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 June 30, 1997
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 x No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of July 31, 1997: Common stock (without par value)
6,998,052 shares.
Transitional Small Business Disclosure Format (Check one): Yes No x
AERO SERVICES INTERNATIONAL, INC. & SUBSIDIARIES
INDEX
PART I - Financial Information Page Number
Item 1. Financial Statements
Condensed Consolidated Balance Sheet
June 30, 1997 (unaudited) and
September 30, 1996 (audited) 2
Consolidated Statement of Earnings
three months and nine months ended June 30, 1997
and 1996 (unaudited) 3
Condensed Consolidated Statement of Cash Flows
nine months ended June 30, 1997 and 1996
(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 11
Item 6. Exhibits and Reports on Form 8-K 12
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS)
ASSETS As of As of
June 30 September 30
1997 1996
CURRENT ASSETS
Cash $ 219 $ 390
Customers receivables, less allowance for
doubtful accounts of $22 and
$15, respectively 272 316
Other receivables 183 264
Inventories 47 47
Prepaid expenses and other current assets 76 39
TOTAL CURRENT ASSETS 797 1,056
PROPERTY AND EQUIPMENT, NET 2,596 2,731
NOTES RECEIVABLE - LONG TERM 500 500
OTHER ASSETS 489 440
TOTAL ASSETS $ 4,382 $ 4,727
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Current maturities of long term debt - affiliate $ 8,851 $ 8,851
Current maturities of long-term debt - other 3,524 3,544
Notes payable 102 -
Accounts payable - trade 948 970
Accrued expenses
Property, payroll, and other taxes 3,123 3,059
Other 782 1,032
Affiliate 1,007 684
TOTAL CURRENT LIABILITIES 18,337 18,140
LONG-TERM DEBT, less current maturities
Affiliate 7,380 7,407
Other 13 10
TOTAL LONG-TERM DEBT 7,393 7,417
OTHER LONG TERM LIABILITIES 724 744
REDEEMABLE PREFERRED STOCK 6,220 5,997
STOCKHOLDERS' DEFICIT
Common stock 8,702 8,702
Additional paid-in capital 3,512 3,735
Accumulated deficit (40,269) (39,771)
(28,055) (27,334)
Less: Common stock in treasury 237 237
TOTAL STOCKHOLDERS' DEFICIT (28,292) (27,571)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 4,382 $ 4,727
NOTE: The balance sheet at September 30, 1996 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,
1997 1996 1997 1996
NET SALES $2,125 $1,734 $5,980 $ 6,058
COST AND EXPENSE
Cost of sales 980 734 2,813 2,736
Departmental costs 765 650 2,255 2,436
Administrative costs 179 193 602 659
Interest expense - other 49 51 159 152
Interest expense - affiliate 374 364 1,109 1,119
$ (222) $ (258) $ (958) $(1,044)
Gain on sale of certain FBO
operations - 295 98 295
Other income, net 301 53 362 110
NET INCOME (LOSS) $ 79 $ 90 $ (498) $ (639)
Loss per common and
common equivalent share $ .00 $ .00 $ (.10) $ (.12)
Fully diluted earnings
per common share $ .01 $ .01 $ - $ -
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,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $ (498) $ (639)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 251 237
Provision for losses on accounts receivable 6 14
Gain on sale of certain FBO operations (98) (295)
Gain on sale of fixed assets (41) (75)
Debt forgiveness to paid-in-capital - 311
Current period interest included in debt forgiveness - 601
Other 5 72
Change in assets and liabilities:
Decrease in restricted cash - 5
(Increase) decrease in accounts receivable 38 (84)
Decrease in other receivables 81 587
Decrease in inventory - 127
Increase in other current assets (37) (75)
Increase in other assets (49) (491)
Increase (decrease) in accounts payable (22) 143
Increase (decrease) in property,
payroll, and other taxes 64 (90)
Decrease in other current liabilities (152) (824)
less deferred gain recognized
Increase (decrease) in other liabilities - affiliate 323 (40)
Increase (decrease) in other long term liabilities (20) 405
Total adjustments 349 528
Net cash (used in) provided by operating activities (149) (111)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (80) (100)
Proceeds from sale of FBOs - 300
Net cash used in investing activities (80) 200
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable 225 -
Principal payments of notes payable - affiliate (27) -
Principal payment of notes payable - other (110) (12)
Principal payments of long-term debt (30) (30)
Net cash provided by (used in) financing activities 58 (42)
Net increase (decrease) in cash & cash equivalents (171) 47
Cash and cash equivalents at beginning of year 390 455
Cash and cash equivalents at end of second fiscal
quarter $ 219 $ 502
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 938 $ 406
Income taxes - -
See Notes to Condensed Consolidated Financial Statements.
NOTE 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of June 30, 1997, consolidated
statement of earnings for the nine month and three month periods ended June
30, 1997 and 1996, and the condensed consolidated statement of cash flows for
the nine month periods 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, 1997 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, 1996
annual report on Form 10-KSB. The results of operations for the periods
ended June 30, 1997 and 1996 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
1997 1996
Aircraft parts and accessories, oil and
supplies less provisions for obsolete
and slow-moving, and excess quantity
of $55 and $57, respectively $26 $18
Fuel 21 29
$47 $47
NOTE 4: OTHER RECEIVABLES
The balance at September 30, 1996 includes a note in the amount of $100 due
from Jason IV Aviation, Inc. as partial payment of the selling price of the
company's facility in New Orleans. The note was paid in February 1997.
Included in the total at both June 30 and September 30 is an escrow deposit
of $107 and $121, respectively, the remainder of $150 required by the City
of Scottsdale, AZ to insure completion of the EPA cleanup that was ongoing
at the time the Company sold the facility in September 1994.
NOTE 5: NOTES RECEIVABLES
The balance is the face amount of another note due from Jason IV Aviation,
Inc. also as partial payment of the selling price of the New Orleans
facility. The note carries an interest rate of 9% per annum, to be paid
monthly, and is due and payable on March 31, 1999.
NOTE 6: OTHER ASSETS
The balance at June 30 and September 30 includes $302 and $326, respectively,
the unamortized portion of goodwill recorded with 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.
NOTE 7: ACCRUED PROPERTY, PAYROLL, AND OTHER TAXES
Included in the balances both at June 30 and September 30 is an accrual of
$1,668 for a New York motor fuels tax assessment which is being appealed, and
$1,363 and $1,316, respectively, for property taxes.
NOTE 8: FINANCING ARRANGEMENTS
Long Term Debt-Affiliate
Included in this category are $8,700 of various demand loans due to Transtech
Holding Company, (Transtech), the Company's principle shareholder. These
notes provide for interest at 2% above the prime rate. Also included is a
note due Transtech in the amount of $6,910, bearing a prime interest rate.
The note is collateralized by a first priority interest on the fixed assets,
inventory, and accounts receivable of the Company. Also, at June 30, and
September 30, respectively, this category includes $470 and $533, the balance
due on the purchase of an airplane in July 1996 from R. Ted Brant, the
Chairman of the Board and Chief Executive Officer of the Company. The note
is due Cessna Corporation but remains in the name of Mr. Brant. The Company
makes payments directly to Cessna.
Long Term Debt-Other
Included in this category at June 30 and September 30 are $3,520 and $3,550,
respectively, due on industrial revenue bonds, with $20 and $50, respective-
ly, being the current maturities. However, due to the uncertainty surround-
ing the renewal of the letter-of-credit (which was due for renewal in May
1997 and extended at that time until November 1997) supporting the $3,500
bond that matures in 2014, Management decided to reclassify that amount as
short term debt at September 30.
NOTE 9: RELATED PARTIES TRANSACTIONS
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 $1,007 and $684, respec-
tively, at June 30 and September 30. During the nine months ended June 30,
1997 the Company paid $777 of interest to Transtech.
The Company provides accounting services to Transtech for one fixed base
operation owned by it for a monthly fee of $1.
In January 1996 the Company purchased a 40% interest in a company called
Peakwood, L.L.C. for $150. $115 of this amount was borrowed from the
following related parties: Transportech, a wholly owned subsidiary of
Transtech Holding Co., $20; Maurice Lawruk, Company Director, $40; James
Affleck, Company Assistant Treasurer, $34; R. Ted Brant, Company Director and
CEO, $15; Bobby Adkins, Company Director, $4; and Alice Buford, a shareholder
of Transtech, $2. The Company issued promissory notes bearing an interest
rate of 10% per annum with principal and interest due in February 1997. At
that time the Company exercised its option contained within the notes to
extend them for one additional year. All interest due and payable was paid
at the time of the extension.
NOTE 10: OTHER INCOME
The amount at June 30, 1997 includes a $285 refund from the state of
Wisconsin for expenses incurred in the environmental remediation of a site
once operated by the Company. The reimbursement totalled 97% of disburse-
ments made during the period from June 1992 through September 1995.
NOTE 11: 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 June 30, 1997 and September 30, 1996, the Company had accrued $424 and
$457, respectively, for expenses related to environmental protection,
assessment and remediation matters at certain locations 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. 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. Arapahoe County Industrial Revenue Bond
The Company sold an FBO in Denver, CO belonging to its wholly-owned
subsidiary, Beckett Aviation Inc. in February 1994. The buyer, Denver
JetCenter, Inc. contractually assumed all liability in connection with the
payment of principal, interest, and related fees of the $3,500 industrial
revenue bond issued by Arapahoe County, CO. These bonds were the source of
construction funds for the facility. From the date of the sale until May 1,
1997 the bond was supported by an irrevocable letter of credit issued by
Barclays Bank International Limited and maintained by the Company. On May
1, 1997 Denver JetCenter obtained a letter of credit in their name with
Colorado National Bank secured by a guaranty from Texaco, Inc.
C. Litigation
Please refer to Part II, Item 1 on page 10 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 Nine Months Ended
June 30, June 30,
1997 1996 1997 1996
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales 46.1 42.3 47.0 45.2
Departmental costs 36.0 37.5 37.7 40.2
Administrative costs 8.4 11.1 10.1 10.9
Interest expense (Net) 19.9 23.9 21.2 21.0
Other income 14.1 20.0 7.7 6.7
Net income (loss) 3.7 5.2 (8.3) (10.6)
Revenues for the three months ended June 30, 1997 increased $391 (23%) to
$2,125 compared to the same period in 1996. Of the increase $298 is the
result of increased fuel sales. Revenues for the nine months ended June 30,
1997 decreased $78 (1%) to $5,980 as compared to 1996. This decline results
from the sale of two FBOs during the first half of fiscal 1996. In order to
compare the results of continuing operations, a comparative statement of
earnings for the three month and nine month periods are presented below,
including only those locations which were in operation during all or both
periods, and excluding other income not relating to those periods, such as
the $285 EPA refund.
CONTINUING OPERATIONS
THREE MONTHS ENDED JUNE 30,
1997 % 1996 %
Net Sales $2,125 100.0 $1,717 100.0
COST AND EXPENSE
Cost of Sales 980 46.1 735 42.8
Departmental costs 765 36.0 644 37.5
Administrative costs 179 8.5 193 11.2
Interest expense 423 19.9 414 24.1
(222) (10.5) (269) (15.6)
Other income, Net 16 0.8 52 3.0
NET (LOSS) $ (206) (9.7) $ (217) (12.6)
As shown above, revenues at continuing operations increased $408 (24%) during
the three months ended June 30, 1997 compared to the previous year. The
volume of fuel sold increased 18% from the previous year providing $298
additional revenue. Airline fueling contracts provided $57 of additional
revenue.
Departmental costs increased $121 (19%) during the three months ended June
30, 1997, but decreased as a percentage of sales by 1.5%. The single largest
increase was $34 for employee health insurance.
Administrative costs decreased $14 (8%).
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,
1997 % 1996 %
Net Sales $5,980 100.0 $5,063 100.0
COST AND EXPENSE
Cost of Sales 2,813 47.0 2,169 42.8
Departmental costs 2,295 38.4 2,100 41.5
Administrative costs 604 10.1 625 12.4
Interest expense 1,268 21.2 1,270 25.1
(1,000) (16.7) (1,101) (21.8)
Other income, Net 77 1.2 110 2.2
NET (LOSS) $ (923) (15.5) $ (991) (19.6)
As shown above, revenues at continuing operations increased $917 (18%). Fuel
volume sold increased 17% and contributed $660 of the increased revenue.
Airline fueling contracts have contributed $99 of the increased revenue, and
an increase in maintenance services provided an increase in revenue of $51.
Cost of sales decreased 4.2% as a percentage of sales in the current year,
primarily in fuel sales because of numerous periodic increases in the cost
of fuel during the three months ended December 31, 1996. Increases totalled
7.5% and could not be reflected in proportionally increased selling prices
due to competitive pressures.
Departmental costs increased $195 (9%) during the current year, but decreased
3.1% as a percentage of sales.
Administrative costs decreased $21 (2%) during 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
Working capital deficiency at June 30, 1997 increased by $456 from September
30, 1996 to ($17,540). Current assets decreased by $259 and current
liabilities increased by $197. An increase in prepaid expenses ($37) was
offset by decreases in cash ($171), accounts receivable ($44), and other
receivables ($81), producing the decrease in current assets. Decreases in
other accrued expenses ($250) and accounts payable ($22) were offset by
increases in notes payable ($82), property and payroll taxes ($64), and
accrued expenses-affiliate ($323), producing the increase in current
liabilities.
Operations during the nine months ended June 30, 1997 used $149 of cash with
an additional $80 used for the purchase of fixed assets. During the nine
month period, the Company issued notes payable of $225, of which $182 was a
conversion of accounts payable to short term notes payable and $18 was used
to finance the purchase of fixed assets. $105 of these notes was repaid by
June 30.
Management is currently not considering offers to purchase the Company's
Chicago FBO. Instead, management is concentrating on finding a substitute
letter of credit supporting the $3,500 bond that matures in 2014. The
proceeds of the bond were used to construct the Chicago facility. The
current letter of credit expires November 30, 1997. When the new letter of
credit is in place, the Company has been promised a line of credit from a
lender, using the Chicago facility as collateral. Proceeds would be used to
resolve certain current liabilities. Also, the Company has been granted a
five year lease to operate an FBO at Harrisburg International Airport in
Harrisburg, Pennsylvania. Operations could begin by September 1997. The
facility will provide aircraft fueling and hanger facilities, and will
require a minimum of start-up costs. Management is working with an
investment banking firm in planning methods to utilize the Company's
approximate $33 million net operating loss carryforwards. The successful
completion of these plans, however, can be no guarantee that the Company can
be returned to profitability 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 EARNINGS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended
June 30, 1997,
PRIMARY FULLY DILUTED
Average Common Shares outstanding 6,998,052 6,998,052
Assumed exercise of Common Stock Options - 1,290,000
Assumed conversion of Series A Cumulative
Convertible Preferred Stock - 1,076,740
Total 6,998,052 9,364,792
Net Income $ 129 $ 129
Less:
Dividends on Series A Cumulative
Convertible Preferred Stock 65 -
Accretion of Series A Cumulative
Convertible Preferred Stock 10 -
$ 204 $ 129
Net earnings per Common Equivalent Share $ .00 $ .01
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.
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT 11.1 - COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended
June 30, 1996,
PRIMARY FULLY DILUTED
Average Common Shares outstanding 6,998,052 6,998,052
Assumed exercise of Common Stock Options - 1,290,000
Assumed conversion of Series A Cumulative
Convertible Preferred Stock - 1,076,740
Total 6,998,052 9,364,792
Net Income $ 90 $ 90
Less:
Dividends on Series A Cumulative
Convertible Preferred Stock 65 -
Accretion of Series A Cumulative
Convertible Preferred Stock 11 -
$ 14 $ 90
Net earnings per Common Equivalent Share $ .00 $ .01
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.
AERO SERVICES INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT 11.1 - COMPUTATION OF PER SHARE LOSS
(UNAUDITED: DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Nine Months Ended
June 30,
1997 1996
Primary loss per common and common
equivalent share
Average common shares outstanding 6,998,052 6,998,052
Net Loss $ (498) $ (639)
Less:
Dividends on Series A cumulative
convertible preferred stock 194 194
Accretion of Series A cumulative
convertible preferred stock 29 35
$ (721) $ (868)
Net loss per common and common
equivalent share $ (0.10) $ (0.12)
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: August 1, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 219
<SECURITIES> 0
<RECEIVABLES> 272
<ALLOWANCES> 0
<INVENTORY> 47
<CURRENT-ASSETS> 797
<PP&E> 5,685
<DEPRECIATION> (3,089)
<TOTAL-ASSETS> 4,382
<CURRENT-LIABILITIES> 18,337
<BONDS> 0
<COMMON> 8,702
6,220
0
<OTHER-SE> (36,994)
<TOTAL-LIABILITY-AND-EQUITY> 4,382
<SALES> 5,980
<TOTAL-REVENUES> 5,980
<CGS> 2,813
<TOTAL-COSTS> 2,813
<OTHER-EXPENSES> 2,857
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,268
<INCOME-PRETAX> (498)
<INCOME-TAX> 0
<INCOME-CONTINUING> (498)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (498)
<EPS-PRIMARY> (.10)
<EPS-DILUTED> 0
</TABLE>
