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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 30, 1998
AVTEAM, INC.
(Exact name of registrant as specified in its charter)
Florida 0-20889 65-0313187
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
3230 Executive Way
Miramar, Florida 33025
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(Address, including zip code, of principal executive office)
(954) 431-2359
Registrant's telephone number, including area code
NOT APPLICABLE
(Former name, former address and fiscal year, if changed since last report)
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ITEM 5. OTHER EVENTS.
On December 15, 1998, AVTEAM, Inc., a Florida corporation ("AVTEAM"),
through its wholly-owned subsidiary, AVTEAM Engine Repair Corp., a Florida
corporation, completed its acquisition of substantially all of the assets and
the assumption of certain liabilities of M&M Aircraft Services, Inc., a Florida
corporation (the "Seller"), for an aggregate purchase price of $30,000,000 and
the issuance of 350,000 shares of Class A Common Stock, par value $.01 per
share, of AVTEAM (the "Acquisition"). The Acquisition was made pursuant to an
Asset Purchase Agreement dated October 12, 1998 by and among AVTEAM, AVTEAM
Engine Repair Corp., the Seller and the shareholders of the Seller. The terms
of the Agreement and the amount of consideration paid for the Acquisition were
determined through arms-length negotiations among the parties.
The Acquisition was financed from available cash and AVTEAM's existing
credit facility with NationsBank, N.A. (the "Credit Facility"). AVTEAM utilized
substantially all of its available borrowings under the Credit Facility for the
Acquisition. AVTEAM is considering a number of options to provide additional
capital for its business activities after the Acquisition, including
refinancing the Credit Facility and raising additional capital through the
offering of debt or equity securities. Until such time as AVTEAM refinances the
Credit Facility or raises additional capital, AVTEAM may forego the purchase of
certain aircraft engines, engine parts and airframe material for resale. As a
result, its business, financial condition and results of operations could be
materially adversely affected during such period.
The Seller, based in Medley, Florida, operated a privately held jet
engine overhaul operation, which specialized in the maintenance, overhaul and
repair of Pratt & Whitney JT8D aircraft engines.
A copy of the press release issued by AVTEAM on December 15, 1998
announcing the Acquisition is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a)&(b) Financial Statements of Business Acquired and Pro Forma
Financial Information.
Pursuant to the provisions of Item 7(a)(4) of Form 8-K, the
Registrant intends to file by amendment such required
financial statements and pro forma financial information as
soon as practical, but not later than 60 days after the date
that this Form 8-K is required to be filed.
(c) Exhibits.
2.1 Asset Purchase Agreement dated October 12, 1998, by
and among AVTEAM, Inc., AVTEAM Engine Repair Corp.,
M&M Aircraft Services, Inc., James McLellan, Leon
Sacco and Mark Schuldiner. (Incorporated herein by
reference to the Registrant's Current Report on Form
8-K which was filed with the Securities and Exchange
Commission on October 15, 1998.)
99.1 Press Release dated December 15, 1998.
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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 hereunto duly authorized.
AVTEAM, INC.
Date: December 30, 1998 By: /s/ Donald A. Graw
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Donald A. Graw
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit Description
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2.1 Asset Purchase Agreement dated October 12, 1998, by and among
AVTEAM, Inc., AVTEAM Engine Repair Corp., M&M Aircraft Services,
Inc., James McLellan, Leon Sacco and Mark Schuldiner. (Incorporated
herein by reference to the Registrant's Current Report on Form 8-K
which was filed with the Securities and Exchange Commission on
October 15, 1998.)
99.1 Press Release dated December 15, 1998.
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EXHIBIT 99.1
AVTEAM Completes Acquisition of M&M Aircraft Services
PR Newswire - December 15, 1998 17:16
-- A Leading Jet Engine Overhaul Operation
-- Licensed by the FAA
-- More Than Doubles AVTEAM's Total Market
MIRAMAR, Fla., Dec. 15 /PRNewswire/ -- AVTEAM, Inc. (Nasdaq: AVTM), a global
supplier of aftermarket aircraft engines, engine parts and airframe components,
today announced that it has completed its previously announced acquisition of
M&M Aircraft Services, Inc., which management believes to be one of the largest
privately held jet engine overhaul operations in the world.
On October 12, AVTEAM announced that it would pay $30 million in cash and
350,000 shares of its class A common stock to acquire the assets and assume
certain liabilities of M&M, an engine and engine component repair operation
licensed by the Federal Aviation Administration.
M&M reported revenue of approximately $27 million in 1997 and more than $30
million in the first nine months of 1998. Donald Graw, AVTEAM's chairman and
chief executive officer, said M&M's full-year 1998 revenues probably will
exceed what his company expected at the time the acquisition was originally
announced.
"We were expecting continued strong growth, but the actual revenue numbers are
coming in better than our forecasts," Mr. Graw said. "This heightens what has
always been a high level of excitement about the acquisition, which greatly
increases AVTEAM's growth prospects and takes us a giant step toward our goal
of becoming a one-stop shop providing engine-related products and services to
airlines and lessors around the world."
He said AVTEAM continues to expect that M&M will have little or no effect on
earnings this year, but will be accretive to earnings in 1999.
M&M will enhance AVTEAM's access to the $28 billion worldwide aviation engine
maintenance, repair and overhaul market. Mr. Graw said the acquisition also is
expected to:
-- Increase AVTEAM's ability to control the marketing, sale and
repair of its engine-related products.
-- Broaden AVTEAM's capabilities as a specialist in the JT8D series of
aircraft engines, the most widely used jet engines in the world, and
greatly enhance the company's ability to expand into the CFM56
engine series, which today is produced in greater quantities than
any other jet aircraft engine in the world.
-- Provide a significant outlet for AVTEAM's growing inventory of JT8D
parts, and also of CFM56 parts as the company expands into this new
product line.
-- Provide a major source of stable, consistent revenues to balance the
more volatile business of buying and selling whole aircraft,
engines, engine parts and airframe components.
M&M, founded in 1984, recently opened a new state-of-the-art facility in
Medley, Fla., less than ten miles from AVTEAM's headquarters.
AVTEAM, which is headquartered in Miramar, Fla., and also has operations in
Dallas, Texas, last year completed an initial public offering of approximately
4.8 million shares, raising net proceeds of approximately $25.6 million. Since
beginning operations in 1992, the company has focused on the purchase and
resale of Pratt & Whitney JT8D engines and components, which power
approximately 33 per cent of the world's commercial aviation fleet. Recently
AVTEAM has expanded its product line to include CF6 engine parts and DC-10
materiel, extending the company's capabilities into the wide-body market. The
company also offers equipment leasing, engine management services and certain
on-wing engine maintenance services.
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Except for the historical information contained in this news release, the
matters discussed in this news release are "forward-looking statements" within
the meaning of the federal securities law and are not guarantees of future
performance. For a variety of reasons, the company's actual results could
differ materially from any forward-looking statements made in this news
release. Among the factors that could cause actual results to differ from
predicted or expected results are the following: the company's ability to
effectively integrate acquired companies and the effects of increased
indebtedness as a result of the company's acquisitions; a decline in the demand
for aftermarket aircraft engines, engine parts and airframe components, which
could materially adversely affect the company's revenues; the availability of
aircraft engines, engine parts and airframe components for resale, which could
hamper the company's ability to maintain adequate levels of inventory and meet
customer demand; the possibility that regulatory changes and unforeseen events
could impact the company's ability to provide products and services to its
customers; existing competition from national and regional competitors and the
condition of the airline industry, which could result in pricing, supply and
demand, and other pressures on profitability and market share; and other risks
and uncertainties set forth in the company's filings with the Securities and
Exchange Commission, including but not limited to the company's prospectus
dated October 30, 1997, for its initial public offering and the company's
annual report on Form 10-K for the year ended December 31, 1997. Consequently,
the reader is cautioned to consider all forward-looking statements in light of
the risks to which they are subject.
SOURCE AVTEAM, Inc.
/CONTACT: Donald A. Graw, Chairman and Chief Executive Officer of AVTEAM,
954-431-2359; General Info, Jerry Meyer, Analyst Info, John McNamara, Media
Info, Claudine Cornelis, all of The Financial Relations Board, 212-661-8030/
(AVTM)
