SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 18,
1997
WORLD AIRWAYS, INC.
(Exact name of registrant as specified in charter)
Delaware 0-26582 94-1358276
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
13873 Park Center Road, Suite 490, Herndon, Virginia 20171
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(703) 834-9200
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ITEM 2. Acquisition or Disposition of Assets.
On September 18, 1997, WorldCorp, Inc., a Delaware
corporation ("WorldCorp"), consummated the sale of 3,227,000
shares (the "Shares") of common stock of World Airways, Inc.
("World Airways") to World Airways. The Shares were purchased by
World Airways for total consideration of $24.7 million or $7.65
per Share. A copy of the press release announcing the completion
of the sale of the Shares is attached hereto as Exhibit 99.1.
ITEM 7. EXHIBITS
(a) Financial Statements of Businesses Acquired
Not Applicable
(b) Pro Forma Financial Information
On August 26, 1997, World Airways completed a private
offering, issuing $50.0 million of 8% convertible senior
subordinated debentures (the "Debentures") due 2004 (the
"Offering"). The Debentures are unsecured obligations,
convertible into shares of the Company's common stock, at a
conversion price of $8.90 per share, and subordinated to all
present and future senior indebtedness of the Company. Net
proceeds from the Offering approximated $48.5 million and would
be used by the Company to: 1) repurchase approximately 4.0
million shares of its common stock, 2) repay certain
indebtedness, and 3) increase working capital for general
corporate purposes.
As expected, the Company repaid approximately $4.0 million
of indebtedness in conjunction with the net proceeds from the
Offering. In addition, the Company repurchased 3,227,000 shares
of its common stock from its largest shareholder, WorldCorp, for
approximately $24.7 million on September 18, 1997.
The following unaudited condensed pro forma income
statements for the year ended December 31, 1996 and the six
months ended June 30, 1997 give effect to the Offering, the $4.0
million repayment of indebtedness, and the repurchase of the
Company's common stock as if they were completed on January 1,
1996. The following unaudited condensed pro forma balance sheet
gives effect to the Offering, the $4.0 million repayment of
indebtedness, and the repurchase of the Company's common stock as
if they were completed on June 30, 1997.
UNAUDITED CONDENSED PRO FORMA
INCOME STATEMENTS
(dollars in thousands, except per share data)
For the Year Ended For the six months
December 31, 1996 ended June 30, 1997
Actual Pro forma Actual Pro forma
Operating revenues:
Flight operations $ 296,930 $ 296,930 $ 158,484 $ 158,484
Flight operations
subcontracted to
others 11,726 11,726 1,943 1,943
Other 931 931 249 249
Total operating
revenues 309,587 309,587 160,676 160,676
Operating expenses
Flight 71,121 71,121 33,114 33,114
Maintenance 60,462 60,462 34,595 34,595
Aircraft costs 85,227 85,227 49,379 49,379
Fuel 19,255 19,255 5,703 5,703
Flight operations
subcontracted
to others 12,932 12,932 2,249 2,249
Promotions, sales
and commissions 6,236 6,236 4,663 4,663
Depreciation and
amortization 8,032 8,032 4,331 4,331
General and
administrative 24,677 24,677 13,808 13,808
Total operating
expenses 287,942 287,942 147,842 147,842
Operating income 21,645 21,645 12,834 12,834
Other income
(expense)
Interest expense (3,529) (6,975)(a) (2,046) (3,856)(b)
Interest income 1,230 1,230 338 338
Other, net (314) (314) (110) (110)
Total other expense (2,613) (6,059) (1,818) (3,628)
Earnings from
continuing operations
before income taxes 19,032 15,586 11,016 9,206
Income tax expense (679) (607) (350) (312)
Earnings from
continuing
operations $18,353 $14,979 $10,666 $8,894
======= ======= ======= ======
Earnings per
share(c)
Primary:
Continuing
operations $ 1.55 $ 1.74 $ 0.95 $ 1.11
Weighted average
common and
common stock
equivalent
shares
outstanding 11,805,947 8,627,750 11,233,677 8,006,677
Fully diluted:
Continuing
operations $ 1.55 $ 1.33 $ 0.95 $ 0.80
Weighted average
common and
common stock
equivalent
shares
outstanding 11,806,468 14,246,248 11,236,281 13,627,259
<PAGE>
UNAUDITED CONDENSED PRO FORMA
BALANCE SHEET
(dollars in thousands)
At June 30, 1997
Actual Pro forma
Cash and cash equivalents
and restricted short-term
investments $ 8,270 $ 28,071(d)
Other current assets 25,188 25,188
Total current assets 33,458 53,259
Net equipment and property 73,147 73,147
Long-term operating deposits 15,965 15,965
Other long-term assets 5,099 6,649(e)
Total assets $ 127,669 $ 149,020
Notes payable and current
maturities of long-term
obligations $ 11,694 $ 10,494(f)
Accounts payable 21,706 21,706
Accrued maintenance in
excess of reserves 16,095 16,095
Other current liabilities 15,815 15,815
Total current liabilities 65,310 64,110
Long-term obligations 29,070 76,308(f)(g)
Other long-term liabilities 14,393 14,393
Total liabilities 108,773 154,811
Common stock 12 12
Additional paid-in capital 42,522 42,522
Contributed capital 3,000 3,000
Accumulated deficit (18,340) (18,340)
ESSOP guaranteed bank loan (461) (461)
Treasury stock, at cost (7,837) (32,524)(h)
Total stockholders'
equity (deficit) 18,896 (5,791)
Total liabilities and
stockholders' equity
(deficit) $ 127,669 $ 149,020
______________________________
(a) Adjusted for an increase in interest expense ($4.0 million)
resulting from the issuance of the Debentures and the
amortization of related debt issuance costs, partially offset by
the reduction in interest expense resulting from the repayment of
certain indebtedness.
(b) Adjusted for an increase in interest expense ($2.0 million)
resulting from the issuance of the Debentures and the
amortization of related debt issuance costs, partially offset by
the reduction in interest expense resulting from the repayment of
certain indebtedness.
(c) Adjustments result from pro forma income statement
adjustments and the repurchase of 3,227,000 shares of common
stock. In addition, weighted average shares outstanding for
fully-diluted purposes include assumed conversion of Debentures
into 5,617,978 shares of common stock.
(d) Adjusted to reflect the $48.5 million in net proceeds
received by the Company, the $4.0 million repayment of certain
indebtedness, and the repurchase of common stock for $24.7
million.
(e) Adjusted to reflect debt issuance costs.
(f) Adjusted for $4.0 million repayment of certain indebtedness.
(g) Adjusted for issuance of $50.0 million of Debentures.
(h) Adjusted for repurchase of common stock for $24.7 million.
(c) Exhibits
Exhibit 99.1 Press Release dated September 18, 1997.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
WORLD AIRWAYS, INC.
/s/Russell L. Ray, Jr.
Name: Russell L. Ray, Jr.
Title: President and Chief
Executive Officer
Date: October 2, 1997
<PAGE>
INDEX TO EXHIBITS
99.1 Press Release, dated September 18, 1997.
Exhibit 99.1
WORLD AIRWAYS
CONTACT: Coleman Andrews
Chairman
(703) 834-9201
or
Doug Poretz
The Poretz Group
(703) 506-1778
FOR IMMEDIATE RELEASE
September 18, 1997
12:30 PM
World Airways Repurchases 3,227,000 Shares of Common Stock
HERNDON, VIRGINIA, September 18, 1997 -- World Airways, Inc.
(Nasdaq: WLDA) today announced that it has completed the
repurchase of 3,227,000 shares of its common stock from its
largest shareholder, WorldCorp, at a price of $7.65 per share.
The company expects to complete the repurchase in the next
several weeks of an additional 773,000 shares of its common stock
from WorldCorp or other shareholders.
Commenting on the repurchases, World's President and CEO
Russ Ray said: "With the accomplishment of this milestone and
the recent convertible offering, World has met three important
objectives. First, we now have in place the required capital to
execute our future plans, with cash on hand in excess of $30 MM
and an additional $25 MM revolver facility under negotiation.
Second, we have substantially reduced the potential overhang
represented by the large block of stock held by WorldCorp.
Third, with the recent roadshow and resulting investor interest
in World, we expect the company's success in the ACMI leasing
business to gain greater exposure."
World Airways provides ACMI leases to commercial and
military customers using MD-11 and DC-10 passenger and cargo
aircraft.
"Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995: This release contains forward
looking statements that are subject to risks and uncertainties,
including, but not limited to, the impact of competitive
products, product demand and market acceptance risks, reliance on
key strategic alliances, fluctuations in operating results and
other risks detailed from time to time in World Airways' periodic
reports filed with the Securities and Exchange Commission (which
reports are available from World Airways upon request). These
risks could cause World Airways' actual results for 1997 and
beyond to differ materially from those expressed in any forward
looking statements made by, or on behalf of, World Airways in
this release.
