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 February 28, 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
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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 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 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 registrant's common stock outstanding as of
March 25, 1998 was 2,553,667.
FORM 10-Q
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
INDEX PAGE NO.
Part I FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
Condensed Consolidated Balance Sheets as of
May 31, 1997 and February 28, 1998 3
Condensed Consolidated Statements of Earnings
for the Three Months and Nine Months
Ended February 28, 1997 and February 28, 1998 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months ended February 28,
1997 and 1998 5
Notes to Unaudited 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 3. Defaults upon Senior Securities 12
Item 6. Exhibits and Reports on Form 8-K 12
<PAGE>
FORM 10-Q
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
February 28,
May 31, 1998
1997* (UNAUDITED)
--------- ----------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 465,725 $ 289,007
Accounts receivable, net of allowance for doubtful accounts
of approximately $610,000 at May 31, 1997 and $724,000 at
February 28, 1998 1,354,030 2,297,626
Inventories 12,000,284 13,574,182
Deferred tax benefit - current, net of valuation allowance
of $960,000 at May 31, 1997 and February 28, 1998 - -
Other current assets 98,285 655,063
---------- ----------
Total current assets 13,918,324 16,815,878
Property and equipment
Aircraft and engines held for lease 6,914,458 7,347,954
Leasehold improvements 21,567 50,756
Machinery and equipment 908,590 927,358
--------- ---------
7,844,615 8,326,068
Accumulated depreciation 1,186,444 1,700,455
--------- ---------
Property and equipment, net 6,658,171 6,625,613
Other assets
Deferred debt costs, net 638,012 638,183
Deferred tax benefit, net of valuation allowance of
$1,814,000 at May 31, 1997 and $114,000 at February 28,
1998 72,663 1,772,663
--------- ---------
Total other assets 710,675 2,410,846
------------ ------------
$ 21,287,170 $ 25,852,337
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term obligations $ 1,542,488 $ 1,571,825
Accounts payable 642,950 563,133
Accrued expenses 2,234,350 2,229,218
--------- ---------
Total current liabilities 4,419,788 4,364,176
Long-term obligations, less current maturities 12,207,113 13,011,931
Stockholders' equity
Preferred stock - $.001 par value; authorized 2,000,000
shares; 0 shares outstanding at May 31, 1997
and February 28, 1998. - -
Common stock - $.001 par value; authorized 20,000,000 shares;
issued and outstanding 2,395,095 shares at May 31, 1997 and
2,464,095 shares at February 28, 1998. 2,395 2,464
Additional paid-in capital 13,003,686 13,209,242
Accumulated deficit (8,345,812) (4,735,476)
---------- ---------
Total stockholders' equity 4,660,269 8,476,230
---------- ----------
$ 21,287,170 $ 25,852,337
========== ==========
</TABLE>
*Condensed from audited Financial Statements
<PAGE>
FORM 10-Q
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February 28, February 28, February 28, February 28,
1997 1998 1997 1998
----------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Revenues
Net sales $ 5,398,573 $ 5,839,739 $ 14,240,684 $ 16,272,348
Lease revenue 279,667 589,702 573,000 1,816,380
----------- ------------ ---------- ----------
Total revenues 5,678,240 6,429,441 14,813,684 18,088,728
Cost of sales 3,662,379 3,763,506 8,880,392 10,474,757
Selling, general and administrative expenses 943,219 1,132,971 2,598,178 3,210,778
Provision for doubtful accounts 55,351 41,071 146,790 40,220
Depreciation and amortization 167,702 272,579 585,840 792,892
----------- ------------ ---------- ----------
Total operating costs 4,828,651 5,210,127 12,211,200 14,518,647
----------- ------------ ---------- ----------
Earnings from operations 849,589 1,219,314 2,602,484 3,570,081
Interest expense 283,568 460,538 1,189,761 1,351,619
Interest and other (income) expense (24,814) 321,132 (67,899) 308,125
----------- ------------ ---------- ----------
Earnings before income taxes 590,835 437,644 1,480,622 1,910,337
Provision for (benefit from) income taxes 87,833 (1,275,000) 102,632 (1,699,999)
----------- ------------ ---------- ----------
Net earnings before extraordinary loss on
debt restructuring 503,002 1,712,644 1,377,990 3,610,336
Extraordinary loss on debt restructuring - - (530,596) -
----------- ------------ ---------- ----------
Net earnings $ 503,002 $ 1,712,644 $ 847,394 $ 3,610,336
Per share data:
Earnings per share available for
common stockholders - Basic
before loss on debt restructuring $ 0.21 $ 0.70 $ 1.04 $ 1.48
Extraordinary loss on debt restructuring - - (0.40) -
----------- ------------ ---------- ----------
Earnings per share available for
common stockholders - Basic $ 0.21 $ 0.70 $ 0.64 $ 1.48
=========== =========== ========= =========
Weighted average number of common
Stock outstanding - Basic 2,395,095 2,463,306 1,330,680 2,441,741
=========== =========== ========= =========
Earnings per share available for
common stockholders - Diluted
before loss on debt restructuring $ 0.21 $ 0.61 $ 0.90 $ 1.27
Extraordinary loss on debt restructuring - - (0.35) -
----------- ------------ ---------- ----------
Earnings per share available for
common stockholders - Diluted $ 0.21 $ 0.61 $ 0.55 $ 1.27
=========== =========== ========= =========
Weighted average number of common
Stock outstanding - Diluted 2,428,851 2,815,483 1,524,546 2,841,477
=========== =========== ========= =========
</TABLE>
FORM 10-Q
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
February 28, February 28,
1997 1998
--------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 847,394 $ 3,610,336
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization 762,631 514,011
Provision for doubtful accounts 146,790 40,220
Changes in assets and liabilities (3,449,455) (4,872,756)
----------- ----------
Total adjustments (2,540,034) (4,318,525)
Net cash used in operating activities (1,692,640) (708,189)
Cash flows from investing activities:
Capital equipment additions (93,973) (47,956)
Additions to aircraft and engines held for lease - (433,496)
----------- ----------
Net cash used in investing activities (93,973) (481,452)
Cash flows from financing activities:
Borrowings/(repayments) of debt obligations 2,631,120 839,157
Issuance of common stock - 205,625
Payment of restructuring costs (1,103,674) -
Payment of offering costs - (31,859)
----------- ----------
Net cash provided by financing activities 1,527,446 1,012,923
----------- ----------
Net decrease in cash (259,167) (176,718)
Cash and cash equivalents at beginning of period 940,274 465,725
----------- ----------
Cash and cash equivalents at end of period $ 681,107 $ 289,007
========== =========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
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.'s condensed
consolidated balance sheets as of May 31, 1997 and February 28,
1998, the condensed consolidated statements of operations for the
three and nine months ended February 28, 1997 and February 28, 1998,
and the condensed consolidated statements of cash flows for the nine
months ended February 28, 1997 and February 28, 1998.
The accounting policies followed by the Company are described
in the May 31, 1997 financial statements.
The results of operations for the three and nine months ended
February 28, 1998 are not necessarily indicative of the results to
be expected for the full year.
2. Inventories consisted of the following:
MAY 31,1997 FEBRUARY 28,1998
Aircraft parts $11,113,867 $ 9,718,968
Aircraft and Engines
available for sale 886,417 3,855,214
----------- -----------
$12,000,284 $13,574,182
=========== ===========
3. On October 3, 1996, the Company completed a restructuring of
its capital structure (the "Restructuring"). Pursuant to the
Restructuring, the Company effected a 1-for-27 reverse split of its
common stock, $.001 par value per share (the "Common Stock"); issued
approximately 2,245,400 shares of its Common Stock, after giving
effect to the reverse split, in exchange for the entire $10,000,000
principal amount outstanding and related accrued interest of its 8%
Convertible Debentures due November 30, 2003 (the "Debentures"); and
redeemed the entire $7,700,000 principal amount outstanding of its
12% Senior Notes due July 17, 1997 (the "Senior Notes") with the
proceeds of an advance under a credit agreement entered into on
October 3 (the "Credit Agreement"). Consummation of the
Restructuring cured all defaults with respect to the Debentures and
the Senior Notes.
All references to the number of common shares and per common
share amounts throughout the financial statements have been restated
to reflect the reverse split.
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. 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
FEBRUARY 28, EARNINGS SHARES EPS SHARES EPS
------------ ---------- --------- ----- --------- -----
1997 $ 503,002 2,395,095 $0.21 2,428,851 $0.21
1998 $1,712,644 2,463,306 $0.70 2,815,483 $0.61
Nine Months
Ended Net Basic Basic Diluted Diluted
FEBRUARY 28, EARNINGS SHARES EPS SHARES EPS
------------ ---------- --------- ----- --------- -----
1997 $ 847,394 1,330,680 $0.64 1,524,546 $0.55
1998 $3,610,336 2,441,741 $1.48 2,841,477 $1.27
Included in diluted shares are common stock equivalents relating
to stock options of 352,177 and 33,756 for the three months ended
February 28, 1998 and 1997, respectively, and 399,736 and
193,866 for the nine months ended February 28, 1998 and 1997,
respectively.
5. 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.
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
6. Supplemental Cash Flow Disclosures:
Cash payments for interest were $945,000 and $1,547,000 for the
nine months ended February 28, 1997 and February 28, 1998,
respectively. Cash and cash equivalents include $284,507 of
restricted cash at February 28, 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.
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
Parts sales (excluding the sale of aircraft and engines) for the
three and nine months ended February 28, 1998 were $4.2 million and
$13.0 million, respectively, compared to $4.7 million and $13.6
million, respectively, during the three and nine months ended
February 28, 1997. Aircraft and engine sales were $1.7 million and
$3.3 million, respectively, for the three and nine months ended
February 28, 1998 compared to $650,000 for both the three and nine
months ended February 28, 1997. Aircraft and engine sales are
unpredictable transactions and may fluctuate significantly from
period to period, dependent, in part, upon the Company's ability to
purchase aircraft or engines at attractive prices and resell them,
as well as the overall market for aircraft and engines. Lease
revenue increased to $590,000 and $1.8 million during the three and
nine months ended February 28, 1998, respectively, compared to
$280,000 and $573,000 during the three and nine months ended
February 28, 1997, respectively. The increase in lease revenues was
attributable primarily to the lease of three B-727 aircraft during
the fourth quarter of fiscal 1997. Total revenue during the three
months ended February 28, 1998 increased to $6.4 million from $5.7
million during the three months ended February 28, 1997, while total
revenues during the nine months ended February 28, 1998 increased to
$18.1 million from $14.8 million during the nine months ended
February 28, 1997. This higher revenue was due primarily to
increased engine and aircraft sales and higher lease revenue.
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
COST OF SALES
Cost of sales increased 3.0% from $3.7 million during the three
months ended February 28, 1997 to $3.8 million during the three
months ended February 28, 1998, primarily as a result of higher
revenues. Cost of sales increased 18.0% from $8.9 million during the
nine months ended February 28, 1997 to $10.5 million during the nine
months ended February 28, 1998, primarily as a result of higher
revenues. As a percentage of total revenues, cost of sales for the
three and nine months ended February 28, 1998 was 59% and 58%,
respectively, compared to 64% and 60% for the three and nine months
ended February 28, 1997, respectively. The decrease in the cost of
sales as a percentage of revenues is in large part due to higher
aircraft and engine sales and increased lease revenue, which had a
lower cost of sales. Excluding aircraft and engine transactions,
which transactions are unpredictable and fluctuate from period to
period, cost of sales as a percentage of part sales during the three
and nine months ended February 28, 1997 was 67% and 62%,
respectively, compared to 73% and 68% during the three and nine
months ended February 28, 1998, respectively.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased from
$943,000 and $2.6 million during the three and nine months ended
February 28, 1997, respectively, to $1.1 million and $3.2 million
during the three and nine months ended February 28, 1998,
respectively. This increase is due, in part, to higher levels of
insurance costs, rent expense, legal and accounting fees, investor
relations fees, and salary and bonuses.
PROVISION FOR DOUBTFUL ACCOUNTS
For the three and nine months ended February 28, 1998, the
Company had a provision for doubtful accounts of $41,000 and
$40,220, respectively, compared to a provision for doubtful accounts
of $55,000 and $147,000, respectively, for the three and nine months
ended February 28, 1997. This decrease in expense for the nine
month period was primarily related to the recovery of a certain
doubtful account during the first quarter of fiscal 1998.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization for the three and nine months
ended February 28, 1997 totaled $168,000 and $586,000, respectively,
compared to $273,000 and $793,000 for the three and nine months
ended February 28, 1998, respectively. The increase in depreciation
and amortization was due primarily to the acquisition of three B-727
aircraft during the fourth quarter of fiscal 1997, while being
partially offset by the sale of the Company's previous headquarters
during the third quarter of fiscal 1997.
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
INTEREST EXPENSE
Interest expense for the three and nine months ended February
28, 1997 was $284,000 and $1.2 million, respectively, compared to
$461,000 and $1.4 million for the three and nine months ended
February 28, 1998, respectively. The increase in interest expense
from 1997 to 1998 was due to an increase in total debt outstanding
during this period from $10.8 million at February 28, 1997 to $14.6
million at February 28, 1998.
INTEREST AND OTHER (INCOME) EXPENSE
Interest and other (income) expense for the three and nine
months ended February 28, 1997 was ($25,000) and ($68,000),
respectively, compared to $321,000 and $308,000 for the three and
nine months ended February 28, 1998, respectively. The increase in
other expenses from 1997 to 1998 was due to $325,000 in expenses
relating to the withdrawn secondary offering in the third quarter of
fiscal 1998.
INCOME TAXES
The Company's tax benefits (and related estimated tax rate)
result from 1) the utilization of its net operating loss
carryforward to eliminate the current tax that would otherwise be
payable and 2) the Company's reduction in the valuation allowance
applied against its deferred tax assets. The Company has reduced
the valuation allowance by $1,275,000 and $1,699,999, respectively,
for the three and nine months ended February 28, 1998, as a result
of its continuing profitability.
The Company recorded an income tax provision of $88,000 and
$103,000 during the three and nine months ended February 28, 1997,
respectively.
LOSS ON DEBT RESTRUCTURING
In connection with the Restructuring as described in Note 3 of
Notes to Condensed Consolidated Financial Statements, the Company
recorded an extraordinary loss of $530,596 relating to the exchange
of the Debentures for the nine months ended February 28, 1997.
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES
Since the Restructuring, the Company's principal sources of
liquidity have been cash from operations and borrowings under its
Credit Agreement with BNY Financial Corporation ("BNY Financial").
The Credit Agreement entered into by the Company in connection
with the Restructuring 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 $13 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 March 26, 1998, the interest rate (8.25%) under
the Credit Facility on both the term loan and the revolving credit
facility was the lender's base rate minus 0.25%. 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.
Net cash used in operating activities for the nine months ended
February 28, 1998 and February 28, 1997 were $4,168,000 and
$2,540,000, respectively. The increase in cash used by operating
activities was due, in part, to an increase in aircraft and engines
held for sale, primarily due to the acquisition of two DC-9-51
aircraft during the quarter ended November 30, 1997.
Net cash provided by financing activities for nine months ended
February 28, 1998 amounted to $1,008,000. This was the result of a
net increase in debt obligations of $839,000 due primarily to the
borrowing of $4.0 million for the acquisition of two DC-9-51
aircraft during the quarter ended November 30, 1997, offset by the
partial repayment of other term loans and the revolving credit.
At March 26, 1998, the Company was permitted to borrow up to an
additional $7.2 million pursuant to the Credit Facility. The
Company believes that amounts available to be borrowed pursuant to
the Credit Agreement, together with its working capital will be
sufficient to meet the requirements of the Company's business for
the foreseeable future; therefore, the Company does not intend to
pursue a secondary offering of shares of its common stock, as
previously announced. The Company does not have any material
planned capital expenditures for the remainder of fiscal 1998 that
would significantly impact its liquidity and capital resources.
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued Statement of Financial Accounting
Standard No. 130 (SFAS 130), "Reporting Comprehensive Income," and
No. 131 (SFAS 131), "Disclosures About Segments of an Enterprise and
Related Information." These statements are effective for fiscal
years commencing after December 15, 1997. The Company will be
required to comply with the provisions of these statements in fiscal
1999. The Company has not assessed the effect that these new
standards will have on its consolidated financial statements and/or
disclosures.
YEAR 2000 ISSUES
The Company has evaluated its major software and computer systems
and has determined that it is Year 2000 compliant. The Company
believes that it will not incur any expenses to ensure that its
computer systems and applications function beyond 1999.
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.
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
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 3. DEFAULTS UPON SENIOR SECURITIES
Prior to the Restructuring, the Company was in default in the
payment of principal and certain payments of interest on the Senior
Notes and was in default in the payment of interest on the
Debentures.
On October 3, 1996, the Company completed the Restructuring.
Pursuant to the Restructuring, the Company effected a 1-for-27
reverse split of its Common Stock; issued approximately 2,245,400
shares of its Common Stock, after giving effect to the reverse
split, in exchange for the entire $10,000,000 principal amount
outstanding of the Debentures; and redeemed the entire $7,700,000
principal amount outstanding of the Senior Notes with the proceeds
of an advance under the Credit Agreement. Consummation of the
Restructuring cured all defaults with respect to the Debentures and
the Senior Notes.
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. 2.4 to the Company's
Annual Report on Form
10-K for the fiscal
year ended May 31,
1997, as amended (the
"1997 Form 10-K").
2.4.1 First Amendment, Waiver and Incorporated by
Agreement, dated as of March 24, reference to Exhibit
1997, between BNY Financial 2.4.1 to the Company's
Corporation and the Registrant. Registration Statement
on Form S-1 (File 333-
40613) filed on
November 20, 1997.
2.4.2 Second Amendment and Agreement, Incorporated by
dated as of September 9, 1997, reference to Exhibit
between BNY Financial 2.4.2 to the Company's
Corporation and the Registrant. Registration Statement
on Form S-1 (File 333-
40613) filed on
November 20, 1997.
2.4.3 Third Amendment and Agreement, Incorporated by
dated as of October 15, 1997, reference to Exhibit
between BNY Financial 2.4.3 to the Company's
Corporation and the Registrant. Registration Statement
on Form S-1 (File 333-
40613) filed on
November 20, 1997.
3.1 Amended and Restated Certificate Incorporated by
of Incorporation of the reference to Exhibit
Registrant. 3.1 to the 1997 Form
10-K.
3.1.1 Amendment to Amended and Incorporated by
Restated Certificate of reference to Exhibit
Incorporation of the Registrant. 3.1.1 to the Company's
Registration Statement
on Form S-1 (File No.
333-40613) filed on
November 20, 1997.
4.1 Specimen Common Stock Incorporated by
Certificates. reference to Exhibit
4.1 to the 1997 Form
10-K.
10.1.1 Employment Agreement, dated as Incorporated by
of December 1, 1996, between the reference to Exhibit
Registrant and Alexius A. Dyer 10.1.1 to the 1997
III, as amended on October 3, Form 10-K.
1997.
10.1.2 Employment Agreement, dated as Incorporated by
of October 3, 1997, between the reference to Exhibit
Registrant and George Murnane 10.1.2 to the 1997
III. Form 10-K.
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).
10.2.5 Form of Option Certificate Incorporated by
(Employee Non-Qualified Stock reference to Exhibit
Option). 10.2.5 to the 1997
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 1997
Form 10-K.
10.2.7 Form of Option Certificate Incorporated by
(Incentive Stock Option). reference to Exhibit
10.2.7 to the 1997
Form 10-K.
10.14 Commission Agreement dated Incorporated by
December 1, 1996 between the reference to Exhibit
Registrant and J.M. Associates, 10.14 to the 1997 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.
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.
11 Statement regarding computation Incorporated by
of per share earnings. reference to Exhibit
11 to the 1997 Form
10-K.
21 Subsidiaries. Incorporated by
reference to Exhibit
21 to the 1997 Form
10-K.
27 Financial Data Schedule. Page no. 18
28 Financial Data Schedule Page no. 19
(Restated).
</TABLE>
(b) REPORTS ON FORM 8-K
None
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC. AND SUBSIDIARIES
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 APRIL 1, 1998
- --------------------- -------------
George Murnane III Date
Executive Vice President and
Chief Financial Officer
<PAGE>
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