Mercury Air (AMEX:MAX)
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Mercury Air Group, Inc. Reports Net Income of $615,000 for Fiscal
2004, Reduces Long-term Debt in Fourth Quarter by $39.7 Million
LOS ANGELES, Sept. 28 /PRNewswire-FirstCall/ -- Mercury Air Group, Inc.
(AMEX:MAX) reported net income of $615,000, or $0.19 per basic and diluted
share, for the twelve-month period ended June 30, 2004. This compares to a net
loss of $2,798,000, or $0.86 per basic and diluted share, for the comparable
fiscal 2003 period. The net income for fiscal 2004 is comprised of a loss from
continuing operations of $5,083,000, a gain on the sale of Mercury Air Centers,
Inc., of $7,501,000 and a loss from discontinued operations of $1,803,000, all
net of income taxes. The net loss for fiscal 2003 is comprised of a loss from
continuing operations of $2,983,000 and income from discontinued operations of
$185,000, both net of income taxes. The fiscal 2004 loss from continuing
operations includes settlement expenses of $2,414,000 and an accrual of
$1,680,000 for termination benefits due the Chairman of the Board of Directors.
The loss from continuing operations for fiscal 2003 includes the write-off of
deferred debt issuance costs of $1,773,000.
"With the completion of the sale of Mercury Air Centers during the fourth
quarter of fiscal 2004, we have significantly strengthened our financial
position through the reduction of high cost debt," said Joseph A. Czyzyk,
President and CEO of Mercury Air Group, Inc. adding, "With our improved
financial condition and our new credit line with Bank of America, we are now
well positioned to meet the cash requirements associated with the higher fuel
costs and provide value to our stockholders."
Revenue from continuing operations in fiscal 2004 was $385,461,000, an increase
of $48,213,000, or 14.3%, as compared to revenue from continuing operations of
$337,248,000 for the same period in fiscal 2003. Gross margin from continuing
operations for the twelve-month period of fiscal 2004 was $13,026,000,
essentially unchanged from $13,109,000 last year.
MercFuel, Inc. ("MercFuel"), the Company's aviation fuel reseller subsidiary,
reported revenue for the twelve-month period ended June 30, 2004 of
$322,631,000 on sales volume of 278,448,000 gallons, or 760,800 gallons per
day, as compared to revenue of $280,136,000 on sales volume of 286,873,000
gallons, or 786,000 gallons per day, for the same period last year. Despite
the lower sales volume, revenue increased primarily due to higher worldwide
petroleum product prices and an increase in the sales volume in the corporate
and fractional aviation segment. The lower sales volume is primarily due to
the cessation of business by National Airlines in November 2002. Despite the
lower sales volume, MercFuel's gross margin for fiscal 2004 increased to
$6,080,000 from $5,926,000 in fiscal 2003. MercFuel's aviation fuel sales
volume within the corporate and fractional aviation segment increased to
39,204,000 gallons, or 14.1% of MercFuel's total sales volume in fiscal 2004,
as compared to 28,418,000 gallons, or 9.9% of MercFuel's total sales volume
last year.
The Company's Mercury Air Cargo, Inc. ("Air Cargo") subsidiary reported revenue
for fiscal 2004 of $39,549,000 as compared to $32,691,000 for fiscal 2003, an
increase of 21%. Air Cargo's gross margin in fiscal 2004 was $1,800,000 as
compared to $2,585,000 in fiscal 2003, a decrease of 30.4% primarily due to the
lower contributions from the cargo marketing services and the warehouse
divisions and the payment of executive severance partially offset by improved
results from Mercury World Cargo.
Maytag Aircraft, Inc. ("Maytag Aircraft"), the Company's wholly-owned
subsidiary engaged in U.S. government contract services, reported revenue for
fiscal 2004 of $23,281,000, a decrease of $1,140,000, or 4.7% from last year's
revenue of $24,421,000. Maytag Aircraft's gross margin increased to
$5,146,000, representing an increase of 11.9% from last year's gross margin of
$4,598,000.
The Company reported net income for the three-month period ended June 30, 2004
of $4,253,000, or $1.46 per basic and diluted share, as compared to a net loss
for the three-month period ended June 30, 2003 of $515,000, or $0.17 per basic
and diluted share. The net income for the latest quarter includes a loss from
continuing operations of $2,735,000, a gain on the sale of Mercury Air Centers,
Inc. of $7,501,000 and a loss from discontinued operations of $513,000, all net
of income taxes. This compares to a loss from continuing operations of
$683,000 and income from discontinued operations of $168,000, both net of
income taxes, in the fourth quarter of fiscal 2003. The loss from continuing
operations for the fourth quarter of fiscal 2004 includes settlement expense of
$615,000 and an accrual of $1,680,000 for termination benefits due the Chairman
of the Board of Directors.
The Company's total revenue from continuing operations for the fourth quarter
of fiscal 2004 was $110,471,000, an increase of 45.8% over the total revenue
from continuing operations for the fourth quarter of fiscal 2003 of
$75,787,000. The Company's gross margin from continuing operations for the
fourth quarter of fiscal 2004 was $2,955,000 as compared to the gross margin
from continuing operations of $2,936,000 in the fourth quarter of fiscal 2003.
MercFuel had revenue of $94,436,000 on sales volume of 70,941,000 gallons, or
779,600 gallons per day, in the fourth quarter of fiscal 2004 as compared to
sales revenue of $62,025,000 on sales volume of 65,387,000 gallons, or 718,500
gallons per day, for the comparable period last year. MercFuel's average
aviation fuel sales price per gallon sold in the fourth quarter of fiscal 2004
was $1.331 as compared to last year's fourth quarter per gallon average
aviation fuel sales price of $0.949. MercFuel's gross margin in the fourth
quarter of fiscal 2004 increased to $1,274,000, equating to an average margin
of $0.018 per gallon sold, as compared to last year's fourth quarter gross
margin of $1,185,000, or $0.018 per gallon sold. MercFuel's aviation fuel
sales volume within the corporate and fractional aviation segment increased to
10,668,000 gallons, or 15.0% of MercFuel's total sales volume in the fourth
quarter of fiscal 2004, as compared to 7,653,000 gallons, or 11.7% of
MercFuel's total sales volume for the same period last year.
Air Cargo had revenue of $10,243,000 in the fourth quarter of fiscal 2004, an
increase of $2,392,000 or 30.5% from last year's fourth quarter revenue of
$7,851,000. Air Cargo's gross margin was $444,000 in the fourth quarter of
fiscal 2004 versus a gross margin of $513,000 in the fourth quarter of fiscal
2003 as both the cargo marketing services and warehouse divisions' margins
declined.
Maytag Aircraft had revenue of $5,792,000 in the fourth quarter of fiscal 2004
as compared to $5,911,000 for the same period last year. Maytag Aircraft's
gross margin for the fourth quarter of fiscal 2004 was $1,237,000, basically
unchanged from the prior year's fourth quarter gross margin of $1,238,000.
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 INCOME
(Unaudited)
(all amounts in thousands of dollars, except per share amounts)
Twelve Months Ended Three Months Ended
June 30, June 30,
2004 2003 2004 2003
Sales and revenues:
Sales $322,631 $280,136 $94,436 $62,026
Service revenues 62,830 57,112 16,035 13,761
385,461 337,248 110,471 75,787
Costs and expenses:
Cost of sales 311,728 269,238 91,860 59,603
Operating expenses 60,707 54,901 15,656 13,248
372,435 324,139 107,516 72,851
Gross margin
(excluding
depreciation
and amortization) 13,026 13,109 2,955 2,936
Expenses (income):
Selling, general
and administrative 12,885 10,818 5,047 2,929
Provision for bad debts 506 1,192 201 113
Depreciation and
amortization 2,828 2,782 659 624
Interest expense 972 997 188 154
Settlement costs 2,414 615
Debt extinguishment
costs 1,773
Other (income) expense (318) 97 (46) 153
Total expenses
(income) 19,287 17,659 6,664 3,973
Loss from continuing
operations before
income tax benefit (6,261) (4,550) (3,709) (1,037)
Income tax benefit (1,178) (1,567) (974) (354)
Loss from continuing
operations, net
of taxes (5,083) (2,983) (2,735) (683)
Income (loss) from
discontinued
operations, net of
taxes (1,803) 185 (513) 168
Gain on sale of
discontinued business,
net of taxes 7,501 7,501
Net income (loss) 615 (2,798) 4,253 (515)
Accrued preferred
stock dividend (37) (19) (9) (19)
Net income (loss)
applicable to common
stockholders $578 ($2,817) $4,244 ($534)
Income (loss) per
common share :
Basic & Diluted:
From continuing
operations, net
of taxes ($1.67) ($0.92) ($0.95) ($0.22)
From discontinued
operations, net
of taxes ($0.59) $0.06 ($0.18) $0.05
From sale of
discontinued
operations, net
of taxes $2.45 $2.59 $0.00
Net income (loss)
per share $0.19 ($0.86) $1.46 ($0.17)
MERCURY AIR GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENT SELECTED DATA
For the Twelve and Three Month Periods ended June 30, 2004 and 2003
(Unaudited)
(all amounts in thousands)
Twelve Months Ended Three Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenue
MercFuel $322,631 $280,136 $94,436 $62,025
Mercury Air Cargo 39,549 32,691 10,243 7,851
Maytag Aircraft 23,281 24,421 5,792 5,911
Total Revenue $385,461 $337,248 $110,471 $75,787
Gross Margin
MercFuel $6,080 $5,926 $1,274 $1,185
Mercury Air Cargo 1,800 2,585 444 513
Maytag Aircraft 5,146 4,598 1,237 1,238
Total Gross Margin $13,026 $13,109 $2,955 $2,936
Depreciation and
Amortization
MercFuel $469 $318 $117 $105
Mercury Air Cargo 1,725 1,887 324 342
Maytag Aircraft 414 349 165 84
Other 220 228 53 93
Total Dep & Amort $2,828 $2,782 $659 $624
Sales Volume
(thousands of gals)
MercFuel
Commercial Aviation 239,244 258,455 60,273 57,734
Corporate/Fractional
Ownership 39,204 28,418 10,668 7,653
Total 278,448 286,873 70,941 65,387
MERCURY AIR GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(all amounts in thousands of dollars)
ASSETS June 30, June 30,
2004 2003
CURRENT ASSETS:
Cash and cash equivalents $4,690 $2,802
Restricted cash $15,414
Trade accounts receivable 50,974 46,753
Inventories, principally aviation fuel 1,165 4,422
Prepaid expenses and other current assets 5,696 5,241
Deferred taxes, current 1,451 901
TOTAL CURRENT ASSETS 79,390 60,119
PROPERTY, EQUIPMENT AND LEASEHOLDS, net 10,349 58,844
NOTES RECEIVABLE 521 1,815
DEFERRED INCOME TAXES, LONG TERM 611 2,284
GOODWILL 4,389 4,389
OTHER INTANGIBLE ASSETS 700 1,033
RESTRICTED CASH 8,989
OTHER ASSETS 1,008 4,471
TOTAL ASSETS $105,957 $132,955
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $33,552 $34,677
Accrued expenses and other current liabilities 11,825 9,244
Current portion of long-term debt 139 4,194
TOTAL CURRENT LIABILITIES 45,516 48,115
LONG-TERM DEBT 17,790 25,501
SENIOR SUBORDINATED NOTE 23,445
DEFERRED GAIN 8,130
OTHER NONCURRENT LIABILITIES 669 918
DEFERRED RENT 1,257 1,885
MINORITY INTEREST 182 180
TOTAL LIABILITIES 73,544 100,044
MANDATORILY REDEEMABLE PREFERRED STOCK 518 481
STOCKHOLDERS' EQUITY:
Common Stock - $ .01 par value;
authorized 18,000,000 shares; 30 33
Additional paid-in capital 20,737 22,496
Retained earnings 14,596 14,018
Accumulated other comprehensive loss (46) (86)
Treasury stock (120)
Notes receivable from officers (3,302) (4,031)
TOTAL STOCKHOLDERS' EQUITY 31,895 32,430
TOTAL LIABILITIES, PREFERRED STOCK, AND
STOCKHOLDERS' EQUITY $105,957 $132,955
For further information, please contact: Company, Joseph Czyzyk of Mercury Air
Group, Inc., +1-310-827-2737; or Investor Relations, David Herbst or Larry
Barrios of The MWW Group, +1-213- 486-6560, ext. 317, for Mercury Air Group,
Inc.
DATASOURCE: Mercury Air Group, Inc.
CONTACT: Company, Joseph Czyzyk of Mercury Air Group, Inc.,
+1-310-827-2737; or Investor Relations, David Herbst or Larry Barrios of The
MWW Group, +1-213- 486-6560, ext. 317, for Mercury Air Group, Inc.
Web site: http://www.mercuryairgroup.com/