SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act
of 1934
For Quarter Ended June 30, 1995 Commission File Number 0-10190-0
AERO SERVICES INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-0385274
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
660 Newtown Yardley Road
Newtown PA 18940
Registrant's telephone number, including area code: (215) 860-5600
Indicate by check mark whether the registrant (1) 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 and (2) has been subject to
such filing requirements for the past 90 days.
Yes x No
6,998,052 Common Shares were outstanding as of June 30, 1995
AERO SERVICES INTERNATIONAL, INC. & SUBSIDIARIES
INDEX
PART I - Financial Information Page Number
Item 1. Financial Statements
Condensed Consolidated Balance Sheet
June 30, 1995 (unaudited) and
September 30, 1994 (audited) 2
Consolidated Statement of Earnings
three months ended June 30, 1995
and 1994 (unaudited) 3
Condensed Consolidated Statement of Cash Flows
nine months ended June 30, 1995 and 1994
(unaudited) 4
Notes to Condensed Consolidated Financial
Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 8
PART II - Other Information
Item 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 12
<PAGE>
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED
CONDENSED BALANCE SHEET
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
AS AT AS AT
JUNE 30 SEPTEMBER 30
1995 1994
ASSETS
Cash $ 1,106 $ 2,406
Restricted Cash 5 5
Accounts Receivable Less Allowance for
Doubtful Accounts of $92 and $73 respectively 339 1,214
Other Receivable - Affiliate 23
Inventories Less Reserve for
Slow Moving of $52 and $85 respectively 79 454
Other Current Assets 368 406
TOTAL CURRENT ASSETS $ 1,920 $ 4,485
Property & Equipment - Net 2,289 2,336
Assets held for sale at Net Book Value 447
Other Assets 515 150
TOTAL ASSETS $ 4,724 $ 7,418
LIABILITIES & STOCKHOLDERS DEFICIT
Current Maturities of Long-Term Debt $ 55 $ 194
Accounts Payable 590 1,293
Other Liabilities 3,262 3,564
Other Liabilities - Affiliate 666 8
TOTAL CURRENT LIABILITIES $ 4,573 $ 5,059
Long-Term Debt - Affiliate $ 15,610 $ 15,428
Long-Term Debt - Other 3,570 4,189
Other Long-Term Liabilities 224 305
Redeemable Preferred Stock 5,616 5,388
TOTAL LONG-TERM LIABILITIES $ 25,020 $ 25,310
STOCKHOLDERS' DEFICIT
Common Stock $ 8,474 $ 8,702
Additional Paid-in Capital 3,380 3,380
Accumulated Deficit (36,486) (34,796)
$(24,632) $(22,714)
Less Treasury Stock $ 237 $ 237
TOTAL STOCKHOLDERS' DEFICIT $(24,869) $(22,951)
TOTAL LIABILITIES & STOCKHOLDERS DEFICIT $ 4,724 $ 7,418
NOTE: The balance sheet at September 30, 1994 has been taken from the
audited financial statements at that date and condensed.
See Notes to Condensed Consolidated Financial Statements.
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENT OF EARNINGS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
NET SALES $2,122 $ 4,976 $ 8,123 $16,764
COST AND EXPENSE
Cost of Sales $1,057 $ 2,569 $ 4,141 $ 8,871
Departmental Costs 1,044 1,985 3,858 7,509
Administrative Costs 327 502 887 1,735
Interest Expense - Other 54 60 168 254
Interest Expense - Affiliate 393 169 1,127 721
$ (753) $ (309) $(2,058) $(2,326)
Gain on Sale of Certain FBO
Operations - - 292 1,686
Other Income/(Expense), Net (163) (54) 26 (84)
NET INCOME (LOSS) $ (916) $ (363) $(1,740) $ (724)
(Loss) per Common and
Common Equivalent Share $(0.14) $ (0.07) $ (0.28) $ (0.17)
See Notes to Condensed Consolidated Financial Statements
AERO SERVICES INTERNATIONAL, INC.
Condensed Consolidated Statement of Cash Flows
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
NINE MONTHS ENDED
JUNE 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $(1,740) $ (724)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 228 563
Provisions for Obsolete, Slow-Moving & Excess Inventory 9
Provision for Losses on Accounts Receivable 16 75
Amortization of Discounted Note Payable 182
(Gain) Loss on Sale of Certain FBO Operations (292) (1,686)
(Gain) Loss on Sale of Fixed Assets (144) (100)
Current Period Interest Forgiven 720
Other Assets included in Sale of FBO Operations (528)
Other 95 (160)
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 859 574
(Increase) Decrease in Other Receivable - Affiliates (23)
(Increase) Decrease in Inventory 375 37
(Increase) Decrease in Other Current Assets 38 19
(Increase) Decrease in Other Assets (365)
Increase (Decrease) in Accounts Payable (703) 46
Increase (Decrease) in Accounts Payable - Affiliate (1,177)
Increase (Decrease) in Other Current Liabilities (302) (805)
Increase (Decrease) in Other Liabilities - Affiliate 658
Increase (Decrease) in Other Long Term Liabilities (81)
Total Adjustments 13 (1,885)
Net Cash Provided by (Used In) Operating Activities $(1,727) $(2,609)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Property and Equipment (151) (29)
Proceeds from Sale of Fixed Assets 4
Proceeds from Sale of FBOs 973 4,900
Net Cash from (Used In) Investing Activities 826 4,871
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issurance of Notes Payable -Affiliate 300
Principal Payment of Notes Payable (355) (50)
Principal Payments of Long-Term Debt (44) (2,844)
Net Cash Provided By (Used In) Financing Activities (399) (2,594)
Net Increase (Decrease) in Cash & Cash Equivalents (1,300) (332)
Cash and Cash Equivalents at Beginning of Year 2,406 537
Cash and Cash Equivalents at End of Third Fiscal Quarter $1,106 $ 205
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid during the Period for:
Interest $ 465 $ 288
Income Taxes 12 13
See Notes to Condensed Consolidated Financial Statements
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statement
June 30, 1995
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
NOTE 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of June 30, 1995, consolidated
statement of earnings for the nine month and three month periods ended
June 30, 1995, and the condensed consolidated statement of cash flows for
the nine month period then ended were prepared by the Company, without
audit. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations, and cash flows at June 30, 1995 and for
all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's September
30, 1994 annual report on Form 10-K. The results of operations for the
periods ended June 30, 1995 and 1994 are not necessarily indicative of the
operating results for the full year.
NOTE 2: CASH AND SHORT-TERM SECURITIES
The Company considers cash on hand and deposits in banks as cash and cash
equivalents. All items in this category have maturities of less than
three months.
NOTE 3: INVENTORIES
Inventories are classified as follows:
JUNE 30 SEPTEMBER 30
1995 1994
Aircraft parts and accessories, oil and
supplies less provisions for obsolete and
slow-moving, and excess quantity of
$52 and $85, respectively $ 53 $ 342
Fuel 26 57
Work-In-Process 0 55
$ 79 $ 454
NOTE 4: OTHER ASSETS
Included in the balance of Other Assets at both June 30, 1995, and
September 30, 1994, is a certificate of deposit in the amount of $150,
with a maturity date of October 21, 1995 which supports an irrevocable
letter of credit due to expire in April 1996. Also included in the
balance at June 30 is $365 of goodwill, net of $8 of amortization,
applicable to the acquisition of Mountain State Flight Services, Inc. on
April 1, 1995.
NOTE 5: RELATED PARTY TRANSACTIONS
In May 1994 Transtech Holding Company, Inc. (Transtech) acquired Triton
Energy Corporation's (Triton) equity in the Company and also purchased
Company debt from Triton consisting of $15,610 of principal and $2,723 of
accrued interest and fees. The $2,723 was forgiven and recorded as
additional paid-in-capital. Transtech agreed to forego any accrual of
interest on the principal through November 20, 1994. This interest
amounted to $657 which was recorded as additional paid-in capital and as
a discount to notes payable at September 30, 1994. The discount has been
amortized as interest expense over the six month period during which no
interest was accrued to Transtech. The nine months ended June 30, 1995
includes $182 of amortized discount. Accrual of interest began again on
November 21, 1994. Through June 30, 1995 interest of $945 has been
accrued on the principal and $279 has been paid with the balance of $666
shown as Other Liabilities - Affiliate on the balance sheet as of that
date.
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 1995
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
NOTE 5: RELATED PARTY TRANSACTIONS (continued)
In August 1994 the Company entered into an agreement with Transtech to
provide accounting services to three fixed base operations (FBOs), reduced
to two in April, 1995, owned or controlled by Transtech for a monthly fee
totalling twenty-six hundred dollars per month, reduced to eighteen
hundred in April, 1995. Through June 30, 1995 the Company has billed
Transtech $26 including expenses and has been paid $14.
On December 23, 1994, in anticipation of acquiring all of its outstanding
stock, the Company advanced $150 to Mountain State Flight Services, Inc.,
(Mountain State) a West Virginia corporation, secured by a promissory note
bearing interest at the rate of nine percent per annum, and due and
payable on February 22, 1995. R. Ted Brant, the Chairman of the Board of
Directors and Chief Executive Officer of the Company is also President of,
and a shareholder of, Mountain State. Another $30 was advanced on
February 3, 1995 and an additional $100 was advanced on February 21, 1995,
secured by a promissory note. On April 1, 1995, the Company bought 100%
of the outstanding stock of Mountain State for $110. There were no
repayments of any of the $280 of notes prior to the sale. The purchase
price of $110 was paid after the stock certificates outstanding were
received.
NOTE 6: LONG TERM DEBT
The balance of $15,610 in Long-Term Debt - Affiliate at June 30 is the
total of the notes due Transtech. The balance of $15,428 at September 30
is net of the $182 discount which was amortized through November. The
balance of $3,570 in Long-Term Debt - Other at June 30 is totally
indebtedness on industrial revenue bonds. The balance of $4,189 at
September 30 includes indebtedness on industrial revenue bonds of $3,593,
$353 due on a capital lease, and $243 on two notes. The $353 due on the
capital lease was assumed by the buyer of the Company's FBO at Saginaw, MI
on December 31, and the $243 balance on the notes was paid in full in
December.
NOTE 7: CERTAIN FIXED BASE OPERATION (FBO) MATTERS
On December 31, 1994 the sale of the Company's facility at Saginaw,
Michigan was completed. The purchase price was $300 plus the assumption
of the fuel farm capital lease in the amount of $387, and a gain of $217
was recognized on the sale.
On February 10, 1995 the Company sold its facility at the Youngstown, Ohio
Airport. The selling price was $120 for the fixed assets and $463 for the
inventories, including work in process. The Company recorded a gain of
$76 on this sale.
As disclosed in NOTE 5, the Company purchased the stock of Mountain State
Flight Services, Inc. on April 1, 1995. For the year ended December 31,
1994, Mountain State generated a loss of $78 on sales of $834. For the
years ended December 31, 1993 and 1992, respectively, Mountain State
generated a profit of $31 on sales of $382, and a loss of $1 on sales of
$340. Mountain State has a Letter of Intent from a Fortune 500 company to
lease a 25,000 square foot facility for a period of 10 years with two five
year options. Construction will begin as soon as final plan approval is
received from the Federal Aviation Agency. Mountain State holds a lease
to operate an FBO at Morgantown Airport until December 31, 2007, with two
additional five year options.
NOTE 8: OTHER LIABILITIES
At June 30, 1995 the major components of the $3,262 balance are accrued
property, payroll, and other taxes of $1,686; accrued EPA expenses of
$263; accrued salaries of $141, and accrued auditing and professional fees
of $117, and other general reserves of $403. At September 30, the major
components of the $3,564 balance were property, payroll, and other taxes
of $1,685; accrued EPA expense of $592; accrued salaries of $220; and
accrued auditing and professional fees of $159.
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 1995
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
NOTE 9: CONTINGENT LIABILITIES
A. Environmental Matters
The Company's business involves the storage, handling and sale of aviation
fuel; and the provision of mechanical maintenance and refurbishing
services which involve the use of hazardous chemicals. Accordingly, the
Company is required to comply with federal, state and local regulations
which have been enacted to control the discharge of material into
theenvironment or otherwise relate to the proteciton of the environment.
As a normal course of business, the Company from time to time discusses
environmental compliance with the appropriate environmental agency.
At September 30, 1994, the Company had accrued $750 for expenses related
to environmental protection, assessment and remediation matters at certain
locations. At June 30, 1995, the financial statements of the Company
included accruals for resolution of environmental matters in the amount of
$420 based upon identified situations and cost estimates provided by firms
and individuals knowledgeable of such matters. These estimates are
subject to change dependent upon additional information and revisions to
governing regulations.
The expenditures and accruals for environmental matters are specific in
nature to identified situations at Company locations. The Company is
presently responsible for remediation projects at three locations, none of
which is presently owned. It is possible that two of these projects will
be completed by the end of the current fiscal year. However, it may take
additional time to receive closure permission from the appropriate EPA
officials. Due to uncertainties related to estimating both elapsed
correction time and the effectiveness of environemtal remediation
techniques utilized to correct non-compliance situations, the Company may
incur additonal costs in future periods related to these same situations.
B. Tax Assessment
On December 19, 1994, the Company received a notice of tax due from the
State of New York in the amount of $163 for a diesel motor fuels tax
covering the quarter ended November 30, 1991. In March 1995 the Company
received a notice of tax due in the amount of $147 for the quarter ended
February 29, 1992. In June 1995 the Company received a notice of tax due
in the amount of $179 for the quarter ended May 31, 1992. Additional
notices are expected which could bring the total assessment in excess of
$1,000. Management believes this assessment to be in error and has filed
an appeal with the State of New York. A date for the hearing has not been
set. The financial statements of the Company at June 30, 1995 include
adequate reserves for these assessments. An expense of $220 was recorded
on the income statement during the current quarter to increase reserves.
C. Litigation
Please refer to Part II, Item 1 on Page 11 for a full discussion of
current litigation matters.
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
Results of Operations:
The following table presents as a percentage of total sales certain
selected financial data for the Company for the periods indicated.
Three Months Ended Nine Months Ended
June 30 June 30
1995 1994 1995 1994
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of Sale 49.8 51.6 51.0 52.9
Departmental Costs 49.2 39.9 47.5 44.8
Administrative Costs 15.4 10.1 10.9 10.4
Interest Expense (Net) 21.1 4.6 15.9 5.8
Other Income/(Expense) (7.7) (1.1) 3.9 9.6
Net Income/(Loss) (43.2) (7.3) (21.4) (4.3)
Revenues for the three months ended June 30, 1995 declined 57% as compared
to the same period for the previous year to $2,122. The decline in
revenue for the nine months was 52%. These declines are the result of
certain FBO sales in fiscal 1994 and 1995. In order to compare the
results of continuing operations, a statement of earnings for both periods
is presented below, including those three FBOs which were in operation
during all of both periods, plus Mountain State Flight Services, Inc.
results of operations for the quarter ended June 30, 1995.
CONTINUING OPERATIONS
THREE MONTHS ENDED
June 30, June 30,
1995 % 1994 %
Net Sales $ 2,122 100.0 $ 2,128 100.0
COST AND EXPENSE
Cost of Sales 1,057 49.8 1,106 52.0
Departmental Costs 1,044 49.2 879 41.3
Administrative Costs 327 15.4 323 15.2
Interest Expense 447 21.1 211 9.9
(753) (35.5) (391) (18.4)
Other Income/(Expense), Net (163) (7.7) (609) (28.6)
NET (LOSS) $ (916) (43.2) $(1,000) (47.0)
As shown above, revenues at continuing operations decreased 0.3% during
the quarter ended June 30, 1995 compared to the previous year. The volume
of fuel sold increased 11.6% and the resulting revenue increased 12.1%.
The sales of maintenance services decreased 53% from last year.
Cost of sales decreased 2.2% as a percentage of sales in the current
quarter.
Departmental costs during the current quarter increased $165 over last
year, which includes a $220 increase in reserves for the New York Tax
Assessment (see Note 9). Administrative costs have remained the same.
Interest expense has increased $236 as compared to the prior year as a
result of interest rate increases that began in the fall of 1994.
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
Results of Operations (Continued):
CONTINUING OPERATIONS
NINE MONTHS ENDED
June 30, June 30,
1995 % 1994 %
Net Sales $ 6,439 100.0 $6,336 100.0
COST AND EXPENSE
Cost of Sales 3,272 50.8 3,358 53.0
Departmental Costs 3,126 48.5 3,079 48.6
Administrative Costs 832 12.9 1,029 16.2
Interest Expense 1,290 20.1 859 13.6
(2,081) (32.3) (1,989) (31.4)
Other Expense, Net $ (2) - $ (30) (0.5)
NET (LOSS) $(2,083) (32.3) $(2,019) (31.9)
Revenues at continuing operations increased 1.6% in the first nine months
of fiscal 1995 compared to fiscal 1994. Fuel volume sold increased 12%
and the resulting revenue increased 12.1%.
Cost of sales, as a percentage of sales, decreased 3.8%, and departmental
costs increased $47 or 1.5%.
Administrative costs have been reduced by 19.1% ($185). The major
reductions are legal fees ($76), directors' and auditors' fees ($121).
Interest expense has increased by $431 due to higher interest rates in the
current year.
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
LIQUIDITY AND CAPITAL RESOURCES
Working capital deficiency at June 30, 1995 increased by $2,079 to
$(2,653) from September 30, 1994. Current assets decreased by $2,565 due
to reductions in cash of $1,300, accounts receivable of $875, and
inventories of $375. Current liabilities decreased $486, resulting from
decreases in accounts payable of $703, other liabilities of $302, current
maturities of long term debt of $139, combined with an increase in other
liabilities - affiliate of $658.
During the nine months ended June 30, 1995, the major source of cash was
provided by the sale of FBOs for $973, by decreases in accounts receivable
of $859, by reductions in inventory of $375, and by an increase in other
liabilities - affiliate of $658. These funds were used primarily to
reduce notes payable and long term debt by $399, to reduce accounts
payable by $703, to increase other assets by $365, to reduce other current
liabilities by $302, to purchase fixed assets of $151, and to fund the
cash portion of the operating loss of $2,278.
In addition to the purchase of Mountain State Flight Services, Inc. (see
Notes 5 and 7), the Company is continuing negotiations for the purchase of
two additional FBOs. The Company has filed with the Federal Aviation
Agency (FAA) an application for a charter certificate (FAR PART 135).
However, until the Company receives its own certificate, it has formed an
alliance with another company to provide charter services, for a fee,
through its certificate for the two aircraft, soon to be three, that Aero
is currently managing. This alliance will provide additional revenue
currently, which will increase upon completion of the Company's
certification by the FAA.
As previously reported, management continues to pursue additional
opportunities, including those not directly related to aviation, in its
effort to attain stable profitability. Management anticipates
construction of a cargo facility, with a pre-committed long-term lease to
a major overnight shipper, to begin in the fourth quarter of this fiscal
year. In addition, management anticipates conclusion of pre-development
activities, lease commitment, and cost construction commencement of at
least one corporate flight facility during the first quarter of fiscal
year 1996.
During June and July of 1995, the current operations have shown a
significant increase in sales as compared to 1994. If this trend
continues, combined with the successful conclusion of the projects
discussed previously, the increased revenue may be enough to sustain
operations through fiscal 1996. However, there is no guarantee of
success.
PART II - OTHER INFORMATION
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
ITEM 1. - LEGAL PROCEEDINGS
The Company is subject to several complaints filed over the last several
years in different courts or administrative agencies by different
individual former employees challenging the termination of their
employment by the Company on a variety of grounds. These claims are
encountered in the ordinary course of business, and in the opinion of
management the resolution of these matters, either individually or in the
aggregate, will not have a material adverse effect on the Company's
financial position in excess of what has already been recorded.
Management believes that it has established adequate reserves for all of
these claims. Management also believes it has strong defenses and intends
to vigorously defend its position.
In October 1992, Mary Ann Durette filed an action, individually and as
executrix, in North Carolina Superior Court, Wake County, against the
Company, Hess Aviation, Inc., Donald Weinhold and others seeking
compensatory damages in no specified amount resulting from a fatal
aircraft accident which occurred in December 1991. The co-defendants are
Weinhold, the pilot of the aircraft and a related company, and Hess, the
company which performed an annual inspection on the aircraft in November
1991. The pilot had brought the aircraft to the Company for service after
an incident in the spring of 1991. The Company removed one engine and
propeller, sent them respectively to Triad Aviation, Inc. and H & H
Propeller Services for repair, and thereafter reinstalled them on the
aircraft. The Company has filed third party claims against both Triad and
H & H for continuation and indemnity in the event of liability. The
Company believes it has strong defenses to this claim, and intends to
vigorously defend its position. The matter is being handled through the
Company's liability insurance carrier. Based on all information available
to date, the Company believes that any amounts for which it may ultimately
be determined to be liable will be covered beyond modest deductibility
limits by its liability insurance policies. Management believes that the
insurance companies involved are viable.
On March 9, 1995, the Company received a letter from a law firm in Tucson,
Arizona notifying the Company of the intent of Don't Waste Arizona, Inc.
to file a civil action against the Company for alleged violations of
certain inventory filing requirements contained in the Emergency Planning
and Community Right to Know Act of 1986. However, the Company anticipates
an amicable resolution of this matter. Should a suit be brought, the
Company intends to vigorously contest the action.
The Company is also exposed to a number of asserted and unasserted
potential claims encountered in the normal course of business. In the
opinion of management, the resolution of these matters, as well as those
discussed above or referenced elsewhere in this report, will not have a
material adverse effect on the Company's financial position in excess of
what has already been recorded. Management believes that it has
established adequate reserves for all of these claims.
PART II - OTHER INFORMATION
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
(DOLLAR AMOUNTS IN THOUSANDS)
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11.1 Computation of per Share Income/Loss.
27.0 Financial Data Schedule.
(b) Reports on Form 8-K:
None
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBITS 11.1 - COMPUTATION OF PER SHARE LOSS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended
June 30, 1995 June 30, 1994
Primary loss per common and common
equivalent share
Average common shares outstanding 6,998,052 6,173,876
Net Loss $(916) $(363)
Less:
Dividends on Series A Cumulative
Convertible Preferred Stock 65 65
Accretion of Series A Cumulative
Convertible Preferred Stock 11 11
$(992) $(439)
Net Loss per Common and Common
Equivalent Share $(0.14) $(0.07)
Note (1)
The Series A and Series B Cumulative Convertible Preferred stock are not
considered common stock equivalents in the computation of primary loss per
share because, at the time of issuance, the effective yield was greater
than two thirds of the then current average A corporate bond yield.
Note (2)
All of the Series B Cumulative Convertible Preferred stock was converted
to Common Stock on May 20, 1994.
Note (3)
The effect of the assumed exercise of the common stock options is
antidilutive.
Fully diluted loss per share is antidilutive and therefore not presented.
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBITS 11.1 - COMPUTATION OF PER SHARE LOSS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Nine Months Ended
June 30, 1995 June 30, 1994
Primary loss per common and common
equivalent share
Average common shares outstanding 6,998,052 5,723,327
Net Loss $ (1,739) $(724)
Less:
Dividends on Series A Cumulative
Convertible Preferred Stock 194 194
Accretion of Series A Cumulative
Convertible Preferred Stock 34 34
$(1,967) $ (952)
Net Loss per Common and Common
Equivalent Share $(0.28) $(0.17)
Note (1)
The Series A and Series B Cumulative Convertible Preferred stock are not
considered common stock equivalents in the computation of primary loss per
share because, at the time of issuance, the effective yield was greater
than two thirds of the then current average A corporate bond yield.
Note (2)
All of the Series B Cumulative Convertible Preferred stock was converted
to Common Stock on May 20, 1994.
Note (3)
The effect of the assumed exercise of the common stock options is
antidilutive.
Fully diluted loss per share is antidilutive and therefore not presented.
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.
AERO SERVICES INTERNATIONAL, INC.
(Registrant)
(Signature)
Paul R. Slack
Chief Accounting Officer
and Controller
(Signature)
R. Ted Brant
Chairman of the Board
Date: August 11, 1995
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5,616
0
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</TABLE>
