Mercury Air (AMEX:MAX)
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Mercury Air Group, Inc. Reports First Quarter Results
LOS ANGELES, Nov. 12 /PRNewswire-FirstCall/ -- Mercury Air Group, Inc.
(AMEX:MAX), reported net income for the three-month period ended September 30,
2004 of $64,000, or $0.02 per basic and diluted share, $4,000 less than the
income from continuing operations, net of taxes, reported for the same period
last year of $68,000, or $0.02 per basic and diluted share. For the first
quarter of fiscal 2004, the Company reported a net loss of $302,000, or $0.10
per basic and diluted share, which included a loss from discontinued
operations, net of taxes, of $370,000, or $0.12 per basic and diluted share.
Revenue from continuing operations for the first quarter of fiscal 2005 was
$125,491,000 as compared to revenue from continuing operations of $79,710,000
for the same period last year, an increase of $45,781,000 or 57.4%. The
increase in revenue from continuing operations is primarily due to the higher
aviation fuel prices driven by higher worldwide petroleum product prices. The
Company's gross margin from continuing operations for the first quarter of
fiscal 2005 was $4,291,000, an increase of $780,000, or 22.2%, as compared to
the gross margin from continuing operations of $3,511,000 in the first quarter
of fiscal 2004.
"Without the significant financing costs associated with our prior high levels
of debt, we are pleased to report relatively stable earnings from continuing
operations on a comparable quarter to quarter basis," said Joseph Czyzyk,
President and CEO of Mercury Air Group, Inc.
Revenue for the Company's MercFuel, Inc. ("MercFuel") subsidiary was
$108,804,000 on sales volume of 74,429 thousand gallons, or 809 thousand
gallons per day, in the first quarter of fiscal 2005 as compared to sales
revenue of $64,990,000 on sales volume of 64,270 thousand gallons, or 699
thousand gallons per day, for the first quarter last year. MercFuel's average
per gallon aviation fuel sales price in the first quarter of fiscal 2005 was
$1.462 as compared to last year's first quarter per gallon average aviation
fuel sales price of $1.011. MercFuel realized sales volume increases in both
the commercial sales unit, where sales volume increased 7,335 thousand gallons,
or 13%, to 63,616 thousand gallons, and in the corporate and fractional
ownership aviation unit, where sales volume increased 2,824 thousand gallons,
or 35.3%, to 10,813 thousand gallons.
The Company's Mercury Air Cargo, Inc. ("Air Cargo") subsidiary had revenue of
$11,190,000 in the first quarter of fiscal 2005, an increase of $2,296,000 or
25.8% from last year's first quarter revenue of $8,894,000. Air Cargo's gross
margin was $1,326,000 in the first quarter of fiscal 2005 versus a gross margin
of $773,000 in the first quarter of fiscal 2004. Air Cargo handled increased
tonnage in both its warehouse handling and its cargo management operations.
The cargo warehouse tonnage throughput was 45.5 million tons in the first
quarter of fiscal 2005 as compared to 36.1 million tons during the same period
last year. The tonnage of air freight managed by the cargo management
operations was 2.7 million tons during the first quarter of fiscal 2005 as
compared to 1.8 million tons during the same period last year.
Maytag Aircraft Corporation ("Maytag"), Mercury's subsidiary engaged in
government services, had revenue of $5,363,000 in the first quarter of fiscal
2005 as compared to $5,826,000 in the first quarter of fiscal 2004 resulting in
gross margin of $1,311,000 in the first quarter of fiscal 2005, essentially
unchanged from the gross margin of $1,312,000 for the first quarter of fiscal
2004.
The first quarter results for fiscal 2004 include a loss from discontinued
operations, net of taxes, of $370,000. The Company sold the stock in Mercury
Air Centers, Inc. ("Air Centers") to Allied Capital in April 2004. The loss
from discontinued operations is comprised of the results from operations from
Air Centers for the quarter less the debt service costs recognized during the
quarter on the debt repaid with the proceeds from the sale.
About Mercury Air Group
Los Angeles-based Mercury Air Group (AMEX:MAX) provides aviation petroleum
products, air cargo services and transportation, and support services for
international and domestic commercial airlines, general and government aircraft
and specialized contract services for the United States government. Mercury
Air Group operates three business segments worldwide: MercFuel, Inc., Maytag
Aircraft Corporation and Mercury Air Cargo, Inc. For more information, please
visit http://www.mercuryairgroup.com/.
Statements contained in this news release which are not historical facts are
forward looking statements as that item is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ materially
from estimated results. Such risks and uncertainties are detailed in the
Company's filings with the Securities and Exchange Commission.
MERCURY AIR GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
All amounts in thousands, except per share amounts
(Unaudited)
Three Months Ended
September 30,
2004 2003
Sales and revenues:
Sales $108,934 $64,990
Service revenues 16,557 14,720
Total sales and revenues 125,491 79,710
Costs and expenses:
Cost of sales 106,040 62,449
Operating expenses 15,160 13,750
Total costs and expenses 121,200 76,199
Gross margin (excluding
depreciation and amortization) 4,291 3,511
Expenses (income):
Selling, general and administrative 2,711 2,281
Provision for bad debts 277 360
Depreciation and amortization 635 713
Interest expense 327 260
Interest and other income (223) (209)
Asset impairment loss 626 --
Total expenses (income) 4,353 3,405
Income (loss) from continuing operations
before minority interest and income tax expense (62) 106
Minority interest 181 6
Income from continuing operations before
income tax expense 119 112
Income tax expense 55 44
Income from continuing operations,
net of taxes 64 68
Loss from discontinued operation, net of tax
benefit of $237,000 for the three months
ended September 30, 2003 -- (370)
Net income (loss) 64 (302)
Accrued preferred stock dividends 9 9
Net income (loss) applicable to
common stockholders $55 $(311)
Income (loss) per common share:
Basic:
From continuing operations, net of taxes $0.02 $0.02
From discontinued operations, net of taxes -- (0.12)
Net income (loss) per share $0.02 $(0.10)
Diluted:
From continuing operations, net of taxes $0.02 $0.02
From discontinued operations, net of taxes -- (0.12)
Net income (loss) per share $0.02 $(0.10)
MERCURY AIR GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
All amounts in thousands
September 30, June 30,
2004 2004
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $12,297 $4,690
Restricted cash -- 15,414
Trade accounts receivable, net of allowance
for doubtful accounts 55,911 50,974
Inventories 2,869 1,165
Prepaid expenses and other current assets 7,874 5,696
Deferred income taxes 1,450 1,451
TOTAL CURRENT ASSETS 80,401 79,390
PROPERTY, EQUIPMENT AND LEASEHOLDS - net 8,025 10,349
NOTES RECEIVABLE, net of allowance for
doubtful accounts 516 521
DEFERRED INCOME TAXES 611 611
GOODWILL 4,403 4,389
OTHER INTANGIBLE ASSETS, NET 650 700
RESTRICTED CASH 9,062 8,989
OTHER ASSETS, NET 1,218 1,008
TOTAL ASSETS $104,886 $105,957
LIABILITIES, MANDATORILY REDEEMABLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $38,857 $33,552
Accrued expenses and other current liabilities 7,448 11,825
Current portion of long-term debt 54 139
TOTAL CURRENT LIABILITIES 46,359 45,516
LONG-TERM DEBT 14,850 17,790
DEFERRED GAIN 10,224 8,130
OTHER LONG TERM LIABILITY 502 669
DEFERRED RENT 1,100 1,257
MINORITY INTEREST -- 182
TOTAL LIABILITIES 73,035 73,544
MANDATORILY REDEEMABLE PREFERRED STOCK 527 518
STOCKHOLDERS' EQUITY:
Common stock 28 30
Additional paid-in capital 19,929 20,737
Retained earnings 14,650 14,596
Accumulated other comprehensive income (loss) 68 (46)
Treasury stock (140) (120)
Notes receivable from officers (3,211) (3,302)
TOTAL STOCKHOLDERS' EQUITY 31,324 31,895
TOTAL LIABILITIES, MANDATORILY REDEEMABLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY $104,886 $105,957
MERCURY AIR GROUP, INC.
SELECTED BUSINESS SEGMENT DATA
All dollar amounts in thousands
(Unaudited)
Three Months
Ended
September 30,
2004 2003
Revenue
MercFuel $108,804 $64,990
Mercury Air Cargo 11,190 8,894
Maytag Aircraft 5,363 5,826
Other 134 --
Total revenue $125,491 $79,710
Gross margin
MercFuel $1,640 $1,426
Mercury Air Cargo 1,326 773
Maytag Aircraft 1,311 1,312
Other 14 --
Total gross margin $4,291 $3,511
Depreciation and amortization
MercFuel $121 $115
Mercury Air Cargo 384 458
Maytag Aircraft 81 81
Other 49 59
Total depreciation and
amortization $635 $713
Sales volume (thousands of gals)
MercFuel
Commercial Aviation 63,616 56,281
Corporate/Fractional Ownership 10,813 7,989
Total 74,429 64,270
Cargo tonnage (thousands of tons)
Warehouse handling 45,525 36,074
Cargo management 2,686 1,801
Total 48,211 37,875
Company Contact:
Joseph Czyzyk
Mercury Air Group, Inc.
(310) 827-2737
Media Contact:
David Herbst / Amado Zavala
MWW Group
(213) 486-6560
DATASOURCE: Mercury Air Group, Inc.
CONTACT: Joseph Czyzyk of Mercury Air Group, Inc., +1-310-827-2737; or
Media, David Herbst, or Amado Zavala of MWW Group, +1-213-486-6560, for
Mercury Air Group, Inc.
Web site: http://www.mercuryairgroup.com/