was partially offset by lower gross margins from fuel sales and services and FBO's. Revenues from fuel sales and services represented 61.2% of total revenues in the current period compared to 51.6% of total revenues a year ago. Revenues from fuel sales and services increased 80.7% to $151.8 million from $84.0 million last year. The increase in revenues from fuel sales and services was due to an increase of 50% in the price of fuel and an increase of 25.1% in the volume of fuel sold. Gross margin from fuel sales and services decreased 25.6% in the current period to $4.8 million from $6.4 million a year ago. The decrease in gross margin from fuel sales and services was due to a loss from RPA of $1.3 million in the current period compared to gross margin of $0.6 million last year caused by lower revenues in the current period. Revenue from RPA was $3.0 million in the current nine month period compared to $4.7 million last year. Revenues from FBOs increased 31.2% in the current period to $52.5 million from $40.0 million a year ago due to higher fuel prices and the addition of Jackson and Charleston in fiscal 1999 and Tulsa in October 1999. Gross margin decreased 9.9% to $8.3 million from $9.2 million in the year ago period due primarily to an increase in the price of fuel, some of which was not passed on to customers, resulting in lower per gallon margins. Revenues from cargo operations in the current period increased 22.0% to $25.0 million from $20.5 million a year ago. The increase was primarily due to an increase in space brokerage and cargo handling revenues at LAX. Gross margin from cargo operations in the current period increased 134.3% to $8.4 million from $3.6 million in the year ago period primarily due to increased space brokerage, higher cargo handling revenues and elimination of losses in its Miami cargo handling operation which was sold in fiscal 1999. Revenues from government contract services in the current period increased 2.2% to $18.8 million from $18.4 million in the year ago period. The increase in revenues from government contract services in the current period compared to last year was primarily due to higher contract revenue from Yokota offset partially by lower revenue from a lower number of Weather Data contracts. Gross margin from government contract services in the current period decreased 1.1% to $3.7 million from $3.8 million last year due to a different contract mix. Selling, general and administrative expenses in the current period increased 3.3% to $5.4 million from $5.2 million in the year ago period. The increase was primarily due to higher professional fees. Provision for bad debts increased by $3,208,000 in the current period to $4,562,000 from $1,354,000 in the year ago period due to a $2.7 million write off of Tower Air Inc.'s receivable and a bad debt provision of $1,862,000 due to significantly higher fuel prices during the current fiscal year which has created a greater risk of loss due to potential bad debts related to certain airline accounts. Future periods may continue to be impacted by higher reserve requirements related to potential bankruptcies. On May 1, 2000 Kitty Hawk, Inc. and its related companies, fuel customers of the Company, filed for bankruptcy under Chapter 11. The potential write off of this receivable has been considered in evaluating the March 31, 2000 accounts receivable allowance. 12 13 Depreciation and amortization expense in the current period increased 23.0% to $7.2 million from $5.8 million a year ago. The increase in the current period is primarily related to the Burbank FBO expansion during fiscal 1999, acquisitions of Jackson and Charleston FBO's in fiscal 1999, acquisition of Tulsa FBO in October 1999 and various capital expenditures. Interest expense (net) increased 45.6% in the current nine months to $4.3 million from $3.0 million a year ago due to higher interest rates and higher average outstanding borrowings. Income tax expense approximated 39.0% of pretax income in both periods reflecting the expected effective annual tax rate. Extraordinary item of $979,000 in the current nine months consisted of charges associated with the redemption of the Company's 7 3/4% convertible subordinated debentures in September 1999. The charge includes a $780,000 redemption premium plus write off of capitalized fees of $824,000, less a tax benefit of $625,000. In last years nine month period, extraordinary item of $255,000 consists of a charge of $418,000 related to the cost of repurchasing convertible subordinated debentures in excess of par value and related bond issuance costs, net of a tax benefit of $163,000. LIQUIDITY AND CAPITAL RESOURCES: Mercury has historically financed its operations primarily through operating cash flow, bank debt and various public and private placements of bonds and subordinated debt. Mercury's cash balance at March 31, 2000 was $1,909,000. Net cash provided by operating activities was $10,773,000 during the nine month period ended March 31, 2000. During this period, the primary sources of net cash provided by operating activities were net income and depreciation and amortization of $8,457,000, an increase in accounts payable of $9,300,000 and bad debt expense of $4,562,000. The primary uses of cash from operating activities was an increase in accounts receivable of $8,491,000. Accounts receivable at March 31, 2000 increased to $54,063,000 from $50,134,000 at June 30, 1999 due to significantly higher sales in the current nine month period. Days sales outstanding were approximately 57 at March 31, 2000 versus approximately 74 at June 30, 1999. Net cash used in investing activities was $11,161,000 during the current nine month period. The primary uses of cash from investing activities included additions to property, equipment and leaseholds of $7,080,000, acquisition of the Tulsa FBO and assets of the Charleston FBO for $3,100,000 and addition to other assets of $1,910,000. Net cash used in financing activities was $2,500,000 during the current nine month period. The primary uses of cash from financing activities in the current nine month period was the early extinguishment of the Convertible Subordinated Debentures of $19,534,000, reduction of long term debt of $10,428,000 and repurchase of common stock of $1,856,000. The primary sources of cash from financing activities was proceeds from the Notes of $24,000,000 and proceeds from the acquisition line of $5,264,000. The Company's senior secured bank credit facility consists of a $40,000,000 revolver, a term loan with an outstanding balance of $21,000,000 at March 31, 2000 and a $15,000,000 acquisition facility with an outstanding balance of $5,264,000 at March 31, 2000. At March 31, 2000, there were no borrowings outstanding under the revolver, however, the line was used to secure $19.0 million in letters of credit. Principal installments are due quarterly on the term loan over a five year period maturing in March 2004. Balances owed under the revolver and acquisition facility are due in March 2004. As a result of the net loss during the current quarter, the Company obtained a waiver from its lender to cure the violation of its minimum profitability covenant. 13 14 On September 10, 1999, the Company redeemed $19,509,000 principal balance of Convertible Subordinated Debentures plus a redemption premium of 4% totalling $780,000. Financing of the redemption was accomplished by issuing the $24,000,000 Notes. The Note pays interest quarterly at the per annum rate of 12%. In connection with the issuance of the Note, the Company issued warrants to purchase 503,126 shares of common stock exerciseable at $6.50 per share. Absent a major prolonged surge in oil prices or a capital intensive acquisition, the Company believes its operating cash flows, revolver, vendor credit and cash balance will provide it with sufficient liquidity during the next twelve months. In the event that fuel prices increase significantly for an extended period of time, the Company's liquidity could be adversely affected unless the Company is able to increase vendor credit or increase lending limits under its revolving credit facility. The Company believes, however, its revolver and vendor credit should provide it with sufficient liquidity in the event of a major temporary surge in oil prices. From June 1999 to March 31, 2000, fuel prices rose approximately 61%. Significantly higher fuel prices for an extended period of time have a negative impact on the aviation industry as it increases the airlines operating expenses. Smaller, less well capitalized airlines may be more seriously impacted. The current three month period includes a bad debt expense of $3.6 million, including $2.7 million resulting from the bankruptcy of Tower Air, Inc., and a bad debt provision of $900,000, due to higher fuel prices affecting the aviation industry. The bad debt provision in the third quarter of fiscal 1999 was $452,000. The increase in the general bad debt reserve resulted from significantly higher fuel prices during the current fiscal year which have created a greater risk of loss due to potential bad debts related to certain airline accounts. Future periods may continue to be impacted by higher reserve requirements related to potential bankruptcies. On May 1, 2000 Kitty Hawk, Inc. and related companies, fuel customers of the Company, filed for bankruptcy under Chapter 11. The potential write off of this receivable has been considered in evaluating the March 31, 2000 accounts receivable allowance. The Company has a note receivable of approximately $824,000 from a former fuel customer, Saeta, an Ecuadorian Airline. Due to political and financial crisis in Ecuador, Saeta has defaulted on its monthly payment obligation of approximately $48,000 since January 2000, with the exception of one $10,000 payment received in February 2000. The Company has initiated legal action and has obtained a default judgement against individual guarantors in the U.S. and is proceeding against Saeta in Ecuador. While no assurance can be given, the Company believes some portion of the note will ultimately be collected. Bad debt reserves will include a continuing assessment of the collectability of the Saeta note. The Company has the following significant contracts or commitments for the purchase of equipment or installation of facilities. On October 22, 1999, the Company acquired certain assets of an FBO in Tulsa, Oklahoma for $2.4 million cash funded from its acquisition line. In a second step to this transaction, the Company will acquire the leasehold and buildings for $3.8 million within eighteen months of the first closing. The Company expects to fund this from its acquisition line. The Company began construction of a 30,000 square foot hangar at its Bedford Massachusetts FBO in this fiscal period at an estimated cost of $3.8 million. Approximately $1.9 million has been spent to date and is being funded under the Company's acquisition line. FORWARD-LOOKING STATEMENTS Statements contained in this Quarterly Report on Form 10-Q which are not historical facts are forward-looking statements. In addition, Mercury, from time-to-time, makes forward-looking statements concerning its expected future operations and performance and other developments. Such forward-looking statements are necessarily estimates reflecting Mercury's best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements. While it is impossible to identify all such factors, factors which could cause actual results to differ materially from those estimated by Mercury include, but are not limited to, risks associated with acquisitions, the financial condition of customers, non-renewal of contracts, government regulation, as well as operating risks, general conditions in the economy and capital markets, and other factors which may be identified from time-to-time in Mercury's Securities and Exchange Commission filings and other public announcements. 14 15 PART II - OTHER INFORMATION Item 1. Legal Proceedings Reference should be made to the Forms 10-Q filed for the quarters ended September 30, 1999 and December 31, 1999. Item 2. Change in Securities None Item 3. Default Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Other Information (a) Exhibit list and exhibits attached (b) Reports on form 8-K (none) 15 16 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. Mercury Air Group, Inc. Registrant /s/ JOSEPH CZYZYK ------------------------------------------- Joseph Czyzyk Chief Executive Officer /s/ RANDY AJER ------------------------------------------- Randy Ajer Principal Financial and Accounting Officer May 09, 2000 16 17 Item 6. (a) Exhibits and Exhibit List (b) Reports on Form 8-K 6 (a) Exhibit No. Description - --- ----------- 1.1 Underwriting Agreement for the Company's $25,000,000 7-3/4% Convertible Subordinated Debentures due February 1, 2006. (11) 3.1 Restated Certificate of Incorporation (4) 3.2 Form of Amendment to Restated Certificate of Incorporation creating the Series A 8% Convertible Cumulative Redeemable Preferred Stock (4) 3.3 Form of Amendment to Restated Certificate of Incorporation declaring the Separation Date for the Series A 8% Convertible Redeemable Preferred Stock (5) 3.4 Bylaws of the Company (4) 3.5 Amendment to Bylaws of the Company (10) 3.6 Amendment to Bylaws of the Company adopted on December 3, 1998 (19) 4.1 Form of Indenture between Mercury Air Group, Inc. and IBJ Schroder Bank & Trust Company. (11) 4.2 Negotiable Promissory Note, dated as of June 21, 1996, from Mercury Air Group, Inc. to Raytheon Aircraft Services, Inc. (13) 4.3 Legend Agreement, dated as of August 29, 1996 between Mercury Air Group, Inc. and Raytheon Aircraft Services, Inc. (13) 10.1 Employment Agreement dated December 10, 1993 between the Company and Seymour Kahn (8) 10.2 Stock Purchase Agreement between the Company, SK Acquisition, Inc., Randolph E. Ajer, Kevin J. Walsh, Grant Murray and Joseph Czyzyk (2) 10.3 Company's 1990 Long-Term Incentive Plan (6) 10.4 Company's 1990 Directors Stock Option Plan (1) 10.5 Lease for 6851 West Imperial Highway, Los Angeles, California (4) 10.6 Memorandum Dated September 15, 1997 regarding Summary of Officer Life Insurance Policies with Benefits Payable to Officers or Their Designated Beneficiaries (15) 10.7 Memorandum dated September 15, 1995 regarding Summary of Bonus Plans for Seymour Kahn, Joseph Czyzyk and Randolph E. Ajer (10) 10.8 Memorandum dated September 15, 1995 regarding Summary of Bonus Plans for Kevin Walsh and William Silva (10) 10.9 The Company's 401(k) Plan consisting of LCI Actuaries, Inc. Regional Prototype Defined Contribution Plan and Trust and Adoption Agreement (7) 10.10 Non-Qualified Stock Option Agreement by and between the Company and Seymour Kahn dated January 21, 1993 (7) 10.11 Stock Purchase Agreement among the Company, SK Acquisition, Inc. and William L. Silva dated as of August 9, 1993 (8) 10.12 Stock Exchange Agreement dated as of November 15, 1994 between Joseph Czyzyk and the Company (9) 10.13 Employment Agreement dated November 15, 1994 between the Company and Joseph Czyzyk (16) 10.14 Non-Qualified Stock Option Agreement dated August 24, 1995, by and between S.K. Acquisition and Mercury Air Group, Inc. (12) 10.15 Non-Qualified Stock Option Agreement dated March 21, 1996, by and between Frederick H. Kopko and Mercury Air Group, Inc. (12) 18 10.16 Credit Agreement by and among Sanwa Bank California, Mellon Bank, N.A., The First National Bank of Boston and Mercury Air Group, Inc. dated March 14, 1997. (14) 10.17 First Amendment to Credit Agreement and Related Loan Documents dated as of November 1997, by and among Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. (16) 10.18 First Amendment of 1998 to Credit Agreement and Other Loan Documents dated as of April 1, 1998, by and among Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. (3) 10.19 Second Amendment of 1998 to Credit Agreement and Other Loan Documents dated as of April 1998, by and between Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. (16) 10.20 Third Amendment of 1998 to Credit Agreement and Other Loan Documents dated as of August 31, 1998, by and between Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. (16) 10.21 Loan Agreement between California Economic Development Financing Authority and Mercury Air Group, Inc. relating to $19,000,000 California Economic Development Financing Authority Variable Rate Demand Airport Facilities Revenue Bonds, Series 1998 (Mercury Air Group, Inc. Project) dated as of April 1, 1998. (3) 10.22 Reimbursement Agreement dated as of April 1, 1998, by and among Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. (3) 10.23 First Amendment to Reimbursement Agreement and Other L/C Documents as of August 31, 1998, by and between Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. (16) 10.24 Fourth Amendment of 1998 to Credit Agreement and Other Loan Documents by and between Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. dated September 15, 1998. (17) 10.25 Second Amendment to Reimbursement Agreement and Other L/C Documents by and between Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. dated September 15, 1998. (17) 10.26 Company's 1998 Long-Term Incentive Plan (18) 10.27 Company's 1998 Directors Stock Option Plan (18) 10.28 Amendment to Employment Agreement by and between Mercury Air Group, Inc. and Joseph A. Czyzyk dated October 15, 1998. (19) 10.29 Amendment No. 2 to Employment Agreement by and between Mercury Air Group, Inc. and Joseph A. Czyzyk dated April 12, 1999. (19) 10.30 First Amendment of 1999 to Credit Agreement and Other Loan Documents dated as of December 31, 1998 by and between Sanwa Bank California, Mellon Bank, N.A. and BankBoston, N.A. and Mercury Air Group, Inc. (19) 10.31 Third Amendment to Reimbursement Agreement and Other L/C Documents dated as of December 31, 1998 by and between Sanwa Bank California, Mellon Bank, N.A., BankBoston, N.A. and Mercury Air Group, Inc. (19) 10.32 Revolving Credit and Term Loan Agreement dated as of March 2, 1999 by and among Mercury Air Group, Inc., The Banks listed on Schedule 1 thereto, and BankBoston, N.A., as Agent. (19) 10.33 Securities Purchase Agreement dated September 10, 1999 by and among Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund, L.P. (20) - -------------------------------- (1) Such document was previously filed as Appendix A to the Company's Proxy Statement for the December 10, 1993 Annual Meeting of Shareholders and is incorporated herein by reference. 19 (2) Such document was previously filed as an Exhibit to the Company's Current Report on Form 8-K dated December 6, 1989 and is incorporated herein by reference. (3) All such documents were previously filed as Exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 and are incorporated herein by reference. (4) All such documents were previously filed as Exhibits to the Company's Registration Statement No. 33-39044 on Form S-2 and are incorporated herein by reference. (5) Such document was previously filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1992 and is incorporated herein by reference. (6) Such document was previously filed as Appendix A to the Company's Proxy Statement for the December 2, 1992 Annual Meeting of Shareholders. (7) All such documents were previously filed as Exhibits to the Company's Annual Report on Form 10-K for the year ended June 30, 1993 and are incorporated herein by reference. (8) All such documents were previously filed as Exhibits to the Company's Annual Report on Form 10-K for the year ended June 30, 1994 and are incorporated herein by reference. (9) Such document was previously filed as an Exhibit to the Company's Current Report on Form 8-K dated November 15, 1994 and is incorporated herein by reference. (10) All such documents were previously filed as Exhibits to the Company's Annual Report on Form 10-K for the year ended June 30, 1995 and are incorporated herein by reference. (11) All such documents were previously filed as Exhibits to the Company's Registration Statement No. 33-65085 on Form S-1 and are incorporated herein by reference. (12) All such documents were previously filed as Exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 and are incorporated herein by reference. (13) All such documents were previously filed as Exhibits to the Company's Report on Form 8-K filed September 13, 1996 and are incorporated herein by reference (14) Such document was previously filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 and is incorporated herein by reference. (15) Such document was previously filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended June 30, 1997 and is incorporated herein by reference. (16) All such documents were previously filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended June 30, 1998 and is incorporated herein by reference. (17) Such document was previously filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1998 and is incorporated herein by reference. 20 (18) Such document was previously filed as Appendix A to the Company's Proxy Statement for the December 3, 1998 Annual Meeting of Shareholders and is incorporated herein by reference. (19) All such documents were previously filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 and incorporated herein by reference. (20) All such documents were previously filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended June 30, 1999 and is incorporated herein by reference. (b) Reports on Form 8-K: None EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2000 AND THE CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS CONTAINED IN FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2000. 9-MOS JUN-30-2000 JUL-1-1999 MAR-31-2000 1,909 0 57,652 3,034 2,990 64,017 101,155 41,821 134,503 42,308 63,559 0 0 64 28,336 134,503 185,074 248,108 162,525 222,942 21,428 4,562 4,465 3,738 1,459 2,279 0 979 0 1,300 .20 .19
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