SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended: March 31, 2003 |
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 0-26582
WORLD AIRWAYS, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE |
94-1358276 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
The HLH Building, 101 World Drive, Peachtree City, GA 30269
(Address of Principal Executive Offices)
(770) 632-8000
(Registrant’s telephone number, including area code)
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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The number of shares of the registrant’s Common Stock outstanding on April 30, 2003 was 11,077,098.
WORLD AIRWAYS, INC.
MARCH 31, 2003 QUARTERLY REPORT ON FORM 10-Q
| Page | ||||
| PART I—FINANCIAL INFORMATION |
||||
| Item 1. |
Financial Statements |
|||
| Condensed Consolidated Balance Sheets, March 31, 2003 (Unaudited) and December 31, 2002 |
3 | |||
| 5 | ||||
| 6 | ||||
| 7 | ||||
| 8 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
11 | ||
| Item 3. |
13 | |||
| Item 4. |
14 | |||
| PART II—OTHER INFORMATION |
||||
| Item 4. |
14 | |||
| Item 6. |
14 | |||
2
ITEM 1. FINANCIAL STATEMENTS
WORLD AIRWAYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands)
| March 31, 2003 |
December 31, 2002 | |||||
| (unaudited) |
||||||
| CURRENT ASSETS |
||||||
| Cash and cash equivalents, including restricted cash of $893 at March 31, 2003 and $665 at December 31, 2002 |
$ |
16,828 |
$ |
21,504 | ||
| Accounts receivable, less allowance for doubtful accounts of $255 at March 31, 2003 and December 31, 2002 |
|
38,569 |
|
28,391 | ||
| Prepaid expenses and other current assets |
|
6,704 |
|
5,569 | ||
| Total current assets |
|
62,101 |
|
55,464 | ||
| EQUIPMENT AND PROPERTY |
||||||
| Flight and other equipment |
|
75,937 |
|
74,868 | ||
| Equipment under capital leases |
|
9,463 |
|
9,463 | ||
|
|
85,400 |
|
84,331 | |||
| Less: accumulated depreciation and amortization |
|
43,943 |
|
42,475 | ||
| Net equipment and property |
|
41,457 |
|
41,856 | ||
| LONG-TERM OPERATING DEPOSITS |
|
18,560 |
|
18,513 | ||
| OTHER ASSETS AND DEFERRED CHARGES, NET |
|
1,550 |
|
1,429 | ||
| TOTAL ASSETS |
$ |
123,668 |
$ |
117,262 | ||
(Continued)
3
WORLD AIRWAYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(continued)
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
(in thousands except share amounts)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (unaudited) |
||||||||
| CURRENT LIABILITIES |
||||||||
| Notes payable |
$ |
13,745 |
|
$ |
17,096 |
| ||
| Accounts payable |
|
32,608 |
|
|
30,497 |
| ||
| Accrued rent |
|
15,004 |
|
|
17,993 |
| ||
| Unearned revenue |
|
3,229 |
|
|
976 |
| ||
| Accrued maintenance |
|
3,552 |
|
|
2,178 |
| ||
| Accrued salaries and wages |
|
11,426 |
|
|
10,000 |
| ||
| Accrued taxes |
|
2,320 |
|
|
2,663 |
| ||
| Other accrued liabilities |
|
2,080 |
|
|
2,820 |
| ||
| Total current liabilities |
|
83,964 |
|
|
84,223 |
| ||
| LONG-TERM OBLIGATIONS, NET OF CURRENT MATURITIES |
|
40,545 |
|
|
40,545 |
| ||
| OTHER LIABILITIES |
||||||||
| Deferred gain from sale-leaseback transactions, net of accumulated amortization of $2,288 at March 31, 2003 and $2,005 at December 31, 2002 |
|
3,626 |
|
|
3,909 |
| ||
| Accrued post-retirement benefits |
|
3,235 |
|
|
3,235 |
| ||
| Deferred rent |
|
14,504 |
|
|
14,217 |
| ||
| Total other liabilities |
|
21,365 |
|
|
21,361 |
| ||
| TOTAL LIABILITIES |
|
145,874 |
|
|
146,129 |
| ||
| STOCKHOLDERS’ DEFICIENCY |
||||||||
| Preferred stock, $.001 par value (5,000,000 shares authorized; no shares issued or outstanding) |
|
— |
|
|
— |
| ||
| Common stock, $.001 par value (100,000,000 shares authorized;12,158,341 shares issued; 11,077,098 shares outstanding at March 31, 2003 and December 31, 2002) |
|
12 |
|
|
12 |
| ||
| Additional paid-in capital |
|
24,407 |
|
|
24,361 |
| ||
| Accumulated deficit |
|
(33,768 |
) |
|
(40,383 |
) | ||
| Treasury stock, at cost (1,081,243 shares at March 31, 2003 and December 31, 2002) |
|
(12,857 |
) |
|
(12,857 |
) | ||
| Total stockholders’ deficiency |
|
(22,206 |
) |
|
(28,867 |
) | ||
| COMMITMENTS AND CONTINGENCIES |
||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY |
$ |
123,668 |
|
$ |
117,262 |
| ||
See accompanying Notes to Condensed Consolidated Financial Statements
4
WORLD AIRWAYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2003 and 2002
(in thousands except per share data)
(unaudited)
| 2003 |
2002 |
|||||||
| OPERATING REVENUES |
||||||||
| Flight operations |
$ |
123,277 |
|
$ |
87,616 |
| ||
| Other |
|
366 |
|
|
423 |
| ||
| Total operating revenues |
|
123,643 |
|
|
88,039 |
| ||
| OPERATING EXPENSES |
||||||||
| Flight |
|
34,432 |
|
|
25,223 |
| ||
| Maintenance |
|
23,220 |
|
|
10,289 |
| ||
| Aircraft costs |
|
21,896 |
|
|
21,166 |
| ||
| Fuel |
|
21,361 |
|
|
12,177 |
| ||
| Flight operations subcontracted to other carriers |
|
92 |
|
|
509 |
| ||
| Commissions |
|
4,659 |
|
|
4,083 |
| ||
| Depreciation and amortization |
|
1,472 |
|
|
1,189 |
| ||
| Sales, general and administrative |
|
8,848 |
|
|
7,151 |
| ||
| Total operating expenses |
|
115,980 |
|
|
81,787 |
| ||
| OPERATING INCOME |
|
7,663 |
|
|
6,252 |
| ||
| OTHER INCOME (EXPENSE) |
||||||||
| Interest expense |
|
(1,234 |
) |
|
(1,177 |
) | ||
| Interest income |
|
97 |
|
|
135 |
| ||
| Other, net |
|
89 |
|
|
(282 |
) | ||
| Total other expense |
|
(1,048 |
) |
|
(1,324 |
) | ||
| NET EARNINGS |
$ |
6,615 |
|
$ |
4,928 |
| ||
| BASIC EARNINGS PER SHARE |
||||||||
| Net earnings |
$ |
0.60 |
|
$ |
0.45 |
| ||
| Weighted average shares outstanding |
|
11,078 |
|
|
10,921 |
| ||
| DILUTED EARNINGS PER SHARE |
||||||||
| Net earnings |
$ |
0.47 |
|
$ |
0.37 |
| ||
| Weighted average shares outstanding |
|
15,750 |
|
|
15,482 |
| ||
See accompanying Notes to Condensed Consolidated Financial Statements
5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS’ DEFICIENCY
Three Months Ended March 31, 2003
(in thousands except share amounts)
(unaudited)
| Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Treasury Stock, at Cost |
Total Stockholders’ Deficiency |
||||||||||||||
| Balance at December 31, 2002 |
$ |
12 |
$ |
24,361 |
$ |
(40,383 |
) |
$ |
(12,857 |
) |
$ |
(28,867 |
) | |||||
| Amortization of warrants |
|
— |
|
46 |
|
— |
|
|
— |
|
|
46 |
| |||||
| Net earnings |
|
— |
||||||||||||||||