-----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, Uw4brfL+W5j2X9fcNOzHvRcAzPMFnmq0LAkAg2cI+0wbJ5Ldk5Hu4KbskqIOeqNM ox1aefYEZZSCeINAX6/5mA== 0000859307-96-000010.txt : 19961016 0000859307-96-000010.hdr.sgml : 19961016 ACCESSION NUMBER: 0000859307-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960831 FILED AS OF DATE: 19961015 SROS: NASD 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: 1934 Act SEC FILE NUMBER: 000-18352 FILM NUMBER: 96643546 BUSINESS ADDRESS: STREET 1: 8095 NW 64TH ST CITY: MIAMI STATE: FL ZIP: 33166 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 August 31, 1996 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) 8095 NW 64th Street, Miami, FL 33166 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (305) 593-2658 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 October 15, 1996 was 149,695. FORM 10-Q INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES INDEX Page No. Part I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets 3 May 31, 1996 and August 31, 1996 Condensed Consolidated Statements of Operations 4 Three Months Ended August 31,1995 and 1996 Condensed Consolidated Statements of Cash Flows 5 Three Months Ended August 31, 1995 and 1996 Notes to Condensed Consolidated Financial 6 Statements Item 2. Management's Discussion and Analysis 8 of Results of Operations and Financial Condition Part II OTHER INFORMATION Item 1. Legal Proceedings 11 Item 3. Defaults upon Senior Securities 11 Item 6. Exhibits and Reports on Form 8-K 11 2 Form 10-Q International Airline Support Group, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS ASSETS
Pro Forma August 31, August 31, May 31, 1996 1996 1996 (unaudited) (unaudited) ---------- ------------ ------------ Current assets Cash and cash equivalents $ 940,274 $ 364,127 $ 364,127 Accounts receivable, net of allowance for doubtful accounts of approximately $735,000 at May 31, 1996 and $776,000 at August 31, 1996 2,014,691 1,584,958 1,584,958 Inventories 9,277,315 9,361,026 9,361,026 Deferred tax benefit - current, net of valuation allowance of $960,000 at May 31, 1996 and August 31, 1996 - - - Other current assets 68,798 146,462 146,462 ---------- ---------- ---------- Total current assets 12,301,078 11,456,573 11,456,573 Property and equipment Aircraft held for lease 2,974,760 2,974,760 2,974,760 Building and leasehold improvements 36,815 - - Machinery and equipment 972,507 955,356 955,356 ---------- ---------- ---------- 3,984,082 3,930,116 3,930,116 Less accumulated depreciation 2,051,620 2,160,018 2,160,018 Land and building held for sale, net 750,000 750,000 750,000 ---------- ---------- ---------- Property and equipment, net 2,682,462 2,520,098 2,520,098 ---------- ---------- ---------- Other assets Deferred debt costs, net 762,431 811,621 503,500 Deferred tax benefit, net of valuation allowance of $3,011,000 at May 31, 1996 and August 31, 1996 - - - Deferred restructuring fees 334,860 568,546 - Deposits and other assets 51,500 - - ---------- ---------- ---------- 1,148,791 1,380,167 503,500 $ 16,132,331 $ 15,356,838 $ 14,480,171 ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Current maturities of long-term obligations $ 3,695,108 $ 435,897 $ 435,897 Long-term obligations in default classified as current 14,041,667 - - Accounts payable 2,171,496 937,077 937,077 Accrued expenses 3,233,231 3,358,162 2,698,428 ---------- ---------- ---------- Total current liabilities 23,141,502 4,731,136 4,271,402 Long-term obligations, less current maturities s 406,760 17,697,565 7,697,565 Commitments and contingencies Stockholders' equity (deficit) Preferred Stock - $.001 par value; authorized 2,000,000 shares; 0 shares outstanding at May 31, 1996 and August 31, 1996. - - - Common stock - $.001 par value; authorized 20,000,000 shares; issued and outstanding 149,695 shares at May 31, 1996 and August 31, 1996. 150 150 2,395 Additional paid-in capital 2,658,224 2,658,224 13,147,979 Accumulated deficit (10,074,305) (9,730,237) (10,439,170) ---------- ---------- ---------- Total stockholders' equity (deficit) (7,415,931) (7,071,863) 2,511,204 ---------- ---------- ---------- $ 16,132,331 $ 15,356,838 $ 14,480,171 ========== ========== ==========
*Condensed from audited Financial Statements The accompanying notes are an integral part of these condensed financial statements 3 Form 10-Q International Airline Support Group, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Pro Forma Three Months Ended Three Months Ended August 31, August 31, 1995 1996 1996 Revenues Net sales $ 4,657,819 $ 4,038,671 $ 4,038,671 Lease revenue 302,110 120,000 120,000 ---------- ---------- ---------- Total revenues 4,959,929 4,158,671 4,158,671 Cost of sales 2,628,997 2,317,141 2,317,141 Selling, general and administrative expenses 1,039,647 834,654 834,654 Financial restructuring costs 141,410 - - Provision (recovery) for doubtful accounts (18,276) 41,157 41,157 Depreciation and amortization 220,961 165,812 165,812 ---------- ---------- ---------- Total operating costs 4,012,739 3,358,764 3,358,764 Income from operations 947,190 799,907 799,907 Interest expense 530,718 488,879 258,382 Interest and other income (2,374) (33,040) (33,040) ---------- ---------- ---------- Earnings before income taxes 418,846 344,068 574,565 Provision for income taxes - - - ---------- ---------- ---------- Net earnings $ 418,846 $ 344,068 $ 574,565 ========== ========== ========== Per share data: Primary earnings per common and common equivalent share $ 2.80 $ 2.30 $ .24 Weighted average shares outstanding used in primary calculation 149,704 149,704 2,395,104 ========== ========== ========== Fully-diluted earnings per common and common equivalent sh are $ 2.55 $ 2.25 $ .24 Weighted average shares outstanding used in fully-diluted calculation 242,297 242,297 2,395,104 ========== ========== ==========
The accompanying notes are an integral part of these condensed financial statements 4 Form 10-Q International Airline Support Group, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months ended August 31, 1995 1996 Cash flows from operating activities: Net earnings $ 418,846 $ 344,068 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 220,961 211,622 Provision for doubtful accounts - 41,157 Changes in assets and liabilities (1,159,164) (830,786) ---------- --------- Total adjustments (938,203) (578,007) Net cash used in operating activities (519,357) (233,939) Cash flows from investing activities: Capital equipment deletions (additions) 96,514 (3,448) ---------- --------- Net cash provided by (used in) investing activities 96,514 (3,448) Cash flows from financing activities: Repayments of notes payable and debt obligations (10,454) (10,073) Increase in deferred restructuring fees - (233,687) Increase in deferred debt costs - (95,000) ---------- --------- Net cash used in financing activities (10,454) (338,760) ---------- --------- Net decrease in cash (433,297) (576,147) Cash at beginning of period 848,331 940,274 ---------- --------- Cash at end of period $ 415,034 $ 364,127 ========== =========
The accompanying notes are an integral part of these condensed financial statements. 5 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.'s condensed consolidated balance sheets as of May 31, 1996 and August 31, 1996, the condensed consolidated statements of operations and the condensed consolidated statements of cash flows for the three months ended August 31, 1995 and 1996. The accounting policies followed by the Company are described in the May 31, 1996 financial statements. The results of operations for the three months ended August 31, 1996 are not necessarily indicative of the results to be expected for the full year. 2. Inventories consisted of the following: May 31,1996 August 31,1996 Aircraft parts $ 7,938,049 $ 7,802,394 Aircraft available for sale 1,339,266 1,558,632 --------- --------- $ 9,277,315 $ 9,361,026 ========= ========= At August 31, 1996, approximately 98% of the ending inventory (including aircraft held for sale) was costed under the specific identification method, and the remaining 2% was costed as part of pools of parts acquired through whole aircraft purchases. 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 of its 8% Convertible Debentures due August 31, 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 historical and Pro Forma financial statements have been restated to reflect the reverse split. 6 INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The unaudited Pro Forma Condensed Consolidated Balance Sheet reflects adjustments as if the Restructuring had occurred as of August 31, 1996. Such adjustments include debt issuance costs incurred, less amounts amortized for debt obligations repaid or converted; the offset of deferred restructuring costs against additional paid-in capital; the repayment of the Senior Notes with the proceeds from an advance pursuant to the Credit Agreement; the exchange of the Debentures and related claims for accrued interest into shares of Common Stock; and the extraordinary loss resulting from the Restructuring in accordance with SFAS 15. The unaudited Pro Forma Statement of Operations reflects adjustments as if the Restructuring had occurred as of June 1, 1996. Such adjustments included the net reduction in interest expense due to the difference in interest rates on the Senior Notes and the Credit Agreement; and the corresponding effect of the exchange of the Debentures for shares of Common Stock. See the Company's Proxy Statement/Prospectus filed with the Securities and Exchange Commission on August 29, 1996 for further explanation as to the nature of such pro-forma adjustments. 4. Primary earnings per share is computed for the three months ended August 31, 1995 and 1996 by dividing net earnings by the weighted average number of common shares outstanding and common stock equivalents. Stock options and warrants are considered common stock equivalents unless their inclusion would be anti- dilutive. For the purpose of computing common stock equivalents for stock options and warrants, the modified treasury stock method was not used as the effect would be anti-dilutive. The Debentures are not considered common stock equivalents for the purpose of computing primary earnings per share as the effective yield on the securities exceeded 66-2/3% of the average Aa corporate bond rate at the time of issuance. Fully diluted earnings per share is computed for the three months ended August 31, 1995 and 1996 as if the Debentures were converted into common stock as of the beginning of the period. Stock options and warrants are not considered common stock equivalents for the purpose of computing fully diluted earnings per share as the effect would be anti-dilutive under the modified treasury stock method. 5. Supplemental Cash Flow Disclosures: Cash payments for interest were $331,000 and $254,537 for the three months ended August 31, 1995 and 1996, respectively. 7 INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION 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 sale of engines) for the three months ended August 31, 1996 were $4.0 million, compared to $3.8 million during the three months ended August 31, 1995. Aircraft and engine sales were $325,000 and $572,000, respectively, during the three months ended August 31, 1995. No such sales of aircraft or engines occurred during the three months ended August 31, 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 decreased to $120,000 during the three months ended August 31, 1996, compared to $302,000 during the three months ended August 31, 1995, as a certain lease that was in existence during the three months ended August 31, 1995 was terminated prior to the three months ended August 31, 1996. The increase in parts sales was insufficient to offset the decrease in aircraft and engine sales, and lease revenue, and, as a result, total revenues during the three months ended August 31, 1996 decreased 16% to $4.2 million, from $5.0 million during the three months ended August 31, 1995. In addition, revenues during the three months ended August 31, 1995 were increased as a result of the settlement of certain disputes with a customer. Pursuant to the settlement, the customer paid the Company $660,000 and the Company canceled a note receivable from the customer. The Company also released all claims it had against the customer, which included among other things, claims for the purchase price of parts purchased by the customer on open account or pursuant to a consignment arrangement. The customer released certain claims it had against the Company as part of the settlement. The transaction resulted in a net gain to the Company of approximately $345,000, consisting of the excess of cash received over the net carrying value of the note receivable and cost of the inventory. The Company recorded as net sales the cost of the inventory plus the amount of the net gain. 8 INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES Cost of Sales Cost of sales decreased 11.9% from $2.6 million during the three months ended August 31, 1995 to $2.3 million during the three months ended August 31, 1996, primarily as a result of lower revenues. As a percentage of total revenues, cost of sales was 53.0% and 55.7% during the three months ended August 31, 1995 and 1996, respectively. The higher cost of sales as a percentage of total revenues from the three months ended August 31, 1995 to 1996 was the result of lower costs associated with lease revenue and the higher lease revenue during the first three months of 1995 as compared to 1996. Aircraft and engine cost of sales as a percentage of related revenues during the three months ended August 31, 1995 was 56.5%. There were no aircraft or engine sales during the three months ended August 31, 1996. Cost of sales for parts sales remained relatively constant, amounting to 56.4% and 57.0% during the three months ended August 31, 1995 and 1996, respectively. Selling, General and Administrative Expenses Selling, general and administrative expenses decreased 19.7% from $1.0 million during the three months ended August 31, 1995 to $.8 million during the three months ended August 31, 1996, primarily as a result of the Company's ongoing emphasis on cost reductions. Financial Restructuring Costs Included in financial restructuring costs during the three months ended August 31, 1995 were approximately $141,000 of legal, accounting and other consulting fees in connection with its debt restructuring activities. Such costs were subsequently capitalized as deferred restructuring fees during the fourth fiscal quarter ended May 31, 1996. In connection with the successful completion of the Restructuring on October 3, 1996, as described in Note 3 of Notes to Condensed Consolidated Financial Statements, deferred restructuring costs were charged to additional paid-in capital, as of the closing date of the Restructuring. Depreciation and Amortization Depreciation and amortization for the three months ended August 31, 1995 and 1996 was $221,000 and $166,000, respectively. The decline in depreciation resulted primarily from certain property and equipment reaching their full depreciated value prior to the three months ended August 31, 1996. 9 INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES Interest Expense Interest expense for the three months ended August 31, 1995 and 1996 were $531,000 and $489,000, respectively. The decrease in interest expense from 1995 to 1996 was due to a net reduction in total debt outstanding, from $20.3 million at August 31, 1995 to $18.1 million at August 31, 1996. Income Taxes No income tax provision or benefits were recorded during the three months ended August 31, 1995 and 1996, as the Company has net operating loss carryforwards sufficient to offset income. The Company has fully exhausted its carryback benefits and recorded a one hundred percent (100%) valuation allowance against the deferred tax asset for net operating loss carryforwards. Liquidity and Capital Resources On October 3, 1996, the Company completed a Restructuring of the Senior Notes Notes and Debentures. The terms of the Restructuring and impact on the Company's liquidity and capital resources is discussed in the Company's Proxy Statement/Prospectus filed with the Securities and Exchange Commission on August 29, 1996. Concurrently with the Restructuring, the Company entered into the Credit Agreement, which provides for a $3 million term loan and up to an $11 million revolving credit (collectively referred to as the "Credit Facility"). 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. At October 14, 1996, the Company was permitted to borrow up to an additional $ 3,287,158 pursuant to the revolving credit facility. The Company believes that amounts available to be borrowed pursuant to the Credit Agreement and its working capital will be sufficient to meet the requirements of the Company's business for the foreseeable future. The Company had no material commitments for capital expenditures as of August 31, 1996. 10 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 On August 31, 1996, 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, 1996, 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 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit Number Description Page Number or Method of Filing 2.1.1 Form of Standstill Agreement Incorporated by dated July 8, 1996 among the reference to Registrant and the holders of Exhibit 2.1.1 to the Registrant's 12% Senior the Company's Secured Notes due 1997 who are Registration signatories thereto. Statement on Form S-4 (File No. 333- 08065), filed on July 12, 1996. 2.1.2 Form of Standstill Agreement Incorporated by dated July 11, 1996 among the reference to Registrant and the holders of Exhibit 2.1.2 to the Registrant's 12% Senior the Company's Secured Notes due 1997 who are Annual Report on signatories thereto. Form 10-K for the fiscal year ended May 31, 1996, as amended (the "1996 Form 10-K"). 11 2.2 Form of Warrant Agreement Incorporated by Amendment No. 1, dated as of reference to July 9, 1996, among the Exhibit 2.2 to the Registrant and the holders of Company's the Warrants, dated July 17, Registration 1992, who are signatories Statement on Form thereto. S-4 (File No. 333- 08065), filed on July 12, 1996. 2.3 Letter, dated June 7, 1996, Incorporated by from BNY Financial Corporation reference to to the Registrant with Exhibit 2.3 to the attached Term Sheet. Company's Registration Statement on Form S-4 (File No. 333- 08065), filed on July 12, 1996. 2.4 Credit Agreement between BNY Incorporated by Financial Corporation and the reference to Registrant. Exhibit 2.4 to the 1996 Form 10-K. 3.1 Amended and Restated Incorporated by Certificate of Incorporation reference to of the Registrant. Exhibit 3.1 to the 1996 Form 10-K. 3.2 Restated and Amended Bylaws of Incorporated by the Registrant, as amended. reference to Exhibit 3.2 to the 1996 Form 10-K. 4.1 Specimen Common Stock Incorporated by Certificate. reference to Exhibit 4.1 to the 1996 Form 10-K. 4.2 Form of Warrant issued to Incorporated by holders of Senior Notes. reference to Exhibit 4-A to the Company's Form 8-K dated July 17, 1992 (the "July 1992 Form 8-K"). 4.3 Form of 8% Convertible Incorporated by Subordinated Debentures due reference to August 31, 2003. Exhibit 4.3 to the 1993 Form 10-K. 12 4.4 Form of 12% Senior Secured Incorporated by Notes. reference to Exhibit 4.4 to the Company's Registration Statement on Form S-4 (File No. 333- 08065), filed on July 12, 1996. 10.1.1 Employment Agreement, dated as Incorporated by of December 1, 1995, between reference to the Registrant and Alexius A. Exhibit 10.1.1 to Dyer III, as amended on the 1996 Form October 3, 1996. 10-K. 10.1.2 Employment Agreement, dated as Incorporated by of October 3, 1996, between reference to the Registrant and George Exhibit 10.1.2 to Murnane III. the 1996 Form 10-K. 10.2.1 1996 Long-Term Incentive and Incorporated by Share Award Plan. reference to Appendix B to the Proxy Statement/Prospect us included in the Company's Registration Statement on Form S-4 (File No. 333-08065). 10.2.2 401(k) Plan. Incorporated by reference to Exhibit 10-H to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1992 (the "1992 Form 10-K"). 10.2.3 Bonus Plan. Incorporated by reference to Exhibit 10.2.4 to the 1992 Form 10- K. 10.2.4 Cafeteria Plan. Incorporated by reference to Exhibit 10.2.5 of the 1993 Form 10- K. 13 10.2.5 Form of Option Certificate Incorporated by (Employee Non-Qualified Stock reference to Option). Exhibit 10.2.5 to the 1996 Form 10-K. 10.2.6 Form of Option Certificate Incorporated by (Director Non-Qualified Stock reference to Option). Exhibit 10.2.6 to the 1996 Form 10-K. 10.2.7 Form of Option Certificate Incorporated by (Incentive Stock Option). reference to Exhibit 10.2.7 to the 1996 Form 10-K. 10.3.1 Form of Securities Purchase Incorporated by Agreement dated as of July 17, reference to 1992 among Registrant and the Exhibit 10-A to Purchasers listed therein, as the Registrant's amended. July 1992 Form 8- K. 10.3.2 Consent, Amendment and Waiver Incorporated by dated as of September 8, 1993 reference to among Registrant and the Exhibit 10.9.2 to parties listed therein. the 1993 Form 10- K. 10.4 Representative Indemnity Incorporated by Agreement between Registrant reference to and its Directors and Exhibit 10.12 to Executive Officers. the 1993 Form 10- K. 10.5.1 Securities Purchase Agreement Incorporated by dated as of September 8, 1993 reference to among Registrant and the Exhibit 10.13 to Purchasers listed therein. the 1993 Form 10- K. 10.6 Form of Registration Rights Incorporated by Agreement dated as of reference to September 8, 1993, among Exhibit 10.14 to Registrant and the Purchasers the 1993 Form 10- listed therein. K. 10.7 Settlement Stipulation, dated Incorporated by January 31, 1995, among Admark reference to International, Ltd., Plaintiff Exhibit 10.7.3 to and Norville Trading Company the Company's Ltd., International Airline Annual Report in Support Group, Inc., and Form 10-K for the Richard R. Wellman, fiscal year ended Defendants. May 31, 1995 (the "1995 Form 10-K"). 14 10.8 Purchase Agreement, dated Incorporated by January 1995, among reference to International Airline Support Exhibit 10.1 to Group, Inc., Richard R. the Company's Wellman, Lynda Wellman, and Form 10-Q/A for Custom Air Holdings, Inc., the quarter ended including as an exhibit the August 31, 1994. "General Proxy" executed by Richard R. Wellman and Lynda Wellman. 10.10 Assignment and Assumption Incorporated by Agreement, dated January 31, reference to 1995, between International Exhibit 10.2 to Airline Service Center, Inc. the Registrant's and Express One International, Form 10-Q/A for Inc. the quarter ended August 31, 1994. 10.11 Notice of Payment Blockage, Incorporated by dated May 25, 1995. reference to Exhibit 10.11 to the 1995 Form 10- K. 10.12 Form of Engagement Letter Incorporated by dated February 16, 1996, reference to between the Registrant and Exhibit 10.12 to Kirkland Messina, Inc. (filed the Company's herewith). Registration Statement on Form S-4 (File No. 333- 08065), filed on July 12, 1996. 10.13 Form of Depositary Agreement Incorporated by between the Registrant and reference to First Union National Bank of Exhibit 10.13 to North Carolina. the 1996 Form 10-K. 10.14 Commission Agreement dated Incorporated by December 1, 1995 between the reference to Registrant and J.M. Exhibit 10.14 to Associates, Inc. the 1996 Form 10-K. 10.15 Aircraft Parts Purchase Incorporated by Agreement, dated May 16, 1996, reference to between Paxford Int'l, Inc. Exhibit 10.15 to and the Registrant. the Company's Registration Statement on Form S-4 (File No. 333- 08065). 11 Statement regarding Incorporated by computation of per share reference to earnings. Exhibit 11 to the 1996 Form 10-K. 21 Subsidiaries. Incorporated by reference to Exhibit 21 to the 1996 Form 10-K. 27 Financial Data Schedule. Page no. 18. 99.1 Form of Consent and Letter of Incorporated by Transmittal for the reference to Registrant's 8% Convertible Exhibit 99.1 to Subordinated Debentures due the Company's August 31, 2003. Registration Statement on Form S-4 (File No. 333- 08065). 99.2 Form of Notice of Guaranteed Incorporated by Delivery for the Registrant's reference to 8% Convertible Subordinated Exhibit 99.2 to Debentures due August 31, the Company's 2003. Registration Statement on Form S-4 (File No. 333- 08065). 99.3 Form of Proxy with respect to Incorporated by the solicitation of the reference to holders of the Registrant's Exhibit 99.3 to Common Stock. the Company's Registration Statement on Form S-4 (File No. 333- 08065). 16 (b) Reports on Form 8-K The Company filed a Current Report on Form 8-K on July 12, 1996. The date of the report was July 12, 1996. The report was with respect to Item 5. 17 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 George Murnane III Date: 10/15/96 Executive Vice President and Chief Financial Officer 18 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS MAY-31-1997 AUG-31-1996 364,127 0 2,360,958 776,000 9,361,026 11,456,573 4,410,116 2,160,018 15,356,838 4,731,136 17,697,565 150 0 0 (7,072,013) 15,356,838 4,038,671 4,158,671 2,317,141 2,317,141 165,812 0 488,879 344,068 0 344,068 0 0 0 344,068 2.30 2.25
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