SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
Form 10-K
_________________
(Mark One)
yes ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended March 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _______________ to _____________
commission file number 0-11720
AIR TRANSPORTATION HOLDING
COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1206400
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
3524 Airport Road
Maiden, North Carolina 28650
(Address of principal (Zip Code)
executive offices)
(704) 377-2109
(Registrant's telephone number,
including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, par value $.25 per share
(Title of Class)
__________________
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 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 yes_ No ____
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [
]
The aggregate market value of voting stock held by non-affiliates
of the registrant as of May 1, 1997, computed by reference to the
average of the closing bid and asked prices for such stock on such
date, was $4,526,108. As of the same date, 2,651,433 shares of Common
Stock, no par value, were outstanding.
PART I
Item 1. Business.
Air Transportation Holding Company, Inc., incorporated under
the laws of the State of Delaware in 1980 (the "Company"),
operates in two industry segments, providing overnight air cargo
services to the air express delivery industry through its wholly
owned subsidiaries, Mountain Air Cargo, Inc. ("MAC") and CSA Air,
Inc. ("CSA"), and aircraft maintenance, parts and other aviation
related services to the commercial and military aviation
industries through its wholly owned subsidiary, Mountain Aircraft
Services, LLC ("MAS"). For the fiscal year ended March 31, 1997
the Company's air cargo services through MAC and CSA accounted
for approximately 90.2% of the Company's consolidated revenues,
and aviation related services through MAS accounted for 9.8% of
consolidated revenues. The Company's air cargo services are
provided to one strategic partner -- Federal Express Corporation
("Federal Express"). Revenues from contracts with Federal
Express accounted for approximately 89.5% of the Company's
consolidated revenues for the year ended March 31, 1997. Certain
financial data with respect to the Company's overnight air cargo
and aviation services segments are set forth in Note 11 of Notes
to Consolidated Financial Statements included under Part II, Item
8 of this report. Such data are incorporated herein by
reference.
The principal place of business of the Company, MAC and MAS
is Maiden, North Carolina, and the principal place of business of
CSA is Iron Mountain, Michigan.
Recent Corporate Reorganization and Diversification.
In October 1993, the Company organized MAS to diversify its
customer base and business mix. MAS is organized as a limited
liability company, of which the Company and MAC are members (99%
of the profits and losses are allocated to the Company and 1% to
MAC).
Effective July 1, 1992, the Company reorganized its
subsidiaries. Prior to such reorganization, the Company directly
held the shares of capital stock of MAC and a corporation then
known as CSA Air, Inc. ("Old CSA"), and MAC held the shares of
capital stock of CSA, then known as MS Aircraft Maintenance
Corporation, Inc. In the reorganization, MAC transferred the
shares of stock of CSA to the Company, Old CSA transferred its
assets to CSA and Old CSA merged with and into MAC. Immediately
following the reorganization CSA changed its name to "CSA Air,
Inc." In the following discussion of the Company's business
operations, all references to "CSA" include Old CSA.
Overnight Air Cargo Services.
MAC and CSA provide small package overnight air freight
delivery services on a contract basis throughout the eastern half
of the United States and Canada, and in Puerto Rico and the U.S.
Virgin Islands. MAC and CSA's revenues are derived principally
pursuant to "dry-lease" service contracts. Under the dry-lease
service contracts, the customer leases its aircraft to MAC (or
CSA) for a nominal amount and pays an administrative fee to MAC
(or CSA). Under these arrangements, all direct costs related to
the operation of the aircraft (including fuel, maintenance,
landing fees and pilot costs) are passed through to the customer.
For the most recent fiscal year, operations under dry-lease
service contracts accounted for 95.7% of MAC and CSA's revenues
(86.3% of the Company's consolidated revenues).
For the fiscal year ended March 31, 1997, MAC and CSA
provided air delivery service exclusively to Federal Express. As
of March 31, 1997, MAC and CSA operated an aggregate of 95
aircraft under agreements with Federal Express. Separate
agreements cover the three types of aircraft operated by MAC and
CSA for Federal Express -- Cessna Caravan, Fokker F-27 and Short
Brothers SD3-30. Cessna Caravan and Fokker F-27 aircraft are dry-
leased from Federal Express, and Short Brothers SD3-30 aircraft
are owned by the Company and operated under "wet-lease"
arrangements with Federal Express which provide for a fixed fee
per flight regardless of the amount of cargo carried. Pursuant
to such agreements, Federal Express determines the schedule of
routes to be flown by MAC and CSA. As of March 31, 1997, MAC and
CSA were flying approximately 140 routes pursuant to their
agreements with Federal Express.
Agreements with Federal Express are renewable annually and
may be terminated by Federal Express any time upon 15 to 30 days'
notice. The Company believes that the short term and other
provisions of its agreements with Federal Express are standard
within the air freight contract delivery service industry. Loss
of Federal Express as a customer would have a material adverse
affect on MAC, CSA and the Company.
MAC and CSA operate under separate aviation certifications.
MAC is certified to operate under Part 121 and Part 135 of the
regulations of the Federal Aviation Administration (the "FAA").
This certification permits MAC to operate aircraft that can carry
up to 18,000 pounds of cargo. CSA is certified to operate under
Part 135 of the FAA regulations. This certification permits CSA
to operate aircraft with a maximum cargo capacity of 7,500
pounds.
MAC and CSA, together, operated or held for sale the
following aircraft as of March 31, 1997:
Form of Number of
Type of Aircraft Model Year Ownership Aircraft
Cessna Caravan, 208A and 208B
(single turbo prop) 1985-1996 dry lease 71
Fokker F-27
(twin turbo prop) 1968-1981 dry lease 22
Short Brothers SD3-30
(twin turbo prop) 1981 owned 2
__________
Total 95
Of the 95 aircraft fleet, 93 aircraft--that is, the Cessna
Caravan and Fokker F-27 aircraft--are owned by Federal Express.
Under the dry-lease service contracts, certain maintenance
expense, including cost of parts inventory, and maintenance
performed by personnel not employed by the Company, is passed
directly to the customer, and the expense of daily, routine
maintenance and aircraft service checks is charged to the
customer on an hourly basis. Accordingly, the Company does not
anticipate maintenance expense, such as engine overhauls, to be
material to the Company's operating results.
All FAA Part 135 aircraft, including Cessna Caravan models
208A and 208B, and Short Brothers SD3-30 aircraft are maintained
on FAA approved inspection programs. The inspection intervals
range from 100 to 200 hours. The engines are produced by Pratt &
Whitney, and overhaul periods are based on FAA-approved
schedules. The current overhaul period on the Cessna aircraft is
4,500 hours. The Short Brothers manufactured aircraft are
maintained on an "on condition" maintenance program (i.e.,
maintenance is performed when performance deviates from certain
specifications) with engine inspections at each phase inspection
and in-shop maintenance at predetermined intervals.
The Fokker F-27 aircraft are maintained under a FAA Part 121
maintenance program. The program consists of A, B, C, D and I
service checks. The engine overhaul period is 5,700 hours.
The Company operates in highly competitive markets and
competes with approximately 50 other contract cargo carriers in
the United States. MAC and CSA's contracts are renewed on an
annual basis. Accurate industry data is not available to
indicate the Company's position within its marketplace (in large
measure because most of the Company's competitors are privately
held), but management believes that MAC and CSA, combined,
constitute one of the largest contract carriers of the type
described immediately above.
The Company's air cargo operations are not materially
seasonal.
Aviation Related Services.
In October 1993, the Company organized MAS to diversify its
customer base and business mix. MAS provides aircraft
maintenance and parts and other aviation related services to the
commercial and military aviation industries. MAS's principal
offices are located in Maiden, North Carolina and its primary
maintenance facilities are located at the Global TransPark in
Kinston, North Carolina and Miami, Florida.
Services offered by MAS include engine overhaul management,
aircraft maintenance and component repair. Services are provided
under standard purchase contracts.
In addition, MAS sells aircraft parts, of which
approximately 5% of the amount sold in the fiscal year ended
March 31, 1997 were used in connection with maintenance performed
by MAS. Sales of parts by MAS do not include any parts purchased
for maintenance of aircraft operated by MAC or CSA.
MAS's inventory of parts held for sale was $936,000 at March
31, 1997 and included parts for use in primarily five types of
commercial and military aircraft, all of which are generally in
current use. MAS maintains its own inventory controls and
documentation, sets stocking levels and determines the conditions
for surplus parts disposal.
MAS's customers include the commercial air cargo and
passenger aviation industries and manufacturers of commercial and
military aircraft and contract maintenance companies serving the
commercial and military aviation industry. MAS generally does
not provide parts or services under contracts directly with the
U.S. government. For the fiscal year ended March 31, 1997, MAS
provided services or parts to over 120 customers, with no single
customer accounting for more than 5% of the Company's revenues
for the year.
MAS's operations are not materially seasonal.
Governmental Regulation.
Under the Federal Aviation Act of 1958, as amended, the FAA
has safety jurisdiction over flight operations generally,
including flight equipment, flight and ground personnel training,
examination and certification, certain ground facilities, flight
equipment maintenance programs and procedures, examination and
certification of mechanics, flight routes, air traffic control
and communications and other matters. The FAA also has power to
suspend or revoke for cause the certificates it issues and to
institute proceedings for imposition and collection of fines for
violation of federal aviation regulations. The Company has
secured appropriate operating certificates and airworthiness
certificates for all aircraft operated by it.
During the most recent fiscal year, the Company underwent
periodic routine FAA reviews of MAC and CSA's operating
procedures and flight and maintenance records; no violations of
procedures or recordkeeping were reported.
The Airline Deregulation Act of 1978 created a new class of
domestic certificated all-cargo carriers. Pursuant to such
certificate, aircraft of specified size may be operated within
the United States, without restriction on routes.
The Company has been subject to FAA regulation since the
commencement of its business activities. The FAA is concerned
with safety and the regulation of flight operations generally,
including equipment used, ground facilities, maintenance,
communications and other matters. The FAA can suspend or revoke
the authority of air carriers or their licensed personnel for
failure to comply with its regulations and can ground aircraft if
questions arise concerning airworthiness. The Company, through
its subsidiaries, holds all operating airworthiness and other FAA
certificates that are currently required for the conduct of its
business, although these certificates may be suspended or revoked
for cause.
The FAA has authority under the Noise Control Act of 1972,
as amended, to monitor and regulate aircraft engine noise. The
aircraft operated by the Company are in compliance with all such
regulations promulgated by the FAA. Moreover, because the
Company does not operate jet aircraft noncompliance is not
likely. Such aircraft also comply with standards for aircraft
exhaust emissions promulgated by the Environmental Protection
Agency pursuant to the Clean Air Act of 1970, as amended.
Because of the extensive use of radio and other
communication facilities in its aircraft operations, the Company
is subject to the Federal Communications Act of 1934, as amended.
Maintenance and Insurance.
The Company, through its subsidiaries, maintains its
aircraft under the appropriate FAA standards and regulations.
The Company has secured public liability and property damage
insurance in excess of minimum amounts required by the United
States Department of Transportation. The Company has also
obtained all-risk hull insurance on Company-owned aircraft.
The Company maintains cargo liability insurance, workers'
compensation insurance and fire and extended coverage insurance,
for leased as well as owned facilities and equipment.
Employees.
At May 1, 1997, the Company had 375 full-time and full-time-
equivalent employees, of which 308 are employed by MAC, 52 are
employed by CSA and 15 are employed by MAS. None of the
Company's employees are represented by a union. The Company
believes its relations with its employees are good.
Item 2. Properties.
The Company leases the Little Mountain Airport in Maiden,
North Carolina from a corporation whose stock is owned in part by
J. Hugh Bingham, William H. Simpson and John J. Gioffre, officers
and directors of the Company and the estate of David Clark. The
facility consists of approximately 65 acres with one 3,000 foot
paved runway, approximately 20,000 square feet of hangar space
and approximately 9,700 square feet of office space. The
operations of the Company and MAC are headquartered at this
facility. The lease for this facility was renewed in May 1996,
and is currently scheduled to expire on May 31, 2001, and may be
renewed for an additional five-year period. In connection with
the renewal, the monthly rental payment for this facility
increased to $8,073.
The Company also leases approximately 800 square feet of
office space and approximately 6,000 square feet of hangar space
at the Ford Airport in Iron Mountain, Michigan. CSA's operations
are headquartered at these facilities. These facilities are
leased under an annually renewable agreement with a monthly
rental payment, as of March 31, 1997, of approximately $1,000.
On November 16, 1995, the Company entered into a twenty-one
and a half year premises and facilities lease with Global
TransPark Foundation, Inc. to lease approximately 53,000 square
feet of a new 66,000 square foot aircraft hangar shop and office
facility at the North Carolina Global TransPark in Kinston, North
Carolina. On August 10, 1996, MAS's component repair services
and part of MAC's aircraft maintenance operations were relocated
to this facility. Rent under this lease increases over time as
follows: the first 18 months, no rent; the next 5-year period,
$2.25 per square foot; the next 5-year period, $3.50 per square
foot; the next 5-year period, $4.50 per square foot; and the
final 5-year period, $5.90 per square foot. This lease is
cancelable under certain conditions at the Company's option. The
Company began operations at this facility in August 1996.
MAS operates an engine overhaul management facility in
Miami, Florida, leasing approximately 4,700 square feet of shop
space. The lease expires in April 1998, and the monthly rental
payment is $2,500.
As of March 31, 1997, the Company leased hangar space at 17
other locations for aircraft storage. Such hangar space is
leased at prevailing market terms.
The table of aircraft presented in Item 1 lists the aircraft
operated by the Company's subsidiaries and the form of ownership.
Item 3. Legal Proceedings.
The Company is not aware of any pending or threatened
lawsuits that if adversely decided would have a material adverse
effect on the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders.
PART II
Item 5. Registrant's Common Equity and Related Stockholder
Matters.
The Company's common stock is publicly traded in the over-
the-counter market under the NASDAQ symbol "AIRT."
As of May 1, 1997, the number of holders of record of the
Company's Common Stock was approximately 523. Over-the-counter
market quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions and may not necessarily
represent actual transactions. The range of high and low bid
quotations per share for the Company's common stock from April
1995 through March 1997 is as follows:
Common Stock
Quarter Ended High Low
June 30, 1995 4 1/8 3 3/8
September 30, 1995 4 1/2 3 3/4
December 31, 1995 4 3/4 3 3/4
March 31, 1996 4 1/2 3 3/4
June 30, 1996 4 3/8 4
September 30, 1996 5 7/8 4 1/8
December 31, 1996 5 1/4 4
March 31, 1997 4 1/4 3 1/4
On June 15, 1994, following the Company's one-for-five
reverse split of shares of its Common Stock, the Company paid a
cash dividend of $.06 per share ($.012 per pre-split share). On
May 31, 1995, the Company paid a cash dividend of $.07 per share.
On April 22, 1996, the Company paid a cash dividend of $.08 per
share. The Company's Board of Directors on May 9, 1997 declared
a cash dividend of $.10 per share payable on June 23, 1997 to
stockholders of record on June 2, 1997. Prior to January 1992,
the Company had not paid a dividend.
Item 6. Selected Financial Data.
SELECTED FINANCIAL DATA
(in thousands except per share data)
Year Ended March 31,
1997 1996 1995 1994 1993
Operating revenues $35,103 $35,432 $32,813 $30,674 $26,776
Earnings before extra-
ordinary credit and
change in accounting
principle 1,323 1,612 1,598 1,579 1,504
Extraordinary credit - - - .22 309
Change in accounting
principle - - - 715 -
Net earnings $ 1,323 $ 1,612 $ 1,598 $ 2,294 $ 1,813
Net earnings per share(1):
Earnings before extra-
ordinary credit and
change in accounting
principle $ .47 $ .53 $ .48 $ .47 $ .47
Extraordinary credit - - - - .09
Change in accounting
principle - - - - -
Net earnings .47 .53 .48 .69 .56
Total assets $ 11,118 $ 10,220 $ 10,161 $ 8,550 $ 7,147
Long-term debt,including
current portion $ - $ 10 $ 14 $ 20 $ 241
Stockholder's
equity $ 8,254 $ 7,414 $ 7,130 $ 6,642 $ 4,493
Average common shares
outstanding(1) 2,794 3,020 3,312 3,348 3,210
Dividend declared per
common share
(1)(2)(3) $ - $ .15 $ .06 $ .05 $ -
Dividend paid per
common share(1)(2) $ .08 $ .07 $ .06 $ .05 $ -
_____________________________
(1) All common share and dividend data at dates or for periods
ending prior to May 16, 1994 have been adjusted to reflect
the one-for-five reverse stock split effected on May 16,
1994.
(2) On February 1, 1996, the Company declared a cash dividend of
$.08 per common share that was paid on April 22, 1996.
(3) On May 9, 1997, the Company declared a cash dividend of $.10
per common share payable on June 23, 1997 to stockholders of
record on June 2, 1997
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Overview
The Company's revenue is primarily generated through its air
cargo subsidiaries, Mountain Air Cargo, Inc. (MAC) and CSA Air,
Inc. (CSA), which are short-haul express air freight carriers
flying nightly contracts for a major express delivery company out
of 81 cities principally located in 30 states in the eastern half
of the United States and in Canada, Puerto Rico, and the Virgin
Islands. During the periods covered by this report, MAC and CSA
provided air delivery service exclusively to Federal Express
Corporation (Customer). As of March 31, 1997, MAC and CSA
operated an aggregate of 95 aircraft under agreements with the
Customer flying approximately 142 routes.
Separate agreements cover the three types of aircraft
operated by MAC and CSA-Cessna Caravan, Fokker F-27, and Short
Brothers SD3-30. Cessna Caravan and Fokker F-27 aircraft (a
total of 93 aircraft at March 31, 1997) are owned by and dry-
leased from the Customer, and Short Brothers SD3-30 aircraft (two
aircraft at March 31, 1997) are owned by the Company and operated
under wet-lease arrangements. Pursuant to such agreements, the
Customer determines the type of aircraft and schedule of routes
to be flown by MAC and CSA, with all other operational decisions
made by the Company. Under the terms of the dry-lease service
agreements, which currently cover approximately 98% of the
revenue aircraft operated, the Company passes through to its
customer certain cost components of its operations without
markup. The cost of fuel, flight crews, landing fees, outside
maintenance, parts and certain other direct operating costs are
included in operating expenses and billed to the customer as
cargo and maintenance revenue, at cost.
Agreements are renewable annually and may be terminated by
the Customer at any time upon 15 to 30 days' notice. The Company
believes that the short term and other provisions of its
agreements with the Customer are standard within the air freight
contract delivery service industry. The Company is not
contractually precluded from providing such services to other
firms, and has done so in the past. Loss of its contracts with
the Customer would have a material adverse effect on the Company.
In Fiscal 1994, to expand its revenue base, the Company
organized Mountain Aircraft Services, LLC ("MAS") to sell
aircraft parts and offer engine overhaul management and engine
component repair services to the commercial and military aviation
industry. Revenue from this operation contributed approximately
$3,445,000 (9.8%) and $3,176,000 (8.9%) to the Company's revenues
in fiscal 1997 and 1996, respectively.
The following table summarizes the changes and trends in the
Company's expenses as a percentage of revenue:
Fiscal Year Ended March 31
1997 1996 1995
Operating revenue (in thousands) $35,103 $35,432 $32,813
Expense as a percentage of revenue % % %
Flight operations 36.75 35.71 36.97
Maintenance 44.46 46.39 43.67
General and administrative 12.06 10.77 10.91
Depreciation and amortization 1.06 1.36 1.39
Facility start-up and merger 0.99 - -
Total costs and expenses 95.32% 94.23% 92.94%
Fiscal 1997 vs. 1996. Consolidated revenue decreased
$329,000 (0.9%) to $35,103,000 for the fiscal year ended March
31, 1997 compared to the prior fiscal year. The decrease in 1997
revenue primarily resulted from a $1,054,000 decrease in cargo
revenue generated by Company-owned aircraft (one of which was
sold in fiscal 1997), partially offset by a $308,000 increase in
dry lease revenue and a $418,000 increase in revenue related to
the expansion of MAS.
Operating expenses increased $72,000 (0.2%) to $33,462,000
for fiscal 1997 compared to fiscal 1996. The increase in
operating expenses consisted of the following changes: cost of
flight operations increased $249,000 (2.0%) as a result of
increases in pilot and flight personnel and costs associated with
pilot travel; maintenance expense decreased $830,000 (5.1%)
primarily as a result of decreases in parts purchases and
contract service and outside maintenance costs; depreciation and
amortization decreased $113,000 (23.3%) due to the sale of a
Company-owned aircraft and the complete amortization of goodwill
in the first quarter of fiscal 1997; the general and
administrative expense increase of $418,000 (11.0%) resulted from
increases in insurance, employee benefits and wage rates, and
increases in operational and clerical staffing related to
expansion of MAS; facility start-up/merger expense reflect
$223,000 and $125,000 of cost, respectively associated with the
start-up and relocation of maintenance operations to Kinston,
North Carolina and professional fees related to the Company's
letter of intent to acquire another entity. These merger
discussions were terminated subsequent to fiscal year end.
Non-operating income increased a net $40,000 (8.4%) due to
increased investment income offsetting decreased proceeds from
the disposal of assets.
Pretax earnings decreased $361,000 to $2,159,000 for fiscal
1997. The pretax earnings decrease was primarily related to the
decreased level of earnings generated by Company-owned aircraft
and costs associated with the above facility start-up and merger
expense.
Provision for income taxes decreased $72,000 (7.9%) to
$836,000 in 1997. The decrease was due to decreased earnings
offset by the complete utilization of net operating loss
carryforwards in the second quarter of fiscal 1997. The
provision for income taxes for the fiscal years ended March 31,
1997 and 1996 were different from the Federal statutory rates due
to state tax provisions and changes to the deferred tax valuation
allowance.
Fiscal 1996 vs. 1995. Consolidated revenue increased
$2,620,000 (8.0%) to $35,432,000 for the fiscal year ended March
31, 1996 compared to the prior fiscal year. Fiscal 1996's
revenue increase resulted primarily from a $1,819,000 increase in
parts brokering and quick engine change revenue related to the
expansion of MAS, and an increase in the number of customer-owned
aircraft operated by the Company.
Operating expenses increased $2,885,000 (9.5%) to
$33,390,000 for fiscal 1996 compared to fiscal 1995. The
increase in operating expenses consisted of the following
changes: cost of flight operations increased $522,000 (4.3%)
primarily due to an increase in pilot staffing and airport fees;
maintenance expense increased $2,103,000 (14.7%), primarily as a
result of increases in cost of sales related to aircraft parts
sold by MAS and increased use of outside contract services;
depreciation increased $26,000 (5.4%); general and administrative
expense increased $234,000 (6.5%) as a result of increased
staffing at MAS, and increased employee benefits, salary and wage
rates.
The $263,000 increase, in fiscal 1996, in non-operating
income reflects a gain on disposal of Company-owned aircraft.
Pretax earnings increased (3.1%) to $2,520,000 for fiscal
1996 compared to 1995. The increases were due to the gain on
disposal of Company-owned aircraft, income on Company
investments, and increased earnings generated by MAS, partially
offset by increased operating and administration cost, and
decreased cargo aircraft maintenance revenue.
The provision for income taxes increased $60,000 (7.1%) to
$908,000 for fiscal 1996 compared to fiscal 1995. Fiscal 1996
experienced an increased effective Federal tax rate due to the
full utilization of certain net operating loss carryforwards
during the third quarter of fiscal 1995.
Liquidity and Capital Resources
As of March 31, 1997 the Company's working capital amounted
to $6,588,000, an increase of $930,000 compared to March 31,
1996. The net increase, primarily resulted from profitable
operations, disposal of aircraft and earnings on investments, as
reflected by a $504,000 increase in cash and investments, a
$203,000 decrease in accounts payable and a $344,000 increase in
inventory, partially offset by a $261,000 increase in accrued
expenses and taxes. The March 31, 1997 cash balance included
$951,000 invested in bonds and commercial paper.
The Company's accounts receivable and inventory financing
line provides credit in the aggregate of up to $2,250,000 and
extends to July 1997. Loans under the line of credit bear
interest at the lender's prime rate. The Company anticipates
that it will renew the line of credit in July 1997.
Substantially all of the Company's assets, excluding
aircraft, have been pledged as collateral under this financing
arrangement. As of March 31, 1997, the Company was in a net
investment position against its credit line. Management believes
that funds anticipated from operations and existing credit
facilities will provide adequate cash flow to meet the Company's
future financial needs.
The respective years ended March 31, 1997, 1996 and 1995
resulted in the following changes in cash flow: Operating
activities provided $1,262,000, $1,510,000 and $3,041,000,
investing activities used $397,000, $1,567,000 and $299,000 and
financing activities used $701,000, $1,110,000 and $1,109,000,
respectively. Net cash increased $164,000 for March 31, 1997,
decreased $1,167,000 for 1996 and increased $1,633,000 for 1995.
Cash provided by operating activities was $247,000 less for
the year ended March 31, 1997 compared to 1996, primarily due to
reductions in net earnings. Cash used in investing activities
for the year ended March 31, 1997 was approximately $1,170,000
less than 1996, principally due to a decrease in short term
investments purchased, partially offset by an increase in capital
expenditures. Cash used in financing activities was $409,000
less in 1997 compared to 1996 due to a decrease in repurchases
of common stock.
During the fiscal year ended March 31, 1997 the Company
repurchased 135,000 shares of its common stock at a total cost of
$549,470. Pursuant to its previously announced stock repurchase
program, $272,000 remains available for repurchase of common
stock.
The Company relocated certain of its aircraft maintenance
and repair operations to Kinston, North Carolina in August 1996.
Costs associated with the relocation (including capital
expenditures) reduced the Company's cash flow by approximately
$313,000 in fiscal 1997.
The Company's Chairman and CEO, David Clark, passed away on
April 18, 1997. In addition to amounts previously expensed,
under the terms of Mr. Clark's employment agreement death
benefits with a present value of $418,000 will be expensed in the
first quarter of fiscal 1998. The death benefits are payable in
the amount of $75,000 per year for 10 years. Other than the
above death benefit, there are currently no commitments for
significant cash expenditures.
Company stockholders approved a consolidation of common
shares via a one-for-five reverse stock split, which became
effective May 16, 1994. The following cash dividend data gives
effect to the reverse stock split. The Company paid, on May 31,
1995, a special cash dividend of $.07 per common share to
shareholders of record May 8, 1995, and paid an $.08 per common
share special cash dividend on April 22, 1996 to shareholders of
record April 2, 1996. The Company will also pay a $.10 per
common share special cash dividend on June 23, 1997 to
shareholders of record June 2, 1997.
Impact of Inflation
The Company believes the impact of inflation and changing
prices on its revenues and net earnings will not have a material
effect since the major cost components of its operations,
consisting principally of fuel, crew and certain maintenance
costs are reimbursed, without markup, under current contract
terms.
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.
Not applicable
Item 8. Financial Statements and Supplementary Data.
The following pages present the consolidated financial
statements of the Company and the independent auditors' report
thereon.
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Air Transportation Holding Company, Inc.
Denver, North Carolina
We have audited the accompanying consolidated balance sheets of
Air Transportation Holding Company, Inc. and subsidiaries as of
March 31, 1997 and 1996, and the related consolidated statements
of earnings, stockholders' equity, and cash flows for each of the
three years in the period ended March 31, 1997. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of Air
Transportation Holding Company, Inc. and subsidiaries as of March
31, 1997 and 1996, and the results of their operations and their
cash flows for each of the three years in the period ended March
31, 1997 in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE
June , 1997
Charlotte, North Carolina
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31,
1997 1996
ASSETS (Note 3)
CURRENT ASSETS
Cash and cash equivalents $ 2,377,898 $ 2,213,841
Marketable securities (Note 1) 2,229,708 1,889,819
Accounts receivable, less allowance for
doubtful accounts of $57,000 in 1997
and $44,000 in 1996 3,310,810 3,133,670
Parts and supplies inventory 1,069,206 725,503
Prepaid expenses 119,828 61,325
Deferred tax asset (Note 7) 344,980 440,000
Total Current Assets 9,452,430 8,464,158
PROPERTY AND EQUIPMENT (Notes 3 and 4):
Furniture, fixtures and improvements 2,555,994 2,084,027
Flight equipment and rotables inventory 842,642 1,164,807
3,398,636 3,248,834
Accumulated depreciation and
amortization (1,943,020) (1,678,980)
Property and equipment, net 1,455,616 1,569,854
OTHER ASSETS 210,365 158,221
DEFERRED TAX ASSET (NOTE 7) - 27,838
Total Assets $11,118,411 $10,220,071
See notes to consolidated financial statements.
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31,
1997 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 809,245 $ 1,012,706
Accrued expenses (Notes 2, 4 and 8) 1,665,046 1,555,284
Income taxes payable (Note 7) 389,916 238,113
Total Current Liabilities 2,864,207 2,806,103
STOCKHOLDERS' EQUITY (Note 5):
Preferred stock, $1 par value, authorized
10,000,000 shares, none issued - -
Common stock, par value $.25; authorized
4,000,000 shares; issued 2,651,433 shares
in 1997 and 2,725,433 shares in 1996 662,858 681,358
Additional paid in capital 7,126,294 7,299,045
Retained earnings (deficit) 465,052 (566,435)
Total Stockholders' Equity 8,254,204 7,413,968
Total Liabilities and Stockholders'
Equity $11,118,411 $10,220,071
See notes to consolidated financial statements.
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Year Ended March 31,
1997 1996 1995
Operating Revenues (Note 6):
Cargo $18,521,298 $19,129,860 $18,283,842
Maintenance 12,966,027 13,104,829 13,149,946
Aircraft services and other 3,615,947 3,197,607 1,378,804
35,103,272 35,432,296 32,812,592
Operating Expenses:
Flight operations 12,902,342 12,653,601 12,131,978
Maintenance and brokerage 15,606,161 16,435,729 14,332,419
General and administrative 4,234,113 3,815,987 3,582,055
Depreciation and amortization 371,615 484,711 458,619
Facility start-up and merger
expense (Note 9) 347,960 - -
33,462,191 33,390,028 30,505,071
Operating Income 1,641,081 2,042,268 2,307,521
Non-operating Expense (Income):
Interest 458 981 661
Investment income (336,222) (215,252) (138,380)
Gain on sale of equipment (182,359) (263,508) -
(518,123) (477,779) (137,719)
Earnings Before Income Taxes 2,159,204 2,520,047 2,445,240
Income Taxes (Note 7) 836,000 908,000 847,687
Net Earnings $ 1,323,204 $ 1,612,047 $ 1,597,553
Net Earnings Per Common
Share $ 0.47 $ 0.53 $ 0.48
Weighted Average Shares
Outstanding 2,793,585 3,019,831 3,312,387
See notes to consolidated financial statements.
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock (Note 5) Additional Retained
Paid-In Earnings
Shares Amount Capital (Deficit)
Balance, March 31, 1994 2,912,433 $ 728,108 $8,279,308 $(2,365,859)
Repurchase and retire-
ment of common stock (278,500) (69,625) (563,450) (534,525)
Exercise of stock
options 232,000 58,000 175,250 -
Cash dividend
($.06 per share) - - - (174,746)
Net earnings - - - 1,597,553
Balance, March 31, 1995 2,865,933 716,483 7,891,108 (1,477,577)
Repurchase and retirement
of common stock (238,500) (59,625) (669,563) (281,855)
Exercise of stock options 98,000 24,500 77,500 -
Cash dividend ($.07 per
share) - - - (200,615)
Cash dividend ($.08 per
share) - - - (218,435)
Net earnings - - - 1,612,047
Balance, March 31, 1996 2,725,433 681,358 7,299,045 (566,435)
Repurchase and retirement
of common stock (135,000) (33,750) (224,001) (291,717)
Exercise of stock options 61,000 15,250 51,250 -
Net earnings - - 1,323,204
Balance, March 31, 1997 2,651,433 $ 662,858 $7,126,294 $ 465,052
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended March 31,
1997 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,323,204 $ 1,612,047 $ 1,597,553
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 371,615 484,711 458,619
Change in deferred tax asset 122,858 107,782 104,180
Gain on sale of assets (182,359) (263,508) -
Charge in lieu of income taxes
credited to goodwill 15,837 323,346 275,468
Other changes:
Accounts receivable (177,140) 232,616 (344,082)
Parts and supplies inventory (343,703) (455,850) (168,833)
Other assets (144,483) (88,180) (4,709)
Accounts payable 14,974 (794,443) 828,102
Accrued expenses 109,762 154,009 264,334
Income taxes payable 151,803 197,059 29,941
Total adjustments (60,836) (102,458) 1,443,020
Net cash provided by operating
activities 1,262,368 1,509,589 3,040,573
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (472,019) (127,156) (1,048,851)
Proceeds from sale of equipment 415,000 450,000 -
Loan repayments from officers - - 750,000
Purchase of marketable securities (674,194) (1,889,819) -
Sale of marketable securities 334,305 - -
Net cash used in investing activities (396,908) (1,566,975 (298,851)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of cash dividend (218,435) (200,615) (174,746)
Repurchase of common stock (549,468) (1,011,043) (1,167,600)
Proceeds from exercise of stock options 66,500 102,000 233,250
Net cash used in financing activities (701,403) (1,109,658) (1,109,096)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 164,057 (1,167,044) 1,632,626
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 2,213,841 3,380,885 1,748,259
CASH AND CASH EQUIVALENTS AT END OF
YEAR $ 2,377,898 $ 2,213,841 $ 3,380,885
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 572 $ 981 $ 1,233
Income/Franchise Taxes 613,396 346,873 338,562
See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1997, 1996, AND 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principal Business Activity - The Company, through its
operating subsidiaries, is an air cargo carrier
specializing in the overnight delivery of small package air
freight, and a provider of aircraft parts, engine overhaul
management and component repair services.
Principles of Consolidation - The consolidated financial
statements include the accounts of the Company and its
wholly-owned subsidiaries, Mountain Air Cargo, Inc., CSA
Air, Inc., and Mountain Aircraft Services, LLC. All
significant intercompany transactions and balances have
been eliminated.
Parts and Supplies Inventory - Parts and supplies inventory
are carried at the lower of average cost or market. In
accordance with industry practice, the Company includes in
current assets parts and supplies, although a certain
portion of these inventories are not expected to be used
within one year.
Property and Equipment - Property and equipment is stated at
cost or, in the case of equipment under capital leases, the
present value of future lease payments. Rotables inventory
represents aircraft parts which are repairable and are,
therefore, capitalized and depreciated over their estimated
useful lives. Depreciation and amortization are provided on
a straight-line basis over estimated useful lives of 3-9
years for property and equipment.
Long-Lived Assets - Statement of Financial Accounting
Standard No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of,"
requires that long-lived assets be reviewed for impairment
whenever events or changes in circumstances indicate that
the carrying amount of the asset in question may not be
recoverable. The new standard, which was adopted in fiscal
1997, did not have a material effect on the Company's
financial position or results of operations.
Goodwill - Goodwill was reduced to zero in the quarter ended
June 30, 1996. Goodwill was amortized on a straight-line
basis over a 40-year period and was further reduced by the
utilization of pre-acquisition net operating losses.
Cargo and Maintenance Revenue - Cargo revenue is recognized
at the time the route is completed, and maintenance revenue
is recognized when the service has been performed.
Operating Expenses Reimbursed by Customer - The Company,
under the terms of its dry-lease service contracts, passes
through to its major customer certain cost components of its
operations without markup. The cost of fuel, landing fees,
outside maintenance and certain other direct operating costs
are included in operating expenses and billed to the
customer, as cargo and maintenance revenue, at cost.
Marketable Securities - Marketable securities consists
primarily of individual stocks and bonds and mutual funds.
The Company has classified marketable securities as
available-for-sale and they are carried at fair value. If
significant, unrealized gains and losses on such securities
are excluded from earnings and reported as a separate
component of stockholders' equity, net of the related income
taxes, until realized. At March 31, 1997 and 1996, such
unrealized amounts were immaterial. Realized gains and
losses on marketable securities are determined by
calculating the difference between the basis of each
specifically identified marketable security sold and its
sales price. During 1997, the Company recorded realized
gains of approximately $67,000 (none in 1996) in the
accompanying consolidated statements of earnings. At March
31, 1996, marketable securities consisted primarily of
commercial paper. At March 31, 1997, marketable securities
consisted of the following investment types:
Mutual funds $ 961,048
Equity securities 237,876
Government bonds 690,541
Corporate bonds 340,243
Total $ 2,229,708
Net Earnings Per Common Share - Earnings per share have been
computed by dividing net earnings by the weighted average
number of common shares outstanding, including common
shares issuable under employee stock options which are
considered common share equivalents. There were no material
differences between primary and fully diluted earnings per
share (see Reverse Stock Split below).
Statement of Financial Accounting Standards No. 128 - In
February 1997, the Financial Accounting Standards Board
issued "Earnings Per Share", which replaces "primary" and
"fully-diluted" earnings per share with "basic" and
"diluted" earnings per share. Management does not expect
that this new standard will result in any significant change
in its earnings per share computation. Adoption of this
standard will be required in the fourth quarter of fiscal
1998.
Reverse Stock Split - Company stockholders, at a special
stockholders meeting held May 4, 1994, approved, effective
May 16, 1994, a one-for-five reverse stock split of the
Company's common shares. All 1996, 1995 and 1994 common
stock par values, share balances, earnings per share and
dividends have been restated to reflect the reverse stock
split.
Cash Equivalents - Cash equivalents consist of liquid
investments with maturities of three months or less when
purchased.
Income Taxes - Income taxes are provided for temporary
differences between the tax and financial accounting bases
of assets and liabilities using the asset and liability
method. Deferred income taxes are recognized for the tax
consequence of such temporary differences at the enacted tax
rate expected to be in effect when the differences reverse.
Statement of Financial Accounting Standards No. 123 -
"Accounting for Stock-Based Compensation," requires
companies to measure employee stock compensation plans based
on the fair value method of accounting. However, the
Statement allows the alternative of continued use of
Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock Issued to Employees," with pro forma
disclosure of net income and earnings per share determined
as if the fair value based method had been applied in
measuring compensation cost. The Company adopted the new
standard in fiscal 1997 and elected the continued use of APB
Opinion No. 25. Pro- forma disclosure has not been provided
since no employee stock options have been granted since
1992.
Accounting Estimates - The preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the amounts reported. Actual
results could differ from those estimates.
Reclassifications - Certain prior year reclassifications
have been made to 1996 and 1995 amounts to conform to the
1997 presentation.
2. ACCRUED EXPENSES
Accrued expenses consist of the following:
MARCH 31,
1997 1996
Salaries, Wages and Related Items $ 741,835 $ 684,440
Profit Sharing 352,000 409,000
Other 571,211 461,844
$ 1,665,046 $ 1,555,284
3. FINANCING ARRANGEMENTS
The Company's accounts receivable and inventory financing
agreement provides for credit up to the lesser of $2,250,000
or the sum of 85% of eligible accounts receivable and 35% of
inventory (up to $400,000 maximum inventory borrowing).
Amounts advanced bear interest at the prime rate and are
payable upon demand. The prime rate at March 31, 1997 was 8
1/2%. Any advances are collateralized by a first lien on
accounts receivable, inventories and certain equipment.
There were no advances outstanding as of March 31, 1997 or
1996.
4. LEASE COMMITMENTS
The Company has operating lease commitments for office
equipment and its office and maintenance facilities. The
Company leases its corporate office and maintenance
facilities from a company controlled by Company officers for
$8,073 per month under a five year lease which expires in
May 2001.
On August 10, 1996, the Company relocated certain portions
of its maintenance operations to a new maintenance facility
located at the Global TransPark in Kinston, N. C. Under the
terms of the 21.5 year facility lease, after an 18 month
grace period (from date of occupancy), rent will escalate
from $2.25 per square foot to $5.90 per square foot over the
life of the lease. However, based on the occurrence of
certain events the lease may be canceled by the Company.
The Company currently considers the lease to be non-
cancelable for four years and has calculated rent expense on
a straight-line basis over this portion of the lease term.
At March 31, 1997, future minimum annual rental payments
under non-cancelable operating leases with initial or
remaining terms of more than one year are as follows:
1998 $ 116,867
1999 216,805
2000 216,805
2001 136,854
2002 16,147
Total minimum lease payments $ 703,478
Rent expense for operating leases amounted to $236,000,
$177,000, and $179,000 for 1997, 1996 and 1995,
respectively. Rent expense to related parties was $94,733
for 1997 and $84,000 for both 1996 and 1995.
5. STOCKHOLDERS' EQUITY
The Company may issue up to 10,000,000 shares of preferred
stock, in one or more series, on such terms and with such
rights, preferences and limitations as determined by the
Board of Directors. No preferred shares have been issued as
of March 31, 1997.
The Company has granted options to purchase shares of common
stock to certain Company employees at prices ranging from
$1.00 to $1.25 per share. All options were granted at
exercise prices which aproximated the fair value of the
common stock on the date of grant. Options vest over a five
year period, and must be exercised within five years of the
vesting date. As of March 31, 1997, options totaling
186,000 shares are outstanding, of which 99,000 are at $1.00
per share and 87,000 are at $1.25 per share. The
outstanding options at March 31, 1997 have a weighted
average contractual life of 2.1 years. Options exercised
during fiscal 1997, 1996 and 1995 were 61,000, 98,000 and
232,000, respectively. No options have been granted or have
expired during fiscal year 1997, 1996 or 1995. The Company
has reserved an aggregate of 186,000 common shares for
issuance upon exercise of these stock options. Of the
outstanding options at March 31, 1997, all are currently
exercisable at a weighted average exercise price of $1.12
per share
The Company has announced its intention to repurchase the
Company's common stock under a share repurchase program. At
March 31, 1997 the Company had repurchased a total of
652,000 shares at a total cost of $2,728,000 and may expend
up to an additional $272,000 under this program.
6. REVENUES FROM MAJOR CUSTOMER
Approximately 89.5%, 89.1% and 95.3% of the Company's
revenues were derived from services performed for a major
air express company in 1997, 1996 and 1995, respectively.
7. INCOME TAXES
The provision for income taxes was based upon the asset and
liability method in 1997, 1996 and 1995 and consisted of:
YEAR ENDED MARCH 31,
1997 1996 1995
Current:
Federal $ 519,000 $ 188,000 $ 169,000
State 178,000 182,000 195,000
Total current 697,000 70,000 364,000
Deferred 123,000 108,000 104,000
Charge in lieu of Federal
taxes 16,000 430,000 380,000
Total $ 836,000 $ 908,000 $ 848,000
Pre-acquisition net operating loss carryforwards have been
utilized for federal income tax purposes for fiscal years
1997, 1996 and 1995. The income tax benefit ($16,000 in
1997, $323,000 in 1996 $275,000 in 1995) derived from these
pre-acquisition net operating loss carryforwards was
accounted for as a reduction of goodwill until goodwill was
fully amortized in fiscal year 1997.
The consolidated income tax provision was different from the
amount computed using the statutory Federal income tax rate
for the following reasons:
1997 1996
1995
Income tax provision at U.S.
statutory rat $ 734,000 $ 857,000 $ 832,000
State income taxes 118,000 120,000 129,000
Reduction in valuation
allowance (37,000) (115,000) 112,000
Other net 21,000 46,000 (1,000)
Income tax provision $ 836,000 $ 908,000 $ 848,000
The tax effect of temporary differences and net operating
loss carryforwards that gave rise to the Company's deferred
tax asset at March 31, 1997 and 1996 are as follows:
1997 1996
Net operating loss carryforwards $ - $ 163,849
Book accruals over tax 452,851 420,392
Fixed assets 25,329 53,850
478,180 638,091
Less: Valuation allowance (133,200) (170,253)
Deferred tax asset $ 344,98 $ 467,838
The deferred tax asset is classified as current and non-
current amounts in the accompanying 1997 and 1996
consolidated balance sheets according to the classification
of the related asset and liability or, in the case of tax
loss carryforwards, based on their expected utilization
date. The Company has recorded a valuation allowance in
order to reduce its deferred tax asset to an amount which is
more likely than not to be realized. At March 31, 1997, the
Company utilized all federal net operating loss
carryforwards available for tax purposes.
8. EMPLOYEE BENEFITS
The Company has a 401K defined contribution plan (AirT
401(K) Retirement Plan). All employees of the Company are
eligible to participate in the plan. The Company's
contribution to the 401(K) plan for the years ended March
31, 1997, 1996 and 1995 was $203,000, $210,000, and
$171,000, respectively.
The Company, in each of the past three years, has paid a
discretionary profit sharing bonus in which all
employees have participated. The Company's March 31, 1997,
1996, and 1995 expense was $352,000, $409,000, and $397,000,
respectively.
Effective January 1, 1996 the Company entered into
supplemental retirement agreements with certain key
executives of the Company, to provide for a monthly benefit
upon retirement. The following table sets forth the funded
status of the plan at March 31, 1997 and 1996.
March 31,
1997 1996
Vested Benefit Obligation $ 1,007,084 $ 913,847
Accumulated Benefit Obligation 1,007,084 913,847
Projected Benefit Obligation 1,007,084 913,847
Plan Assets at Fair Value - -
Projected Benefit Obligation
greater than plan assets (1,007,084) (913,847)
Prior service cost not yet
recognized 785,551 871,737
Accrued pension cost recognized
in the consolidated balance sheet $ (221,533) $ (42,110)
The projected benefit obligation was determined using an
assumed discount rate of 7%. The liability relating to
these benefits has been included in accrued expenses in the
accompanying financial statements.
Net periodic pension expense for fiscal 1997 and 1996
included the following:
1997 1996
Future Service Cost $ 29,267 $ 6,838
Interest Cost 63,969 15,212
Amortization 86,187 20,060
Net periodic pension cost $ 179,423 $ 42,110
The Company's Chairman and CEO passed away on April 18,
1997. Under the terms of his employment agreement
approximately $498,000 in present value of death benefits is
required to be paid to fulfill death benefit payments over
the next 10 years. As of March 31, 1997 accruals related to
this benefit amounted to approximately $80,000, and the
balance, $418,000, will be accrued in the first quarter of
fiscal 1998.
9. FACILITY START-UP AND MERGER EXPENSES
During fiscal year 1997 the Company relocated certain of its
aircraft maintenance and repair operations to a new hangar
facility in Kinston, North Carolina, and incurred
approximately $223,000 of preopening expenses relative to
the start-up of this new operation.
In March 1997, the Company entered into a letter of intent
to acquire another aviation services entity. Merger
discussions were terminated subsequent to March 31, 1997.
The Company incurred approximately $125,000 of professional
fees during fiscal year 1997 relating to the proposed
merger.
10. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(in thousands except per share data)
FIRST SECOND THIRD FOURTH
1997 QUARTER QUARTER QUARTER QUARTER
Operating Revenue $ 8,059 $ 8,280 $ 8,911 $ 9,853
Gross Profit 611 327 446 775
Net Earnings 405 128 305 485
Net Earnings Per Share$ .14 $ .05 $ .11 $ .17
1996
Operating Revenue $ 7,410 $ 8,644 $ 8,712 $10,666
Gross Profit 812 504 663 541
Net Earnings 520 301 353 438
Net Earnings Per Share$ .16 $ .10 $ .12 $ .15
11. SEGMENT DATA
The Company operates in two different business segments,
overnight air cargo and aviation parts and repair service.
Segment data is summarized as follows:
As of and for the Year Ended March 31,
1997 1996
1995
Operating Revenues
Overnight Air Cargo $31,530,661 $32,224,145 $31,508,889
Aviation Services 3,448,622 3,175,768 1,235,905
Corporate 123,989 32,382 67,798
Total $35,103,272 $35,432,296 $32,812,592
Operating Income
Overnight Air Cargo 1,099,683 892,871 1,211,693
Aviation Services 96,395 130,088 59,064
Corporate (1) 445,003 1,019,109 1,036,764
Total $ 1,641,081 $ 2,042,068 $ 2,307,521
Identifiable Assets
Overnight Air Cargo 7,385,257 6,537,141 6,262,871
Aviation Services 1,766,081 1,353,021 535,174
Corporate 1,967,073 2,329,909 3,363,011
Total $11,118,411 $10,220,071 $10,161,056
Capital Expenditures
Overnight Air Cargo 228,998 114,141 274,925
Aviation Services 242,968 98,422 151,856
Depreciation and Amortization
Overnight Air Cargo 178,302 222,047 240,368
Aviation Services 72,756 67,709 14,302
____________________________
(1) Includes income from intersegment transactions.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
The Company had no disagreements on accounting or financial
disclosure matters with its independent certified public
accountants to report under this Item 9.
PART III
Item 10. Directors and Executive Officers of the Registrant.
J. Hugh Bingham, age 51, has served as President and Chief
Operating Officer of the Company since April 1997, as Senior Vice
President of the Company from June 1990 until April 1997, as
Executive Vice President from June 1983 to June 1990, and as a
director since March 1987. Mr. Bingham also serves as Chief
Executive Officer and a director of MAC, as Chief Executive
Officer of MAS and as an Executive Vice President and director of
CSA.
Allison T. Clark, age 41, was elected as a director on May
9, 1997. Mr. Clark is self-employed in the real estate
development business since 1987.
Walter Clark, age 40, has served as Chairman of the Board of
Directors of the Company and Chief Executive Officer since April
1997. Mr. Clark also serves as a director of MAC and CSA. Mr.
Clark was elected a director of the Company in April 1996. Mr.
Clark was self-employed in the real estate development business
from 1985 until April 1997.
John J. Gioffre, age 53, has served as Vice President-
Finance and Chief Financial Officer of the Company since
April 1984 and as Secretary/Treasurer of the Company since
June 1983. He has served as a director of the Company since
March 1987. Mr. Gioffre also serves as Vice-President,
Secretary/Treasurer and a director of MAC and CSA and as Vice
President-Finance, Treasurer and Secretary of MAS.
H. Wayne Ross, age 52, has served as President of CSA since
October 1988.
William H. Simpson, age 49, has served as Executive Vice
President of the Company since June 1990, as Vice President from
June 1983 to June 1990, and as a director of the Company since
June 20, 1985. Mr. Simpson is also the President and a director
of MAC, the Chief Executive Officer and a director of CSA and
Executive Vice President of MAS.
Menda J. Street, age 45, has served as Vice President of MAC
since 1984, and in various other capacities at MAC since 1979.
Claude S. Abernethy, Jr., age 70, was elected as director of
the Company in June 1990. For the past five years, Mr. Abernethy
has served as a Senior Vice President of Interstate/Johnson Lane
Incorporated, a securities brokerage and investment banking firm.
Mr. Abernethy is also a director of Interstate/Johnson Lane
Incorporated, Carolina Mills, Inc. and Ridgeview Incorporated.
Sam Chesnutt, age 63, was elected a director of the Company
in August 1994. Mr. Chesnutt serves as President of Sam Chesnutt
and Associates, an agribusiness consulting firm. From November
1988 to December 1994, Mr. Chesnutt served as Executive Vice
President of AgriGeneral Company, L.P., an agribusiness firm.
J. Leonard Martin, age 60, was elected a director in August
1994 and joined the Company as a Vice President in April 1997.
From June 1995 until April 1997, Mr. Martin was an independent
aviation consultant. From April 1994 to June 1995, Mr. Martin
has served as Chief Operating Officer of Musgrave Machine & Tool,
Inc., a machining company. From January 1989 to April 1994, Mr.
Martin served as a consultant to the North Carolina Air Cargo
Authority in connection with the establishment of the Global
TransPark air cargo facility in Kinston, North Carolina. From
1955 through 1988 Mr. Martin was employed by Piedmont Airlines, a
commercial passenger airline, in various capacities, ultimately
serving as Senior Vice President-Passenger Services.
George C. Prill, age 74, has served as a director of the
Company since June 1982, as Chief Executive Officer and Chairman
of the Board of Directors from August 1982 until June 1983, and
as President from August 1982 until spring 1984. Mr. Prill has
served as an Editorial Director for General Publications, Inc., a
publisher of magazines devoted to the air transportation
industry, since November 1992 and was retired from 1990 until
that time. From 1979 to 1990, Mr. Prill served as President of
George C. Prill & Associates, Inc., of Charlottesville, Virginia,
which performed consulting services for the aerospace and airline
industry. Mr. Prill has served as President of Lockheed
International Company, as Assistant Administrator of the FAA, as
a Senior Vice President of the National Aeronautic Association
and Chairman of the Aerospace Industry Trade Advisory Committee.
Terry Sanford, age 79, was elected a director in August
1994. Mr. Sanford is President Emeritus of Duke University, a
position held since 1985, and has been a Professor of Public
Policy at the Terry Sanford Institute of Public Policy at Duke
University since 1992. In addition, since 1993, Mr. Sanford has
been a partner of The Sanford Holshouser Law Firm in Raleigh,
North Carolina. From 1986 to 1993, Mr. Sanford served as a
United States Senator representing the State of North Carolina.
Mr. Sanford serves on the board of directors of IMC, Inc., the
parent of Golden Corral Corporation.
The officers of the Company and its subsidiaries each serve
at the pleasure of the Board of Directors. Allison Clark and
Walter Clark are brothers.
Each director receives a director's fee of $500 per month
and an attendance fee of $500 is paid to outside directors for
each meeting of the board of directors or a committee thereof.
To the Company's knowledge, based solely on review of the
copies of reports under Section 16(a) of the Securities Exchange
Act of 1934 that have been furnished to the Company and written
representations that no other reports were required, during the
fiscal year ended March 31, 1996 all executive officers,
directors and greater than ten-percent beneficial owners have
complied with all applicable Section 16(a) filing requirements,
except that [Mr. Clark was late in filing his initial report on
Form 3.]
Item 11. Executive Compensation.
The following table sets forth a summary of the compensation
paid during each of the three most recent fiscal years to the
Company's as Chief Executive Officer and to the four other
executive officers on March 31, 1997 with total compensation of
$100,000 or more. During this period, David Clark served as the
Company's Chief Executive Officer. Mr. David Clark passed away
on April 18, 1997.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and Principal Position Year Salary ($) Bonus ($)
David Clark 1997 171,391 50,222
Chief Executive Officer 1996 155,749 59,583
1995 144,738 59,345
J. Hugh Bingham 1997 190,977 50,222
Senior Vice President 1996 124,953 67,583
1995 107,177 67,845
1994 102,153 37,747
John J. Gioffre 1997 145,556 37,667
Vice President 1996 97,426 49,937
1995 99,898 52,134
1994 90,443 28,747
William H. Simpson 1997 247,168 50,222
Executive Vice President 1996 160,204 73,583
1995 149,221 79,845
1994 140,537 77,494
Menda J. Street 1997 96,206 38,110
Vice President of MAC 1996 93,316 38,291
1995 89,283 39,422
____________________________
The following table sets forth the number of shares of
Common Stock underlying unexercised options at March 31, 1997
held by each of the executive officers listed in the Summary
Compensation Table. The table also includes the value of such
options at March 31, 1997 based upon the closing bid price of the
Company's Common Stock in the over-the-counter market on that
date ($4.00 per share) and the exercise price of the options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexe-
Shares Underlying Unexercised ercised
Acquired Value Options In-the-MoneyOptions
On Realized at FY-End(#) at FY-End ($)
Name Exercise# ($) Exercis Unexer- Exercis- Unexer-
able cisable able cisable
David Clark - - - - - -
J. Hugh Bingham 20,000 51,000 58,000 - 261,000 -
John J. Gioffre 9,000 24,000 33,000 - 135,000 -
William H. Simpson 28,000 71,000 80,000 - 360,000 -
Menda J. Street - - 15,000 - 68,000 -
Employment Agreements.
Effective January 1, 1996, the Company and each of its
subsidiaries entered into an Employment Agreement with David
Clark, the Company's Chief Executive Officer. The employment
agreement provides for an annual base salary of $150,000, which
may be increased upon annual review by the Compensation Committee
of the Company's Board of Directors. In addition, the agreement
provides for the payment to Mr. Clark of annual incentive bonus
compensation equal to two percent of the Company's consolidated
earnings before income taxes and extraordinary items as reported
by the Company in its Annual Report on Form 10-K. Payment of
such bonus is to be made within 15 days after the Company files
its Annual Report on Form 10-K with the Securities and Exchange
Commission.
The initial term of the employment agreement expires on
December 31, 1998, and the term is automatically extended for
additional one-year terms unless either Mr. Clark or the
Company's Board of Directors gives notice to terminate automatic
extensions by September 1 of each year (commencing with September
1, 1996).
The agreement provides that upon Mr. Clark's retirement, he
shall be entitled to receive an annual benefit equal to $75,000
for up to ten years following termination of employment. In the
event Mr. Clark dies prior to the expiration of such ten-year
period, the remaining amount of such benefit is to be paid to his
estate.
The employment agreement provides that if the Company
terminates Mr. Clark's employment other than for "cause" (as
defined in the agreement), Mr. Clark will be entitled to receive
a lump sum cash payment equal to the amount of base salary
payable for the remaining term of the agreement (at the then
current rate) plus one-half of the maximum incentive bonus
compensation that would be payable if Mr. Clark continued
employment through the date of the expiration of the agreement.
Effective January 1, 1996, the Company and each of its
subsidiaries entered into employment agreements with J. Hugh
Bingham, John J. Gioffre and William H. Simpson, each of
substantially similar form. Each of such employment agreements
provides for an annual base salary ($130,000, $103,443 and
$165,537 for Messrs. Bingham, Gioffre and Simpson, respectively)
which may be increased upon annual review by the Compensation
Committee of the Company's Board of Directors. In addition, each
such agreement provides for the payment of annual incentive bonus
compensation equal to a percentage (2.0%, 1.5% and 2.0% for
Messrs. Bingham, Gioffre and Simpson, respectively) of the
Company's consolidated earnings before income taxes and
extraordinary items as reported by the Company in its Annual
Report on Form 10-K. Payment of such bonus is to be made within
15 days after the Company files its Annual Report on Form 10-K
with the Securities and Exchange Commission.
The initial term of each such employment agreement expires
on March 31, 1999, and the term is automatically extended for
additional one-year terms unless either such executive officer or
the Company's Board of Directors gives notice to terminate
automatic extensions which must be given by December 1 of each
year (commencing with December 1, 1996).
Each such agreement provides that upon the executive
officer's retirement, he shall be entitled to receive an annual
benefit equal $75,000 ($60,000 for Mr. Gioffre), reduced by three
percent for each full year that the termination of his employment
precedes the date he reaches age 65. The retirement benefits
under such agreements may be paid at the executive officer's
election in the form of a single life annuity or a joint and
survivor annuity or a life annuity with a ten-year period
certain. In addition, such executive officer may elect to
receive the entire retirement benefit in a lump sum payment equal
to the present value of the benefit based on standard insurance
annuity mortality tables and an interest rate equal to the 90-day
average of the yield on ten-year U.S. Treasury Notes.
Retirement benefits shall be paid commencing on such
executive officer's 65th birthday, provided that such executive
officer may elect to receive benefits on the later of his 62nd
birthday, in which case benefits will be reduced as described
above, or the date on which his employment terminates, provided
that notice of his termination of employment is given at least
one year prior to the termination of employment. Any retirement
benefits due under the employment agreement shall be offset by
any other retirement benefits that such executive officer
receives under any plan maintained by the Company. In the event
such executive officer becomes totally disabled prior to
retirement, he will be entitled to receive retirement benefits
calculated as described above.
In the event of such executive officer's death before
retirement, the agreement provides that the Company shall be
required to pay an annual death benefit to such officer's estate
equal to the single life annuity benefit such executive officer
would have received if he had terminated employment on the later
of his 65th birthday or the date of his death, payable over ten
years; provided that such amount would be reduced by five percent
for each year such executive officer's death occurs prior to age
65, but in no event more than 50 percent.
Each of the employment agreements provides that if the
Company terminates such executive officer's employment other than
for "cause" (as defined in the agreement), such executive officer
be entitled to receive a lump sum cash payment equal to the
amount of base salary payable for the remaining term of the
agreement (at the then current rate) plus one-half of the maximum
incentive bonus compensation that would be payable if such
executive officer continued employment through the date of the
expiration of the agreement(assuming for such purposes that the
amount of incentive bonus compensation would be the same in each
of the years remaining under the agreement as was paid for the
most recent year prior to termination of employment). Each of
the agreements further provides that if any payment on
termination of employment would not be deductible by the Company
under Section 280G(b)(2) of the Internal Revenue Code, the amount
of such payment would be reduced to the largest amount that would
be fully deductible by the Company.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth information regarding the
beneficial ownership of shares of Common Stock (determined in
accordance with Rule 13d-3 of the Securities and Exchange
Commission) of the Company as of May 1, 1997 by each person that
beneficially owns five percent or more of the shares of Common
Stock. Each person named in the table has sole voting and
investment power with respect to all shares of Common Stock shown
as beneficially owned, except as otherwise set forth in the notes
to the table.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Amount and Nature of
Title of Name and Address of Beneficial Ownership Percent
Class Beneficial Owner as of May 1, 1997 of Class
Common Stock, Walter Clark and Caroline 1,283,716(1) 48.4%
par value $.25Clark, Executors(1)
per share P.O. Box 488
Denver, N.C.
William H. Simpson 261,580(2) 9.6%
P.O. Box 488
Denver, N.C.
Kennedy Capital Management, Inc.(3) 175,438 6.6%
425 North Ballas Road
St. Louis, Missouri 63141
_____________________________
(1) Includes 1,279,272 shares controlled by such individuals
as the executors of the estate of David Clark who passed away
on April 18, 1997, 2,222 shares owned by Walter Clarke and
2,222 shares owned by Caroline Clark.
(2) Includes 1,200 shares held jointly with J. Hugh Bingham
and 80,000 shares under options granted by the Company.
(3) Information regarding Kennedy Capital Management, Inc. is
based upon information provided by Kennedy Capital Management
Inc. to the Company on May 1, 1997.
The following table sets forth information regarding the
beneficial ownership of shares of Common Stock of the Company by
each director of the Company and by all directors and officers of
the Company as a group as of May 1, 1997. Each person named in
the table has sole voting and investment power with respect to
all shares of Common Stock shown as beneficially owned, except as
otherwise set forth in the notes to the table.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
Shares and Percent
of Common Stock
Beneficially Owned
as of May 1, 1997
Name Position with Company No. of Shares Percent
J. Hugh Bingham President, Chief Operating 116,080 (1)(2) 4.3%
Officer, Director
Walter Clark Chairman of the Board of 1,281,494 (3) 48.3%
Directors and Chief
Executive Officer
John J. Gioffre Vice President-Finance, 57,580 (4) 2.1%
Secretary and Treasurer,
Director
William H. Simpson
Executive Vice President, 261,580 (1)(5) 9.6%
Director
Claude S. Abernethy, Jr.
Director 22,611 *
Sam Chesnutt Director 3,600 *
Allison T. Clark Director 2,222 *
J. Leonard Martin
Vice President, Director 100 (6) *
George C. Prill Director 45,966 1.7%
Terry Sanford Director 0 0%
All directors & N/A 1,813,253 (7) 63.9%
executive officers as a group
(12 persons)
__________________________________________
* Less than one percent.
(1) Includes 1,200 shares jointly held by Messrs. Simpson and
Bingham.
(2) Includes 58,000 shares under options granted by the Company
to Mr. Bingham.
(3) Includes 1,279,272 shares held by the estate of David Clark,
of which Mr. Walter Clark is a co-executor.
(4) Includes 33,000 shares under options granted by the Company
to Mr. Gioffre.
(5) Includes 80,000 shares under options granted by the Company
to Mr. Simpson.
(6) Such 100 shares are held by Mr. Martin's spouse of which
shares Mr. Martin disclaims beneficial ownership.
(7) Includes an aggregate of 186,000 shares of Common Stock
members of such group have the right to acquire within 60
days.
Item 13. Certain Relationships and Related Transactions.
The Company leases its corporate and operating facilities at
the Little Mountain, North Carolina airport from Little Mountain
Airport Associates, Inc. ("Airport Associates"), a corporation
whose stock is owned by J. Hugh Bingham, William H. Simpson, John
J. Gioffre, the estate of David Clark and three unaffiliated
third parties. On May 30, 1996, the Company renewed its lease
for this facility, scheduled to expire on that date, for an
additional five-year term, and adjusted the rent to account for
increases in the consumer price index. The lease may be extended
for an additional five-year term, with rental payments to be
adjusted to reflect changes in the consumer price index. Upon
the renewal, the monthly rental payment was increased from $7,000
to $8,073. The Company paid aggregate rental payments of $94,730
to Airport Associates pursuant to such lease during the fiscal
year ended March 31, 1997. The Company believes that the terms
of such lease are no less favorable to the Company than would be
available from an independent third party.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
The following documents are filed as part of this report:
1. Financial Statements
The following financial statements are incorporated herein
by reference in Item 8 of Part II of this report:
(i) Independent Auditors' Report.
(ii) Consolidated Balance Sheets as of March 31,
1997 and 1996.
(iii) Consolidated Statements of Earnings for
each of the three years in the period ended
March 31, 1997.
(iv) Consolidated Statements of Stockholders'
Equity for each of the three years in the period
ended March 31, 1997.
(v) Consolidated Statements of Cash Flows for
each of the three years in the period ended
March 31, 1997.
(vi) Notes to Consolidated Financial Statements.
2. Financial Statement Schedules
No schedules are required to be submitted.
3. Exhibits
No. Description
3.1 Certificate of Incorporation, as
amended, incorporated by reference to Exhibit
3.1 of the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 1994
3.2 By-laws of the Company, as amended,
incorporated by reference to Exhibit 3.2 of
the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1996
4.1 Specimen Common Stock Certificate,
incorporated by reference to Exhibit 4.1 of
the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1994
10.1 Aircraft Dry Lease and Service Agreement
dated February 2, 1994 between Mountain Air
Cargo, Inc. and Federal Express Corporation,
incorporated by reference to Exhibit 10.13 to
Amendment No. 1 on Form 10-Q/A to the
Company's Quarterly Report on Form 10-Q for
the quarterly period ended December 31, 1993
10.2 Loan Agreement among NationsBank of
North Carolina, N.A., the Company and its
subsidiaries, dated January 17, 1995,
incorporated by reference to Exhibit 10.7 to
the Company's Quarterly Report on Form 10-Q
for the period ended December 31, 1994
10.3 Aircraft Wet Lease Agreement dated April
1, 1994 between Mountain Air Cargo, Inc. and
Federal Express Corporation, incorporated by
reference to Exhibit 10.4 of Amendment No. 1
on Form 10-Q/Q to the Company's Quarterly
Report on Form 10-Q for the period ended
September 30, 1994
10.4 Adoption Agreement regarding the
Company's Master 401(k) Plan and Trust,
incorporated by reference to Exhibit 10.7 to
the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1993*
10.5 Form of option to purchase the following
amounts of Common Stock issued by the Company
to the following executive officers during
the following fiscal years ended March 31: *
Number of Shares
Executive Officer 1993 1992 1991
J. Hugh Bingham 150,000 150,000 200,000
John J. Gioffre 100,000 100,000 125,000
William H. Simpson200,000 200,000 300,000
incorporated by reference to Exhibit
10.8 to the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 1993
10.6 Premises and Facilities Lease dated
November 16, 1995 between Global TransPark
Foundation, Inc. and Mountain Air Cargo,
Inc., incorporated by reference to Exhibit
10.5 to Amendment No. 1 on Form 10-Q/A to the
Company's Quarterly Report on Form 10-Q for
the period ended December 31, 1995
10.7 Employment Agreement dated January 1,
1996 between the Company, Mountain Air Cargo
Inc., CSA Air Inc. and Mountain Aircraft
Services, LLC and David Clark, incorporated
by reference to Exhibit 10.7 to the Company's
Annual Report Form 10-K for the fiscal year
ended March 31, 1996
10.8 Employment Agreement dated January 1,
1996 between the Company, Mountain Air Cargo
Inc. and Mountain Aircraft Services, LLC and
William H. Simpson, incorporated by reference
to Exhibit 10.8 to the Company's Annual
Report Form 10-K for the fiscal year ended
March 31, 1996
10.9 Employment Agreement dated January 1,
1996 between the Company, Mountain Air Cargo
Inc. and Mountain Aircraft Services, LLC and
John J. Gioffre, incorporated by reference to
Exhibit 10.9 to the Company's Annual Report
Form 10-K for the fiscal year ended March 31,
1996
11.1 Computation of Primary and Fully Diluted
Earnings per Common Share
21.1 List of subsidiaries of the Company,
incorporated by reference to Exhibit 21.1 of
the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1994
27.1 Financial Data Schedule
__________________
* Management compensatory plan or arrangement required
to be filed as an exhibit to this report.
b. Reports on Form 8-K.
No Current Reports on Form 8-K were filed in the last
quarter of the fiscal year ended March 31, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
AIR TRANSPORTATION HOLDING COMPANY, INC.
By: /s/ Walter Clark
Walter Clark, Chief Executive Officer
(Principal Executive Officer)
Date: May 23, 1997
By: /s/ John J. Gioffre
John J. Gioffre, Vice President - Finance
(Principal Financial and Accounting Officer)
Date: May 23, 1997
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ Claude S. Abernathy
Claude S. Abernethy, Jr., Director
Date: May 23, 1997
By: /s/ J. Hugh Bingham
J. Hugh Bingham, Director
Date: May 23, 1997
By: /s/ Allison T. Clark
Allison T. Clark, Director
Date: May 23, 1997
By: /s/ Walter Clark
Walter Clark, Director
Date: May 23, 1997
By: /s/ Sam Chesnutt
Sam Chesnutt, Director
Date: May 23, 1997
By: /s/ John J. Gioffre
John J. Gioffre, Director
Date: May 23, 1997
By: /s/ J. Leonard Martin
J. Leonard Martin, Director
Date: May 23, 1997
By: /s/ George C. Prill
George C. Prill, Director
Date: May 23, 1997
By: /s/ William Simpson
William Simpson, Director
Date: May 23, 1997
By: /s/ Terry Sanford
Terry Sanford, Director
Date: May 23, 1997
EXHIBIT INDEX
Sequentially
Exhibit Number Document Numbered Page
11.1 Computation of Primary and Fully Diluted
Earnings per Common Stock __37__
27.1 Financial Data Schedule __38__
<TABLE>
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
Exhibit 11.1
Computation of Primary and Fully Diluted Earnings Per Common Share
<CAPTION>
For year ended March 31,
1997 1996 1995
<S> <C> <C> <C>
NET EARNINGS $1,323,204 $1,612,047 $1,597,553
WEIGHTED AVERAGE COMMON SHARES:
Primary:
Weighted average shares
outstanding 2,656,215 2,771,025 2,867,766
Dilutive stock options 137,370 248,806 444,621
2,793,585 3,019,831 3,312,387
Fully Diluted:
Weighted average shares
outstanding 2,656,215 2,771,025 2,867,766
Dilutive stock options 124,170 250,054 426,988
2,780,385 3,021,079 3,294,754
NET EARNINGS PER COMMON SHARE:
Primary
Net earnings $0.47 $0.53 $0.48
Fully Diluted
Net earnings $0.47 $0.53 $0.48
<FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"This schedule contains summary financial information extracted from Air
Transportation Holding Company, Inc. SEC Form 10-K for period ended March
31, 1997 (identify specific financial statements) and is qualified in its
entirety by reference to such financial statements."
</LEGEND>
<S> <C>
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<PERIOD-END> MAR-31-1997
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<INVENTORY> 1069206
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<DEPRECIATION> 1943020
<TOTAL-ASSETS> 11188411
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0
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</TABLE>
