SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended August 31, 1998 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 0-18352
-------
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
DELAWARE 59-2223025
------------------------------ --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1954 AIRPORT ROAD, SUITE 200, ATLANTA, GA 30341
------------------------------------------ ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 455-7575
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 for 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 CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
The number of shares of the Company's common stock outstanding as of
October 15, 1998 was 2,569,167.
<PAGE>
FORM 10-Q
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
INDEX
PAGE NO.
--------
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 3
May 31, 1997 and August 31, 1998
Condensed Consolidated Statements of Earnings 4
Three Months Ended August 31, 1997 and August 1998
Condensed Consolidated Statements of Cash Flows 5
Three Months Ended August 31, 1997 and August 31, 1998
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8
Part II OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
2
<PAGE>
FORM 10-Q
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
August 31,
May 31, 1998
1998* (UNAUDITED)
---------- ----------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 438,403 $ 347,584
Accounts receivable, net of allowance for doubtful
accounts of approximately $514,000 at May 31, 1998
and $554,000 at August 31, 1998 1,179,760 1,947,828
Inventories 11,744,924 13,779,519
Deferred tax benefit - current 1,202,345 1,202,345
Other current assets 194,618 722,984
---------- ----------
Total current assets 14,760,050 18,000,260
Investments 92,194 81,950
Property and equipment
Aircraft and engines held for lease 7,347,954 7,170,854
Leasehold improvements 65,881 63,435
Machinery and equipment 931,092 939,218
---------- ----------
8,344,927 8,173,507
Accumulated depreciation 1,969,138 2,178,688
---------- ----------
Property and equipment, net 6,375,789 5,994,819
Other assets
Deferred debt costs, net 513,222 563,993
Deferred tax benefit 1,760,565 1,489,839
Deposits and other assets 134,533 1,079,769
---------- ----------
Total other assets 2,408,320 3,133,601
---------- ----------
$ 23,636,353 $ 27,210,630
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term obligations $ 1,351,805 $ 1,621,668
Accounts payable 247,982 787,834
Accrued expenses 2,932,016 1,962,361
---------- ----------
Total current liabilities 4,531,803 4,371,863
Long-term obligations, less current maturities 8,296,063 11,582,062
Commitments and contingencies
Stockholders' equity
Preferred stock - $.001 par value; authorized
2,000,000 shares; 0 shares outstanding at
May 31, 1998 and August 31, 1998. - -
Common stock - $.001 par value; authorized
20,000,000 shares; issued and outstanding
2,562,667 shares at May 31, 1998 and
2,569,167 shares at August 31, 1998. 2,562 2,569
Additional paid-in capital 13,511,610 13,528,354
Unrealized loss on equity security (22,545) (32,789)
Accumulated deficit (2,683,140) (2,241,429)
---------- ----------
Total stockholders' equity 10,808,487 11,256,705
---------- ----------
$ 23,636,353 $ 27,210,630
========== ==========
</TABLE>
*Condensed from audited Financial Statements
The accompanying notes are an intergral part of these financial statements.
3
<PAGE>
FORM 10-Q
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
August 31, August 31,
1997 1998
---------- -----------
<S> <C> <C>
Revenues
Net sales $ 4,940,969 $ 4,788,384
Lease and service revenue 626,057 786,562
---------- -----------
Total revenues 5,567,026 5,574,946
Cost of sales 3,140,020 3,256,923
Selling, general and administrative expenses 1,036,448 1,003,139
Provision (recovery) for doubtful accounts (47,529) 39,745
Depreciation and amortization 253,744 257,830
---------- -----------
Total operating costs 4,382,683 4,557,637
---------- -----------
Earnings from operations 1,184,343 1,017,309
Interest expense 413,300 310,489
Interest and other income (1,695) (5,617)
---------- -----------
Earnings before income taxes 772,738 712,437
Provision for (benefit from) income taxes - current - -
Provision for (benefit from) income
taxes - deferred (212,499) 270,726
---------- -----------
Net earnings $ 985,237 $ 441,711
========== ===========
Per share data:
Earnings per share available for
common stockholders - Basic $ 0.41 $ 0.17
Weighted average number of common
Stock outstanding - Basic 2,405,361 2,563,874
========== ===========
Earnings per share available for
common stockholders - Diluted $ 0.36 $ 0.16
Weighted average number of common
Stock outstanding - Diluted 2,759,800 2,820,264
========== ===========
</TABLE>
The accompanying notes are an intergral part of these financial statements.
4
<PAGE>
FORM 10-Q
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three months ended
August 31, August 31,
1997 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 985,237 $ 441,711
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 253,404 257,830
Provision (recovery) for doubtful accounts (47,529) 39,745
(Increase) decrease in inventory 1,048,533 (2,034,595)
Changes in other assets and liabilities (1,191,598) (1,570,591)
--------- ---------
Total adjustments 62,810 (3,307,611)
Net cash provided by (used in)
operating activities 1,048,047 (2,865,900)
Cash flows from investing activities:
Capital equipment additions (46,146) (33,031)
Proceeds from sale of engine held for lease - 265,000
Deposit on investment in joint venture (note 6) - (1,000,000)
--------- ---------
Net cash used in investing activities (46,146) (768,031)
Cash flows from financing activities:
Net (decrease) increase in debt obligations (1,382,661) 3,555,862
Issuance of common stock 134,250 14,250
--------- ---------
Net cash provided by (used in)
financing activities (1,248,411) 3,570,112
--------- ---------
Net decrease in cash (246,510) (63,819)
Cash and cash equivalents at beginning of period 465,725 438,403
--------- ---------
Cash and cash equivalents at end of period $ 219,215 $ 374,584
======== =======
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
5
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain adjustments
(consisting only of normal and recurring adjustments) necessary to
present fairly International Airline Support Group, Inc. and
Subsidiary's condensed consolidated balance sheets as of May 31,
1998 and August 31, 1998, the condensed consolidated statements of
earnings for the three months ended August 31, 1997 and August 31,
1998, and the condensed consolidated statements of cash flows for
the three months ended August 31, 1997 and August 31, 1998.
The accounting policies followed by the Company are described
in the May 31, 1998 financial statements.
The results of operations for the three months ended August 31,
1998 are not necessarily indicative of the results to be expected
for the full year.
2. Inventories consisted of the following:
MAY 31,1998 AUGUST 31,1998
----------- --------------
Aircraft parts $11,294,924 $10,659,519
Aircraft and Engines
available for sale 450,000 3,120,000
----------- -----------
$11,744,924 $13,779,519
=========== ===========
3. Earnings Per Share:
The Company's basic earnings per share are calculated by
dividing Net earnings by the weighted average shares outstanding
during the period. The computation of diluted earnings per share
includes all dilutive common stock equivalents in the weighted
average shares outstanding.
Financial Accounting Standards Board (FASB) Statement 128 "Earnings
Per Share" was adopted by the Company on January 1, 1998 and
requires the dual presentation of basic and diluted earnings per
share on the face of the statement of earnings. The reconciliation
between the computation is as follows:
Three Months
Ended Net Basic Basic Diluted Diluted
AUGUST 31, EARNINGS SHARES EPS SHARES EPS
---------- --------- --------- ----- --------- -----
1997 $ 985,237 2,405,361 $0.41 2,759,800 $0.36
1998 $ 441,711 2,563,874 $0.17 2,820,264 $0.16
Included in diluted shares are common stock equivalents relating
to stock options of 256,390 and 354,439 for the three months ended
August 31, 1998 and 1997, respectively.
6
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. Credit Facility
On October 3, 1996, the Company entered into the Credit
Agreement, which provided for a $3 million term loan and up to an
$11 million revolving credit. The Credit Agreement was amended on
various occasions to create new term loan facilities totaling $6.85
million (collectively referred to as the "Credit Facility") and
increasing the revolving credit to $14 million. The Credit
Facility is secured by substantially all of the assets of the
Company and availability of amounts for borrowing is subject to
certain limitations and restrictions. Such limitations and
restrictions are discussed in the Company's Proxy
Statement/Prospectus filed with the Securities and Exchange
Commission on August 29, 1996.
5. Supplemental Cash Flow Disclosures:
Cash payments for interest were $413,000 and $310,000 for
the three months ended August 31, 1997 and August 31, 1998,
respectively. Cash and cash equivalents include $224,544 of
restricted cash at August 31, 1998. Restricted cash includes
customer receipts deposited into the Company's lockbox account,
which are applied the next business day against the outstanding
amount of the Credit Facility, and customer deposits on aircraft
and engines leases.
1. Joint Venture
As of August 31, 1998, the Company had a deposit of
$1,000,000 relating to a planned 50% investment in a joint venture.
On September 16, 1998, the Company entered into this joint venture
for the acquisition of 20 DC-9-41H aircraft from Scandinavian
Airlines System ("SAS"). The aircraft have been leased back to SAS
and the leases have an average term of 39 months. The Company's
investment in the joint venture is approximately $2 million. The
Company's joint venture partner is AirCorp, Inc., a privately held
company. The aircraft were financed through the joint venture,
utilizing non-recourse debt to the partners. The joint venture
will be accounted for under the equity method and the leases will
be treated as operating leases.
7
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following is management's discussion and analysis of certain
significant factors which have affected the Company's operating
results and financial position during the periods included in the
accompanying condensed consolidated financial statements.
RESULTS OF OPERATIONS:
REVENUES
Total revenue during the three months ended August 31, 1998
remained unchanged compared to August 31, 1997 at $5.6 million. Net
sales for the three months ended August 31, 1998 were $4.8 million
compared to $4.9 million for the three months ended August 31, 1997.
Net sales include parts sales as well as aircraft and engine sales.
Aircraft and engine sales are unpredictable transactions and may
fluctuate significantly from year to year, dependent, in part, upon
the Company's ability to purchase an aircraft or engine at an
attractive price and resell it within a relatively brief period of
time, as well as the overall market for used aircraft or engines.
Lease and service revenue increased to $787,000 during the three
months ended August 31, 1998 compared to $626,000 during the three
months ended August 31, 1997, primarily due to an increase in
service revenue which was partially offset by a decrease in lease
revenue.
COST OF SALES
Cost of sales increased from $3.1 million during the three
months ended August 31, 1997 to $3.3 million during the three months
ended August 31, 1998. As a percentage of total revenues, cost of
sales for the three months ended August 31, 1998 was 58% compared to
56% for the three months ended August 31, 1997. This increase was
due primarily to a higher cost of sales for engines during the three
months ended August 31, 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses was $1.0 million
for the three months ended August 31, 1998 and August 31, 1997.
PROVISION FOR (RECOVERY OF) DOUBTFUL ACCOUNTS
For the three months ended August 31, 1998, the Company recorded
a provision for doubtful accounts of $39,745 compared to a credit to
the provision for doubtful accounts of $47,529 for the three months
ended August 31, 1997. This increase in expense was primarily
related to the recovery of a certain doubtful account during the
first quarter of fiscal 1998 that had previously been written off
and was in excess of the amount otherwise provisioned.
8
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased from $254,000 for the
three months ended August 31, 1997 to $258,000 for the three months
ended August 31, 1998.
INTEREST EXPENSE
Interest expense for the three months ended August 31, 1997 was
$413,000 compared to $310,000 for the three months ended August 31,
1998. This decrease in interest expense was due to a reduction in
the interest rate assessed to the Company (see Liquidity and Capital
Resources) and a lower average of total debt outstanding during this
period.
INCOME TAXES
Income taxes have been provided at the Company's estimated
effective tax rate of approximately 38% for fiscal 1999. In the
prior year, the Company recognized deferred tax benefits as the
realization of such benefits was determined to be more likely than
not because of the Company's consistent profitability. The
realization of the tax benefits was accomplished through a reduction
in the valuation allowance that had been previously established
against the Company's deferred tax assets.
NET EARNINGS
Net earnings decreased from $985,000 for the first quarter of
fiscal 1998 to $442,000 for the first quarter of fiscal 1999,
primarily due to last year's benefit from income taxes of $212,000
compared to a provision for income taxes in fiscal 1999 of $271,000.
Income before taxes decreased from $773,000 to $712,000. Earnings
for the first quarter of fiscal 1999 were $0.16 per share - diluted,
based on 2,820,264 weighted average shares outstanding, compared to
earnings for the first quarter of fiscal 1998 of $0.36 per share -
diluted, based on 2,759,800 weighted average shares outstanding. On
a pro forma basis, adjusted as if the Company had been a full
taxpayer in fiscal 1998, earnings per share - diluted for the first
quarter of fiscal 1998 would have been $0.17.
9
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
LIQUIDITY AND CAPITAL RESOURCES
The Credit Agreement originally entered into by the Company in
October of 1996 provided for a $3 million term loan and up to an $11
million revolving credit. The Credit Agreement has been amended to
create new term loan facilities totaling $6.85 million (collectively
referred to as the "Credit Facility") and to increase the revolving
credit to $14 million. The revolving credit facility matures in
October 2001 and the term loans mature between March 2000 and October
2001. The interest rate that the Company is assessed is subject to
fluctuation and may change based upon certain financial covenants.
As of October 15, 1998, the interest rate under the Credit Facility
was the lender's base rate minus 0.25% (8.00%). The Credit Facility
is secured by substantially all of the assets of the Company and
availability of amounts for borrowing is subject to certain
limitations and restrictions. Such limitations and restrictions are
discussed in the Company's Proxy Statement/Prospectus filed with the
Securities and Exchange Commission on August 29, 1996. The Company's
lender has approved a waiver granting permission for the Company to
enter into the joint venture as described in note 6 and repurchase up
to $1,000,000 of its common stock.
Net cash provided by (used in) operating activities for the
three months ended August 31, 1998 and August 31, 1997 were
($3,246,000) and $63,000, respectively. The cash used in operating
activities for the three months ended August 31, 1998 was due
primarily to an increase in inventories of $2.0 million, an increase
in accounts receivables and a decrease in accounts payables. The
cash provided by operating activities for three months ended August
31, 1997 was due, in part, to a decrease in inventory of $1,049,000.
Net cash used for investing activities for the three months
ended August 31, 1998 amounted to $768,031 compared to $46,146 for
the three months ended August 31, 1997. The net cash used for
investing activities for the three months ended August 31, 1998 was
primarily the result of a deposit on an investment in a joint venture
that closed subsequent to the end of the quarter offset by the
proceeds from the sale of an engine that had been held for lease.
Net cash provided by (used in) financing activities for three
months ended August 31, 1998 amounted to $3,570,000 compared to
($1,248,000) for the three months ended August 31, 1997. The net
cash provided by financing activities for the three months ended
August 31, 1998 was primarily the result of a net increase in debt
obligations of $3.6 million dollars. For the three months ended
August 31, 1997, the net cash used in financing activities resulted
primarily from a decrease in debt obligations of $1,383,000.
At August 31, 1998, the Company was permitted to borrow up to an
additional $3.9 million pursuant to the revolving credit facility.
The Company believes that amounts available to be borrowed pursuant
to the Credit Agreement and its working capital will be sufficient to
meet the requirements of the Company's business for the foreseeable
future. The Company had no material commitments for capital
expenditures as of August 31, 1998.
10
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
As of August 31, 1998, the Company had a deposit of
$1,000,000 relating to a planned 50% investment in a joint venture.
On September 16, 1998, the Company entered into this joint venture
for the acquisition of 20 DC-9-41H aircraft from Scandinavian
Airlines System ("SAS"). The Company's investment in the joint
venture is approximately $2 million and was financed through
additional bank borrowings under the Company's Credit Facility and
the application of the Company's portion of the first month's rental
income. The aircraft were financed through the joint venture,
utilizing non-recourse debt to the partners.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued Statement of Financial Accounting
Standard No. 130 (SFAS 130), "Reporting Comprehensive Income." SFAS
130 establishes standards for reporting and display of comprehensive
income and its components in financial statements. Differences
between net earnings and comprehensive earnings for the three months
ended August 31, 1998 and 1997 were insignificant and, therefore,
have not been separately disclosed.
YEAR 2000 ISSUES
The Company has conducted a preliminary Year 2000 compliance
review of its major software and computer systems. At this time, the
Company believes that its existing systems are Year 2000 compliant.
While the Company is aggressively addressing the Year 2000 issue
internally, the compliance of third parties with which the Company
has material relationships is presently unknown and the failure of
third parties to be compliant could potentially have an adverse
effect on the Company's operations. As any Year 2000 compliance
failure risk is specifically identified, appropriate action will be
taken to develop alternative contingency plans.
FORWARD LOOKING STATEMENTS
This Form 10-Q contains statements that may constitute "forward-
looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Those statements include
statements regarding the capital spending and future financing plans
of the Company and reflect the intent, belief or current expectations
of the Company and members of its management team. Prospective
investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from
those contemplated by such forward-looking statements. The Company
undertakes no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results over
time.
11
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is from time to time subject to legal proceedings
and claims that arise in the ordinary course of its business. On the
date hereof, no such proceedings are pending and no such claims have
been asserted.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) EXHIBITS
<TABLE>
<CAPTION>
Exhibit
NUMBER DESCRIPTION PAGE NUMBER OR METHOD
OF FILING
<S> <C> <C> <C>
2.4 Credit Agreement between BNY Incorporated by
Financial Corporation and the reference to Exhibit
Registrant, as amended. 2.4 to Amendment No. 2
to the Company's
Registration Statement
on Form S-4 filed
August 29, 1996 (File
No. 333-08065).
3.1 Amended and Restated Certificate Incorporated by
of Incorporation of the reference to Exhibit
Registrant. 3.1 to the Company's
Annual report on Form
10-K for the fiscal
year ended May 31, 1996
(the "1996 Form 10-K").
3.2 Restated and Amended Bylaws of Incorporated by
the Registrant, as amended. reference to Exhibit
3.2 to the 1996 Form
10-K.
4.1 Specimen Common Stock Certificate Incorporated by
reference to Exhibit
4.1 to the 1996 Form
10-K.
12
<PAGE>
10.1.1 Employment Agreement, dated as of Incorporated by
December 1, 1995, between the reference to Exhibit
Registrant and Alexius A. Dyer 10.1.1 to the to
III, as amended on October 3, Amendment No. 2 to the
1996. Company's Registration
Statement on Form S-4
filed August 29, 1996
(File No. 333-08065).
10.1.2 Employment Agreement, dated as of Incorporated by
October 3, 1996, between the reference to Exhibit
Registrant and George Murnane 10.1.2 to the Company's
III. Quarterly Report for
the quarter ended
February 28, 1997.
10.2.1 1996 Long-Term Incentive and Incorporated by
Share Award Plan. reference to Appendix B
to the Proxy Statement/
Prospectus included in
the Company's
Registration Statement
on Form S-4 (File No.
333-08065) filed on
July 12, 1996.
10.2.2 401(k) Plan. Incorporated by
reference to Exhibit
10-H to the Company's
Annual Report on
Form 10-K for the
fiscal year ended
May 31, 1992 (the "1992
Form 10-K").
13
<PAGE>
10.2.3 Bonus Plan. Incorporated by
reference to Exhibit
10.2.4 to the 1992
Form 10-K.
10.2.4 Cafeteria Plan.
Incorporated by
reference to Exhibit
10.2.5 of the Company's
Annual report on Form
10-K for the fiscal
year ended May 31,
1993.
10.2.5 Form of Option Certificate Incorporated by
(Employee Non-Qualified Stock reference to Exhibit
Option). 10.2.5 to the 1996 Form
10-K.
10.2.6 Form of Option Certificate Incorporated by
(Director Non-Qualified Stock reference to Exhibit
Option). 10.2.6 to the 1996 Form
10-K.
10.2.7 Form of Option Certificate Incorporated by
(Incentive Stock Option). reference to Exhibit
10.2.7 to the 1996 Form
10-K.
10.14 Commission Agreement dated Incorporated by
December 1, 1995 between the reference to Exhibit
Registrant and J.M. Associates, 10.14 to the 1996 Form
Inc. 10-K.
10.15 Aircraft Parts Purchase Incorporated by
Agreement, dated May 16, 1996, reference to Exhibit
between Paxford Int'l, Inc. and 10.15 to the Company's
the Registrant. Registration Statement
on Form S-4 (File No.
333-08065).
10.16 Contract for Sale and Purchase Incorporated by
dated January 31, 1997, between reference to Exhibit
the Registrant and American 10.16 to the Company's
Connector Corporation. 1997 Form 10-K.
14
<PAGE>
10.17 Office Lease Agreement dated Incorporated by
January 31, 1997 between the reference to Exhibit
Registrant and Globe Corporate 10.17 to the Company's
Center. 1997 Form 10-K.
10.18 Lease Agreement dated March 31, Incorporated by
1997, between the Registrant and reference to Exhibit
Port 95-4, Ltd. 10.18 to the Company's
1997 Form 10-K.
27 Financial Data Schedule Page No. 17
</TABLE>
(b) REPORTS ON FORM 8-K
None
15
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
(Registrant)
/S/GEORGE MURNANE III OCTOBER 15, 1998
- ---------------------------- ----------------
George Murnane III Date
Executive Vice President and
Chief Financial Officer
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> May-31-1999
<PERIOD-END> Aug-31-1998
<CASH> 347,584
<SECURITIES> 81,950
<RECEIVABLES> 2,501,828
<ALLOWANCES> 554,000
<INVENTORY> 13,779,519
<CURRENT-ASSETS> 18,000,260
<PP&E> 8,173,507
<DEPRECIATION> 2,178,688
<TOTAL-ASSETS> 27,210,630
<CURRENT-LIABILITIES> 4,371,863
<BONDS> 11,582,062
<COMMON> 2,569
0
0
<OTHER-SE> 11,254,136
<TOTAL-LIABILITY-AND-EQUITY> 27,210,630
<SALES> 4,788,384
<TOTAL-REVENUES> 5,574,946
<CGS> 3,256,923
<TOTAL-COSTS> 4,260,062
<OTHER-EXPENSES> 257,830
<LOSS-PROVISION> 39,745
<INTEREST-EXPENSE> 304,872
<INCOME-PRETAX> 712,437
<INCOME-TAX> 270,726
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 441,711
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.16
</TABLE>
