U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
Commission file number 0-10190-0
AERO SERVICES INTERNATIONAL, INC.
(Exact name of small business issuer as
specified in its charter)
LOUISIANA 72-0385274
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
660 Newtown-Yardley Road, Newtown, PA 18940
(Address of principal executive offices)
(215) 860-5600
(Issuer's telephone number)
Check whether the issuer (1) 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 No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of April 30, 1996: Common stock (without par value)
6,998,052 shares.
Transitional Small Business Disclosure Format (Check one): Yes No
AERO SERVICES INTERNATIONAL, INC. & SUBSIDIARIES
INDEX
PART I - Financial Information Page Number
Item 1. Financial Statements
Condensed Consolidated Balance Sheet
March 31, 1996 (unaudited) and
September 30, 1995 (audited) 2
Consolidated Statement of Earnings
three months and six months ended March 31, 1996
and 1995 (unaudited) 3
Condensed Consolidated Statement of Cash Flows
six months ended March 31, 1996 and 1995
(unaudited) 4
Notes to Condensed Consolidated Financial Statements
(unaudited) 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 9
PART II - Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 13
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
ASSETS As of As of
March 31 September 30
1996 1995
CURRENT ASSETS
Cash $ 238 $ 455
Restricted cash 5
Customers receivables, less allowance for
doubtful accounts of $47 and
$37, respectively 328 229
Other receivables 781 1,045
Inventories 55 175
Prepaid expenses and other current assets 102 63
TOTAL CURRENT ASSETS 1,504 1,972
PROPERTY AND EQUIPMENT, NET 2,065 2,142
ASSETS HELD FOR SALE AT NET BOOK VALUE 14 25
OTHER ASSETS 355 357
TOTAL ASSETS $ 3,938 $ 4,496
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Notes payable - affiliate $ 8,700 $
Current maturities of long-term debt - other 50 55
Accounts payable - trade 856 648
Accrued expenses
Property, payroll, and other taxes 2,923 3,037
Other 1,535 1,945
Affiliate 362 532
TOTAL CURRENT LIABILITIES 14,426 6,217
LONG-TERM DEBT, less current maturities
Affiliate 6,910 15,610
Other 3,532 3,554
TOTAL LONG-TERM DEBT 10,442 19,164
OTHER LONG TERM LIABILITIES 257 343
REDEEMABLE PREFERRED STOCK 5,844 5,692
STOCKHOLDERS' DEFICIT
Common stock 8,399 8,399
Additional paid-in capital 3,998 3,380
Accumulated deficit (39,191) (38,462)
(26,794) (26,683)
Less: Common stock in treasury 237 237
TOTAL STOCKHOLDERS' DEFICIT (27,031) (26,920)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 3,938 $ 4,496
NOTE: The balance sheet at September 30, 1995 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 SIX MONTHS ENDED
March 31, March 31,
1996 1995 1996 1995
NET SALES $1,798 $2,559 $4,324 $6,001
COST AND EXPENSE
Cost of sales 776 1,340 2,002 3,084
Departmental costs 748 1,307 1,786 2,814
Administrative costs 172 256 466 560
Interest expense - other 49 52 101 114
Interest expense - affiliate 368 383 755 734
$ (315) $ (779) $(786) $(1,305)
Gain on sale of certain FBO
operations 75 292
Other income/(expense), net 42 60 57 189
NET (LOSS) $ (273) $ (644) $(729) $(824)
(Loss) per common and
common equivalent share $ (.04) $ (.10) $(.05) $(.14)
See Notes to Condensed Consolidated Financial Statements.
AERO SERVICES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED
MARCH 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $ (729) $ (824)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 159 155
Provision for losses on accounts receivable 10 21
Amortization of discounted note payable - 182
(Gain) loss on sale of certain FBO operations - (292)
(Gain) loss on sale of fixed assets (53) (120)
Other assets included in sale of FBO operations - (528)
Debt forgiveness to paid-in-capital 311 -
Current period interest included in debt forgiveness 459 -
Other 49 83
Change in assets and liabilities:
(Increase) decrease in restricted cash 5 -
(Increase) decrease in accounts receivable (109) 584
(Increase) decrease in other receivables 264 (27)
(Increase) decrease in notes receivable - affiliate - (280)
(Increase) decrease in inventory 120 382
(Increase) decrease in other current assets (39) 25
(Increase) decrease in other assets 2 -
Increase (decrease) in accounts payable 208 (733)
Increase (decrease) in property,
payroll, and other taxes (114) 14
Increase (decrease) in other current liabilities (410) (510)
Increase (decrease) in other liabilities - affiliate (170) 427
Increase (decrease) in other long term liabilities (86) (57)
Total adjustments 606 (674)
Net cash provided by (used in) operating activities (123) (1,498)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (67) (36)
Proceeds from sale of fixed assets - 3
Proceeds from sale of FBOs - 973
Net cash from (used in) investing activities (67) 940
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payment of notes payable (6) (379)
Principal payments of long-term debt (21) (30)
Net cash provided by (used in) financing activities (27) (409)
Net increase (decrease) in cash & cash equivalents (217) (967)
Cash and cash equivalents at beginning of year 455 2,406
Cash and cash equivalents at end of second fiscal
quarter $ 238 $1,439
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 345 $ 241
Income taxes - 11
See Notes to Condensed Consolidated Financial Statements.
NOTE 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of March 31, 1996, consolidated
statement of earnings for the six month and three month periods ended March
31, 1996 and 1995, and the condensed consolidated statement of cash flows for
the six 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 March 31, 1996 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, 1995
annual report on Form 10-KSB. The results of operations for the periods
ended March 31, 1996 and 1995 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:
MARCH 31 SEPTEMBER 30
1996 1995
Aircraft parts and accessories, oil and
supplies less provisions for obsolete
and slow-moving, and excess quantity
of $46 and $49, respectively $31 $ 55
Fuel 24 47
Work-In-Process - 73
$55 $175
NOTE 4: OTHER RECEIVABLES
The balance at September 30 includes $756 of receivables due from insurance
companies for lawsuits against the Company. A liability of $816 was recorded
in Accrued Expense - Other, with the difference representing the Company's
deductible amount of insurance. In January 1996 payment was made on one of
these lawsuits in the amount of $330. Of this amount, $320 was covered by
insurance. At March 31, $436 is due from insurance companies with a
liability of $486 remaining in Accrued Expense-Other.
NOTE 5: OTHER ASSETS
The balance at March 31 and September 30 includes the unamortized portion of
goodwill, which totalled $373, that was recorded as the result of the
acquisition of Mountain State Flight Services Inc. on April 1, 1995. The
goodwill is being amortized over 141 months from the date of the acquisition.
Included in the balance at March 31 is $14, the net of a note for the sale
of Houston from TigerAir, Inc. reduced by the deferred gain of $236 on the
sale.
NOTE 6: ACCRUED PROPERTY, PAYROLL, AND OTHER TAXES
Included in the balances both at March 31 and September 30 is an accrual of
$1,457 for a New York motor fuels tax assessment which is being appealed, and
respectively, $1,316 and $1,496 for property taxes.
NOTE 7: LONG-TERM DEBT
The balance of $6,910 in Long-Term Debt-Affiliate at March 31 is the note due
Transtech Holding Company, Inc. (Transtech). $8,700 that was in this
category at September 30 is the total of a series of demand notes due
Transtech that were reclassified to short-term debt at March 31. As part of
an addendum to the Debt and Note Modification Agreement of May 20, 1994 (see
Note 8) the maturity date for each of these notes has been amended to the
earlier of (a) demand or (b) June 30, 1996. However, the agreement states
that Transtech will forbear collection of principal under these notes to the
extent that payments would exceed fifty percent (50%) of the Company's
available cash flow (as defined in the agreement). Included in Long-Term
Debt-Other at March 31 and September 30, respectively, are $3,530 and $3,550
due on industrial revenue bonds.
NOTE 8: RELATED PARTY TRANSACTIONS
In December 1995 the Board of Directors approved an addendum to the Debt and
Note Modification Agreement of May 20, 1994 between the Company and
Transtech. Pursuant to the terms of the Modification Agreement, Transtech
agreed to the forgiveness of certain interest and fee payments arising out
of the Triton notes and the Whitney notes which Transtech had acquired from
Triton Energy Corporation. Transtech waived and forgave collection of
interest on all notes for a period of 180 days, and agreed to forbear, under
certain circumstances, collection of principal and interest under the Triton
notes and the Whitney notes. The addendum modifies certain provisions of the
agreement to provide for the acceleration of certain interest payments under
the Triton notes in return for forgiveness by Transtech of additional
interest that has been and will continue to accrue under the Whitney note,
namely, the period December 1, 1994 to June 30, 1996. Through March 31,
1996, $770 of interest had been accrued under the Whitney note. As part of
the forgiveness this amount was reclassified to Paid-in-Capital at March 31.
The Company is indebted to its major shareholder Transtech (holder of 42.2%
of common stock and 34.9% of preferred) in the amount of $15,610. Relative
to this debt, the Company had accrued interest of $362 and $832, respective-
ly, at March 31 and September 30. During the six months ended March 31, 1995
the Company paid $90 of interest to Transtech.
The Company provides accounting services to Transtech for one fixed base
operation owned by it for a monthly fee of nine hundred dollars.
On November 8, 1995 the Company assigned its interest in the sublease and
purchase option agreement at Houston's Hobby Airport, together with fixed
assets situated at the facility, to TigerAir, Inc., a Texas corporation
formed by Wallace E. Congdon, the then President of the Company. In
consideration of the assignment, TigerAir paid $250 in the form of a non-
interest bearing promissory note. Effective as of the closing, Mr. Congdon
resigned as President and as a Director of the Company.
NOTE 9: CERTAIN FIXED BASED OPERATION (FBO) MATTERS
In consideration of the assignment of the Company's interest at Houston's
Hobby Airport (see Note 8) TigerAir paid $250 in the form of a non-interest
bearing promissory note due and payable on the first to occur of: (1)
TigerAir's subsequent sale of the Houston FBO; (2) a change in ownership of
TigerAir; or (3) the third anniversary date of the closing. Based on the
results of operations during 1995, the Company believed significant
uncertainties existed as to the ability of TigerAir to generate the required
cash necessary to repay the note. Therefore, the Company had elected to
defer recognition of a $236 gain generated by this sale. The gain is
recorded in the financial statements at March 31 as an offset to the $250
note receivable and the net result of $14 is included in Other Assets. In
April 1996, TigerAir ceased operations at Hobby Airport. The landlord has
seized the assets on the premises for back rent. These assets are pledged
to the Company as security for the note. The Company's attorneys are
attempting to protect its interests but at this time how much the Company may
recover can not be determined. TigerAir owes the Company a total of $351 at
March 31. Since the Company has deferred a gain on the sale of Houston of
$236, if there is no recovery of any amounts, the maximum effect on the
financial statements will be a charge of $115. There are no additional
reserves recorded in the financial statements at March 31.
On January 30, 1996 the Company entered into an agreement with Jason IV
Aviation, Inc. (Jason IV) to participate in the ownership of a combination
of the Company's current facility and one owned by Jason IV at Lakefront
Airport in New Orleans. The business combination agreed to in January was
subsequently found to be unworkable. A new agreement was reached whereby
Jason IV would purchase Aero's leasehold interest at New Orleans, together
with all furniture, fixtures, and equipment used at the facility and all of
the fuel and oil inventory on hand at February 1, 1996 for the purchase price
of $900, plus the invoice cost of the fuel and oil inventory, plus 35% of
cash flow (as defined in the agreement) from the consolidated operations for
the months of February and March 1996. Payment is to be made as follows:
(a) $300 plus the invoice cost of all inventory, plus Aero's portion of the
cash flow for February 1996 to be paid at closing; (b) $100 paid in the form
of a promissory note bearing interest at the rate of 8% per annum from April
1, 1996 until paid, and due and payable on April 30, 1997; (c) $500 paid in
the form of a promissory note bearing interest at the rate of 9% per annum
from April 1, 1996 until paid and due and payable on March 31, 1999.
Interest on both notes is to be paid monthly. Settlement was held on May 10,
1996 and the Company received funds totalling $305.
The sale of New Orleans will generate a gain of approximately $286. No gain
relating to this sale has been recorded in the financial statements at March
31, 1996.
NOTE 10: 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 the environment or
otherwise relate to the protection 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, 1995, the Company had accrued $490 for expenses related to
environmental protection, assessment and remediation matters at certain
locations. At March 31, 1996, the financial statements of the Company
included accruals for resolution of environmental matters in the amount of
$501 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 two locations previously
sold. Closure of one of these locations has been requested of the appropri-
ate EPA officials, but it may be many months before a decision is rendered.
Due to uncertainties related to estimating both elapsed correction time and
the effectiveness of environmental remediation techniques utilized to correct
non-compliance situations, the Company may incur additional costs in future
periods related to these same situations.
B. Litigation
Please refer to Part II, Item 1 on page 12 for a 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 Six Months Ended
March 31, March 31,
1996 1995 1996 1995
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales 43.2 52.4 46.3 51.4
Departmental costs 41.6 51.1 41.3 46.9
Administrative costs 9.6 10.0 10.8 9.3
Interest expense (Net) 23.2 17.0 19.8 14.1
Other income 2.4 5.3 1.3 8.0
Net loss (15.2) (25.2) (16.9) (13.7)
Revenues for the three months and six months ended March 31, 1996 declined
30% and 28%, respectively as compared to the same period for the previous
year to $1,798 and $4,324, respectively. These declines are the result of
certain FBO sales in fiscal 1995 and 1996. In order to compare the results
of continuing operations, a comparative statement of earnings for the three
month and six month periods are presented below, including one FBO which was
in operation during all of both periods, plus Mountain State Flight Services,
Inc., which was acquired on April 1, 1995.
CONTINUING OPERATIONS
THREE MONTHS ENDED MARCH 31,
1996 % 1995 %
Net Sales $1,657 100.0 $1,083 100.0
COST AND EXPENSE
Cost of Sales 693 41.8 467 43.1
Departmental costs 708 42.7 636 58.7
Administrative costs 166 10.0 218 20.1
Interest expense 417 25.2 433 40.0
(327) (19.7) (671) (61.9)
Other income, Net 41 2.4 33 3.0
NET (LOSS) $ (286) (17.3) $ (638) (58.9)
As shown above, revenues at continuing operations increased 53.0% during the
quarter ended March 31, 1996 compared to the previous year, with 17% of the
increase attributed to Mountain State. The volume of fuel sold increased 64%
and the resulting revenue increased 75.5%. A major portion ($232) of the
sales increase is due to an airline fueling contract which began October
1995. The contract is for services only. No fuel is sold to the airline.
The sales of maintenance services decreased 6.5% from last year.
Cost of sales decreased 1.3% as a percentage of sales in the current quarter.
Departmental costs during the current quarter increased $72 over last year,
but decreased as a percentage of sales by 16 percentage points to 42.7%.
Administrative costs have been reduced by $52 to 10% of sales, down from
20.1% last 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)
Results of Operations (continued):
CONTINUING OPERATIONS
SIX MONTHS ENDED MARCH 31,
1996 % 1995 %
Net Sales $3,346 100.0 $2,152 100.0
COST AND EXPENSE
Cost of Sales 1,434 42.9 932 43.3
Departmental costs 1,460 43.6 1,158 53.8
Administrative costs 427 12.8 393 18.3
Interest expense 857 25.6 842 39.1
(832) (24.9) (1,173) (54.5)
Other income, Net 57 1.7 69 3.2
NET (LOSS) $ (775) (23.2) $ (1,104) (51.3)
As shown above, revenues at continuing operations increased $1,194 (55.5%)
with $183 being attributed to Morgantown. Fuel volume increased 50.8% and
contributed $750 of the increased revenue. The airline fueling contract has
contributed $373 of the increased revenue. The sale of maintenance services
increased 2.3%.
Cost of sales decreased 0.4% as a percentage of sales in the current year.
Departmental costs increased $302 during the current year, with $181 of the
increase at Mountain State, and salaries and benefits increased $144 as a
result of the additional personnel required to service the airline fueling
contract.
Administrative costs increased $34 during the current quarter, with $24 of
the increase at Mountain State.
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 March 31, 1996 increased by $8,677 to ($12,922)
entirely as a result of the reclassification of $8,700 of demand notes due
Transtech from long term to short term (see Note 7). All of the other
changes in current assets and liabilities during the six month period netted
to a decrease of $23 in the working capital deficiency.
Operations during the six months ended March 31, 1996 used $123 of cash with
an additional $67 used for the purchase of fixed assets, and $27 applied to
debt reduction for a total decrease in cash of $217. The statement of cash
flows presented as part of Form 10-QSB for the three months ended December
31, 1995 indicated that operations for that period used $210 of cash, which
means that operations during the quarter ended March 31, 1996 actually
provided cash of $87. Of this amount, $52 was used to purchase fixed assets,
and $14 was applied to debt reduction, leaving a net increase in cash of $21
during the quarter.
On May 10, 1996 the Company received $305 as the first payment on the sale
of New Orleans (see Note 9 on page 7).
As discussed in the Company's Form 10-KSB for the year ended September 30,
1995 management has decided that the best chance to maintain the viability
of the Company is to sell some, if not all, of the remaining assets and use
the proceeds to pay current liabilities. Several investment bankers have
indicated an interest in financing two or three major acquisitions if this
plan is successful and Transportech subordinated its debt, primarily because
the Company would retain approximately $24 million of net operating loss
carryforward for tax purposes. The successful completion of this plan,
however, can be no guarantee that the Company can be returned to profitabili-
ty or maintained as a going concern.
The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
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.
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 Loss.
27.0 Financial Data Schedule
(b) Reports on Form 8-K: None.
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT 11.1 - COMPUTATION OF PER SHARE LOSS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended
March 31,
1996 1995
Primary loss per common and common
equivalent share
Average common shares outstanding 6,998,052 6,998,052
Net Loss $ (273) $ (644)
Less:
Dividends on Series A cumulative
convertible preferred stock 65 65
Accretion of Series A cumulative
convertible preferred stock 12 11
$ (350) $ (720)
Net loss per common and common
equivalent share $ (0.05) $ (0.10)
Note (1)
The Series A cumulative convertible preferred stock is 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)
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
EXHIBIT 11.1 - COMPUTATION OF PER SHARE LOSS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Six Months Ended
March 31,
1996 1995
Primary loss per common and common
equivalent share
Average common shares outstanding 6,998,052 6,998,052
Net Loss $ (729) $ (824)
Less:
Dividends on Series A cumulative
convertible preferred stock 129 129
Accretion of Series A cumulative
convertible preferred stock 23 23
$ (881) $ (976)
Net loss per common and common
equivalent share $ (0.06) $ (0.14)
Note (1)
The Series A cumulative convertible preferred stock is 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)
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: May 15, 1996
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5,844
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