Attached files
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| 8-K - FORM 8-K - Avantair, Inc | d297876d8k.htm |
Exhibit 99.1
Avantair, Inc. Reports Second Quarter Fiscal 2012
Financial Results
Revenue and Adjusted EBITDA Improvement Continue
CLEARWATER, Fla. – February 8, 2012 — Avantair, Inc. (OTCBB: AAIR), the industry leader of fractional aircraft ownership in the light jet cabin category and the only publicly traded stand-alone private aircraft operator, today announced financial results for its second quarter of fiscal 2012, which ended December 31, 2011.
Second Quarter Fiscal 2012 Performance:
| • | Total revenue grew 4.9% to $38.4 million, compared with $36.6 million in fiscal 2011 second quarter. |
| • | Total number of revenue generating flight hours flown increased by 3.4% to 11,441, compared with 11,061 hours flown in fiscal 2011 second quarter. |
| • | Non-GAAP Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and stock-based compensation) of $1.6 million, achieving a $3.1 million improvement over fiscal 2011 second quarter. In addition, the Company achieved a $1.7 million improvement over fiscal 2012 first quarter. |
| • | Net loss attributable to common stockholders was ($1.2) million, or ($.05) per share, based on 26.5 million weighted average shares outstanding, compared with a net loss of ($4.4) million, or ($0.17) per share, based on 26.4 million weighted average shares outstanding in fiscal 2011 second quarter. |
Steven Santo, Chief Executive Officer of Avantair said, “We are pleased with our second quarter revenue growth and improved operating performance in light of a difficult new fractional share sales environment. The planned improvements, efficiencies and back office cost reductions positively impacted our quarter-over-quarter results. As we have consistently communicated, our focus remains on providing our owners with unparalleled service, while safety remains our number one priority.”
Avantair, Inc.
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Conference Call
Chief Executive Officer Steven Santo and Executive Vice President and Chief Financial Officer Stephen Wagman will hold a conference call with the financial community today, Wednesday, February 8, 2012 at 5:00 PM ET to review the Company’s financial results and provide an update on business developments.
Interested parties may participate in the conference call by dialing: 1 (888) 895-5271 U.S. Toll Free and 1 (847) 619-6547 U.S. Toll. For international callers: 1 (847) 619-6547 Toll. When prompted, give Confirmation Number: 31679482 or ask for “Avantair’s Fiscal 2012 Second Quarter Earnings Conference Call.” The live conference call will also be webcast on the Company’s website at www.avantair.com under the Investors section.
A telephonic replay of the conference call may be accessed approximately two hours after the call through February 22, 2012, by dialing 1 (888) 843-7419 US Toll Free or 1 (630) 652-3042 US Toll. For international callers: 1 (630) 652-3042 Toll. When prompted key in the Passcode: 31679482#.
Use of Non-GAAP Measure of Performance
The following table reflects the reconciliation of net loss, prepared in conformity with GAAP to the non-GAAP financial measure of Adjusted EBITDA:
| Three Months Ended December 31, |
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| 2011 | 2010 | |||||||
| Net Loss |
$ | (872,259 | ) | $ | (4,066,365 | ) | ||
| Add: |
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| Depreciation and amortization |
1,059,148 | 1,261,559 | ||||||
| Interest expense |
1,240,333 | 1,217,517 | ||||||
| Stock-based compensation |
181,445 | 94,116 | ||||||
| Subtract: |
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| Interest and other income |
(14,478 | ) | (23,031 | ) | ||||
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| Adjusted EBITDA |
$ | 1,594,189 | $ | (1,516,204 | ) | |||
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Avantair, Inc.
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The Company believes that the non-GAAP financial measure of Adjusted EBITDA is useful to investors as it excludes other income and expense items that do not directly reflect the underlying performance of the Company’s business operations. This measure is a supplement to accounting principles generally accepted in the U.S. used to prepare the Company’s financial statements and should not be viewed as a substitute for GAAP measures. In addition, the Company’s non-GAAP measure may not be comparable to non-GAAP measures of other companies.
About Avantair
Avantair, the sole North American provider of fractional shares, leases and flight time cards in the Piaggio Avanti aircraft, and the only publicly traded stand-alone private aircraft operator, is headquartered in Clearwater, FL, with more than 500 employees. The Company offers private travel solutions for individuals and businesses traveling within its service area, which includes the continental U.S., parts of Canada, the Caribbean and Mexico, at a fraction of the cost of whole aircraft ownership. The Company currently manages a fleet of 57 aircraft. For more information about Avantair, please visit: www.avantair.com.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Avantair’s future financial or business performance, strategies and expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions. Avantair cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and Avantair assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
Avantair, Inc.
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In addition to factors previously disclosed in Avantair’s filings with the Securities and Exchange Commission (“SEC”) and those as may be identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: general economic and business conditions in the U.S. and abroad, changing interpretations of accounting principles, generally accepted in the U.S., changes in market acceptance of the company’s products, inquiries and investigations and related litigation, fluctuations in customer demand, management of rapid growth, intensity of competition. The information set forth herein should be read in light of such risks. Avantair does not assume any obligation to update the information contained in this press release.
Avantair’s filings with the SEC, accessible on the SEC’s website at http://www.sec.gov, discuss these factors in more detail and identify additional factors that can affect forward-looking statements.
| Contact: | ||
| Avantair, Inc. | Maryann Aarseth | |
| Stephen Wagman | Public Relations/ | |
| EVP and Chief Financial Officer | Corporate Communications | |
| 727.538.7909 | 727.538.7948 | |
| swagman@avantair.com | maarseth@avantair.com |
Avantair, Inc.
Page 5 of 7
AVANTAIR, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
ASSETS
| December 31, 2011 |
June 30, 2011 | |||||||
| (Unaudited) | ||||||||
| Current Assets |
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| Cash and cash equivalents |
$ | 12,278,925 | $ | 5,643,305 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $667,732 and $231,357, respectively |
8,678,802 | 12,202,020 | ||||||
| Inventory |
380,780 | 442,634 | ||||||
| Current portion of aircraft costs related to fractional share sales |
14,631,948 | 20,770,142 | ||||||
| Prepaid expenses and other current assets |
7,866,197 | 7,012,555 | ||||||
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| Total current assets |
43,836,652 | 46,070,656 | ||||||
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| Long-Term Assets |
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| Aircraft costs related to fractional share sales, net of current portion |
4,571,640 | 9,913,793 | ||||||
| Property and equipment, at cost, net of accumulated depreciation and amortization of $22,762,834 and $21,235,649 respectively |
41,726,678 | 36,733,929 | ||||||
| Cash - restricted |
2,363,042 | 2,361,851 | ||||||
| Deposits on aircraft |
7,163,906 | 9,500,988 | ||||||
| Deferred maintenance on aircraft engines |
369,610 | 266,087 | ||||||
| Goodwill |
1,141,159 | 1,141,159 | ||||||
| Other assets |
7,055,465 | 4,950,035 | ||||||
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| Total long-term assets |
64,391,500 | 64,867,842 | ||||||
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| Total assets |
$ | 108,228,152 | $ | 110,938,498 | ||||
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Avantair, Inc.
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AVANTAIR, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS’ DEFICIT
| December 31, 2011 |
June 30, 2011 | |||||||
| (Unaudited) | ||||||||
| Current Liabilities |
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| Accounts payable |
$ | 7,341,648 | $ | 5,908,979 | ||||
| Accrued liabilities |
13,018,319 | 6,181,807 | ||||||
| Customer deposits |
3,417,956 | 2,082,160 | ||||||
| Short-term debt |
12,000,000 | 13,000,000 | ||||||
| Current portion of long-term debt |
7,625,004 | 7,856,117 | ||||||
| Current portion of deferred revenue related to fractional aircraft share sales |
16,810,335 | 23,550,037 | ||||||
| Unearned management fee, flight hour card and club membership revenue |
52,467,748 | 51,437,316 | ||||||
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| Total current liabilities |
112,681,010 | 110,016,416 | ||||||
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| Long-Term Liabilities |
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| Long-term debt, net of current portion |
12,689,508 | 8,198,326 | ||||||
| Deferred revenue related to fractional aircraft share sales, net of current portion |
11,808,723 | 18,014,232 | ||||||
| Unearned club membership revenue, net of current portion |
596,983 | 1,353,618 | ||||||
| Other liabilities |
2,684,559 | 2,658,945 | ||||||
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| Total long-term liabilities |
27,779,773 | 30,225,121 | ||||||
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| Total liabilities |
140,460,783 | 140,241,537 | ||||||
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| COMMITMENTS AND CONTINGENCIES |
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| Series A convertible preferred stock, $.0001 par value, authorized 300,000 shares; 152,000 shares issued and outstanding |
14,753,729 | 14,708,088 | ||||||
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| STOCKHOLDERS’ DEFICIT |
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| Preferred stock, $.0001 par value, authorized 700,000 shares; none issued |
— | — | ||||||
| Common stock, Class A, $.0001 par value, 75,000,000 shares authorized, 26,484,585 and 26,418,246 shares issued and outstanding, respectively |
2,649 | 2,642 | ||||||
| Additional paid-in capital |
57,510,754 | 57,212,099 | ||||||
| Accumulated deficit |
(104,499,763 | ) | (101,225,868 | ) | ||||
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| Total stockholders’ deficit |
(46,986,360 | ) | (44,011,127 | ) | ||||
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| Total liabilities and stockholders’ deficit |
$ | 108,228,152 | $ | 110,938,498 | ||||
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Avantair, Inc.
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AVANTAIR, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended December 31, |
Six Months Ended December 31, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue |
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| Fractional aircraft shares sold and lease revenue |
$ | 7,410,894 | $ | 8,778,578 | $ | 14,669,191 | $ | 17,976,401 | ||||||||
| Management and maintenance fees |
20,993,680 | 18,813,477 | 41,266,770 | 37,232,183 | ||||||||||||
| Flight hour card and club membership revenue |
8,767,161 | 7,257,098 | 17,762,631 | 13,414,493 | ||||||||||||
| Other revenue |
1,205,658 | 1,735,386 | 2,890,087 | 3,743,578 | ||||||||||||
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| Total revenue |
38,377,393 | 36,584,539 | 76,588,679 | 72,366,655 | ||||||||||||
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| Operating expenses |
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| Cost of fractional aircraft shares sold |
5,820,614 | 7,526,245 | 12,270,578 | 15,637,690 | ||||||||||||
| Cost of flight operations |
17,186,287 | 17,689,159 | 34,742,451 | 35,342,272 | ||||||||||||
| Cost of fuel |
5,052,842 | 4,597,316 | 9,670,354 | 8,535,888 | ||||||||||||
| General and administrative expenses |
7,321,781 | 6,674,368 | 15,288,451 | 13,554,219 | ||||||||||||
| Selling expenses |
1,583,125 | 1,707,771 | 3,451,054 | 3,226,525 | ||||||||||||
| Depreciation and amortization |
1,059,148 | 1,261,559 | 1,962,961 | 2,518,356 | ||||||||||||
| Gain on debt extinguishment |
— | — | (438,621 | ) | — | |||||||||||
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| Total operating expenses |
38,023,797 | 39,456,418 | 76,947,228 | 78,814,950 | ||||||||||||
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| Income (loss) from operations |
353,596 | (2,871,879 | ) | (358,549 | ) | (6,448,295 | ) | |||||||||
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| Other income (expenses) |
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| Interest and other income |
14,478 | 23,031 | 80,476 | 34,153 | ||||||||||||
| Interest expense |
(1,240,333 | ) | (1,217,517 | ) | (2,296,456 | ) | (2,466,531 | ) | ||||||||
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| Total other expenses |
(1,225,855 | ) | (1,194,486 | ) | (2,215,980 | ) | (2,432,378 | ) | ||||||||
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| Net loss |
(872,259 | ) | (4,066,365 | ) | (2,574,529 | ) | (8,880,673 | ) | ||||||||
| Preferred stock dividend and accretion of expenses |
(372,522 | ) | (372,383 | ) | (745,007 | ) | (744,729 | ) | ||||||||
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| Net loss attributable to common stockholders |
$ | (1,244,781 | ) | $ | (4,438,748 | ) | $ | (3,319,536 | ) | $ | (9,625,402 | ) | ||||
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| Loss per common share: |
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| Basic and diluted |
$ | (0.05 | ) | $ | (0.17 | ) | $ | (0.13 | ) | $ | (0.37 | ) | ||||
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| Weighted-average common shares outstanding: |
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| Basic and diluted |
26,450,305 | 26,381,664 | 26,436,770 | 26,368,084 | ||||||||||||
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