UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

 

MAIR HOLDINGS, INC.

Incorporated under the laws of Minnesota

 

41-1616499

(I.R.S. Employer ID No.)

Fifth Street Towers, Suite 1720

150 South Fifth Street

Minneapolis, MN  55402

(612) 333-0021

 

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  ý    No  o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

 

Yes  o    No  ý

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

 

 

CAUTIONARY STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

 

Statements in this Quarterly Report on Form 10-Q under the caption “Management’s Discussion and Analysis of  Financial Condition and Results of Operations” and elsewhere in this report, as well as oral statements that may be made by the Company or its subsidiaries or by officers, directors or employees of the Company or its subsidiaries acting on the Company’s behalf, that are not historical fact may constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward-looking statements.  The Company cautions the public not to place undue reliance on forward-looking statements, which may be based on assumptions and anticipated events that do not materialize.  Factors which could cause the Company’s actual results to differ from forward-looking statements include material changes in the relationship between the Company, its subsidiaries and Northwest Airlines (“Northwest”); changes in Northwest’s air service; reduced passenger and flight activity; a slow-down in the overall United States economy; expenses associated with restructuring operations; increased operating costs due to heightened security measures; the impact of United States government programs on operations; changes in regulations affecting the airline industry, including those issued by the Department of Transportation (“DOT”), Transportation Security Administration (“TSA”) and Federal Aviation Administration (“FAA”); seasonal factors; labor relations, including labor shortages, slow downs and/or work stoppages; and ongoing legal proceedings.  All subsequent written or oral forward-looking statements attributable to the Company or persons acting on the Company's behalf are expressly qualified by the factors described above.

 

2

 

Part I.  FINANCIAL INFORMATION

 

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

 

MAIR HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share information)

(Unaudited)

 

		December 31 2003			March 31 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	59,092		$	60,908
Short term investments		65,297			40,464
Accounts receivable, net of reserves of $566 and $389		31,220			40,682
Inventories, net		8,439			8,459
Prepaid expenses and deposits		6,163			4,925
Deferred income taxes and other		10,740			10,706
Total current assets		180,951			166,144
PROPERTY AND EQUIPMENT:
Flight equipment		79,595			78,549
Other property and equipment		42,115			37,916
Less: Accumulated depreciation and amortization		(81,016		)	(72,667		)
Net property and equipment		40,694			43,798
LONG TERM INVESTMENTS		34,111			21,762
OTHER ASSETS, net		14,906			15,706
		$	270,662		$	247,410

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

3

 

MAIR HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS (Continued)

(In thousands, except share information)

(Unaudited)

 

		December 31 2003			March 31 2003
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	15,769		$	15,285
Accrued liabilities:
Payroll		18,446			14,295
Maintenance		19,410			16,031
Deferred income		2,593			2,619
Other, primarily property and income taxes		20,587			14,445
Total current liabilities		76,805			62,675
OTHER NONCURRENT LIABILITIES		6,845			6,790
COMMITMENTS AND CONTINGENCIES (Notes 2 and 12)
SHAREHOLDERS’ EQUITY:
Common stock, $.01 par value; 60,000,000 shares authorized, 20,348,141 and 20,320,641 shares issued and outstanding		203			203
Paid-in capital		51,546			50,615
Warrants		16,500			16,500
Accumulated other comprehensive income		53			116
Retained earnings		118,710			110,511
Total shareholders’ equity		187,012			177,945
		$	270,662		$	247,410

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

4

 

MAIR HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share information)

(Unaudited)

 

		Three Months Ended December 31						Nine Months Ended December 31
		2003			2002			2003			2002
OPERATING REVENUES:
Passenger		$	107,161		$	106,675		$	323,606		$	328,747
Freight and other		8,166			6,146			23,216			16,063
Total operating revenues		115,327			112,821			346,822			344,810
OPERATING EXPENSES:
Wages and benefits		37,660			33,762			109,443			99,518
Aircraft fuel		5,707			5,068			17,183			17,174
Aircraft maintenance		21,399			20,227			60,354			59,692
Aircraft rents		26,517			27,024			80,059			80,548
Landing fees		1,867			1,791			5,437			5,580
Insurance and taxes		2,261			3,824			7,759			12,452
Depreciation and amortization		4,186			4,608			13,019			14,179
Administrative and other		15,057			15,122			41,876			43,098
Total operating expenses		114,654			111,426			335,130			332,241
Operating income		673			1,395			11,692			12,569
NONOPERATING INCOME (EXPENSE):
Interest income		450			631			1,268			2,083
Other, net		36			(38		)	2,557			(2,790		)
Other nonoperating income (expense), net		486			593			3,825			(707		)
Income before provision for income taxes		1,159			1,988			15,517