SEC Info - Flight International Group Inc

SEC Info℠

Home

Help

Please Sign In

Flight International Group Inc – ‘10QSB’ for 7/31/98

As of: Friday, 9/11/98 · For: 7/31/98 · Accession #: 890163-98-185 · File #: 0-17066

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

 9/11/98  Flight International Group Inc    10QSB       7/31/98    2:20K                                    Starkey & Henricks/FA

Quarterly Report — Small Business — Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    12     44K 
 2: EX-27       Financial Data Schedule                                1      7K

10QSB — Quarterly Report — Small Business
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) CAS-MOS Contract Changes in Securities. None Defaults Upon Senior Securities. None Exhibits Financial Statements Liquidity and Capital Resources Other Information. None Submission of Matters to a Vote of Security Holders. None
1	1st Page - Filing Submission
6	Item 1. Financial Statements
8	CAS-MOS Contract
10	Liquidity and Capital Resources
11	Item 2. Changes in Securities. None
"	Item 3. Defaults Upon Senior Securities. None
"	Item 4. Submission of Matters to a Vote of Security Holders. None
"	Item 5. Other Information. None
"	Item 6. (a). Exhibits

10QSB 1st Page of 12 TOC ↑Top Previous Next ↓Bottom Just 1st
 
 U.S. Securities and Exchange Commission
Washington, D.C. 20549

 FORM 10-QSB

(Mark One)                                                                      

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE   
 SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 31, 1998

[ ] 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 2-87778A

THE FLIGHT INTERNATIONAL GROUP, INC.
------------------------------------
 (Exact name of small business issuer as specified in its charter)

         Georgia                        58-1476225
       --------------------              -----------------
   (State or other jurisdiction           (I.R.S. Employer
   of incorporation or organization)       Identification No.)

 Newport News/Williamsburg International Airport, Newport News, VA 23602
 -----------------------------------------------------------------------
(Address of principal executive offices)

(757) 886-5500
 -------------------------
 Issuer's telephone number

 -------------------------------------------------------
 (Former name, former address and former fiscal year, if
changed since last report)

         Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for    
such shorter period that the registrant was required to file such reports), and 
(2) has been subject to such filing requirements for the past 90 days. Yes X No 

 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
 PROCEEDINGS DURING THE PRECEDING FIVE YEARS

       Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the            
distribution of securities under a plan confirmed by a court.                   
Yes        No    X                                                              

APPLICABLE ONLY TO CORPORATE ISSUERS
         State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date: As of September 10, 1998,     
there were 1,013,976 shares of the issuer's New Common Stock, par value $.01 per
share, issued and outstanding.                                                  

Transitional Small Business Disclosure Format [check one]:Yes     No X          

1 

10QSB 2nd Page of 12 TOC 1st Previous Next ↓Bottom Just 2nd
THE FLIGHT INTERNATIONAL GROUP, INC.                                            
CONDENSED CONSOLIDATED BALANCE SHEETS                                           

                                                                [Download Table]

ASSETS                                                                        

                                  July 31, 1998            April 30, 1998     
                                   (Unaudited)                                
                              -----------------------  -----------------------
                                                                              
CURRENT ASSETS                                                                
  Cash                        $               83,938   $              104,008 
  Accounts Receivable, net                 2,750,869                3,989,073 
  Inventories                              2,306,941                2,087,700 
  Prepaid expenses and other                 723,039                  510,785 
  Deposits                                   983,774                  983,774 
                              -----------------------  -----------------------

Total current assets                       6,848,561                7,675,340 

PROPERTY AND EQUIPMENT, NET                4,372,717                4,096,017 

OTHER ASSETS                                  39,164                   22,262 
                              -----------------------  -----------------------

                              $           11,260,442   $           11,793,619 
                              =======================  =======================


2 

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.      

10QSB 3rd Page of 12 TOC 1st Previous Next ↓Bottom Just 3rd
THE FLIGHT INTERNATIONAL GROUP, INC.                                            
CONDENSED CONSOLIDATED BALANCE SHEETS                                           
LIABILITIES AND STOCKHOLDERS' EQUITY                                            

                                                        [Enlarge/Download Table]


                                                          July 31, 1998            April 30, 1998     
                                                           (Unaudited)                                
                                                     ------------------------  -----------------------
                                                                                                      
CURRENT LIABILITIES                                                                                   
  Accounts payable                                   $               359,887   $              450,403 
  Deferred revenue                                                 1,394,505                  950,802 
  Accrued expenses and other liabilities                           2,505,763                2,362,442 
  Note payable                                                             0                  451,097 
  Long-term debt due currently                                       667,559                  652,238 
  Income tax payable                                                   8,588                   20,000 
                                                     ------------------------  -----------------------

Total current liabilities                                          4,936,302                4,886,982 

DEFERRED REVENUE                                                     232,417                  727,586 
ACCRUED ENGINE RESERVES                                              762,878                  744,647 
LONG-TERM DEBT, LESS CURRENT MATURITIES                            2,874,802                3,030,231 
                                                     ------------------------  -----------------------

Total liabilities                                                  8,806,399                9,389,446 
                                                     ------------------------  -----------------------

STOCKHOLDERS' EQUITY                                                                                  
  Common stock, $.01 par value, 10,000,000 shares                                                     
      authorized,  1,013,976 issued and outstanding                   10,140                   10,140 
  Additional paid in capital                                       1,007,617                1,007,617 
  Treasury stock                                                                                      
  Retained Earnings                                                1,436,286                1,386,416 
                                                     ------------------------  -----------------------

Total stockholders' equity                                         2,454,043                2,404,173 

                                                     $            11,260,442   $           11,793,619 
                                                     ========================  =======================


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.      

3 

10QSB 4th Page of 12 TOC 1st Previous Next ↓Bottom Just 4th
THE FLIGHT INTERNATIONAL GROUP, INC.                                            
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                       

                                                        [Enlarge/Download Table]


                                                     For the Three Months Ended              
                                              July 31, 1998               July 31, 1997      
                                         ----------------------------------------------------
                                                                                             
REVENUES                                   $           6,182,499       $           6,178,852 

OPERATING COSTS AND EXPENSES                                                                 
  Costs of services                                    5,305,389                   4,911,601 
  Gain on disposal of assets                             (18,167)                    (18,167)
  Depreciation and amortization                          141,827                     139,881 
  General, corporate and administrative                  622,349                     534,408 
                                         ----------------------------------------------------

Total operating costs and expenses                     6,051,398                   5,567,723 

INCOME (LOSS) BEFORE OTHER                               131,101                     611,129 
    EXPENSES                                                                                 

OTHER EXPENSES                                                                               
  Interest expense                                        81,231                      95,107 
                                         ----------------------------------------------------

Total other expenses                                      81,231                      95,107 

INCOME BEFORE TAXES                                       49,870                     516,022 

Income tax expense                                             0                      11,777 
                                         ----------------------------------------------------

NET INCOME (LOSS)                          $              49,870       $             504,245 
                                         ====================================================

NET INCOME (LOSS) PER COMMON               $                0.05       $                0.50 
                                         ====================================================
    SHARE - BASIC                                                                            

WEIGHTED AVERAGE NUMBER OF SHARES                      1,013,976                   1,013,976 
                                         ====================================================

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.      

4 

10QSB 5th Page of 12 TOC 1st Previous Next ↓Bottom Just 5th
THE FLIGHT INTERNATIONAL GROUP, INC.                                            
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                       

                                                        [Enlarge/Download Table]


                                                             For the Three Months Ended             
                                                     July 31, 1998                July 31, 1997     
                                                 ---------------------------------------------------
                                                                                                    
OPERATING ACTIVITIES                                                                                
  Net income                                         $          49,870           $          504,245 
  Adjustments to reconcile net income                                                               
   to net cash provided (absorbed) by operating                                                     
   activities                                                                                       
    Depreciation and amortization                              141,827                      139,881 
    Engine reserve                                              18,231                       53,721 
    Gain on sale of assets                                     (18,167)                             
    Net cash provided (absorbed) by                                                                 
      Accounts receivable                                    1,238,204                     (616,991)
      Inventories                                             (219,241)                    (114,101)
      Prepaid expenses and other assets                       (212,254)                    (328,990)
      Accounts payable                                         (90,516)                     224,220 
      Accrued expenses and other liabilities                   161,488                      119,569 
      Deferred revenue                                         (51,466)                     (37,947)
       Income taxes payable                                    (11,412)                           0 
                                                 ---------------------------------------------------

Net cash provided by operating activities                    1,006,564                      (56,393)

INVESTING ACTIVITIES                                                                                
  Purchase of property and equipment                          (418,527)                    (140,648)
  Net (increase) decrease in other assets                      (16,902)                           0 
                                                 ---------------------------------------------------

Net cash absorbed by investing activities                     (435,429)                    (140,648)

FINANCING ACTIVITIES                                                                                
  Proceeds from credit line, net                              (451,097)                     240,886 
  Repayment of long-term debt                                 (140,108)                    (162,804)
                                                 ---------------------------------------------------

Net cash absorbed by financing activities                     (591,205)                      78,082 

NET (DECREASE) INCREASE IN CASH AND                                                                 
  CASH EQUIVALENTS                                             (20,070)                    (118,959)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                 104,008                      231,111 

CASH AND CASH EQUIVALENTS, END OF PERIOD             $          83,938           $          112,152 
                                                 ===================================================


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.      

5 

10QSB 6th Page of 12 TOC 1st Previous Next ↓Bottom Just 6th
PART 1

 FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

     The Flight International Group, Inc. (the "Company") files herewith
unaudited condensed consolidated balance sheets of the Company and its          
subsidiaries as of July 31, 1998 (unaudited) and April 30, 1998 (the Company's  
most recent fiscal year), unaudited condensed consolidated statements of        
operations for the three months ended July 31, 1998 and 1997, and unaudited     
condensed consolidated statements of cash flows for the three months ended July 
31, 1998 and 1997, together with unaudited condensed notes thereto. In the      
opinion of management of the Company, the financial statements reflect all      
adjustments, all of which are normal recurring adjustments, necessary to fairly 
present the financial condition of the Company for the interim period presented.
The financial statements included in this report on Form 10-QSB should be read  
in conjunction with the audited financial statements of the Company and the     
notes thereto included in the annual report of the Company on Form 10-KSB for   
the year ended April 30, 1998.                                                  

6 

10QSB 7th Page of 12 TOC 1st Previous Next ↓Bottom Just 7th
THE FLIGHT INTERNATIONAL GROUP, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                             

     The Flight International Group, Inc. (the "Company") is an aviation
services company that performs military training services using specially       
modified commercial aircraft, principally under contracts with the United States
Department of Defense, other government agencies and foreign countries. In      
addition, the Company has established a market for training and testing in the  
aerospace industry. The Company also operates a fixed base operation ("FBO") and
licensed repair station at the Newport News/Williamsburg International Airport. 

   The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany         
transactions and balances have been eliminated.                                 

Net income/loss per common share is computed by dividing the  
income/loss by the weighted average number of shares of common stock outstanding
during the year.                                                                

2.       NOTES PAYABLE                                                          

  During the year ended April 30, 1998, the Company entered into a
$2,000,000 asset based borrowing agreement with a bank in Newport News,         
Virginia. Under the terms of the Agreement, the Company may obtain advances up  
to 85% of amounts billed by the Company on government contracts. The Company    
must pay interest at prime plus .50% on outstanding advances. Under the         
Agreement, the Company must maintain certain net worth ratios. The Company was  
in compliance with these ratios at July 31, 1998. No advances were outstanding  
as of July 31, 1998.                                                            

3.       INCOME TAXES                                                           

        No provision for federal income taxes has been made by the Company, as
it has substantial Net Operating Loss carry forwards available to offset against
current income.                                                                 

7 

10QSB 8th Page of 12 TOC 1st Previous Next ↓Bottom Just 8th
ITEM 2
 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BACKGROUND AND GENERAL INFORMATION                                              

       The Flight International Group, Inc. (the "Company") was incorporated
in Georgia on May 7, 1982. The Company is an aviation services company that     
performs military training services using specially modified commercial         
aircraft, principally under contract with the Untied States Department of       
Defense, other government agencies and foreign countries, operating through its 
direct and indirect subsidiaries described in the next paragraph. In addition,  
with the use of these aircraft, the Company has established a market for        
training and testing in the aerospace industry. The Company also operates a     
fixed base operation ("FBO") at the Newport News/Williamsburg International     
Airport ("NN/W Airport").                                                       

   Flight International, Inc., a Georgia corporation ("FII"), Flight
International Aviation, Inc., a Georgia corporation ("FIA"), and Flight         
International Sales and Leasing, Inc., a Delaware corporation, are wholly-owned 
subsidiaries of the Company. Flight International of Florida, Inc., a Florida   
corporation ("FIF") is a wholly-owned subsidiary of FII.                        

        In its last three fiscal years, the Company has increased its revenue,
obtained, in August 1996, a major long-term contract (see "CAS-MOS Contract"    
below) and has generated positive net income (after extraordinary item in 1996) 
for the years ended April 30, 1998, 1997 and 1996.                              

Management believes that, in this three year period, it has   
strengthened its balance sheet, developed contracts in its core areas and, as a 
result, acquired more personnel and equipment, and enhanced the Company's       
ability to compete more effectively in its marketplaces.                        

CAS-MOS CONTRACT                                                                

In August 1996, the Company was awarded a major contract. The 
Commercial Air Services-Military Operations Support (CAS-MOS) Contract is a     
derivative of the original government contract won by the Company in 1980 and   
operated until September 1993. The new contract began on October 1, 1996 and has
completed its one base year, is currently in its first option year and three    
additional years remain. Annual revenues from this contract have been $13.9     
million and $7.3 million for the fiscal year ended April 30, 1998 and the seven 
months ended April 30, 1997, respectively. This contract currently constitutes a
substantial portion of the Company's revenues. The Government recently exercised
the second option year on the CAS-MOS contract.                                 

8 

10QSB 9th Page of 12 TOC 1st Previous Next ↓Bottom Just 9th
RESULTS OF OPERATIONS                                                           

Revenues                                                      

       Total revenues for the three months ended July 31, 1998 and 1997 were
$6,182,499 and $6,178,852, respectively. Total revenue for the quarter was      
virtually unchanged from the prior year; however, the major components of       
revenue did show some change. Flight Operations revenue increased 2% to         
$5,149,000. This was due to an increase in contract flying partially offset by a
decrease in Purchase Order work. The FBO in Newport News produced a 15% increase
in revenue principally from increased fuel sales. Maintenance operations showed 
a 24% decrease in revenue due to a slowdown in parts sales.                     

Cost of Services                                              

         Cost of services for the three months ended July 31, 1998 and 1997 were
$5,305,389 and $4,911,601, respectively. The 8% increase is due to a rise in    
aircraft operating costs in the current quarter. The startup of operations in   
Alaska also contributed substantially to the cost increase.                     

        As a result of the flat revenue and increased costs of operations, the
overall gross margin declined from 20% to 14%.                                  

Depreciation and Amortization                                 

        Depreciation and amortization for the three months ended July 31, 1998
and 1997 were $141,827 and $139,881, respectively.                              

General Corporate and Administrative                          

    General corporate and administrative expenses for the three months
ended July 31, 1998 and 1997 were $622,349 and $534,408, respectively. The 16%  
increase is a result of certain facility expenses incurred due to a higher level
of operations and certain executive and marketing expenses incurred to secure   
expanded business opportunities.                                                

Interest                                                      

        Interest expense for the three months ended July 31, 1998 and 1997 was
$81,231 and $95,107, respectively. The 15% reduction in interest expenses is due
to lower borrowing costs on the Company's new line of credit (see "Liquidity and
Capital Resources" below).                                                      

 9

10QSB 10th Page of 12 TOC 1st Previous Next ↓Bottom Just 10th
Net Income                                                    

      As a result of the foregoing, the Company's net income for the three
months ended July 31, 1998 was $49,870, or $.05 per share of the Company's      
common stock, compared to $504,245, or $.50 per share for the three months      
ended July 31, 1997. The weighted average number of shares used in computing per
share earnings for the three months ended July 31, 1998 and 1997 was 1,013,976. 

Liquidity and Capital Resources                               

        The Company has funded its operations primarily through cash flow from
operations, bank indebtedness and a sale-leaseback of certain aircraft effected 
in April 1996. The Company's operating activities provided cash of $1,006,564   
for the three months ended July 31, 1998, while using $56,393 in the comparable 
prior year period. A decrease in accounts receivable of $1,200,000 provided cash
during the current quarter; however, this was offset by a paydown on the line of
credit, the purchase of two jet engines and the repayment of long term debt.    

      On February 25, 1998, the Company entered into a line of credit with
Crestar Bank ("Crestar") for all short term financing needs. The new Agreement, 
which replaces the Agreement with Metro Factors, Inc., which has now been       
terminated, provides for up to $2,000,000 in credit. The loan is represented by 
a demand note which may be payable at any time upon the demand of Crestar. The  
Company will be obligated to pay Crestar interest at prime rate plus one-half   
percent of the average balance outstanding. The line is secured by the Company's
accounts receivable and an assignment of the CAS-MOS Contract.                  

        The Company operates in a capital intensive industry. Typically, major
expenses are incurred in connection with the initiation of a new contract. These
costs can be reduced through leasing arrangements and advance payments from     
customers, if these are obtainable. The Company believes that it will be able to
arrange through available means the financing of these initial contract costs   
when necessary, although no assurance can be given.                             

10

10QSB 11th Page of 12 TOC 1st Previous Next ↓Bottom Just 11th
 PART II - OTHER INFORMATION

Item 1. Legal Proceedings. To the best knowledge of the officers and directors, 
    neither the Company nor any of its officers and directors are party to any
    legal proceeding or litigation. The officers and directors know of no such
litigation being threatened or contemplated.                          

Item 2. Changes in Securities. None                                             

Item 3. Defaults Upon Senior Securities. None                                   

Item 4. Submission of Matters to a Vote of Security Holders. None               

Item 5. Other Information. None                                                 

Item 6. (a) Exhibits                                                            

Exhibit Number and Description                  

27.1 Financial Data Schedule                    

(b) Reports on Form 8-K.  None                                  

11

10QSB Last Page of 12 TOC 1st Previous Next ↓Bottom Just 12th
SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized.                                                                

Dated: September 11, 1998                   THE FLIGHT INTERNATIONAL GROUP, INC.

                                  By:   /s/ David E. Sandlin
                                         ---------------------------
                                      David E. Sandlin
                                         Principal Executive Officer

                                 By:  /s/ Wayne M. Richmon
                                         ---------------------------
                                      Wayne M. Richmon
                                         Principal Financial Officer

12

10QSB	1st Page of 12	TOC	↑Top	Previous	Next	↓Bottom	Just 1st

10QSB	2nd Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 2nd

10QSB	3rd Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 3rd

10QSB	4th Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 4th

10QSB	5th Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 5th

10QSB	6th Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 6th

10QSB	7th Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 7th

10QSB	8th Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 8th

10QSB	9th Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 9th

10QSB	10th Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 10th

10QSB	11th Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 11th

10QSB	Last Page of 12	TOC	1st	Previous	Next	↓Bottom	Just 12th

Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10QSB’ Filing	Date	First	Last	Other Filings

Filed on:	9/11/98	12
	9/10/98	1		DEF 14A
For Period End:	7/31/98	1	10
	4/30/98	2	8	10KSB
	2/25/98	10
	7/31/97	4	10	10QSB
	4/30/97	8		10KSB40, 10KSB40/A
	10/1/96	8
	4/30/96	8		10KSB40, 10KSB40/A
				List all Filings

↑Top

Filing Submission 0000890163-98-000185 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Flight International Group Inc – ‘10QSB’ for 7/31/98

As of: Friday, 9/11/98 · For: 7/31/98 · Accession #: 890163-98-185 · File #: 0-17066

Previous ‘10QSB’: ‘10QSB’ on 3/17/98 for 1/31/98 · Next: ‘10QSB’ on 12/11/98 for 10/31/98 · Latest: ‘10QSB’ on 3/16/00 for 1/31/00

Quarterly Report — Small Business — Form 10-QSBFiling Table of Contents

10QSB — Quarterly Report — Small BusinessDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Quarterly Report — Small Business — Form 10-QSB
Filing Table of Contents

10QSB — Quarterly Report — Small Business
Document Table of Contents