SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
OR
( ) 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 0-17846
CCAIR, Inc.
Incorporated under the laws of Delaware 56-1428192
(I.R.S. Employer ID No.)
4700 Yorkmont Road, Second Floor
Charlotte, North Carolina 28208
(704) 359-8990
Indicate by a 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 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at February 9, 1996
----- -------------------------------
Common stock, $0.01 par value 7,740,695
1
<PAGE>
CCAIR, Inc.
FORM 10-Q QUARTERLY REPORT FOR
FISCAL QUARTER ENDED DECEMBER 31, 1995
TABLE OF CONTENTS
PAGE NO.
PART I - FINANCIAL INFORMATION:
ITEM 1. Financial Statements: 3
Condensed Balance Sheets as of
December 31, 1995 and June 30, 1995. 3
Condensed Statements of Income for
the Three and Six Months ended
December 31, 1995 and 1994. 4
Condensed Statements of Cash Flows
for Six Months ended December 31,
1995 and 1994. 5
Notes to Condensed Financial Statements. 6
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations. 7
PART II - OTHER INFORMATION:
ITEM 1. Legal Proceedings. 10
ITEM 2. Changes in Securities. 10
ITEM 3. Defaults Upon Senior Securities. 10
ITEM 4. Submission of Matters to a Vote
of Security Holders. 10
ITEM 5. Other Information. 11
ITEM 6. Exhibits and Reports on Form 8-K. 11
SIGNATURES 11
EXHIBIT INDEX E-1
2
<PAGE>
CCAIR, Inc.
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
CONDENSED BALANCE SHEETS
(Unaudited)
-----------
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
---------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 141,553 $ 56,995
Receivables, net 4,677,457 5,517,072
Related party receivable 1,000,000
Inventories, less allowance for
obsolescence of $466,000 1,949,634 1,784,885
Prepaid expenses and deposits 1,836,854 1,354,130
----------- -----------
Total current assets 8,605,498 9,713,082
----------- -----------
PROPERTY AND EQUIPMENT:
Flight equipment and aircraft 20,828,536 20,380,436
Ground and other equipment and
leasehold improvements 4,589,219 4,383,803
----------- -----------
25,417,755 24,764,239
Less accumulated depreciation
and amortization (13,121,117) (12,358,632)
----------- -----------
12,296,638 12,405,607
----------- -----------
OTHER ASSETS 34,542 34,542
----------- -----------
Total assets $20,936,678 $22,153,231
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable and current
maturities of long-term debt $ 685,837 $ 1,575,047
Current obligations under capital leases 361,636 350,377
Accounts payable 3,062,950 4,058,097
Accrued expenses 4,317,820 4,288,320
----------- -----------
Total current liabilities 8,428,243 10,271,841
LONG-TERM DEBT, less current maturities 1,520,056 1,863,371
Capital lease obligations, less
current obligations 2,828,556 3,012,217
Deferred credits, net 1,849,275 1,810,486
Noncurrent rent obligations 151,981 162,611
----------- -----------
Total liabilities 14,778,111 17,120,526
----------- -----------
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value, 10,000,000 shares authorized, 7,740,695 and
7,400,695 issued and outstanding at December 31
and June 30, 1995 77,407 74,007
Additional paid-in-capital 17,725,184 17,020,148
Accumulated deficit (11,644,024) (12,061,450)
----------- -----------
Total shareholders' equity 6,158,567 5,032,705
----------- -----------
Total liabilities and
shareholders' equity $20,936,678 $22,153,231
=========== ===========
</TABLE>
See notes to condensed financial statements.
3
<PAGE>
CCAIR, Inc.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
-----------
<TABLE>
<CAPTION>
3 Months ended December 31, 6 Months ended December 31,
---------------------------- ---------------------------
1995 1994 1995 1994
------------ ----------- ------------ --------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Passenger $15,714,159 $14,595,693 $31,451,115 $29,986,265
Public service 64,511 156,583 251,581 312,485
Other 266,546 343,575 572,727 705,871
----------- ----------- ----------- -----------
Total 16,045,216 15,095,851 32,275,423 31,004,621
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Flight operations 5,729,651 4,670,867 11,584,136 10,892,204
Fuel and oil 1,573,143 1,364,504 2,961,851 2,731,237
Maintenance 3,139,808 2,797,195 6,182,512 5,552,615
Ground operations 1,740,166 1,891,686 3,513,854 3,821,358
Advertising, promotions
and commissions 2,117,236 2,127,031 4,330,642 4,461,460
General and administration 1,051,932 1,183,437 2,038,134 2,407,761
Depreciation and amortization 465,581 424,641 897,339 854,695
----------- ----------- ----------- -----------
Total 15,817,517 14,459,361 31,508,468 30,721,330
----------- ----------- ----------- -----------
OPERATING INCOME 227,699 636,490 766,955 283,291
Interest expense ( 188,807) ( 202,797) ( 359,667) ( 408,195)
Other income (expense), net (160) 3,615 10,138 ( 7,664)
----------- ----------- ----------- -----------
Net income (loss) $ 38,732 $ 437,308 $ 417,426 $( 132,568)
=========== =========== =========== ===========
EARNINGS (LOSS) PER COMMON SHARE $ .01 $ .06 $ .05 $( .02 )
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,760,929 7,535,163 7,813,253 7,381,195
=========== =========== =========== ===========
</TABLE>
See notes to condensed financial statements.
4
<PAGE>
CCAIR, Inc.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six Months Ended December 31,
1995 1994
------------ --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 417,426 $( 132,568)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Note discount amortization 137,599 168,705
Depreciation and amortization 2,997,999 2,438,736
Loss (gain) on disposal of assets ( 10,500) 22,896
Rental expense in excess
of payments 146,189 254,139
Changes in certain assets and liabilities:
Accounts receivable 839,615 970,184
Inventories ( 164,749) 64,477
Other note payable --- ( 801,000)
Accounts payable ( 995,147) ( 306,322)
Accrued expenses 29,500 ( 481,497)
Prepaid expenses and deposits ( 482,724) 2,095,303
Other changes, net ( 114,303) ( 86,578)
----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,800,905 4,206,475
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,889,030) (2,195,110)
Proceeds from sale of assets 10,500 21,925
----------- -----------
NET CASH USED BY
INVESTING ACTIVITIES (2,878,530) (2,173,185)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale-leaseback transaction 1,000,000 ---
Issuance of common stock 17,813 ---
Issuance of notes and long-term debt --- 1,393,054
Reductions of notes and long-term debt ( 855,630) (4,075,331)
----------- -----------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES 162,183 (2,682,277)
----------- -----------
Net increase (decrease) in cash 84,558 ( 648,987)
Cash, beginning of period 56,995 651,020
----------- -----------
CASH, END OF PERIOD $ 141,553 $ 2,033
=========== ===========
</TABLE>
See notes to condensed financial statements.
5
<PAGE>
CCAIR, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
-----------
1. Basis of Presentation:
The condensed financial statements included herein have been prepared
by CCAIR, Inc. (the "Company"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. These
condensed financial statements reflect all adjustments which are, in
the opinion of management, necessary for a fair statement of results
for the interim period. These adjustments consist solely of normal
recurring adjustments. Certain information and footnote disclosures
normally included in the financial statements prepared in accordance
with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed
financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's annual
report for fiscal year ended June 30, 1995.
2. Earnings (Loss) Per Common Share:
The computation of earnings (loss) per common share is based on the
weighted average number of common shares outstanding for each period,
after considering the effect of common stock equivalents.
3. Commitments and Contingencies:
The Company is subject to the regulatory authority, among others, of
the Federal Aviation Administration and the Department of
Transportation. These agencies require compliance with their standards
and conduct safety and compliance audits. Violations, if any, of these
regulations subject the Company to fines or sanctions. The Company is
also subject to other claims arising in the ordinary course of
business. In the opinion of management, the outcome of these matters
would not have a material adverse impact on the Company's financial
condition or results of operations.
6
<PAGE>
CCAIR, Inc.
FISCAL QUARTER ENDED DECEMBER 31, 1995
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
In the six-month period ended December 31, 1995, the Company recorded
net income of $417,426, or $.05 per share, versus a net loss of $132,568, or
$.02 per share in the comparable period of fiscal 1995. Significant yield
improvement and reduced unit costs were the primary factors in the improved
results. In addition, fiscal 1995 results reflect the benefit of a one-time
reversal of $585,000 in accrued aircraft lease expenses.
Net income for the three months ended December 31, 1995 was $38,732 or
$.01 per share versus $437,308 for the three months ended December 31, 1994.
Fiscal 1995 results reflect the one-time expense reversal described above.
Results of Operations
The following table sets forth selected operating comparisons for the
three- and six-month periods ended December 31, 1995 and 1994:
<TABLE>
<CAPTION>
Airline Operating Statistics
For the Three Months For the Six Months
Ended December 31, Ended December 31,
% %
1995 1994 Change 1995 1994 Change
----------- ----------- ------ ----------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenue $16,045,216 $15,095,851 6.3 $32,275,423 $31,004,621 4.1
Operating expense $15,817,517 $14,459,361 9.4 $31,508,468 $30,721,330 2.6
Revenue passengers carried 193,340 218,951 (11.7) 389,235 457,038 (14.8)
Revenue passenger miles (1) 36,023,270 36,593,710 ( 1.6) 70,745,572 75,141,497 ( 5.9)
Available seat miles (2) 78,380,666 75,927,606 3.2 158,425,100 150,425,702 5.3
Passenger load factor (3) 46.0% 48.2% ( 4.6) 44.7% 50.0% (10.6)
Passenger breakeven load factor 45.9% 46.7% ( 1.7) 44.0% 50.2% (12.4)
Yield per revenue passenger
mile (4) 43.6(cent) 39.9(cent) 9.3 44.5(cent) 39.9(cent) 11.5
Operating cost per available
seat mile 20.2(cent) 19.0(cent) 6.3 19.9(cent) 20.4(cent)( 2.5)
Average passenger trip (miles) 186.3 167.1 11.5 181.7 164.4 10.5
Average daily aircraft utilization
per plane (block hours) 8.3 8.1 2.5 8.2 8.0 2.5
Average passenger fare $81.28 $66.66 21.9 $80.80 $65.61 23.2
Average monthly completion factor 95.9% 95.0% .9 96.0% 95.5% .5
</TABLE>
(1) One revenue passenger transported one mile.
(2) The product of the number of aircraft miles and the number of available
seats on each stage, representing the total passenger capacity offered.
(3) The ratio of revenue passenger miles to available seat miles,
representing the percentage of seats occupied by revenue passengers.
(4) The operating revenue per revenue passenger mile.
For the Three Months Ended December 31, 1995 Compared to Three
Months Ended December 31, 1994
For the quarter ended December 31, 1995, the Company experienced
continued improvement in operating revenue as higher yields more than offset
decreased traffic. Operating revenues increased 6.3% in the second quarter of
fiscal 1996 as the 1.6% decrease in Revenue Passenger Miles ("RPMs") was more
than offset by the 9.3% increase in yield. Operating revenues thus increased
from $15,095,851 in the second quarter of fiscal 1995 to $16,045,216 in the
second quarter of fiscal 1996. The yield improvement reflects the continuation
of higher fares first implemented in the third quarter of fiscal 1995 as a
result of lessened competitive pressures in the Company's market area.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, continued
Results of Operations, continued
Available Seat Miles ("ASMs") increased 3.2% in the second quarter of
fiscal 1996 over the comparable period in fiscal 1995. The ASM increase was a
result of two factors: the addition of two 19-seat Jetstream 31 aircraft, one in
June, 1995 and the other in November, 1995; and a 2.5% increase in daily
aircraft utilization per aircraft. In conjunction with USAir's strategy of
eliminating jet service to short haul markets and turning this flying over to
USAir Express commuter operators, the Company initiated all turboprop service to
Augusta, Georgia in February, 1995 and Jacksonville, North Carolina and
Lynchburg, Virginia in May, 1995. Also during fiscal 1995, the Company ceased
service to several cities it had previously served on a shared basis with USAir
from Charlotte, North Carolina. The net effect of these schedule changes was an
increase in ASMs and a lengthening of the average passenger trip, which
increased from 167.1 miles in the second quarter of fiscal 1995 to 186.3 miles
in the second quarter of fiscal 1996.
The number of revenue passengers carried decreased by 11.7% and RPMs
decreased by 1.7% in the three months ended December 31, 1995 as compared to the
prior year. The primary reason for the reduced passengers and RPMs is the
elimination of the low-fare, traffic stimulation environment which existed in
the Company's service area until the elimination of the low-fare division of
Continental, Continental Lite, in the third quarter of fiscal 1995. Continental
Lite was a direct competitor of both USAir and the Company, and USAir reduced
fares, including joint fares shared with the Company, to avoid losing market
share and to stimulate traffic in the winter of 1993.
Operating costs per ASM increased 6.3% from 19.0(cent) in the quarter
ended December 31, 1994 to 20.2(cent) in the quarter ended December 31, 1995.
The following table compares components of operating cost per ASM for the three
months ended December 31, 1995 and 1994:
Cost per ASM -
Quarter Ended
December 31,
(in cents)
1995 1994
Flight operations 7.3 6.1
Fuel and oil 2.0 1.8
Maintenance 4.0 3.7
Ground operations 2.2 2.5
Advertising, promotions, commissions 2.7 2.8
General and administration 1.4 1.5
Depreciation and amortization 0.6 0.6
----- -----
20.2 19.0
==== ====
Flight operations expense per ASM increased 1.2(cent) in the current
quarter as compared to the prior year, primarily due to the reversal of $585,000
of accrued aircraft rental payments previously due to a predecessor lessor in
the second quarter of fiscal 1995. These accruals were reversed in conjunction
with the signing of new lease agreements for the Company's four Dash 8 aircraft
with CIT Leasing Corporation in December 1994. Also, pilots' salaries and
related costs increased .4(cent) per ASM in the current quarter. As a result of
a salary reduction plan implemented in October 1994, pilots' salaries were
reduced 16% at implementation. After each subsequent four-month period, an
additional 4% of the initial reduction would be reinstated until February, 1996.
The scheduled reinstatement under the plan resulted in the increased pilots'
salaries per ASM. Fuel costs increased .2(cent) per ASM in the second quarter of
1996 as compared to the second quarter of 1995, primarily due to the expiration
of the 4.3(cent) per gallon fuel tax exemption on September 30, 1995. If the
fuel tax exemption is not extended, the Company's fuel expense will increase
approximately $350,000 on an annual basis at current consumption levels. The
Company thus will be adversely affected to the extent such costs are not offset
by higher fares. Maintenance costs increased .3(cent) per ASM in the current
quarter, primarily as a result of the timing of scheduled maintenance
inspections and overhauls of time controlled parts. Ground operations expense
decreased .3(cent) in the quarter ended December 31, 1995 versus the same
quarter in the prior year, primarily as a result of decreased passenger handling
charges. Marketing and commissions expense declined .1(cent), principally as a
result of decreased travel agents commission rates and decreased booking fees
paid to other airlines due to decreased passenger counts. General and
administration expenses declined .1(cent) on a unit basis due to decreased
passenger liability insurance expense as a result of fewer passengers and a
decrease in legal fees.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, continued
Results of Operations, continued
For the Six Months Ended December 31, 1995 Compared to Six Months Ended
December 31, 1994
The Company reported net income of $417,426, or $.05 per share,
for the six months ended December 31, 1995 as compared to a net loss of
$132,568, or $.02 per share for the six months ended December 31, 1994.
Operating income increased from $283,291 for the six months ended December 31,
1994 to $766,955 for the six months ended December 31, 1995. The principal
reason for the improved operating performance was the 11.5% increase in yield.
Cost per ASM decreased 2.5% in the six-month period ended December 31,
1995. This reduction was primarily due to decreased ground operations and
advertising and commission expenses. The results for the six months ended
December 31, 1994 were also favorably impacted by the reversal of $585,000 in
accrued aircraft lease liabilities.
Liquidity and Capital Resources
The cash position of the Company remains critical at December 31, 1995.
The key element to improved operating results will be the level of the yield per
revenue passenger mile. The yield for the last half of December, 1995 and the
first week of January 1996 was significantly below estimates. Although the yield
for the remainder of January, 1996 has improved, the yield could be affected by
fare discounting beyond the control of the Company. The Company also suffered
from inclement weather as two winter storms negatively affected the Company's
operations in January and February, 1996. If operating cash flows and the
Company's Line of Credit are insufficient to meet obligations, the Company has
these financing sources available: short-term loans from officers and directors,
extending terms with trade creditors, restructuring aircraft lease payments and
issuance of stock.
Pursuant to the signing of the Master Agreement with Jet Acceptance
Corporation ("JACO") on December 28, 1995, the Company recorded the
restructuring of the entire remaining amount due to JACO under the bankruptcy
plan. Under this agreement, the Company issued a promissory note to JACO in the
principal amount of $676,000. Installment payments of $17,727 begin in January,
1996. Additionally, the remaining balance due under the bankruptcy plan was
satisfied with the issuance of 325,000 shares of the Company's common stock to
JACO (see Management's Discussion and Analysis of Financial Condition and
Results of Operations in the Company's Annual Report on Form 10-K for further
information).
In September, 1995, as discussed in Note 5 to the financial statements
included in the Company's 1995 Annual Report on Form 10-K, the Company and Jet
Acceptance Corporation ("JACO") agreed to extend the lease reductions for the
Company's 12 Jetstream 31 aircraft for the remainder of the lease term. These
lease reductions had originally been negotiated in September, 1994, and had
provided for lease reductions aggregating approximately $98,000 per month
through December 31, 1995. Additionally, the Company has agreed to lease
replacement Jetstream 31 aircraft, at further reduced rates through December,
2001, upon the expiration of seven of the current leases with JACO during
calendar years 1997, 1998 and 1999. The Company has also committed to lease four
additional Jetstream 31 aircraft during the first half of calendar year 1996, of
which one aircraft was leased by the Company in June, 1995, and another aircraft
was leased in November, 1995. The lease terms for the additional aircraft will
expire in December, 2001. The Company has accounted for the modifications to the
JACO lease agreements as they have occurred. As a result, at December 31, 1995,
the Company has recorded a deferred credit of approximately $846,000
representing the excess of rent expense recorded on a straight line basis
(reflecting lease payment reductions only through December 31, 1995) over actual
payments made from September 1, 1994 through September 30, 1995. This amount
will reduce lease expense over the remaining term of the leases.
In September, 1995 the Company reached an agreement with Short Brothers
(USA), Inc. ("Shorts") to restructure the payment of certain outstanding
obligations. Under this agreement, the Company issued a promissory note to
Shorts in the principal amount of $892,067, payable in forty-eight installments
of $22,625. These payments began October 1, 1995. The Company and Shorts have
also agreed to satisfy an outstanding lease payment of $306,000 with the sale of
125,000 shares of the Company's common stock (see Management's Discussion and
Analysis of Financial Condition and Results of Operations in the Company's
Annual Report on Form 10-K for further information).
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, continued
Liquidity and Capital Resources, continued
The Company increased cash and cash equivalents by $85,000 during the
first six months of fiscal 1996. Cash generated from operating activities was
$2,801,000. The Company used $1,000,000 received from related parties in a sale
leaseback transaction (see Note 7 to the financial statements included in the
Company's 1995 Annual Report on Form 10-K), cash flows generated from
depreciation and amortization of $2,998,000 and trade receivable decreases of
$840,000 to reduce accounts payable due to trade creditors by $995,000, fund
capital expenditures of $2,889,000 and make scheduled debt payments of $856,000.
The capital expenditures of $2,889,000 during the six months ended
December 31, 1995 resulted primarily from expenditures on major overhaul of
engines and on major spare parts and assemblies. Also, Federal Aviation
Administration directives required the installation of traffic alert and
collision avoidance systems prior to December 31, 1995. The Company incurred
costs of $450,000 to fulfill this mandate in the six months ended December 31,
1995. Capital expenditures planned for the remainder of the fiscal year consist
of scheduled major overhaul of engines and on major spare parts and assemblies.
USAir instituted a new fee structure effective January 1, 1996. The
passenger handling and systems fees were modified, with an additional fee on all
tickets billed to USAir. While the ultimate effect of the rate change is
uncertain, preliminary Company projections indicate an increase in passenger
fees of approximately $1.40.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
None to report.
ITEM 2. Changes in Securities
None to report.
ITEM 3. Defaults Upon Senior Securities
None to report.
ITEM 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders of the Company was held in
Charlotte, North Carolina on November 16, 1995. Of the
7,400,695 shares of common stock outstanding on the record
date, 6,667,671 shares were present by proxy. Those shares
were voted on the matters before the meeting as follows:
A. Election of Directors:
Name of Director No. Votes For: No. Votes Withheld:
---------------- -------------- -------------------
John A. Adams 6,603,677 63,994
K. Ray Allen 6,603,977 63,694
Kenneth W. Gann 6,602,041 65,630
Gordon Linkon 6,601,941 65,730
Dean E. Painter, Jr. 6,603,977 63,694
10
<PAGE>
B. Proposal to amend the Company's Stock Option Plan to
increase by 200,000 shares of common stock for which
options can be granted
For: 6,111,282 Against: 491,033 Abstain: 65,356
C. Proposal to ratify the selection of Arthur Andersen LLP.
as independent auditors of the Company for the fiscal
year ending June 30, 1995:
For: 6,617,024 Against: 28,589
Abstain: 22,058
ITEM 5. Other Information
The Company has been engaged with representatives of and
counsel for Her Majesty the Queen in Right of Canada as
Represented by the Ministry of Industry, Science and
Technology (the "Ministry") in discussions and negotiations
regarding the reimbursement obligation, if any, of the Company
to the Ministry arising from the change in lessor for the four
(4) deHavilland DHC-8-102 aircraft (the "Aircraft") leased by
the Company. The Ministry has informed the Company that the
new lessor, CIT Group/Capital Equipment Financing, Inc.
("CIT") made a claim under certain economic development
insurance provided by the Ministry to the former lessor,
Mellon Financial Services Corporation #3 ("Mellon"), when the
Company entered into new lease agreements with CIT for the
Aircraft in December of 1994. The Ministry asserts that it has
a right to reimbursement in the amount of $16,996,995 but has
proposed that the Company agree to pay $6,000,000 secured by a
pledge of an undetermined number of shares of the Company's
common stock.
The Company does not have an agreement with the Ministry
regarding the economic development insurance and has not
acknowledged any obligation to reimburse the Ministry for
claims paid under the economic development insurance. Mellon
released the Company from any liability under the original
leases at the same time that the Company entered into new
leases with CIT. The Company has made certain proposals for
future consideration to resolve the Ministry's claim, but the
Ministry recently notified the Company that the proposals to
date are unsatisfactory to the Ministry. It is uncertain
whether the Company and the Ministry will reach an agreement
on future considerations, but, if litigation results, the
costs to the Company will adversely affect the Company's cash
position.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Exhibit
4 Specimen Common Stock Certificate. (1)
11 Computation of Earnings Per Share.
(b) Reports on Form 8-K
None.
- ----------------------
(1) Incorporated by reference to Registration Statement on Form S-1,
File No. 33-28967.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
February, 14, 1996 CCAIR, Inc.
By: /s/ Kenneth W. Gann By: /s/ Eric W. Montgomery
Kenneth W. Gann, President and Eric W. Montgomery
Chief Executive Officer Vice President - Finance
(Principal Executive Officer) (Principal Financial Officer)
11
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Filed Sequential
No. Exhibit Herewith At Page No.
<S> <C> <C> <C>
2 Revised Plan of Reorganization
4 Specimen Common Stock
Certificate. (1)
11 Computation of Earnings Per Share E-2
</TABLE>
- ---------------------
(1) Incorporated by reference to Registration Statement on Form S-1,
File No. 33-28967.
E-1
<PAGE>
PART II, ITEM 6 EXHIBIT 11
CCAIR, Inc.
COMPUTATION OF EARNINGS (LOSS) PER SHARE (1)
<TABLE>
<CAPTION>
Three Months ended December 31,
1995 1994
-------------- ---------
<S> <C> <C>
Net income $ 38,732 $ 437,308
============ ===========
Shares
Weighted average number of
shares outstanding 7,426,293 7,381,195
Assuming exercise of options 334,636 153,968
------------- ------------
Weighted average number of
shares outstanding,
as adjusted 7,760,929 7,535,163
============ ============
Income per share: $ .01 $ .06
=============== ==========
</TABLE>
<TABLE>
<CAPTION>
Six Months ended December 31,
1995 1994
-------------- ---------
<S> <C> <C>
Net income (loss) $ 417,426 $( 132,568)
=========== ===========
Shares
Weighted average number of
shares outstanding 7,419,957 7,381,195
Assuming exercise of options (2) 393,296 ---
------------ ----------
Weighted average number of
shares outstanding,
as adjusted 7,813,253 7,381,195
============ ============
Income (loss) per share: $ .05 $ ( .02 )
=============== ============
</TABLE>
(1) Fully diluted average number of shares outstanding, as adjusted and
earnings (loss) per share are the same as calculated for primary for
the periods presented.
(2) Not reflected in 1994 due to anti-dilutive effect.
E-2
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from CCAIR,
Inc., condensed financial statements for the fiscal quarter ended December 31,
1995 and is qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 141,553
<SECURITIES> 0
<RECEIVABLES> 4,677,457
<ALLOWANCES> 0
<INVENTORY> 1,949,634
<CURRENT-ASSETS> 8,605,498
<PP&E> 25,417,755
<DEPRECIATION> 13,121,117
<TOTAL-ASSETS> 20,936,678
<CURRENT-LIABILITIES> 8,428,243
<BONDS> 0
0
0
<COMMON> 77,407
<OTHER-SE> 6,081,160
<TOTAL-LIABILITY-AND-EQUITY> 20,936,678
<SALES> 0
<TOTAL-REVENUES> 16,045,216
<CGS> 0
<TOTAL-COSTS> 15,817,517
<OTHER-EXPENSES> 160
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 188,807
<INCOME-PRETAX> 38,732
<INCOME-TAX> 0
<INCOME-CONTINUING> 38,732
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,732
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
