SEC Info - International Airline Support Group Inc

SEC Info℠

Home

Help

Please Sign In

International Airline Support Group Inc – ‘10-K/A’ for 5/31/00

On: Friday, 6/1/01, at 6:02pm ET · As of: 6/4/01 · For: 5/31/00 · Accession #: 859307-1-500004 · File #: 1-12893

  As Of                Filer                Filing    For·On·As Docs:Size

 6/04/01  Int’l Airline Support Group Inc   10-K/A      5/31/00    1:18K

Amendment to Annual Report — Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K/A      10K/A Air 41                                          13     38K 

10-K/A 1st Page of 13 TOC ↑Top Previous Next ↓Bottom Just 1st
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-K/A

AMENDMENT NO. 1 TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2000

Commission file number:  0-18352

 INTERNATIONAL AIRLINE SUPPORT GROUP, INC.

(Exact name of Registrant as specified in its charter)

Delaware          59-2223025
--------          ----------
(State or Other Jurisdiction of                                   
  Incorporation or Organization)  (I.R.S. Employer Identification No.)
 ------------------------------   ------------------------------------

1954 Airport Road, Suite 200,                 
         Atlanta, Georgia                        30341
(Address of Principal Executive Offices)          (Zip Code)
----------------------------------------          ----------

      (770) 455-7575
----------------------------------- 
(Registrant's telephone number, including area code)

 Securities registered pursuant to Section 12(b) of the Act:

 Title of class          Name of each exchange on which registered
Common Stock, $.001 par value          American Stock Exchange
-----------------------------          -----------------------

 Securities registered pursuant to Section 12(g) of the Act:  None

10-K/A 2nd Page of 13 TOC 1st Previous Next ↓Bottom Just 2nd
The  undersigned  Registrant  hereby  amends  the  following  items,  financial 
statements, exhibits or other portions of its Annual Report on Form 10-K for the
year  ending  May  31,  2000  as  set  forth  below:                            

Part  II,  Item  8                                                              
Financial  Statements                                                           

The  following  financial statements of Air 41 LLC, a Delaware limited liability
company  in  which  the  Company  owns an equity interest, are filed pursuant to
Regulation  S-X,  Rule  3-09:                                                   

Report  of  independent  certified  public  accountants                         
Balance  sheets  as  of  May  31,  2000  and  1999;                             
Statements  of  earnings  for  the  years  ended  May  31,  2000  and  1999;    
Statement of members' capital for the year ended May 31, 2000 and for the period
from  September  19,     1998  through  May  31,  1999;                         
Notes  to  financial  statements.                                               

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant  has  duly  caused  this  amendment to be signed on its behalf by the
undersigned  thereunto  duly  authorized.                                       

International  Airline  Support  Group,  Inc.,                        
a  Delaware  corporation                                              

By:  /s/  James  M.  Isaacson                                                   
--------------------------                                                
James  M.  Isaacson                                                 
Chief  Accounting  Officer                                          

Date:  May  31,  2001                                                           

FINANCIAL  STATEMENTS  AND                                            
REPORT  OF  INDEPENDENT  CERTIFIED                                    
PUBLIC  ACCOUNTANTS                                                   

AIR  41  LLC                                                          

MAY  31,  2000  AND  1999                                             

10-K/A 3rd Page of 13 TOC 1st Previous Next ↓Bottom Just 3rd
 C O N T E N T S

                                          Page

REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS     1                   

FINANCIAL  STATEMENTS                                                           

BALANCE  SHEETS                                        2              

STATEMENTS  OF  EARNINGS                               3              

STATEMENT  OF  MEMBERS'  CAPITAL                       4              

STATEMENTS  OF  CASH  FLOWS                            5              

NOTES  TO  FINANCIAL  STATEMENTS                6  -  10              

10-K/A 4th Page of 13 TOC 1st Previous Next ↓Bottom Just 4th
 REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS

Board  of  Directors                                                            
AIR  41  LLC                                                                    

We have audited the accompanying balance sheets of AIR 41 LLC (the "Company") as
of  May  31,  2000  and  1999,  and the related statements of earnings, members'
capital  and  cash  flows  for  the  year ended May 31, 2000 and the period from
September  19,  1998  (date of inception) through May 31, 1999.  These financial
statements  are  the  responsibility  of  the  Company's  management.  Our      
responsibility  is  to express an opinion on these financial statements based on
our  audits.                                                                    

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a 
reasonable  basis  for  our  opinion.                                           

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects, the financial position of AIR 41 LLC as of May 31, 2000
and 1999 and the results of its operations and its cash flows for the year ended
May  31, 2000 and the period from September 19, 1998 (date of inception) through
May 31, 1999, in conformity with accounting principles generally accepted in the
United  States  of  America.                                                    

Miami,  Florida                                                                 
July  21,  2000                                                                 

F-1 

10-K/A 5th Page of 13 TOC 1st Previous Next ↓Bottom Just 5th
AIR 41 LLC

BALANCE SHEETS

 MAY 31,

ASSETS

                                                                [Download Table]

                                                          2000             1999   
                                                      -----------      -----------
                                                                                  
Aircraft, net                                    $     71,573,610   $   76,458,333
Deferred  debt  costs,  net  of  accumulated                                      
  amortization  of  $225,848  and  $83,431  as                                    
  of  May  31,  2000  and  1999,  respectively            222,739          303,782
                                                          -------          -------

                    Total  assets                $     71,796,349   $   76,762,115
                                                 =     ==========   =   ==========

                        LIABILITIES AND MEMBERS' CAPITAL                          

Current  liabilities                                                              
     Accounts  payable  and accrued expenses     $        262,955   $     283,670 
     Deferred  revenue                                    600,000         600,000 
     Current  portion  of  long-term debt              22,234,761       7,846,929 
                                                       ----------       --------- 

                    Total  current  liabilities        23,097,716       8,730,599 

Long-term  debt,  net of current portion               40,978,361      63,284,372 

Commitment  and  contingencies                             -               -      

Members'  capital                                       3,353,327       3,174,426 
Retained  earnings                                      4,366,945       1,572,718 
                                                        ---------       --------- 

                    Total members' capital              7,720,272       4,747,144 
                                                        ---------       --------- 

                    Total  liabilities and                                        
                       members' capital          $     71,796,349  $   76,762,115 
                                                 =     ==========  =   ========== 

The  accompanying  notes  are  an  integral  part  of  these  statements.       

   F-2

10-K/A 6th Page of 13 TOC 1st Previous Next ↓Bottom Just 6th
AIR 41 LLC
STATEMENTS OF EARNINGS

 YEAR ENDED MAY 31, 2000 AND
FOR THE PERIOD FROM SEPTEMBER 19, 1998 (DATE OF INCEPTION)
THROUGH MAY 31, 1999

                                                                [Download Table]

                                                    2000             1999   
                                                -----------      -----------
                                                                            
Rental  revenue                             $    14,475,000  $    10,200,000

Expenses                                                                    
     Interest  expense                            5,770,912        4,522,184
     Depreciation and amortization expense        5,189,861        3,625,098
                                                  ---------        ---------
                                                 10,960,773        8,147,282
                                                 ----------        ---------

                    Net  earnings            $    3,514,227   $    2,052,718
                                             =    =========   =    =========

The  accompanying  notes  are  an  integral  part  of  these  statements.       

F-3     

10-K/A 7th Page of 13 TOC 1st Previous Next ↓Bottom Just 7th
AIR 41 LLC

 STATEMENT OF MEMBERS' CAPITAL

 YEAR ENDED MAY 31, 2000 AND
FOR THE PERIOD FROM SEPTEMBER 19, 1998 (DATE OF INCEPTION)
THROUGH MAY 31, 1999

                                                                [Download Table]

                                     Members'     Retained                      
                                     Capital      Earnings              Total   
                                   -----------   -----------        ----------- 
                                                                                
Balance  at  September  19,  1998                                               
  (date  of  inception)            $     -       $     -        $         -     

Capital  contributions               3,174,426         -              3,174,426 

Net  earnings                            -         2,052,718          2,052,718 

Distributions                            -          (480,000)          (480,000)
                                     ---------      --------           -------- 
Balance at May 31, 1999              3,174,426     1,572,718          4,747,144 

Capital  contributions                 178,901         -                178,901 

Net  earnings                             -        3,514,227          3,514,227 

Distributions                             -         (720,000)          (720,000)
                                      ---------     --------           -------- 

Balance  at  May  31,  2000        $  3,353,327  $ 4,366,945   $      7,720,272 
                                     ==========   ==========       ============ 


The  accompanying  notes  are  an  integral  part  of  this  statement.         

             F-4

10-K/A 8th Page of 13 TOC 1st Previous Next ↓Bottom Just 8th
AIR 41 LLC

STATEMENTS OF CASH FLOWS

 YEAR ENDED MAY 31, 2000 AND
FOR THE PERIOD FROM SEPTEMBER 19, 1998 (DATE OF INCEPTION)
THROUGH MAY 31, 1999

                                                        [Enlarge/Download Table]

                                                               2000               1999    
                                                           -----------        ----------- 
                                                                                          
Net  cash  flows  from  operating  activities:                                            
     Net  earnings                                      $    3,514,227    $     2,052,718 
     Adjustments  to  reconcile  net  earnings                                            
      to  cash provided  by  operating  activities:                                       
          Depreciation  and  amortization                    5,189,861          3,625,098 
          Changes  in  assets  and  liabilities:                                          
            Increase  (decrease)  in  liabilities:                                        
               Accounts  payable  and  accrued  expenses       (20,715)           283,670 
               Deferred  revenue                                  -               600,000 
                                                             ----------           ------- 
               Net cash provided by operating activities      8,683,373         6,561,486 

Cash  flows  from  investing  activities:                                                 
     Purchase  of  aircraft                                       -           (80,000,000)
     Additions  to  aircraft                                   (162,721)           -      
                                                             -----------       ---------- 
               Net  cash  used  in  investing activities       (162,721)      (80,000,000)

Cash  flows  from  financing  activities:                                                 
     Principal  payments  on  long-term  debt                (7,918,179)       (4,868,699)
     Proceeds  from  long-term  debt                             -             76,000,000 
     Capital  contributions                                     178,901         3,174,426 
     Distributions                                             (720,000)         (480,000)
     Payment  of  debt  costs                                   (61,374)         (387,213)
                                                                -------          -------- 
               Net  cash  (used  in)  provided                                            
                  by  financing activities                   (8,520,652)       73,438,514 
                                                             ----------        ---------- 

Net  change  in  cash  and  cash  equivalents                    -                  -     

Cash  and  cash  equivalents  at  beginning  of  period          -                  -     
                                                             ----------        ---------- 

Cash  and  cash  equivalents  at  end  of  period          $     -          $       -     
                                                             ==========        ========== 

Supplemental  disclosure  of  cash  flow  information:                                    
     Cash  paid  during  the  year  for:                                                  
          Interest                                         $  5,813,845     $   3,995,524 
                                                           ============     ============= 
          Taxes                                            $     -          $      -      
                                                           ============     ============= 

The  accompanying  notes  are  an  integral  part  of  these  statements.       

     F-5

10-K/A 9th Page of 13 TOC 1st Previous Next ↓Bottom Just 9th
AIR 41 LLC

 NOTES TO FINANCIAL STATEMENTS - CONTINUED

 YEAR ENDED MAY 31, 2000 AND
FOR THE PERIOD FROM SEPTEMBER 19, 1998 (DATE OF INCEPTION)
THROUGH MAY 31, 1999

AIR 41 LLC

 NOTES TO FINANCIAL STATEMENTS

 YEAR ENDED MAY 31, 2000 AND
FOR THE PERIOD FROM SEPTEMBER 19, 1998 (DATE OF INCEPTION)
THROUGH MAY 31, 1999

NOTE  A  -  SIGNIFICANT  ACCOUNTING  POLICIES                                   

Basis  of  Presentation                                               
-----------------------                                               

     The  statements include the accounts of AIR 41 LLC (the "Company") which is
equally  owned by International Airline Support Group ("IASG") and Aircorp, Inc.

Nature  of  Operations                                                
----------------------                                                

    The  Company  is  the owner and lessor of twenty McDonnell Douglas aircraft.
The  aircraft  are  leased  primarily to Scandinavian Airline Systems ("SAS"), a
company  based  in  Sweden.                                                     

Cash  Flow                                                            
----------                                                            

     All monthly rental income from operations is paid directly to the Company's
lender.  The  lender  applies the portion of the rental income to the respective
monthly  principal  and  interest  due  on  the Company's debt and the remaining
portion  is  distributed  back  to the members of the Company.  Accordingly, the
Company  does  not  retain  any  cash.                                          

Aircraft  and  Depreciation                                           

 The  aircraft  is  recorded  at  cost  less  accumulated  depreciation.
Depreciation  is  computed  using  the  straight-line  method  over an estimated
economic  life  of  twelve years with an estimated salvage value equal to 25% of
the  original  asset  cost.  Major improvements to aircraft are capitalized when
incurred  and  depreciated over the useful life of the improvement.  The Company
evaluates  the  carrying  value of the aircraft based upon changes in market and
other  physical and economic conditions and will record write-downs to recognize
a  loss  in  the  value  of the aircraft when management believes that, based on
expected  future  cash flows, the recoverability of the Company's investment has
been  impaired.                                                                 

Operating  Leases                                                     

     The  aircraft  leases  are  accounted  for  as operating leases and have an
average  original  term  of  39  months.  Lease revenues are recognized in equal
installments  over  the  terms  of  the  related  leases.                       

                                                                     (continued)

F-6               

10-K/A 10th Page of 13 TOC 1st Previous Next ↓Bottom Just 10th
NOTE  A  -  SIGNIFICANT  ACCOUNTING  POLICIES  -  Continued                     

Operating  Leases  -  Continued                                       

     Currently, the Company has no further commitment related to the disposition
of  these  aircraft upon the termination of the leases, although, the Company is
actively  marketing  these  aircraft.  A future impairment in the value of these
aircraft and/or the inability of the Company to sell or re-lease these aircraft,
after  they  come  off  lease,  could  have a significant negative impact on the
Company's  operations.                                                          

Deferred  Debt  Costs                                                 
---------------------                                                 

     Deferred  debt  costs  represent  costs  incurred  related to the loan with
Finova  Capital  Corporation.  These  costs  are  amortized  using the effective
interest  rate  method.                                                         

Income  Taxes                                                         
-------------                                                         

     Income  taxes on earnings are payable personally by the members pursuant to
an  election  under  section 701 of the Internal Revenue Code and the Company is
not  taxed as a Corporation. Accordingly, no provision has been made for federal
income  taxes  in  these  financial  statements.                                

Revenue  Recognition                                                  
--------------------                                                  

     Rental  income is recognized on a straight-line basis over the term of each
lease  and  when  collection  is  reasonably  assured.                          

Deferred  Revenue                                                     
-----------------                                                     

     Lease  revenues  received  in advance, but not yet earned, are deferred and
recognized  as  rental  revenue  when  earned.                                  

Use  of  Estimates                                                    

     In  preparing financial statements in conformity with accounting principles
generally  accepted  in  the United States of America, management is required to
make  estimates  and  assumptions that effect the reported amounts of assets and
liabilities  at  the  date  of the financial statements and revenue and expenses
during  the reporting period.  Actual results could differ from those estimates.

F-7     

10-K/A 11th Page of 13 TOC 1st Previous Next ↓Bottom Just 11th
NOTE  B  -  AIRCRAFT                                                            

Net  Investment  in  Aircraft                                         
-----------------------------                                         

     The  Company's  net  investment  in aircraft as of May 31, consisted of the
following:                                                                      

                                          2000                  1999
                                        ------------          ------------
Aircraft  on  operating                                               
        leases,  at  cost        $     80,115,277     $       80,000,000
  Less:  Accumulated  depreciation      (8,541,667)            (3,541,667)
                                       -----------            ----------

               Aircraft,  net    $     71,573,610     $       76,458,333
                                 =     ==========     =       ==========

NOTE  C  -  FUTURE  MINIMUM  RENTAL  INCOME                                     

     The  following  is a schedule by year of future minimum rental income under
the  leases  as  of  May  31,  2000:                                            

Year          Amount                                            
-------     -----------                                               

2001     $     12,840,000                                             
2002            7,800,000                                             
2003              600,000                                             
-------                           
Total    $     21,240,000                                             
=     ==========                                    

     In  September  1998,  the  Company  entered  into  a  lease  agreement with
Scandinavian  Airline  Systems ("SAS") to lease twenty McDonnell Douglas DC-9-41
aircraft.  The  monthly  lease payments are $60,000 per aircraft and the average
original  lease  term  was  39  months.  The  operational responsibility for the
aircraft  rests  with the lessee, and at its cost must maintain, service, repair
and  overhaul  the  aircraft so as to keep the aircraft in good repair condition
and  appearance and airworthy in all respects and to the same standard as lessee
maintains,  services,  repairs and overhauls other commercial jet aircraft which
it  owns or leases.  However, the Company is responsible for the cost related to
any  Airworthiness  Directives  over  a  certain amount, as defined in the Lease
Agreement.                                                                      

     Title  to the aircraft remains with the lessor throughout the lease period,
however,  the  lessee  is  responsible  for  the  insurance  on  the  aircraft. 

   IASG  and  Aircorp,  Inc.  collectively  have  guaranteed  the  Company's
obligation  as  the  lessor  of  the  aircraft.                                 

F-8         

10-K/A 12th Page of 13 TOC 1st Previous Next ↓Bottom Just 12th
NOTE  D  -  DEBT                                                                

Long-term  obligations  at  May  31,  consisted  of  the  following:  

                                            2000                  1999
                                          ------------          ------------

Note  payable                           $     63,213,122     $     71,131,301   
Less:  Current  maturities                    22,234,761            7,846,929   
                                           ----------            ---------
                                     $     40,978,361     $     63,284,372
                                     =     ==========     =     ==========

     In  September  1998,  the Company entered into a loan agreement with Finova
Capital  Corporation  in  the amount of $76 million.  The annual interest on the
loan  is fixed at 8.63% and the loan is collateralized by the twenty aircraft as
well  as the interest in the SAS leases (see Note B).  During the original terms
of  the  leases,  the Company is required to repay principal and interest on the
debt  based on 95% of the rental income received from the lease of the aircraft.
Once  an  aircraft lease expires, the remaining principal on the aircraft is due
to  Finova  Capital  Corporation.  If  the  aircraft is re-leased, the repayment
terms  of  the debt on the aircraft is modified in accordance with the new lease
terms.  If  the aircraft is sold, the remaining principal due on the aircraft is
repaid  in  full with the proceeds from the aircraft sale.  In fiscal 2001, nine
aircraft are due to come off lease.  Accordingly, the remaining principal due on
these  nine aircraft as of May 31, 2000 is classified as part of current portion
of  long-term  debt on the accompanying May 31, 2000 Balance Sheet.    This loan
represents  non-recourse  debt  to  IASG  and  Aircorp,  Inc.                   

     The  following is a schedule of the future principal payments as of May 31,
2000:                                                                           

2001     $     22,234,761                                             
2002           27,425,604                                             
2003           13,552,757                                             
----------                                

$     63,213,122                                    
=     ==========                                    

F-9                 

10-K/A Last Page of 13 TOC 1st Previous Next ↓Bottom Just 13th
NOTE  E  -  RELATED  PARTY  TRANSACTIONS                                        

Funding  of  Expenses                                                 
---------------------                                                 

     The  members  pay  all  expenses  on behalf of the Company, which represent
primarily  aircraft maintenance and improvements.  The payment of these expenses
is  accounted  for  by  the  Company  as  capital  contributions.               

Allocation  of  Expenses                                              
------------------------                                              

     Certain  management  and accounting expenses of the Company are absorbed by
IASG  and  have not been allocated to the Company.  These expenses are deemed to
be  insignificant.                                                              

Aircraft  Lease                                                       
---------------                                                       

     In  fiscal  2000,  the  Company  leased  one  of  its aircraft to an entity
controlled by the owner of Aircorp, Inc., a member of the Company.  Total rental
income  from  this  related  party  was $75,000 for the year ended May 31, 2000.

NOTE  F  -  SUBSEQUENT  EVENT                                                   

     Subsequent  to May 31, 2000, two additional aircraft came off of lease from
SAS.  One  of  these  aircraft  has  been leased to an unrelated party at a more
favorable  lease  rate,  and  the Company is currently searching for a potential
lessee  for  the  other  aircraft.                                              

F-10

10-K/A	1st Page of 13	TOC	↑Top	Previous	Next	↓Bottom	Just 1st

10-K/A	2nd Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 2nd

10-K/A	3rd Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 3rd

10-K/A	4th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 4th

10-K/A	5th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 5th

10-K/A	6th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 6th

10-K/A	7th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 7th

10-K/A	8th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 8th

10-K/A	9th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 9th

10-K/A	10th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 10th

10-K/A	11th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 11th

10-K/A	12th Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 12th

10-K/A	Last Page of 13	TOC	1st	Previous	Next	↓Bottom	Just 13th

Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-K/A’ Filing	Date	First	Last	Other Filings

Filed as of:	6/4/01
Filed on:	6/1/01
	5/31/01	2		10-K
	7/21/00	4
For Period End:	5/31/00	1	13	10-K, 10-K/A
	5/31/99	2	9	10-K
	9/19/98	2	9
				List all Filings

↑Top

Filing Submission 0000859307-01-500004 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

International Airline Support Group Inc – ‘10-K/A’ for 5/31/00

On: Friday, 6/1/01, at 6:02pm ET · As of: 6/4/01 · For: 5/31/00 · Accession #: 859307-1-500004 · File #: 1-12893

Previous ‘10-K’: ‘10-K’ on 8/30/00 for 5/31/00 · Next: ‘10-K/A’ on 6/7/01 for 5/31/00 · Latest: ‘10-K’ on 8/29/02 for 5/31/02

Amendment to Annual Report — Form 10-KFiling Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Amendment to Annual Report — Form 10-K
Filing Table of Contents