-----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, EOe8t+DGNxGStrOWKwr3EQyWdFOHiWof0t5wiSBujmGhGsLUKJ/1AF9kl/b9Dl25 LKrDvPT4G0IXeJmEMXJjKQ== 0000859307-98-000002.txt : 19980116 0000859307-98-000002.hdr.sgml : 19980116 ACCESSION NUMBER: 0000859307-98-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971130 FILED AS OF DATE: 19980115 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL AIRLINE SUPPORT GROUP INC CENTRAL INDEX KEY: 0000859307 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MACHINERY, EQUIPMENT & SUPPLIES [5080] IRS NUMBER: 592223025 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12893 FILM NUMBER: 98507475 BUSINESS ADDRESS: STREET 1: 1954 AIRPORT RD STREET 2: STE 200 CITY: ATLANTA STATE: GA ZIP: 30341 BUSINESS PHONE: 3055932658 MAIL ADDRESS: STREET 1: 8095 NW 64TH STREET CITY: MIAMI STATE: FL ZIP: 33166 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 November 30, 1997 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to . -------------- ---------------- Commission file number 0-18352 --------- INTERNATIONAL AIRLINE SUPPORT GROUP, INC. --------------------------------------------------- DELAWARE 59-2223025 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1954 AIRPORT ROAD, SUITE 200, ATLANTA, GA 30341 ----------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (770) 455-7575 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 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. The number of shares of the Company's common stock outstanding as of January 15, 1997 was 2,463,095. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES INDEX PAGE NO. -------- Part I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets as of May 31, 1997 and November 30, 1997 3 Condensed Consolidated Statements of Earnings for the Three Months and Six Months Ended November 30,1996 and 1997 4 Condensed Consolidated Statements of Cash Flows for the Six Months Ended November 30, 1996 and 1997 5 Notes to Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 8 Part II OTHER INFORMATION Item 1. Legal Proceedings 12 Item 3. Defaults upon Senior Securities 12 Item 4. Submission of Matters to a Vote 12 of Security Holders Item 6. Exhibits and Reports on Form 8-K 13 FORM 10-Q INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
November 30, May 31, 1997 1997* (unaudited) ------- ----------- Current assets Cash and cash equivalents $ 465,725 $ 361,250 Accounts receivable, net of allowance for doubtful accounts of approximately $610,000 at May 31, 1997 and $683,000 at November 30, 1997 1,354,030 1,581,171 Inventories 12,000,284 14,481,046 Deferred tax benefit - current, net of valuation allowance of $772,000 at May 31, 1997 and November 30, 1997 - - Other current assets 98,285 221,293 ---------- ---------- Total current assets 13,918,324 16,644,760 Property and equipment Aircraft and engines held for lease 6,914,458 7,562,954 Leasehold improvements 21,567 45,929 Machinery and equipment 908,590 918,186 --------- --------- 7,844,615 8,527,069 Accumulated depreciation 1,186,444 1,590,085 --------- --------- Property and equipment, net 6,658,171 6,936,984 Other assets Deferred debt costs, net 638,012 672,353 Deferred tax benefit, net of valuation allowance of $1,814,000 at May 31, 1997 and $1,389,000 at November 30, 1997 72,663 497,663 --------- --------- Total other assets 710,675 1,170,016 ---------- ---------- $ 21,287,170 $ 24,751,760 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term obligations $ 1,542,488 $ 1,578,648 Accounts payable 642,950 320,951 Accrued expenses 2,234,350 2,281,222 --------- --------- Total current liabilities 4,419,788 4,180,821 Long-term obligations, less current maturities 12,207,113 13,811,852 Stockholders' equity Preferred stock - $.001 par value; authorized 2,000,000 shares; 0 shares outstanding at May 31, 1997 and November 30, 1997. - - Common stock - $.001 par value; authorized 20,000,000 shares; issued and outstanding 2,395,095 shares at May 31, 1997 and 2,463,095 shares at November 30, 1997. 2,395 2,463 Additional paid-in capital 13,003,686 13,204,743 Accumulated deficit (8,345,812) (6,448,119) --------- --------- Total stockholders' equity 4,660,269 6,759,087 --------- --------- $ 21,287,170 $ 24,751,760 ============ ============
*Condensed from audited Financial Statements FORM 10-Q INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended Six Months Ended November 30 November 30, 1996 1997 1996 1997 -------- --------- -------- ---------- Revenues Net sales $ 4,803,439 $ 5,491,639 $ 8,842,111 $ 10,432,609 Lease revenue 173,333 600,621 293,333 1,226,678 -------- --------- --------- ---------- Total revenues 4,976,772 6,092,260 9,135,444 11,659,287 Cost of sales 2,900,873 3,571,232 5,218,014 6,711,252 Selling, general and administrative expenses 820,304 1,041,359 1,654,958 2,077,808 Provision for (recovery of) doubtful accounts 50,282 46,678 91,440 (852) Depreciation and amortization 252,326 266,569 418,138 520,313 -------- --------- --------- ---------- Total operating costs 4,023,785 4,925,838 7,382,550 9,308,521 -------- --------- --------- ---------- Earnings from operations 952,987 1,166,422 1,752,894 2,350,766 Interest expense 417,314 477,781 906,193 891,080 Interest and other income (10,046) (11,312) (43,086) (13,006) -------- --------- --------- ---------- Earnings before income taxes 545,719 699,953 889,787 1,472,692 Provision for (benefit from) income taxes 14,799 (212,500) 14,799 (424,999) -------- --------- --------- ---------- Net earnings before extraordinary loss on debt restructuring 530,920 912,453 874,988 1,897,691 Extraordinary loss on debt restructuring (530,596) - (530,596) - -------- --------- --------- ---------- Net earnings $ 324 $ 912,453 $ 344,392 $ 1,897,691 ======== ======== ======== ========= Per share data: Earnings per common and common equivalent share before loss on debt restructuring $ 0.32 $ 0.32 $ 0.97 $ 0.68 Extraordinary loss on debt restructuring (0.32) - (0.59) - -------- --------- -------- --------- Earnings per share $ 0.00 $ 0.32 $ 0.38 $ 0.68 ======== ========= ======== ========== Weighted average shares outstanding used in calculation 1,646,628 2,862,900 898,162 2,796,080 ========= ========= ======= =========
FORM 10-Q INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months ended November 30, 1996 1997 -------- ----------- Cash flows from operating activities: Net earnings $ 344,392 $ 1,897,693 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 418,138 520,313 Provision for (recovery of) doubtful accounts 91,440 (852) Changes in assets and liabilities 530,815 (3,647,890) -------- ----------- Total adjustments 1,040,393 (3,128,429) Net cash provided by (used in) operating activities 1,384,785 (1,230,736) Cash flows from investing activities: Capital equipment additions (35,457) (33,958) Additions to aircraft and engines held for lease - (648,496) -------- ----------- Net cash used in investing activities (35,457) (682,454) Cash flows from financing activities: Borrowings/(repayments) of debt obligations (505,553) 1,645,901 Issuance of common stock - 201,125 Payment of restructuring costs (1,161,081) - Payment of offering costs - (38,311) -------- ----------- Net cash provided by (used in) financing activities (1,666,634) 1,808,715 Net decrease in cash (317,306) (104,475) Cash at beginning of period 940,274 465,725 -------- ----------- Cash at end of period $ 622,968 $ 361,250 =========== ==========
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain adjustments (consisting only of normal and recurring adjustments) necessary to present fairly International Airline Support Group, Inc. and Subsidiary's condensed consolidated balance sheets as of May 31, 1997 and November 30, 1997, the condensed consolidated statements of earnings for the three and six months ended November 30, 1996 and 1997, and the condensed consolidated statements of cash flows for the six months ended November 30, 1996 and 1997. The accounting policies followed by the Company are described in the May 31, 1997 financial statements. The results of operations for the three and six months ended November 30, 1997 are not necessarily indicative of the results to be expected for the full year. 2. Inventories consisted of the following: MAY 31,1997 NOVEMBER 30,1997 Aircraft parts $11,113,867 $ 9,735,848 Aircraft and Engines available for sale 886,417 4,745,198 ----------- ----------- $12,000,284 $14,481,046 =========== =========== 3. On October 3, 1996, the Company completed a restructuring of its capital structure (the "Restructuring"). Pursuant to the Restructuring, the Company effected a 1-for-27 reverse split of its common stock, $.001 par value per share (the "Common Stock"); issued approximately 2,245,400 shares of its Common Stock, after giving effect to the reverse split, in exchange for the entire $10,000,000 principal amount outstanding and related accrued interest of its 8% Convertible Debentures due November 30, 2003 (the "Debentures"); and redeemed the entire $7,700,000 principal amount outstanding of its 12% Senior Notes due July 17, 1997 (the "Senior Notes") with the proceeds of an advance under a credit agreement entered into on October 3 (the "Credit Agreement"). Consummation of the Restructuring cured all defaults with respect to the Debentures and the Senior Notes. All references to the number of common shares and per common share amounts throughout the financial statements have been restated to reflect the reverse split. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Earnings Per Share The Company's earnings per share for the three and six months ended November 30, 1997 were calculated using the modified treasury stock method. This method was used because the number of shares of common stock issuable on exercise of stock options, in the aggregate, exceeded 20 percent of the number of shares of common stock outstanding as of November 30, 1997. In 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share", which changes the method for reporting Earnings Per Share. The statement is effective for financial statement periods ending after December 15, 1997. The Company has not yet determined the impact, if any, of adopting the new standard. 5. Credit Facility On October 3, 1996, the Company entered into the Credit Agreement, which provided for a $3 million term loan and up to an $11 million revolving credit. The Credit Agreement was amended to create new term loan facilities totaling $6.85 million (collectively referred to as the "Credit Facility") and increasing the revolving credit to $13 million. The Credit Facility is secured by substantially all of the assets of the Company and availability of amounts for borrowing is subject to certain limitations and restrictions. Such limitations and restrictions are discussed in the Company's Proxy Statement/Prospectus filed with the Securities and Exchange Commission on August 29, 1996. 6. Supplemental Cash Flow Disclosures: Cash payments for interest were $712,000 and $758,000 for the six months ended November 30, 1996 and November 30, 1997, respectively. Cash and cash equivalents include $217,350 of restricted cash at November 30, 1997. Restricted cash includes customer receipts deposited into the Company's lockbox account, which are applied the next business day against the outstanding amount of the Credit Facility, and customer deposits on aircraft and engines leases. 7. Secondary Offering On January 13, 1998, the Company decided not to proceed with its proposed offering of 1,750,000 shares of Common Stock due to unfavorable market conditions. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following is management's discussion and analysis of certain significant factors which have affected the Company's operating results and financial position during the periods included in the accompanying condensed consolidated financial statements. RESULTS OF OPERATIONS: REVENUES Parts sales (excluding the sale of aircraft and engines) for the three and six months ended November 30, 1997 were $4.7 million and $8.9 million, respectively, compared to $4.8 million and $8.8 million, respectively, during the three and six months ended November 30, 1996. Aircraft sales were $667,000 for both the three and six months ended November 30, 1997. Engine sales were $138,000 and $913,000, respectively, during the three and six months ended November 30, 1997. No sales of aircraft or engines occurred during the three or six months ended November 30, 1996. Aircraft and engine sales are unpredictable transactions and may fluctuate significantly from period to period, dependent, in part, upon the Company's ability to purchase aircraft or engines at attractive prices and resell them within a relatively brief period of time, as well as the overall market for aircraft and engines. Lease revenue increased to $601,000 and $1.2 million during the three and six months ended November 30, 1997, respectively, compared to $173,000 and $293,000, during the three and six months ended November 30, 1996, respectively. The increase in lease revenues was attributable primarily to the lease of three B-727 aircraft during the fourth quarter of fiscal 1997. Total revenue, aided by the increase in aircraft and engine sales and an increase in lease revenue, increased from $5.0 million and $9.1 million, respectively, for the three and six months ended November 30, 1996, to $6.1 million and $11.7 million, respectively, for the three and six months ended November 30, 1997, a net increase of 22% and 29%, respectively, for the three and six months ended November 30, 1997 compared to the three and six months ended November 30, 1996. COST OF SALES Cost of sales increased 24% from $2.9 million during the three months ended November 30, 1996 to $3.6 million during the three months ended November 30, 1997, primarily as a result of increased aircraft and engine sales. Cost of sales increased 29% from $5.2 million during the six months ended November 30, 1996 to $6.7 million during the six months ended November 30, 1997, primarily as a result of higher revenue. As a percentage of total revenues, cost of sales for the three and six months ended November 30, 1996 was 58.3% and 57.1%, respectively, compared to 58.6% and 57.6% during the three and six months ended November 30, 1997, respectively. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses increased from $820,000 and $1.7 million during the three and six months ended November 30, 1996, respectively, to $1.0 million and $2.1 million during the three and six months ended November 30, 1997, respectively. These increases are due, in part, to higher levels of insurance costs, American Stock Exchange and investor relations fees, legal expenses, rent and certain relocation expenses associated with the move of the Company's warehouse, and compensation associated with increased sales. Selling, general, and administrative costs as a percentage of total revenue were 21.9% and 17.8%, respectively, for the three and six months ended November 30, 1997 compared to 17.5% and 35.1%, respectively, for the three and six months ended November 30, 1996. PROVISION FOR (RECOVERY OF) DOUBTFUL ACCOUNTS For the three and six months ended November 30, 1997, the Company had a provision for (recovery of) doubtful accounts of $47,000 and ($852), respectively, compared to a provision for doubtful accounts of $50,000 and $91,000, respectively, for the three and six months ended November 30, 1996. This decrease in expense for the six month period was primarily related to the recovery of a certain doubtful account during the first quarter of fiscal 1998. DEPRECIATION AND AMORTIZATION Depreciation and amortization for the three and six months ended November 30, 1996 totaled $252,000 and $418,000, respectively, compared to $266,000 and $520,000, respectively, for the three and six months ended November 30, 1997, respectively. The increase in depreciation and amortization was due primarily to the acquisition of three B-727-100 aircraft during the fourth quarter of fiscal 1997, while being partially offset by the sale of the Company's previous headquarters during the third quarter of fiscal 1997. INTEREST EXPENSE Interest expense for the three and six months ended November 30, 1996 was $417,000 and $906,000, respectively, compared to $478,000 and $891,000 for the three and six months ended November 30, 1997, respectively. The increase in interest expense for the three months ended November 30, 1997 was due to a net increase in total debt outstanding during this period from $7.6 million at November 30, 1996 to $15.4 million at November 30, 1997. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES INCOME TAXES The Company's tax benefits (and related estimated tax rate) result from 1) the utilization of its net operating loss carryforward to eliminate the current tax that would otherwise be payable and 2) the Company's reduction in the valuation allowance applied against its deferred tax assets. The Company has reduced the valuation allowance by $212,500 and $424,999, respectively, for the three and six months ended November 30, 1997, as a result of its continuing profitability. Subject to its continuing profitability, the Company expects to further reduce the valuation allowance in the future. The Company recorded an income tax provision of $14,799 during the three and six months ended November 30, 1996. LOSS ON DEBT RESTRUCTURING In connection with the Restructuring as described in Note 3 of Notes to Condensed Consolidated Financial Statements, the Company recorded an extraordinary loss of $530,596 relating to the exchange of the Debentures for the three and six months ended November 30, 1996. LIQUIDITY AND CAPITAL RESOURCES Since the Restructuring, the Company's principal sources of liquidity have been cash from operations and borrowings under its Credit Agreement with BNY Financial Corporation ("BNY Financial"). The Credit Agreement entered into by the Company in connection with the Restructuring provided for a $3 million term loan and up to an $11 million revolving credit. The Credit Agreement has been amended to create new term loan facilities totaling $6.85 million (collectively referred to as the "Credit Facility") and to increase the revolving credit to $13 million. The revolving credit facility matures in October 2001 and the term loans mature between March 2000 and October 2001. The interest rate under the Credit Facility on both the term loan and the revolving credit facility is the lender's base rate plus 2%. The Company is currently in negotiations with BNY Financial to, among other things, reduce the rate of interest charged on its borrowings. The Credit Facility is secured by substantially all of the assets of the Company and availability of amounts for borrowing is subject to certain limitations and restrictions. Such limitations and restrictions are discussed in the Company's Proxy Statement/Prospectus filed with the Securities and Exchange Commission on August 29, 1996. Net cash provided by (used in) operating activities for the six months ended November 30, 1997 and November 30, 1996 were ($3,128,000) and $1,040,394, respectively. The increase in cash used by operating activities was due, in part, to an increase in aircraft and engines held for sale, primarily due to the acquisition of two DC-9-51 aircraft during the three months ended November 30, 1997. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES LIQUIDITY AND CAPITAL RESOURCES (CONT.) Net cash provided by financing activities for six months ended November 30, 1997 amounted to $1,808,715. This was the result of a net increase in debt obligations of $1,646,000 due to the borrowing of $4.0 million for the acquisition of two DC-9-51 aircraft during the three months ended November 30, 1997, offset by the partial repayment of other term loans and the revolving credit. At January 13, 1998, the Company was permitted to borrow up to an additional $4.8 million pursuant to the Credit Facility. The Company believes that amounts available to be borrowed pursuant to the Credit Agreement, together with its working capital will be sufficient to meet the requirements of the Company's business for the foreseeable future. The Company does not have any material planned capital expenditures for the remainder of fiscal 1998 that would significantly impact its liquidity and capital resources. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS The Company is from time to time subject to legal proceedings and claims that arise in the ordinary course of its business. On the date hereof, no such proceedings are pending and no such claims have been asserted. Item 3. DEFAULTS UPON SENIOR SECURITIES Prior to the Restructuring, the Company was in default in the payment of principal and certain payments of interest on the Senior Notes and was in default in the payment of interest on the Debentures. On October 3, 1997, the Company completed the Restructuring. Pursuant to the Restructuring, the Company effected a 1-for-27 reverse split of its Common Stock; issued approximately 2,245,400 shares of its Common Stock, after giving effect to the reverse split, in exchange for the entire $10,000,000 principal amount outstanding of the Debentures; and redeemed the entire $7,700,000 principal amount outstanding of the Senior Notes with the proceeds of an advance under the Credit Agreement. Consummation of the restructuring cured all defaults with respect to the Debentures and the Senior Notes. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Company submitted the matters described below to a vote of the holders of its Common Stock at an annual meeting of its stockholders held on September 22, 1997: ELECTION OF DIRECTORS: A board of four directors was elected at the annual meeting. Messrs. Alexius A. Dyer III and George Murnane III were elected for terms expiring at the annual meeting of the Company to be held in 2000. Messrs. Kyle R. Kirkland and E. James Mueller were elected for terms expiring at the annual meeting of the Company to be held in 1999. The following table sets forth certain information regarding the votes cast by the holders of the Company's Common Stock with respect to the election of directors.
Total Abstentions and Broker Non-votes Director Votes For Votes Withheld Dyer 2,364,314 2,190 28,591 Murnane 2,364,314 2,190 28,591 Kirkland 2,364,314 2,190 28,591 Mueller 2,364,314 2,190 28,591
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES APPROVAL OF AMENDMENT TO PLAN: The Company's stockholders approved an amendment to the Company's 1996 Long Term Incentive and Share Award Plan to increase by 115,000 the number of shares available for grant under the Plan. The Company's stockholders cast 2,317,452 votes in favor of the amendment and 40,975 votes against the amendment. There were 8,077 abstentions and broker non-votes. APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO MAKE SECTION 203 APPLICABLE: The Company's stockholders approved an amendment to the Company's Amended and Restated Certificate of Incorporation to make the provisions of Section 203 of the Delaware General Corporation Law applicable to the Company. Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" unless certain requirements are satisfied. The Company's stockholders cast 1,599,414 votes in favor of the amendment and 185,113 votes against the amendment. There were 799 abstentions and broker non-votes. CLASSIFIED BOARD AMENDMENT: The Company's stockholders approved an amendment to the Company's Amended and Restated Certificate of Incorporation to provide for three classes of directors with staggered terms of up to three years such that approximately one-third of the Board stands for election each year. The Company's stockholders cast 1,255,256 votes in favor of the amendment and 529,848 votes against the amendment. There were 222 abstentions and broker non-votes. RATIFICATION OF AUDITORS: The Company's stockholders ratified the appointment of Grant Thornton, LLP to serve as the Company's independent auditors for the fiscal year ended May 31, 1998. The Company's stockholders cast 2,365,740 votes in favor of ratification and 379 votes against ratification. There were 385 abstentions and broker non-votes. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS
Exhibit NUMBER DESCRIPTION PAGE NUMBER OR METHOD OF FILING 2.4 Credit Agreement between BNY Incorporated by Financial Corporation and the reference to Exhibit Registrant. 2.4 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1997, as amended (the "1997 Form 10-K"). 2.4.1 First Amendment, Waiver and Incorporated by Agreement, dated as of March 24, reference to Exhibit 1997, between BNY Financial 2.4.1 to the Company's Corporation and the Registrant. Registration Statement on Form S-1 (File 333- 40613) filed on November 20, 1997. 2.4.2 Second Amendment and Agreement, Incorporated by dated as of September 9, 1997, reference to Exhibit between BNY Financial Corporation 2.4.2 to the Company's and the Registrant. Registration Statement on Form S-1 (File 333- 40613) filed on November 20, 1997. 2.4.3 Third Amendment and Agreement, Incorporated by dated as of October 15, 1997, reference to Exhibit between BNY Financial Corporation 2.4.3 to the Company's and the Registrant. Registration Statement on Form S-1 (File 333- 40613) filed on November 20, 1997. 3.1 Amended and Restated Certificate Incorporated by of Incorporation of the reference to Exhibit Registrant. 3.1 to the 1997 Form 10-K. 3.1.1 Amendment to Amended and Restated Incorporated by Certificate of Incorporation of reference to Exhibit the Registrant. 3.1.1 to the Company's Registration Statement on Form S-1 (File No. 333-40613) filed on November 20, 1997. 4.1 Specimen Common Stock Incorporated by Certificates. reference to Exhibit 4.1 to the 1997 Form 10-K. 10.1.1 Employment Agreement, dated as of Incorporated by December 1, 1996, between the reference to Exhibit Registrant and Alexius A. Dyer 10.1.1 to the 1997 Form III, as amended on October 3, 10-K. 1997. 10.1.2 Employment Agreement, dated as of Incorporated by October 3, 1997, between the reference to Exhibit Registrant and George Murnane 10.1.2 to the 1997 Form III. 10-K. 10.2.1 1996 Long-Term Incentive and Incorporated by Share Award Plan. reference to Appendix B to the Proxy Statement/ Prospectus included in the Company's Registration Statement on Form S-4 (File No. 333-08065). 10.2.5 Form of Option Certificate Incorporated by (Employee Non-Qualified Stock reference to Exhibit Option). 10.2.5 to the 1997 Form 10-K. 10.2.6 Form of Option Certificate Incorporated by (Director Non-Qualified Stock reference to Exhibit Option). 10.2.6 to the 1997 Form 10-K. 10.2.7 Form of Option Certificate Incorporated by (Incentive Stock Option). reference to Exhibit 10.2.7 to the 1997 Form 10-K. 10.14 Commission Agreement dated Incorporated by December 1, 1996 between the reference to Exhibit Registrant and J.M. Associates, 10.14 to the 1997 Form Inc. 10-K. 10.15 Aircraft Parts Purchase Incorporated by Agreement, dated May 16, 1997, reference to Exhibit between Paxford Int'l, Inc. and 10.15 to the Company's the Registrant. Registration Statement on Form S-4 (File No. 333-08065). 10.16 Contract for Sale and Purchase Incorporated by dated January 31, 1997, between reference to Exhibit the Registrant and American 10.16 to the Company's Connector Corporation. 1997 Form 10-K. 10.17 Office Lease Agreement dated Incorporated by January 31, 1997 between the reference to Exhibit Registrant and Globe Corporate 10.17 to the Company's Center. 1997 Form 10-K. 10.18 Lease Agreement dated March 31, Incorporated by 1997, between the Registrant and reference to Exhibit Port 95-4, Ltd. 10.18 to the Company's 1997 Form 10-K. 11 Statement regarding computation Incorporated by of per share earnings. reference to Exhibit 11 to the 1997 Form 10-K. 21 Subsidiaries. Incorporated by reference to Exhibit 21 to the 1997 Form 10-K. Page no. 19 27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K None INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES 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. INTERNATIONAL AIRLINE SUPPORT GROUP, INC. (Registrant) /S/GEORGE MURNANE III JANUARY 15, 1997 George Murnane III Date Executive Vice President and Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS May-31-1998 Nov-30-1997 361,250 0 2,264,171 683,000 14,481,046 16,644,760 8,527,069 1,590,085 24,751,760 4,180,821 13,811,852 2,463 0 0 6,756,624 24,751,760 5,491,639 6,092,260 3,571,232 4,612,591 266,569 46,678 477,781 699,953 (212,500) 0 0 0 0 912,453 0.32 0.32
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