January 18, 1996
Dear Securities and Exchange Commission,
The following submission is an amendment to our Sepetmber 10Q filing. This
10Q has remained unchanged, the amendment is the Financial Data Schedule,
which was not included in the original 10Q submission. Should you have
questions, I can be reached at (406) 245-9449.
Sincerely,
Karie Kane
Accounting Manager
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the period-ended September 30, 1995
Commission file number 0-9267
BIG SKY TRANSPORTATION CO.
(exact name of registrant as specified in its charter)
MONTANA 81-0387503
(state of other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1601 Aviation place
Billings Logan Int'l Airport
Billings MT 59105
(406) 245-9449
(address of registrant's principal executive offices)
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
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 XX NO ____
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15
(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
YES XX NO ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS: Common Stock, $.10 par value
SHARES OUTSTANDING: at September 30, 1995: 5,307,314
<PAGE>
BIG SKY TRANSPORTATION CO.
FORM 10-Q
For the Period-Ended September 30, 1995
CONTENTS
Part I Financial Information
Item 1. Condensed Financial Statements:
Balance Sheets
September 30, 1995 (unaudited) and June 30, 1995 (audited)
Statement of Operations
Three months-ended September 30, 1995 and 1994 (unaudited)
Statement of Cash flows
Three months-ended September 30, 1995 and 1994 (unaudited)
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
<PAGE>
Part I. Financial Information, Item 1.
BIG SKY TRANSPORTATION CO.
Balance Sheets
September 30, June 30,
1995 1995
ASSETS (unaudited) (audited)
Current Assets:
Cash $ 493,955 $ 408,457
Restricted cash 403,568 369,009
Accounts receivable, net 438,638 457,936
Expendable parts/supplies 227,195 241,944
Prepaid expenses 54,072 4,985
---------- ----------
Total current assets 1,617,428 1,482,331
Property & Equipment:
Flight equipment 602,733 601,867
Capital lease facility 456,185 456,185
Other property & equipment 177,107 176,725
---------- ----------
1,236,025 1,234,777
Accumulated depreciation (363,326) (339,416)
---------- ----------
Net property & equipment 872,699 895,361
---------- ----------
Excess reorganization value -- 10,108
Other assets 26,758 26,758
---------- ----------
Total assets $ 2,516,885 $ 2,414,558
===================================
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Current long-term debt $ 130,433 $ 136,930
Current capital lease 14,782 14,406
Accounts payable 96,305 80,247
Accrued expenses 630,986 562,483
Traffic payable 33,000 30,380
---------- ----------
Total current liabilities 905,506 824,446
Long-term debt, excluding current 474,682 518,901
Capital lease, excluding current 299,251 303,057
Stockholders' Equity
Common stock of $.10 par value
authorized 20,000,000 shares;
5,307,314 shares outstanding 530,731 530,731
Paid-in capital (34,882) (51,770)
Retained earnings 341,597 289,193
---------- ----------
Stockholders' equity 837,446 768,154
---------- ----------
Total liability & equity $ 2,516,885 $ 2,414,558
===================================
See notes to financial statements.
<PAGE>
BIG SKY TRANSPORTATION CO.
Statement of Operations
Three months-ended
September 30,
1995 1994
(unaudited) (unaudited)
Operating Revenues:
Passenger $ 414,120 $ 382,887
Cargo 27,525 26,507
Public service 898,637 895,070
Other 10,433 3,572
----------- ----------
Total 1,350,715 1,308,036
Operating Expenses:
Flying 473,412 431,151
Maintenance 275,107 287,737
Passenger service 309,217 256,230
Sales 54,217 46,726
General/Administrative 119,111 138,469
Depreciation 21,345 21,736
---------- ----------
Total 1,252,409 1,182,049
Operating Income (Loss) 98,306 125,987
Other Income/(expenses):
Interest, net (12,203) (10,149)
Gain (loss) equipment 172 494
---------- ----------
Total (12,031) (9,655)
---------- ----------
Income before taxes 86,275 116,332
Income Tax Expense:
Current 5,976 8,143
Charge in lieu of taxes 26,996 36,784
---------- ----------
Total 32,972 44,927
Extraordinary item
Debt extinguishment (899) --
---------- ----------
Net Income: $ 52,404 $ 71,405
====================================
Per share data:
Income per common and
common equivalent share $.01 $.01
Weighted average number
of common & common
equivalent shares
outstanding 5,307,314 5,307,314
See notes to financial statements.
<PAGE>
BIG SKY TRANSPORTATION CO.
Statement of Cash Flows
Three months-ended
September 30,
1995 1994
(unaudited) (unaudited)
From operating activities:
Net income $ 52,404 $ 71,405
Depreciation 23,910 25,755
(Gain) loss on equipment (172) (494)
Excess reorganization value
amortization and charges
in lieu of taxes 26,996 37,705
Changes in assets/liabilities:
Restricted cash (34,559) (49,826)
Accounts receivable 19,298 9,730
Expendable parts 14,749 (60,488)
Prepaid expenses (49,087) (59,522)
Other assets -- 14,952
Accounts Payable 16,058 62,224
Accrued expenses 68,503 13,242
Traffic payable 2,620 16,741
--------- ----------
Net cash provided by operations 140,720 81,424
From investing activities:
Proceeds from equipment 480 1,935
Property & equipment (1,556) (74,676)
Facility expenditures -- (44,474)
---------- -----------
Net cash used by investing (1,076) (117,215)
From financing activities:
Proceeds from borrowing -- 60,050
Payments on long-term debt (50,716) (40,854)
Payments on capital lease ( 3,430) --
---------- ----------
Net cash used by financing (54,146) 19,196
Net cash increase (decrease) 85,498 (16,595)
Cash at beginning of period 408,457 570,030
---------- -----------
Cash at end of period $ 493,955 $ 553,435
==================================
see notes to financial statements
<PAGE>
BIG SKY TRANSPORTATION CO.
Statement of Cash Flows
Three months-ended
September 30,
1995 1994
(unaudited) (unaudited)
Supplement disclosures of
cash flow information:
Cash paid during the period for:
Interest $ 21,545 $ 19,991
Income taxes -- --
<PAGE>
BIG SKY TRANSPORTATION CO.
Notes to Financial Statements
NOTE A. The accompanying unaudited condensed financial statements
have been prepared by the Company in accordance with its
understanding of the rules and regulations of the
Securities and Exchange Commission. These financial
statements reflect, in the opinion of management, all
adjustments (consisting only of recurring accruals) for
fair presentation of the results of operations for the
interim periods presented. However, these financial
statements have been prepared in accordance with
instructions to Form 10-Q and therefore, do not include
all information and footnotes necessary for a fair
presentation of financial position, statement of
operations and cash flows in conformity with generally-
accepted accounting principles. It is recommended that
these interim financial statements be read in conjunction
with the financial statements and notes thereto, included
in the Company's latest annual report on Form 10-K.
NOTE B. Earnings per share is based on the weighted average
number of common and common equivalent shares
outstanding. The effect of common stock equivalents is
anti-dilutive and therefore not presented.
NOTE C. Results of operations for the three month-ended September
30, 1995 and 1994 are not necessarily indicative of the
results to be expected for the full year.
NOTE D. The Company filed its Chapter 11 Reorganization Petition
March 14, 1989 in the United States Bankruptcy Court for
the District of Montana. The Plan of Reorganization was
confirmed by order issued July 16, 1991.
NOTE E. In the September 1991 quarter, the Company adopted AICPA
Statement of Position 90-7, financial reporting by
entities in reorganization under the bankruptcy code.
Based on specific elements of the plan, the SOP required
that the financial statements be prepared on the basis
that a new reporting entity was created and that assets
and liabilities be recorded at their fair values. This
reporting is referred to as "Fresh Start" reporting.
<PAGE>
PART I. Financial Information, Item 2.
BIG SKY TRANSPORTATION CO.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Summary of Airline Operating Statistics:
Three months-ended
September 30,
% change
1995 1994 +/(-)
----- ----- --------
Passengers carried 6,794 5,242 29.6
Average passenger
trip (miles) 198 202 (2.0)
Revenue passenger miles 1,346,416 1,059,034 27.1
Available seat miles 4,798,716 4,148,157 15.7
Passenger load factor (%) 28.06 25.53 10.0
Aircraft miles 322,412 279,810 15.2
Yield per revenue
passenger mile (cents) 30.76 34.16 (10.0)
Freight pounds enplaned 26,843 18,508 45.0
Operating cost per
available seat mile (cents) 28.15 28.50 (1.2)
Operating break-even load
factor (%) 26.02 23.07 12.8
<PAGE>
BIG SKY TRANSPORTATION CO.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Analysis of Results for the three months-ended
September 30, 1995 and 1994:
Total operating revenues in the first quarter of fiscal year 1996
were $1.35 million, compared with $1.31 millon in the same quarter
last year. Passenger revenues increased $31,233 or 7.5% to total
$414,120, while public service revenues increased $3,567 or .4% to
total $898,637. Available seat miles increased 15.7% to total
4,798,716 and revenue passenger miles increased 27.1% to total
1,346,416, resulting in a 10.0% load factor improvement from 25.53%
to 28.06%. Yield per passenger mile decreased 10% to total 30.76
cents for the September 1995 quarter.
Total operating expenses increased $70,360 or 5.9% for the three
months-ended September 30, 1995, as compared to the three months-
ended September 30, 1994. Capacity (ASMs) for the same period
increased 15.7% while operating cost per available seat mile (ASM)
decreased 8.6% from 28.50 cents to 26.05 cents.
The following table summarizes and compares major components of
cost per ASM:
For three months-ended
September 30,
1995 1994
------ ------
Payroll-related costs $.0948 $.1045
Other .0645 .0686
Maintenance .0409 .0480
Aircraft lease costs .0325 .0378
Fuel and oil .0278 .0261
------ ------
$.2605 $.2850
=================
Payroll-related expenses increased $21,540 or 5% in the September
1995 quarter, as compared to the September 1994 quarter. Regularly
scheduled wage increases and additional payroll for service to
Great Falls Montana, along with adding an individual in the
capacity of special assistant for mergers, acquisitions and
business development comprise the major components of this
increase. The average full-time equivalent employees (FTE) for the
three months-ended September 30, 1995 and 1994 were 66 and 65,
respectively.
<PAGE>
BIG SKY TRANSPORTATION CO.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Analysis of Results (continued):
Other expenses increased $25,253 or 8.9% in the quarter-ended
September 30, 1995 as compared to the same quarter for the prior
year. Increases were experienced in memberships, printing and
customer reservation system (CRS) expenses. Costs associated with
the new Great Falls service, such as ground handling and
advertising, also contributed to the added expenditures.
Maintenance expenditures for outside purchases and repairs along
with maintenance materials have decreased 29.6%. The aircraft
fleet at September 1995 was one aircraft less than September 1994,
due to the return of a charter aircraft.
Fuel and oil costs increased $25,725 or 23.7%. Metro block hours
increased an average of 77 hours or 15.8% per month and the average
monthly gallons of fuel consumed which rose by 6,210 gallons.
Implementation of two weekday round-trips between Billings, Montana
and Great Falls, Montana accounts for the majority of this
increase.
Aircraft ownership/lease and insurance costs increased despite the
reduction of one aircraft. Actual lease expense declined by
10.6%, however a substantial increase was experienced in insurance
costs.
Net non-operating expenses were $45,902 for the September 1995
quarter and $54,582 for the September 1994 quarter. Pursuant to
Chapter 11 Reorganization "Fresh Start" reporting, charges in lieu
of taxes of $26,996 and $36,784 were recorded in the September 1995
and 1994 quarters, respectively.
The September 1995 quarter generated operating income of $98,306
and net income, including "Fresh Start" charges of $52,404. By
comparison, the same quarter in 1994 produced $125,987 in operating
income and net income of $71,405, also including "Fresh Start"
charges.
<PAGE>
BIG SKY TRANSPORTATION CO.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources:
At September 30, 1995, the Company showed a current ratio of 1.79:1
and positive working capital of $711,922 compared to a current
ratio of 1.8 and positive working capital of $657,885 at June 30,
1995. The Company generated cash from operations of $140,720 and
$81,424 for the quarters ended September 30, 1995 and 1994,
respectively. Total long-term debt (including current
installments) at September 30, 1995 was $919,148 (including capital
lease obligations) compared to $973,294 at June 30, 1995. In
September 1995 the Company made its fourth annual scheduled payment
to the unsecured creditors. The Company is current on all of its
debt service obligations. Stockholders' equity was $837,446 at
September 30, 1995, a 9% increase over the balance of $768,154 at
June 30, 1995, primarily attributable to the positive net income.
Big Sky currently is operating under DOT Order 94-10-4 at an annual
rate of $3.54 million through November 30, 1996. The Company is
investigating available business opportunities in order to reduce
dependence upon the Federal Government Essential Air Service
Program. There is uncertainty about the future funding of this
program. As part of these efforts, a non-subsidized route to Great
Falls, Montana was implemented May 15, 1995.
The Company now occupies a new custom built maintenance
hangar/general office facility at the Billings Airport, which is
leased from a member of the Board of Directors and is recorded as
a capital lease. The interest rate on the capital lease is 8.5%
with principal due on a 20 year amortization with a five-year
balloon payment. It is the intent of the building owner and Big
Sky to refinance the debt after five years, hopefully on similar
terms. The Company has purchase options at 5, 10, 15 and 20 years
and a right of first refusal upon approval by the owner of sale of
his interests to a third party. At September 30, 1995, the Company
had contributed $156,185 of equity to the building. The purchase
provisions provide a vehicle for recovering the company's full
equity in the transaction and to share in any appreciated value.
Currently, the Company does not have a formal operating line of
credit. A member of the Board of Directors signed an agreement
with the Company where for 18 months the Company could borrow
$100,000 at 8.5% interest with a five year amortization. The
Company's Cessna 402C would have been used as collateral. This
agreement expired October 21, 1995. The Company's local bank has
indicated a willingness to loan money to the Company with the same
collateral.
<PAGE>
BIG SKY TRANSPORTATION CO.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources (continued):
The House/Senate Conference Committee has approved funding for the
essential air service program in fiscal year 1996 of $22.6 million,
a one-third reduction from fiscal year 1995. It is the
understanding of the Company that reductions likely will be made in
three areas as follows: 1) elimination of all services to second
designated hubs, 2) elimination of all services in excess of basic
minimum of two round-trips per day and 3) possible elimination of
some weekend services. Changes in the first two areas would not
affect services at the eastern/central Montana cities. Depending
on the form and extent of the reduction in weekend services,
central/eastern Montana could be impacted; however it is believed
that such reduction would not seriously imperil the existence of
the seven city service network, nor Big Sky's viability under the
contract during fiscal year 1996.
The Company has initiated a limited stock re-purchase program,
subject to all applicable regulations. The board's commitment at
this point is to acquire up to 200,000 shares on the open market.
The public release has been provided in a Form 8-K.
<PAGE>
BIG SKY TRANSPORTATION CO.
Signature
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.
BIG SKY TRANSPORTATION CO.
registrant
By: /s/ Terry D. Marshall
Terry D. Marshall
President/CEO & Temporary CFO
November 6, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 897,523
<SECURITIES> 0
<RECEIVABLES> 439,838
<ALLOWANCES> 1,200
<INVENTORY> 227,195
<CURRENT-ASSETS> 1,617,428
<PP&E> 1,236,025
<DEPRECIATION> 363,326
<TOTAL-ASSETS> 2,516,885
<CURRENT-LIABILITIES> 905,506
<BONDS> 773,933
0
0
<COMMON> 530,731
<OTHER-SE> 306,715
<TOTAL-LIABILITY-AND-EQUITY> 2,516,885
<SALES> 0
<TOTAL-REVENUES> 1,350,715
<CGS> 0
<TOTAL-COSTS> 1,252,409
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,203
<INCOME-PRETAX> 86,275
<INCOME-TAX> 32,972
<INCOME-CONTINUING> 53,303
<DISCONTINUED> 0
<EXTRAORDINARY> (899)
<CHANGES> 0
<NET-INCOME> 52,404
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
