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 OCTOBER 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 2-87778A
THE FLIGHT INTERNATIONAL GROUP, INC.
(Exact name of small business issuer as specified in its charter)
Georgia 58-1476225
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Newport News/Williamsburg International Airport, Newport News, VA 23602
(Address of principal executive offices)
(757) 886-5500
Issuer's telephone number
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) has 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 / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes / / No /X/
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date: As of December 10, 1999, there
were 1,013,976 shares of the issuer's New Common Stock, par value $.01 per
share, issued and outstanding.
Transitional Small Business Disclosure Format [check one]: Yes / / No /X/
<PAGE>
PART 1
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Flight International Group, Inc. (the "Company") files herewith
unaudited condensed consolidated balance sheets of the Company and its
subsidiaries as of October 31, 1999 (unaudited)and April 30, 1999 (the Company's
most recent fiscal year), unaudited condensed consolidated statements of
operations for the three and six months ended October 31, 1999 and 1998, and
unaudited condensed consolidated statements of cash flows for the three and six
months ended October 31, 1999 and 1998, together with unaudited condensed notes
thereto. In the opinion of management of the Company, the financial statements
reflect all adjustments, all of which are normal recurring adjustments,
necessary to fairly present the financial condition of the Company for the
interim period presented. The financial statements included in this report on
Form 10-QSB should be read in conjunction with the audited financial statements
of the Company and the notes thereto included in the annual report of the
Company on Form 10-KSB for the year ended April 30, 1999.
<PAGE>
THE FLIGHT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
October 31, 1999 April 30, 1999
(Unaudited)
---------------- --------------
<S> <C> <C>
Current Assets
Cash $ 9,144 $ 79,292
Accounts Receivable, net 6,950,873 3,517,018
Inventories 3,001,901 2,886,665
Prepaid expenses and other 211,786 138,286
Deposits 584,381 681,799
-------------- --------------
Total current assets 10,758,085 7,303,060
Property and equipment, net 5,457,572 4,600,619
Other assets 1,357,633 11,703
-------------- --------------
$ 17,573,290 $ 11,915,382
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE FLIGHT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
October 31, 1999 April 30, 1999
(Unaudited)
---------------- --------------
<S> <C> <C>
Current Liabilities
Accounts payable $ 1,617,446 $ 555,609
Deferred revenue 0 727,586
Accrued fuel expense 1,121,430 923,715
Accrued expenses and other liabilities 2,547,067 1,644,703
Note payable 1,629,687 1,080,505
Long-term debt due currently 619,675 750,950
-------------- --------------
Total current liabilities 7,535,305 5,683,068
Accrued engine reserves 597,534 448,469
Long-term debt, less current maturities 5,504,354 2,570,261
-------------- --------------
Total liabilities 13,637,193 8,701,798
-------------- --------------
Stockholders' equity
Common stock, $.01 par value, 10,000,000 shares
authorized, 1,013,976 issued and
outstanding 10,140 10,140
Additional paid in capital 1,007,617 1,007,617
Retained Earnings 2,918,340 2,195,827
-------------- --------------
Total stockholders' equity 3,936,097 3,213,584
$ 17,573,290 $ 11,915,382
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE FLIGHT INTERNATIONAL GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
October 31, 1999 October 31, 1998 October 31, 1999 October 31, 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues $ 7,828,879 $ 6,292,331 $ 14,706,431 $ 12,474,830
Operating costs and expenses
Costs of services 6,217,517 5,312,010 12,158,810 10,617,397
Gain on disposal of assets 0 (18,167) 0 (36,334)
Depreciation and amortization 180,920 149,271 360,582 291,098
General, corporate and administrative 611,978 515,293 1,267,211 1,137,642
-------------- -------------- ------------ ------------
Total operating costs and expenses 7,010,415 5,958,407 13,786,603 12,009,803
Income before other 818,464 333,924 919,828 465,027
expenses
Other expenses
Interest expense 121,089 76,792 197,315 158,023
-------------- -------------- ------------ ------------
Total other expenses 121,089 76,792 197,315 158,023
Income before taxes 697,375 257,132 722,513 307,004
Income tax expense 0 0 0 0
-------------- -------------- ------------ ------------
Net income $ 697,375 $ 257,132 $ 722,513 $ 307,004
============== ============== ============ ============
Net income per common
share - basic $ 0.69 $ 0.25 $ 0.71 $ 0.30
============== ============== ============ ============
Weighted average number of shares 1,013,976 1,013,976 1,013,976 1,013,976
============== ============== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE FLIGHT INTERNATIONAL GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
October 31, 1999 October 31, 1998
---------------- ----------------
<S> <C> <C>
Operating Activities
Net income $ 722,513 $ 307,004
Adjustments to reconcile net income
to net cash provided (absorbed) by operating
activities
Depreciation and amortization 360,582 291,098
Engine reserve 149,065 (397,036)
Gain on sale of assets 0 (36,334)
Net cash provided (absorbed) by
Accounts receivable (3,433,855) (145,891)
Inventories (115,236) (193,232)
Prepaid expenses and other assets 23,918 (262,542)
Accounts payable 1,061,837 444,063
Accrued expenses and other liabilities 1,100,079 (181,310)
Deferred revenue (727,586) (126,928)
Income taxes payable 0 (11,412)
-------------- --------------
Net cash absorbed by operating activities (858,683) (312,520)
Investing Activities
Purchase of property and equipment (1,217,535) (576,134)
Net (increase) decrease in other assets (1,345,930) (15,504)
-------------- --------------
Net cash absorbed by investing activities (2,563,465) (591,638)
Financing activities
Proceeds from credit line, net 549,182 659,438
Proceeds from long-term debt, net 2,802,818 25,667
Net cash provided by financing activities 3,352,000 685,105
Net (decrease) increase in cash and
cash equivalents (70,148) (219,053)
Cash and cash equivalents, beginning of period 79,292 104,008
Cash and cash equivalents, end of period $ 9,144 $ (115,045)
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE FLIGHT INTERNATIONAL GROUP, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Flight International Group, Inc. (the "Company") is an aviation
services company that performs military training services using specially
modified commercial aircraft, principally under contracts with the United States
Department of Defense, other government agencies and foreign countries. In
addition, the Company has established a market for training and testing in the
aerospace industry. The Company also operates a fixed base operation ("FBO") and
licensed repair station at the Newport News/Williamsburg International Airport.
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany
transactions and balances have been eliminated.
Net income/loss per common share is computed by dividing the
income/loss by the weighted average number of shares of common stock outstanding
during the year.
2. NOTES PAYABLE
During the year ended April 30, 1998, the Company entered into a
$2,000,000 asset based borrowing agreement with a bank in Newport News,
Virginia. Under the terms of the Agreement, the Company may obtain advances up
to 85% of amounts billed by the Company on government contracts. The Company
must pay interest at prime plus .50% on outstanding advances. Under the
Agreement, the Company must maintain certain net worth ratios. The Company was
in compliance with these ratios at October 31, 1999. As of October 31, 1999,
$1,629,687 was outstanding.
3. INCOME TAXES
No provision has been made for federal income taxes because of
substantial net operating loss carry forwards that are available to offset
against current income.
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BACKGROUND AND GENERAL INFORMATION
The Flight International Group, Inc. (the "Company") was incorporated
in Georgia on May 7, 1982. The Company is an aviation services company that
performs military training services using specially modified commercial
aircraft, principally under contract with the Untied States Department of
Defense, other government agencies and foreign countries, operating through its
direct and indirect subsidiaries described in the next paragraph. In addition,
with the use of these aircraft, the Company has established a market for
training and testing in the aerospace industry. The Company also operates a
fixed base operation ("FBO") at the Newport News/Williamsburg International
Airport ("NN/W Airport").
Flight International, Inc., a Georgia corporation ("FII"), Flight
International Aviation, Inc., a Georgia corporation ("FIA"), Flight
International Sales and Leasing, Inc., a Delaware corporation and Flight Alaska,
Inc., a Delaware corporation, are wholly-owned subsidiaries of the Company.
Flight International of Florida, Inc., a Florida corporation ("FIF") is a
wholly-owned subsidiary of FII. GeoFlight, LLC is a joint venture established in
October 1999 with Geophysical & Environmental Resources Corporation of
Millbrook, New York. The purpose of the joint venture is to provide commercial
remote sensing services, and the Limited Liability Company Agreement with
respect to the joint venture is expected to be executed and delivered shortly.
The venture will be 50% owned by the Company.
In its last three fiscal years, the Company has increased its revenue,
obtained two major long-term contracts (see "CAS-MOS Contract" and "CAS-MED
Contract" below) and has generated positive net income for the years ended April
30, 1999, 1998 and 1997.
Management believes that, in this three year period, it has
strengthened its balance sheet, developed contracts in its core areas and, as a
result, acquired more personnel and equipment, and enhanced the Company's
ability to compete more effectively in its marketplaces.
CHINA LAKE CONTRACT
The Company was granted a twelve (12) month extension of the Navy China
Lake Contract, which had been due to be completed on October 1, 1999. The
estimated value of the contract is approximately $4,000,000.
<PAGE>
CAS-MED CONTRACT
In October 1999, the Company was awarded the Commercial Air
Services-Mediterranean Contract. This Contract is similar in scope to CAS-MOS,
which the Company has operated since 1996. CAS-MED is a one (1) year contract
with four (4) options providing a potential value of $15 million in revenues
over the five years. There can be no assurance that the Company will achieve
this level of revenues, or that the DOD will exercise its renewal options.
CAS-MOS CONTRACT
In August 1996, the Company was awarded a major contract. The
Commercial Air Services-Military Operations Support (CAS-MOS) Contract is a
derivative of the original government contract won by the Company in 1980 and
operated until September 1993. The new contract began on October 1, 1996 and has
completed its base year and first option year, and is currently in its second
option year, with two additional option years remaining. Annual revenues from
this contract have been $15.2 million and $13.9 million for the fiscal years
ended April 30, 1999 and 1998, respectively. The contract has provided
$9,012,901 million in revenues in the six months ended October 31, 1999, a 20.1%
increase from the same period last year. This contract currently constitutes a
substantial portion of the Company's revenues.
RESULTS OF OPERATIONS
Revenues
Total revenues for the three months ended October 31, 1999 and 1998
were $7,828,879 and $6,292,331, respectively. Total revenue for the three months
increased 24.4% from the prior year.
Total revenues for the six months ended October 31, 1999 and 1998 were
$14,706,431 and $12,474,830, respectively. Total revenue for the six months
increased 17.9% from the prior year, with flight operations leading the way with
an increase of 24% to $12,270,675. This increase was principally due to a 20%
increase in CAS-MOS flying, the addition of the CAS-MED Contract, and a 230%
increase in Alaska operations. Revenues declined 15% at the Newport News FBO,
due to weak fuel sales.
Cost of Services
Cost of services for the three months ended October 31, 1999 and 1998
were $6,217,517 and $5,312,010, respectively. Cost of services for the three
months increased by 17.0%.
Cost of services for the six months ended October 31, 1999 and 1998
were $12,158,812 and $10,617,398, respectively. The 14.5% increase is due to the
start-up of the CAS-MED and China Lake Contracts.
The overall gross margin was 17%.
<PAGE>
Depreciation and Amortization
Depreciation and amortization for the three months ended October 31,
1999 and 1998 were $180,920 and $149,271, respectively. Depreciation and
amortization for three months increased by 21.2%.
Depreciation and amortization for the six months ended October 31, 1999
and 1998 were $360,582 and $291,098, respectively. The 24% increase is due to
equipment purchases and aircraft modifications completed in the first quarter of
fiscal year 2000.
General Corporate and Administrative
General corporate and administrative expenses for the three months
ended October 31, 1999 and 1998 were $611,978 and $515,293, respectively.
General corporate and administrative expenses for the three months increased
18.8%.
General corporate and administrative expenses for the six months ended
October 31, 1999 and 1998 were $1,267,210 and $1,137,642, respectively. The 11%
increase is a result of certain executive and marketing expenses incurred to
secure expanded business opportunities.
Interest
Interest expense for the three months ended October 31, 1999 and 1998
was $121,089 and $76,792, respectively. Interest expense increased 57.7% for the
three months.
Interest expense for the six months ended October 31, 1999 and 1998 was
$197,315 and $158,023, respectively. The 25% increase in interest expense is due
to increased long term debt associated with the purchase of aircraft to maintain
current operations and for resale.
Other Assets
Other assets increased to $1,357,633 due to the acquisition of a Lear
35A airframe for modification/repair and resale. Additionally, the Company
purchased two Jetstream 31 aircraft to support current operations.
Net Income
As a result of the foregoing, the Company's net income for the three
months ended October 31, 1999 was $697,375 or $.69 per share of the Company's
common stock, compared to $257,132 or $.25 per share for the three months ended
October 31, 1998.
The Company's net income for the six months ended October 31, 1999 was
$722,513, or $.71 per share of the Company's Common Stock, compared to $307,004,
or $.30 per share for the six months ended October 31, 1998. The weighted
average number of shares used in computing per share earnings for the six months
ended October 31, 1999 and 1998 was 1,013,976.
Liquidity and Capital Resources
The Company has funded its operations primarily through cash flow from
operations and bank indebtedness. The Company's operating activities used cash
of $858,683 for the six months ended October 31, 1999, while providing
$312,520 in the comparable prior year period. An increase in accounts
receivable of $3,433,855 absorbed cash during the quarter, which was due to the
timing of the billing cycle on the CAS-MOS Contract. This was offset by an
increase in accounts payable and borrowings under the Company's line of credit.
<PAGE>
The Company entered into a line of credit with Crestar Bank ("Crestar")
for all short term financing needs. The agreement provides for up to $2,000,000
in credit. The loan is a demand note which may be payable at any time upon the
demand of Crestar. The Company is be obligated to pay Crestar interest at prime
rate plus one-half percent of the average balance outstanding. The line is
secured by the Company's accounts receivable and an assignment of the CAS-MOS
Contract.
The Company operates in a capital intensive industry. Typically, major
expenses are incurred in connection with the initiation of a new contract. These
costs can be reduced through leasing arrangements and advance payments from
customers, if these are obtainable. The Company believes that it will be able to
arrange through available means the financing of these initial contract costs
when necessary, although no assurance can be given.
Year 2000 Planning and Preparation
The Company continues to evaluate and prepare for the potential impact
of the "Year 2000" problem on its systems and operations. The Company's Year
2000 evaluation and remediation plan is dual faceted, focusing both on
information technology "IT" systems as well as imbedded, non IT systems that are
integral to specific operating and support functions. The Company's Year 2000
efforts began in 1996 with IT systems with long lead time dates. While the total
cost of the new IT systems will be substantial ($400,000 based on current
estimates) the vast majority of the new system costs will go towards enhancing
and upgrading existing capability, not the specific Year 2000 issue. The actual
costs of the Year 2000 reparations is not expected to be material on future
earnings. Non IT systems are being evaluated and corrected or replaced as
identified. The costs of ensuring compliance in non IT systems is not
anticipated to have a material impact on earnings. All non compliant non IT
systems are expected to be replaced or corrected by December, 1999.
Notwithstanding this, the Year 2000 readiness of the Company's suppliers and
customers (including the DOD) may vary, and the Company cannot determine whether
or to what extent the Company may be affected thereby.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. The Company is not party to any
material legal proceeding or litigation.
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. None
Item 5. Other Information. None
Item 6. (a) Exhibits
Exhibit Number and Description
10.1 Current pricing information with respect to
CAS-MOS Contract
27.1 Financial Data Schedule
(b) Reports on Form 8-K. None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Dated: December 13, 1999 THE FLIGHT INTERNATIONAL GROUP, INC.
By: /s/ David E. Sandlin
David E. Sandlin
Principal Executive Officer
By: /s/ B. Scott Terry
B. Scott Terry
Principal Financial Officer
Exhibit 10.1
<TABLE>
<CAPTION>
REVISED SCHEDULE B N00019-96-D-2047
P00027 Revision
Page 21 of 80
PART 1 - THE SCHEDULE
SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS
OPTION YEAR III - FY-00 (REVISED BY P00027)
CLIN SUPPLIES/SERVICES QTY UNIT UNIT PRICE AMOUNT
- ---- ----------------- --- ---- ---------- ------
<S> <C> <C> <C> <C> <C>
301 PROP AIC, ASAC, TRACK FERRY UTILITY MISSIONS
0301AA Guaranteed Flight Hours 450 FH $1,015.62 $457,029.00
0301AB Level I Excess Flight Hours 100 FH $403.62 $40,362.00
0301AC Level II Excess Flight Hours 100 FH $403.62 $40,362.00
0302 JET AIC, TRACK, FERRY, UTLITY MISSIONS
0302AA Guaranteed Flight Hours 2,400 FH $1,283.62 $3,080,688.00
0302AB Level I Excess Flight Hours 600 FH $712.62 $427,572.00
0302AC Level II Excess Flight Hours 200 FH $712.62 $142,524.00
0303 JET AlC, TRACK, FERRY, UTILITY MISSIONS(LEAR 35 or 36)
0303AA Guaranteed Flight Hours 190 FH $2,440.62 $463,717.80
0303AB Level I Excess Flight Hours 400 FH $705.62 $282,248.00
0303AC Level II Excess Flight Hours 450 FH $705.62 $317,529.00
0303AD Level III Excess Flight Hours 450 FH $705.62 $317,529.00
0304 TOW MISSIONS BASIC (LEAR 35 or 36)
0304AA Guaranteed Flight Hours 500 FH $3,199.62 $1,599,810.00
0304AB Level I Excess Flight Hours 200 FH $976.62 $195,324.00
0304AC Level II Excess Flight hours 100 FH $818.62 $81,862.00
0305 TOW MISSIONS BASIC - GFE TARGET/BANNERS (LR 35 or 36)
0305 AA Guaranteed Flight Hours 100 FH $2,147.62 $214,762.00
0305AB Level I Excess Flight Hours 100 FH $881.62 $88,162.00
0305AC Level 11 Excess Flight Hours 50 FH $881.62 $44,081.00
0306 TOW MISSIONS SPECIAL (LEAR 35 or 36)
0306AA Estimated Flight Hours 40 FH $2,651.62 $106,064.80
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REVISED SCHEDULE B N00019-96-D-2047
P00027 Revision
Page 22 of 80
CLIN SUPPLIES/SERVICES QTY UNIT UNIT PRICE AMOUNT
- ---- ----------------- --- ---- ---------- ------
<S> <C> <C> <C> <C> <C>
0307 EW MISSIONS (LEAR 35 or 36)
0307AA Guaranteed Flight Hours 700 FH $1,842.62 $1,289,834.00
0307AB Level I Excess Flight Hours 450 FH $527.62 $237,429.00
0307AC Level II Excess Flight Hours 450 FH $476.62 $214,479.00
0307AD Level III Excess Flight Hours 450 FH $375.62 $169,029.00
0308 SPECIAL EW SYSTEMS MISSIONS-GFE INTERNAL EW
EQUIPMENT AND/OR EXTERNAL PODS (LEAR 35 or 36)
0308AA Guaranteed Flight Hours 120 FH $2,842.62 $341,114.40
0308AB Level I Excess Flight Hours 300 FH $2,230.62 $669,186.00
0308AC Level II Excess Flight Hours 450 FH $727.62 $327,429.00
PART B REQUIREMENTS - EAST COAST
0309 JET AIC, TRACK, FERRY, UTILITY MISSIONS
ROOSEVELT ROADS, PR 175 FH $1,520.62 $266,108.50
0310 JET AIC, TRACK, FERRY UTILITY MISSIONS
JACKSONVILLE. FL 500 FH $1,015.62 $507,810.00
0311 JET AIC;, TRACK, FERRY, UTILITY MISSIONS
ROOSEVELT ROADS PR (LEAR 35 or 36) 250 FH $1,739.62 $434,905.00
0312 RESERVED
0313 JET FERRYUTILITY - WITH EXTERNALLY MOUNTED
EQUIPMENT (LEAR 35 or 36) 200 FH $1,077.62 $215,524.00
0314 TOW MISSIONS BASIC - ROOSEVELT ROADS, PR
(LEAR 35 or 36) 130 FH $2,164.62 $281,400.60
0315 TOW MISSIONS BASIC - GFE TARGETS/BANNERS
ROOSEVELT ROADS PR (LEAR 35 or 36) 50 FH $1,939.62 $96,981.00
0316 RESERVED
0317 EW MISSIONS - ROOSEVELT ROADs, PR (LEAR 35 250 FH $1,767.62 $441,905.00
0318 SPECIAL EW SYSTEMS MISSIONS - LEAR 36 TEST
BED/EW PLATFORM 475 FH $2,231.62 $1,060,019.50
PART C COST REIMBURSABLE ITEMS - EAST COAST
0319 SPECIAL FERRY OF LEAR 36 TO HONOLULU, Hl
FROM EAST COAST 1 LO $134,983.68 $134,983.68
0320 SPECIAL FERRY OF LEAR 36 TO ATSUKI, JAPAN
FROM EAST COAST 1 LO $168,729.60 $168,729.60
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REVISED SCHEDULE B N00019-96-D-2047
P00027 Revision
Page 23 of 80
PART D - INDEFINITE DELIVERY/INDEFINITE QUANTITY - WEST COAST
CLIN SUPPLIES/SERVICES QTY UNIT UNIT PRICE AMOUNT
- ---- ----------------- --- ---- ---------- ------
<S> <C> <C> <C> <C> <C>
0321 JET AIC, TRACK, FERRY, UTILITY MISSIONS
0321AA Guaranteed Flight Hours 2400 FH $1,283.62 $3,080,688.00
0321AB Level I Excess Flight Hours 450 FH $740.62 $333,279.00
0321AC Level II Excess Flight Hours 150 FH $740.62 $111,093.00
0322 TOW MISSIONS BASICS (LEAR 35 or 36)
0322AA Guaranteed Flight Hours 300 FH $3,157.62 $947,286.00
0322AB Level I Excess Flight Hours 200 FH $933.62 $186,724.00
0322AC Level IIExcess Flight Hours 150 FH $726.62 $108,993.00
0323 EW MISSIONS (LEAR 35 or 36)
0323AA Guaranteed Flight Hours 650 FH $1,854.62 $1,205,503.00
0323AB Level I Excess Flight Hours 450 FH $527.62 $237,429.00
0323AC Level IIExcess Flight Hours 450 FH $476.62 $214,479.00
PART E COST RElMBURSABLE ITEMS - WEST COAST
0324 PROP ASAC, TRACK, UTILITY MISSIONS 1 LO $303,713.28 $303,713.28
0325 JET AIC, TRACK, FERRY, UTILITY MISSIONS
WHIDBEY ISLAND WA 1 LO $455,569.22 $455,569.22
0326 JET AlC, TRACK, FERRY, UTILITY MISSIONS
(LEAR 36 or 36) 442 FH $1,836.00 $811,512.00
0327 JET FERRY, UTILITY - WITH EXTERNAL EQUIPMENT
(LEAR 35 or 36) 1 LO $134,983.68 $134,983.68
0328 TOW MISSIONS - BASIC GFE BANNER (LEAR 35 or 3 1 LO $776,156.16 $776,156.16
0329 TOW MISSIONS SPECIAL - TLX (LEAR 35 or 36) 1 LO $179,978.24 $179,978.24
0330 EW MISSIONS - GFE/CFE PODS {LEAR 35 or 36) 1 LO $944,855.76 $944,855.76
0331 SPECIAL EW SYSTEMS MISSIONS . GFE INTERNAL
EQUIPMENT AND/OR EXTERNAL PODS (LEAR 35 or 1 LO $382,453.76 $382,453.76
0332 SPECIAL EW SYSTEMS MISSIONS - LEAR 36 TEST BED/
EW PLATFORM 1 LO $809,902.08 $809,902.08
0333 SPECIAL FERRY OF LEAR 36 TO HONOLULU. HI
FROM WEST COAST 1 LO $80,990.21 $80,990.21
0334 SPECIAL FERRY OF LEAR 36 TO ATSUKI, JAPAN
FROM WEST COAST 1 LO $161,980.00 $161,980.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REVISED SCHEDULE B N00019-96-D-2047
P00027 Revision
Page 24 of 80
PART F - COST REIMBURSABLE - MIDPAC/WESTPAC
CLIN SUPPLIES/SERVICES QTY UNIT UNIT PRICE AMOUNT
- ---- ----------------- --- ---- ---------- ------
<S> <C> <C> <C> <C> <C>
MIDPAC
0335 JET AIC, TRACK FERRY, UTILITY, TOW MISSIONS
BASIC GFE/CFE, EW MISSIONS (LEAR 36) 1 LO $1,079,869.44 $1,079,869.44
0336 SPECIAL FERRY OF LEAR 36 TO ATSUKI, JAPAN
FROM HONOLULU, Hl 1 LO $105,287.27 $105,287.27
WESTPAC
0337 JET AlC, TRACK, FERRY, UTILITY, TOW MISSIONS,
BASIC GFE/CFE EW MISSIONS (LEAR 36) 1 LO $1,214,853.12 $1,214,853.12
PART G REQUIREMENTS
0338 SPECIAL MISSION EQUIPMENT (SME)/EW OPERATO 2000 MH $62.00 $124,000.00
0339 SPECIAL REQUIREMENTS PILOTS, OTHER THAN FL 800 MH $62.00 $49,600.00
0340 GFE EQUIPMENT INSTALLERS/GFE MAINTENANCE 5000 MH $49.00 $245,000.00
PERSONNEL
PART H COST REIMBURSABLE ITEMS
0341 TRAVEL/PER DIEM 1 LO $371,204.90 $371,204.90
0342 MATERIAL 1 LO $989,880.10 $989,880.10
0343 SITE ACTIVATION/DEACTIVATION-EAST/WEST COA 1 LO $7,874.00 $7,874.00
0344 SITE RELOCATION - EAST/WEST COAST
0344AA SITE RELOCATION - EAST COAST 1 LO $84,457.00 $84,457.00
0345 SITE ACTIVATION - MIDPAC/WESTPAC 1 LO $7,874.00 $7,874.00
0346 SITE RELOCATION - MIDPAC/WESTPAC 1 LO $4,500.00 $4,500.00
0347 ADMINISTRATIVE/TECHNICAL DATA IN ACCORDANCE 1 LO NSP NSP
WITH DD FORM 1423, EXHIBIT A
348 ADDITIONAL SUPPORT AIRCRAFT
0348AA EAST COAST 1 LO $450,000.00 $450,000.00
0348AB WEST COAST 1 LO $450,000.00 $450,000.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REVISED SCHEDULE B N00019-96-D-2047
P00027 Revision
Page 25 of 80
PART 1 - REQUIREMENTS - AIRCRAFT MODIFICATIONS
CLIN SUPPLIES/SERVICES QTY UNIT UNIT PRICE AMOUNT
- ---- ----------------- --- ---- ---------- ------
<S> <C> <C> <C> <C> <C>
0349 AIRCRAFT MODIFICATIONS {SPECIAL EQUIPMENT) 1 EA $0.00 $0.00
0349AA BELLY RADOME 1 EA $0.00 $0.00
0349AB ANTI-COLLISON LIGHT (SB 35/36 33-9) 1 EA $0.00 $0.00
0349AC WING HARDPOINTS 1 EA $0.00 $0.00
0349AD EJECTOR RELEASE 1 EA $0.00 $0.00
0349AE INVERTORS 1 EA $0.00 $0.00
0349AF NOSE RADOME 1 EA $0.00 $0.00
0349AG TAIL RADOME 1 EA $0.00 $0.00
0349AH AN/APX-72 OR APX-100 PROVISIONS INCLUDING 2 GFE
ANTENNAS (JET AlRCRAFT) 1 EA $3,450.00 $3,450.00
0349AJ AN/APX-72 OR APX-100 PROVISIONS INCLUDING 2 GFE
ANTENNAS. (LEAR 30 SERIES AIRCRAFT) 1 EA $3,450.00 $3,450.00
0349AK STORMSCOPE 1 EA $13,800.00 $13,800.00
0349AL UPGRADE AIR CONDITIONING 1 EA $0.00 $0.00
0349AM ADDITIONAL UHF TRANSCEIVER (225-400 MHZ) WITH GFE CRYPTO
CAPABILITY (JET AIRCRAFT) 1 EA $5,750.00 $5,750.00
0349AN ADDITIONAL UHF TRANSCEIVER (225-400 MHZ) WITH
GFE CRYPTO CAPABILITY (LEAR 30 SERIES AIRCRAFT 1 EA $8,625.00 $8,625.00
TOTAL ESTIMATED AMOUNT FOR ALL CLINS $31,443,537.10
--------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> MAY-01-1999
<PERIOD-END> OCT-31-1999
<CASH> 9,144
<SECURITIES> 0
<RECEIVABLES> 7,044,625
<ALLOWANCES> 93,752
<INVENTORY> 3,001,901
<CURRENT-ASSETS> 10,758,085
<PP&E> 8,203,083
<DEPRECIATION> 2,745,511
<TOTAL-ASSETS> 17,573,290
<CURRENT-LIABILITIES> 7,535,305
<BONDS> 0
0
0
<COMMON> 10,140
<OTHER-SE> 3,925,957
<TOTAL-LIABILITY-AND-EQUITY> 17,573,290
<SALES> 14,706,431
<TOTAL-REVENUES> 14,706,431
<CGS> 12,158,810
<TOTAL-COSTS> 13,786,603
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 197,315
<INCOME-PRETAX> 722,513
<INCOME-TAX> 0
<INCOME-CONTINUING> 722,513
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 722,513
<EPS-BASIC> 0.71
<EPS-DILUTED> 0.71
</TABLE>
