SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] |
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 |
[ ] | Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 | |
For the Transition period from to |
Commission File No. 1-7134
MERCURY AIR GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware | 11-1800515 | |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
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5456 McConnell Avenue, Los Angeles, CA | 90066 | |
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(Address of principal executive offices) | (Zip Code) |
(310) 827-2737
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 the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date.
Title |
Number of Shares Outstanding As of February 11, 2002 |
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Common Stock, $0.01 Par Value | 6,577,380 |
MERCURY AIR GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
DECEMBER 31, | JUNE 30, | |||||||||||
2001 | 2001 | |||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS: |
||||||||||||
Cash and cash equivalents |
$ | 3,215,000 | $ | 3,886,000 | ||||||||
Trade accounts receivable, net of allowance for doubtful accounts
of $2,270,000 at 12/31/01 and $1,653,000 at 6/30/01 |
44,062,000 | 53,530,000 | ||||||||||
Inventories, principally aviation fuel |
3,136,000 | 4,069,000 | ||||||||||
Prepaid expenses and other current assets |
5,643,000 | 2,882,000 | ||||||||||
Net assets of discontinued operations (Note 2) |
4,338,000 | |||||||||||
Total current assets |
56,056,000 | 68,705,000 | ||||||||||
PROPERTY, EQUIPMENT AND LEASEHOLDS , net of accumulated
depreciation and amortization of $54,695,000 at 12/31/01 and $52,165,000
at 6/30/01 |
67,231,000 | 71,779,000 | ||||||||||
NOTES RECEIVABLE |
1,784,000 | 1,510,000 | ||||||||||
OTHER ASSETS |
8,237,000 | 9,140,000 | ||||||||||
$ | 133,308,000 | $ | 151,134,000 | |||||||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||
CURRENT LIABILITIES: |
||||||||||||
Accounts payable |
$ | 21,011,000 | $ | 31,668,000 | ||||||||
Accrued expenses and other current liabilities |
9,011,000 | 10,357,000 | ||||||||||
Income tax payable |
317,000 | 96,000 | ||||||||||
Current portion of long-term debt |
7,246,000 | 7,461,000 | ||||||||||
Total current liabilities |
37,585,000 | 49,582,000 | ||||||||||
LONG-TERM DEBT |
37,694,000 | 44,560,000 | ||||||||||
DEFERRED INCOME TAXES |
401,000 | 380,000 | ||||||||||
SENIOR SUBORDINATED NOTE (Note 5) |
23,123,000 | 23,030,000 | ||||||||||
COMMITMENTS AND CONTINGENCIES (Note 4) |
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STOCKHOLDERS EQUITY: |
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Preferred Stock $.01 par value; authorized 3,000,000 shares;
no shares outstanding |
||||||||||||
Common Stock $ .01 par value; authorized 18,000,000 shares;
outstanding 6,577,380 shares at 12/31/01; |
||||||||||||
outstanding 6,576,680 shares at 6/30/01 |
66,000 | 66,000 | ||||||||||
Additional paid-in capital |
21,442,000 | 21,442,000 | ||||||||||
Retained earnings |
13,758,000 | 12,835,000 | ||||||||||
Accumulated
other comprehensive loss (Note 8) |
(228,000 | ) | (228,000 | ) | ||||||||
Notes receivable from sale of stock |
(533,000 | ) | (533,000 | ) | ||||||||
Total stockholders equity |
34,505,000 | 33,582,000 | ||||||||||
$ | 133,308,000 | $ | 151,134,000 | |||||||||
See accompanying notes to consolidated financial statements
2
MERCURY AIR GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Six Months Ended | Three Months Ended | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
2001 | 2000 | 2001 | 2000 | |||||||||||||||||||||
Sales and Revenues: |
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Sales |
$ | 149,902,000 | $ | 199,131,000 | $ | 69,459,000 | $ | 109,455,000 | ||||||||||||||||
Service revenues |
45,941,000 | 46,357,000 | 22,632,000 | 24,638,000 | ||||||||||||||||||||
195,843,000 | 245,488,000 | 92,091,000 | 134,093,000 | |||||||||||||||||||||
Costs and Expenses: |
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Cost of sales |
129,578,000 | 180,069,000 | 59,159,000 | 99,259,000 | ||||||||||||||||||||
Operating expenses |
50,427,000 | 45,943,000 | 24,840,000 | 24,384,000 | ||||||||||||||||||||
180,005,000 | 226,012,000 | 83,999,000 | 123,643,000 | |||||||||||||||||||||
Gross Margin (Excluding depreciation
and amortization) |
15,838,000 | 19,476,000 | 8,092,000 | 10,450,000 | ||||||||||||||||||||
Expenses (Income): |
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Selling, general and administrative |
4,435,000 | 4,156,000 | 2,487,000 | 2,124,000 | ||||||||||||||||||||
Provision for bad debts |
772,000 | 1,899,000 | 187,000 | 1,099,000 | ||||||||||||||||||||
Depreciation and amortization |
5,030,000 | 4,991,000 | 2,553,000 | 2,509,000 | ||||||||||||||||||||
Interest expense |
2,991,000 | 3,857,000 | 1,465,000 | 1,929,000 | ||||||||||||||||||||
Costs and expenses of stock offering (Note 1) |
985,000 | 985,000 | ||||||||||||||||||||||
Loss on sale of property |
71,000 | 71,000 | ||||||||||||||||||||||
Interest income |
(28,000 | ) | (36,000 | ) | (11,000 | ) | (6,000 | ) | ||||||||||||||||
14,256,000 | 14,867,000 | 7,737,000 | 7,655,000 | |||||||||||||||||||||
Income from Continuing Operations Before
Provision for Income Taxes |
1,582,000 | 4,609,000 | 355,000 | 2,795,000 | ||||||||||||||||||||
Provision for Income Taxes |
617,000 | 1,797,000 | 138,000 | 1,090,000 | ||||||||||||||||||||
Income from Continuing Operations |
965,000 | 2,812,000 | 217,000 | 1,705,000 | ||||||||||||||||||||
(Loss) Income from Discontinued Operations net of
income tax (benefit) charge of ($27,000) in 2001 and
$81,000 and $50,000 in 2000 |
(42,000 | ) | 126,000 | 77,000 | ||||||||||||||||||||
Net Income |
$ | 923,000 | $ | 2,938,000 | $ | 217,000 | $ | 1,782,000 | ||||||||||||||||
Net Income Per Common Share (Note 6): |
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Basic: |
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From Continuing Operations |
$ | 0.15 | $ | 0.43 | $ | 0.03 | $ | 0.26 | ||||||||||||||||
(Loss) Income from Discontinued Operations |
(0.01 | ) | 0.02 | 0.01 | ||||||||||||||||||||
Net income |
$ | 0.14 | $ | 0.45 | $ | 0.03 | $ | 0.27 | ||||||||||||||||
Diluted: |
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From Continuing Operations |
$ | 0.14 | $ | 0.42 | $ | 0.03 | $ | 0.25 | ||||||||||||||||
(Loss) Income from Discontinued Operations |
0.02 | 0.02 | ||||||||||||||||||||||
Net income |
$ | 0.14 | $ | 0.44 | $ | 0.03 | $ | 0.27 | ||||||||||||||||
See accompanying notes to consolidated financial statements
3
MERCURY AIR GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended December 31, | |||||||||||
2001 | 2000 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
$ | 923,000 | $ | 2,938,000 | |||||||
Less: (Loss) Income from discontinued operations |
(42,000 | ) | 126,000 | ||||||||
Income from continuing operations |
965,000 | 2,812,000 | |||||||||
Adjustments to derive cash flow from
Operating activities: |
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Loss on sale of property |
71,000 | ||||||||||
Bad debt expense |
772,000 | 1,899,000 | |||||||||
Depreciation and amortization |
5,030,000 | 4,991,000 | |||||||||
Deferred income taxes |
21,000 | 10,000 | |||||||||
Amortization of senior subordinated note discount |
93,000 | 93,000 | |||||||||
Changes in operating assets and liabilities: |
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Trade and other accounts receivable |
8,696,000 | (14,200,000 | ) | ||||||||
Inventories |
933,000 | (1,252,000 | ) | ||||||||
Prepaid expenses and other current assets |
(2,761,000 | ) | 554,000 | ||||||||
Accounts payable |
(10,657,000 | ) | 11,317,000 | ||||||||
Income taxes payable |
221,000 | 1,408,000 | |||||||||
Accrued expenses and other current liabilities |
(1,346,000 | ) | 1,860,000 | ||||||||
Net cash provided by operating activities |
2,038,000 | 9,492,000 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
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Net
decrease in other assets |
441,000 | 859,000 | |||||||||
Increase in notes receivable |
(274,000 | ) | (1,547,000 | ) | |||||||
Acquisition of businesses |
(10,400,000 | ) | |||||||||
Proceeds from sale of property |
2,078,000 | ||||||||||
Additions to property, equipment and leaseholds |
(2,169,000 | ) | (3,268,000 | ) | |||||||
Net cash provided by (used in) investing activities |
76,000 | (14,356,000 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from long-term debt |
11,969,000 | ||||||||||
Reduction of long-term debt |
(7,081,000 | ) | (5,955,000 | ) | |||||||
Reduction of note receivable from sale of stock |
75,000 | ||||||||||
Proceeds from exercise of stock options |
187,000 | ||||||||||
Net
cash (used in) provided by financing activities |
(7,081,000 | ) | 6,276,000 | ||||||||
Net Cash provided by (used in) Discontinued Operations |
4,296,000 | (117,000 | ) | ||||||||
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS FROM CONTINUING OPERATIONS |
(4,967,000 | ) | 1,412,000 | ||||||||
CASH AND CASH EQUIVALENTS, beginning of period |
3,886,000 | 2,143,000 | |||||||||
CASH AND CASH EQUIVALENTS, end of period |
$ | 3,215,000 | $ | 3,438,000 | |||||||
CASH PAID DURING THE PERIOD: |
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Interest |
$ | 2,943,000 | $ | 3,816,000 | |||||||
Income taxes paid (refunded) |
$ | 348,000 | ($715,000 | ) |
See accompanying notes to consolidated financial statements
4
MERCURY AIR GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
(Unaudited)
Note 1 General:
Business:
Mercury Air Group, Inc., ( the Company) a Delaware corporation, provides a broad range of services to the aviation industry through four principal operating units: fuel sales, cargo operations, fixed base operations and U.S. government contract services. Fuel sales include the sale of fuel and delivery of fuel primarily to domestic and international commercial airlines, business aviation and air freight airlines. Cargo operations consist of cargo handling, space logistics operations and general cargo sales agent services. Fixed base operations (FBOs) include fuel sales, into-plane services, ground support services, aircraft hangar and tie-down facilities and maintenance at certain locations for commercial, private, general aviation and military aircraft. Government contract services consist of aircraft refueling and fuel storage operations, base operating support (BOS) services, air terminal and ground handling services and weather observation and forecasting services performed principally for agencies of the United States government. Additionally, the Company had a fifth operating unit, RPA Airline Automation Services, Inc. (RPA) which was sold on July 3, 2001 and is classified as a discontinued operation (see Note 2).
MercFuel, Inc:
On March 7, 2001, the Company announced its plan to create an independent publicly traded company, MercFuel, Inc. (MercFuel). MercFuel was organized in Delaware on October 27, 2000 as a wholly owned subsidiary of the Company. On January 1, 2001, the Company transferred to MercFuel, the assets and liabilities of its Fuel Sales division. On May 16, 2001 and amended twice thereafter, MercFuel filed a registration statement related to the proposed sale of 1,200,000 shares of common stock (the Offering). On April 30, 2001, MercFuel agreed to sell 239,942 shares of common stock in a private placement at a per share price of $4.35. Due to market conditions, the Company was not able to complete the Offering and the proceeds of the private placement are expected to be returned. The Company incurred $985,000 of expenses associated with the Offering and private placement which were expensed in the quarter ended December 31, 2001. The Company has also elected to withdraw MercFuels application for registration of its common stock; depending on market conditions and other factors, the Company may re-file a registration statement at a later point in time. The Company may pursue various financing options with respect to MercFuel.
5
Basis of Presentation:
The accompanying unaudited financial statements reflect all adjustments (consisting of normal, recurring accruals only) which are necessary to fairly present the results for the interim periods. Such financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and therefore do not include all the information or footnotes necessary for a complete presentation. They should be read in conjunction with the Companys Annual Report on Form 10-K for the year ended June 30, 2001 and the notes thereto. The results of operations for the six months ended December 31, 2001 are not necessarily indicative of results for the full year.
New Accounting Pronouncements:
In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business Combinations. SFAS No. 141 requires the purchase method of accounting for business combinations initiated after June 30, 2001 and eliminates the pooling-of-interest method.
In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets. The Company has elected to adopt SFAS No. 142 on July 1, 2002. SFAS No. 142 requires, among other things, the discontinuance of goodwill amortization. In addition, the standard includes provisions for the reclassification of certain existing recognized intangibles as goodwill, reassessment of the useful lives of existing recognized intangibles, reclassification of certain intangibles out of previously reported goodwill and the identification of reporting units for purposes of assessing potential future impairments of goodwill. SFAS. No. 142 also requires the Company to complete a transitional goodwill impairment test six months from the date of adoption. The Company has not yet determined what impact the adoption will have on its financial statements.
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which supersedes FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. This new statement also supersedes certain aspects of APB Opinion No 30, Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, with regard to reporting the effects of a disposal of a segment of a business and will require expected future operating losses from discontinued operations to be reported in discontinued operations in the period incurred (rather than as of the measurement date as presently required by APB Opinion No 30). In addition, more dispositions may qualify for discontinued operations treatment. The provisions of this statement are required to be applied on July 1, 2002. The Company has not yet determined what effect this statement will have on its financial statements.
6
Note 2 Discontinued Operations:
On July 3, 2001, the Company completed the sale of its subsidiary, RPA Airline Automation Services, Inc. (RPA), which provides airline revenue accounting and management information software consisting of proprietary software programs which are marketed to foreign and domestic airlines. The Company has reclassified its consolidated financial statements to reflect the sale of RPA and to segregate the revenues, direct costs and expenses (excluding allocated costs), assets and liabilities, and cash flows of RPA. The net operating results, net assets and net cash flows of this business have been reported as Discontinued Operations in the accompanying consolidated financial statements. Summarized income statement information for the six months ended December 31, 2000 and balance sheet information as of June 30, 2001 are as follows:
Six Months Ended | ||||
December 31, | ||||
2000 | ||||
Service revenues |
$ | 2,839,000 | ||
Operating expense |
2,489,000 | |||
Gross margin |
350,000 | |||
Other expense |
143,000 | |||
Income before income taxes |
207,000 | |||
Income tax charge |
81,000 | |||
Net income |
$ | 126,000 | ||
June 30, 2001 | ||||
Current assets |
$ | 4,324,000 | ||
Total assets |
5,292,000 | |||
Current and total liabilities |
954,000 | |||
Net assets of discontinued operations |
4,338,000 |
During the quarter ended September 30, 2001, the Company recorded a loss of $42,000 related to sale of a building that had previously been RPAs corporate headquarters. At December 30, 2001, the Company no longer retained any significant assets or liabilities related to RPA.
Note 3 Income Taxes:
Income taxes have been computed based on the estimated annual effective income tax rate for the respective periods.
Note 4- Litigation:
In April 2000, Mercury filed a collection action against AER Global Logistics (AER) in the state of New York. AER filed a counterclaim for $1.0 million alleging among other things, tortious interference with contract. Mercury believes that this claim is without merit, and accordingly, does not believe this matter will have a significant impact on it financial position or operating results.
7
On April 3, 2001 Mercury received notice of an action filed by Skylink Express, Inc. in the Superior Court of Justice Ontario, Canada against Excel Cargo, Inc. and others for damages to aircraft occurring on November 30, 1999 and January 10, 2000 at Mirabel International Airport Quebec for a total amount of $2.5 million Canadian ($1.65 million U.S.) plus interest and fees. Mercury does not believe the outcome of this claim will have a significant impact on its financial position or operating results.
On November 30, 2001, the Company received notice of a counter-complaint filed by UPS against the Company and a third party seeking indemnification and reimbursement in the amount of $470,000 for the costs incurred as a result of the fuel spill at the Ontario, CA Airport. The Company has provided a response to UPS denying such claim and on September 28, 2001, filed a lawsuit seeking reimbursement for damages. Mercury does not believe the outcome of this claim will have a significant impact on its financial position or operating results.
In October 2001, Mercury received notice that the California Court of Appeals had rejected its appeal in the matter of Koye Fernandez v. Mercury Air Group, Inc. The case was settled in January 2002. The settlement amount of approximately $383,000 has been accrued as a liability at December 31, 2001.
The Company is also a defendant in certain litigation arising in the normal course of business. In the opinion of management, the ultimate resolution of such litigation will not have a significant effect on its financial position or operating results.
Note 5- Debt:
On September 10, 1999, the Company issued, in a private placement, a $24.0 million senior Subordinated 12% Note (the Note) due 2006 with detachable warrants to purchase 503,126 shares of the Companys common stock exercisable at $6.50 per share for seven years. On November 16, 2001, the agreement was amended to reduce the exercise price to $5.50 per share. The reduction in the exercise price of the warrants resulted in an insignificant change in the value of the warrants. The Note agreement contains covenants that, among other matters, limit senior indebtedness, the disposition of assets and unfunded capital expenditures. The covenants also included a ratio test for interest coverage, leverage, fixed charge coverage and debt service. On November 16, 2001 and effective September 30, 2001, the Company received a waiver pertaining to the interest coverage test and the agreement was amended by reducing the ongoing interest coverage test. The Company was in compliance with the debt covenants at December 31, 2001.
Note 6- Earnings Per Share:
Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares and potential common shares. Potential common shares include stock options and shares resulting from the assumed conversion of subordinated debentures, when dilutive.
8
Six Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||
December 31, 2001 | December 31, 2000 | December 31, 2001 | December 31, 2000 | |||||||||||||||||||||||||||||
Diluted | Basic | Diluted | Basic | Diluted | Basic | Diluted | Basic | |||||||||||||||||||||||||
Weighted average number of
common shares outstanding
during the period |
6,577,000 | 6,577,000 | 6,516,000 | 6,516,000 | 6,577,000 | 6,577,000 | 6,531,000 | 6,531,000 | ||||||||||||||||||||||||
Common share equivalents
resulting from the assumed
exercise of stock options |
156,000 | 173,000 | 149,000 | 151,000 | | |||||||||||||||||||||||||||
Common shares resulting
from the assumed
conversion of debentures |
32,000 | | 46,000 | | 32,000 | | 46,000 | | ||||||||||||||||||||||||
Weighted average number of
common and common
equivalent shares
outstanding during the
period |
6,765,000 | 6,577,000 | 6,735,000 | 6,516,000 | 6,758,000 | 6,577,000 | 6,728,000 | 6,531,000 | ||||||||||||||||||||||||
Note 7-Segment Reporting:
The Company operates and reports its activities through four principal units: 1) Fuel Sales, 2) Fixed Based Operations, 3) Cargo Operations and 4) Government Contract Services. Additionally, the Company had a fifth operating unit, RPA, which was sold on July 3, 2001. As a result, RPAs historical operating results have been reclassified as discontinued operations. The segment data for the quarter and six months ended December 31, 2000 included below has been restated to exclude amounts related to the RPA business unit.
9
Government | Corporate | |||||||||||||||||||||||
Fixed Base | Cargo | Contract | or | |||||||||||||||||||||
Fuel Sales | Operations | Operations | Services | Unallocated | Total | |||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||
Quarter Ended December 31, 2001 |
||||||||||||||||||||||||
Revenues |
$ | 54,610 | $ | 23,122 | $ | 7,548 | $ | 6,811 | $ | 92,091 | ||||||||||||||
Gross Margin |
1,417 | 3,943 | 1,021 | 1,711 | 8,092 | |||||||||||||||||||
Depreciation and Amortization |
16 | 1,468 | 721 | 191 | $ | 157 | 2,553 | |||||||||||||||||
Capital Expenditures |
11 | 832 | 843 | |||||||||||||||||||||
Segment Assets |
24,469 | 46,430 | 34,126 | 23,146 | 5,137 | 133,308 | ||||||||||||||||||
Quarter Ended December 31, 2000 |
||||||||||||||||||||||||
Revenues |
$ | 91,760 | $ | 26,444 | $ | 8,669 | $ | 7,220 | $ | 134,093 | ||||||||||||||
Gross Margin |
2,511 | 4,065 | 2,349 | 1,525 | 10,450 | |||||||||||||||||||
Depreciation and Amortization |
16 | 1,303 | 805 | 212 | $ | 173 | 2,509 | |||||||||||||||||
Capital Expenditures |
(26 | ) | 1,063 | 1,263 | 11 | 68 | 2,379 | |||||||||||||||||
Segment Assets |
26,532 | 39,331 | 34,598 | 20,557 | 38,979 | 159,997 | ||||||||||||||||||
Six Months Ended December 31, 2001 |
||||||||||||||||||||||||
Revenues |
$ | 119,110 | $ | 47,084 | $ | 14,686 | $ | 14,963 | $ | 195,843 | ||||||||||||||
Gross Margin |
3,256 | 7,389 | 1,455 | 3,738 | 15,838 | |||||||||||||||||||
Depreciation and Amortization |
31 | 2,811 | 1,481 | 384 | $ | 323 | 5,030 | |||||||||||||||||
Capital Expenditures |
11 | 2,057 | 97 | 4 | 2,169 | |||||||||||||||||||
Segment Assets |
24,469 | 46,430 | 34,126 | 23,146 | 5,137 | 133,308 | ||||||||||||||||||
Six Months Ended December 31, 2000 |
||||||||||||||||||||||||
Revenues |
$ | 164,905 | $ | 50,335 | $ | 15,728 | $ | 14,520 | $ | 245,488 | ||||||||||||||
Gross Margin |
4,534 | 7,810 | 4,071 | 3,061 | 19,476 | |||||||||||||||||||
Depreciation and Amortization |
31 | 2,583 | 1,606 | 428 | $ | 343 | 4,991 | |||||||||||||||||
Capital Expenditures |
11 | 12,300 | 1,332 | (43 | ) | 68 | 13,668 | |||||||||||||||||
Segment Assets |
26,532 | 39,331 | 34,598 | 20,557 | 38,979 | 159,997 |
Gross margin is used as the measure of profit and loss for segment reporting purposes as it is viewed by key decision makers as the principal operating indicator in measuring segment profitability. The key decision makers also view bad debt expense as an important measure of profit and loss. The predominant component of bad debt expense relates to Fuel Sales. Bad debt expense for Fuel Sales was approximately $87,000 and $999,000; total bad debt expense was $187,000 and $1,099,000 for the quarter ended December 2001 and December 2000, respectively. Bad debt expense for fuel sales was approximately $572,000 and $1,699,000; total bad debt expense was $772,000 and $1,899,000 for the six months ended December 31, 2001 and December 31, 2000, respectively.
Note 8 Comprehensive Income:
For the periods presented, adjustments to derive comprehensive income from net income were insignificant.
Note 9 Subsequent Event:
In January 2002, the Company sold land and building which comprise its corporate headquarters to CFK Realty Partners, LLC (CFK Partners) for $4.2 million, consisting of $2.8 million cash and a note receivable of $1.4 million. The note receivable accrues interest at 5% and is due on December 31, 2002, however, CFK Partners has options to extend the note through December 31, 2004. Concurrently, the Company also entered into a ten-year lease for the property.
CFK Partners is a partnership consisting of three of the Companys directors, one of whom also serves as the Companys Chief Executive Officer. In addition, CFK Partners also owns approximately 30% of the Companys outstanding shares.
10
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Results of Operations- Comparison of the Three Months Ended December 31, 2001 and December 31, 2000 and Comparison of the Six Months Ended December 31, 2001 and December 31, 2000.
The following tables set forth, for the periods indicated, the revenues and gross margin for each of the Companys four operating units, as well as selected other financial statement date.
Six Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||||||||||||||||||
($ in millions) | 2001 | 2000 | 2001 | 2000 | ||||||||||||||||||||||||||||
% of | % of | % of | % of | |||||||||||||||||||||||||||||
Total | Total | Total | Total | |||||||||||||||||||||||||||||
Amount | Revenues | Amount | Revenues | Amount | Revenues | Amount | Revenues | |||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Fuel sales |
$ | 119.1 | 60.8 | % | $ | 164.9 | 67.2 | % | $ | 54.6 | 59.3 | % | $ | 91.8 | 68.4 | % | ||||||||||||||||
FBOs |
47.1 | 24.0 | 50.4 | 20.5 | 23.1 | 25.1 | 26.4 | 19.7 | ||||||||||||||||||||||||
Cargo operations |
14.7 | 7.5 | 15.7 | 6.4 | 7.6 | 8.2 | 8.7 | 6.5 | ||||||||||||||||||||||||
Government contract
services |
15.0 | 7.7 | 14.5 | 5.9 | 6.8 | 7.4 | 7.2 | 5.4 | ||||||||||||||||||||||||
Total Revenue |
$ | 195.8 | 100.0 | % | $ | 245.5 | 100.0 | % | $ | 92.1 | 100.0 | % | $ | 134.1 | 100.0 | % | ||||||||||||||||
% of | % of | % of | % of | |||||||||||||||||||||||||||||
Unit | Unit | Unit | Unit | |||||||||||||||||||||||||||||
Amount | Revenues | Amount | Revenues | Amount | Revenues | Amount | Revenues | |||||||||||||||||||||||||
Gross Margin(1): |
||||||||||||||||||||||||||||||||
Fuel sales |
$ | 3.3 | 2.7 | % | $ | 4.5 | 2.7 | % | $ | 1.4 | 2.6 | % | $ | 2.5 | 2.7 | % | ||||||||||||||||
FBOs |
7.4 | 15.7 | 7.8 | 15.5 | 4.0 | 17.1 | 4.1 | 15.4 | ||||||||||||||||||||||||
Cargo operations |
1.5 | 9.9 | 4.1 | 25.9 | 1.0 | 13.5 | 2.4 | 27.1 | ||||||||||||||||||||||||
Government contract
services |
3.7 | 25.0 | 3.1 | 21.1 | 1.7 | 25.1 | 1.5 | 21.1 | ||||||||||||||||||||||||
Total Gross Margin |
$ | 15.9 | 8.1 | % | $ | 19.5 | 7.9 | % | $ | 8.1 | 8.8 | % | $ | 10.5 | 7.8 | % | ||||||||||||||||
% of | % of | % of | % of | |||||||||||||||||||||||||||||
Total | Total | Total | Total | |||||||||||||||||||||||||||||
Amount | Revenues | Amount | Revenues | Amount | Revenues | Amount | Revenues | |||||||||||||||||||||||||
Selling, general and
administrative |
$ | 4.4 | 2.3 | % | $ | 4.2 | 1.7 | % | $ | 2.5 | 2.7 | % | $ | 2.1 | 1.6 | % | ||||||||||||||||
Provision for bad debts |
0.8 | 0.4 | 1.9 | 0.8 | 0.2 | 0.2 | 1.1 | 0.8 | ||||||||||||||||||||||||
Depreciation and
amortization |
5.0 | 2.6 | 5.0 | 2.0 | 2.6 | 2.8 | 2.5 | 1.9 | ||||||||||||||||||||||||
Interest expense and other |
4.0 | 2.0 | 3.8 | 1.6 | 2.5 | 2.7 | 1.9 | 1.4 | ||||||||||||||||||||||||
Income before income taxes |
1.6 | 0.8 | 4.6 | 1.9 | 0.4 | 0.4 | 2.8 | 2.1 | ||||||||||||||||||||||||
Provision for income taxes |
0.6 | 0.3 | 1.8 | 0.7 | 0.2 | .02 | 1.1 | 0.8 | ||||||||||||||||||||||||
Income from continuing
operations before tax |
1.0 | 0.5 | 2.8 | 1.1 | 0.2 | 0.2 | 1.7 | 1.3 | ||||||||||||||||||||||||
(Loss) Income from
discontinued operations |
(0.1 | ) | | 0.1 | | | | 0.1 | 0.1 | |||||||||||||||||||||||
Net income |
$ | 0.9 | 0.5 | % | $ | 2.9 | 1.2 | % | $ | 0.2 | 0.2 | % | $ | 1.8 | 1.3 | % | ||||||||||||||||
(1) | Gross margin as used here and throughout Managements Discussion excludes depreciation and amortization and selling, general and administrative expense |
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Three Months ended December 31, 2001 Compared to December 31, 2000
Revenue decreased by 31.3% to $92.1 million in the current period from $134.1 million in the prior year primarily due to lower fuel prices and fuel volume in the current period. Gross margin decreased 22.6 % to $ 8.1 million in the current period from $10.5 million a year ago, primarily due to declines in Cargo operations and fuel sales. The declines were, in part, caused by the slow down in the airline industry resulting from the events of September 11, 2001.
Revenues from fuel sales represented 59.3% of total revenues in the current period compared to 68.4% of revenues a year ago. Revenues from fuel sales decreased 40.5% to $54.6 million from $91.8 million last year. The decrease from fuel sales was due to a decrease of 32% in the price of fuel sold and a decrease of 12.6% in volume sold. Gross margin from fuel sales was $1.4 million in the current period compared with $2.5 million last year primarily due to lower per gallon margins in the current period caused by a change in the customer mix. The volume decline was, in part, caused by the slow down in the airline industry resulting from the events of September 11, 2001. Revenues and gross margin from fuel sales includes the activities of Mercurys contract fueling business.
Revenues from FBOs decreased 12.6 % to $23.1 million in the current period compared to $26.4 million a year ago. The decrease in revenue was primarily due to a decline in fuel prices of 11% and a reduction in fuel volume of 5.0%. Gross margin decreased 3.0% in the current period to $4.0 million from $4.1 million last year due to lower volume.
Revenues from cargo operations decreased 12.9% to $7.6 million in the current period from $8.7 million a year ago. Revenues were lower in cargo handling, brokerage and general sales agency (GSA), due to softness in the market place causing a decline in revenues from existing customers. Gross margin from cargo operations in the current period decreased 56.5% to $1.0 million from $2.4 million in the year ago period primarily due to lower revenues. The Companys operations in Atlanta were impacted by higher lease costs associated with a new facility and lower revenues primarily caused by the loss of an account which had represented approximately 30% of its revenues in the year ago period and none in the current period. Revenues from existing customers at the Companys LAX operations for both warehouse and GSA were lower compared to last year due to a softer marketplace. The Cargo business has been impacted by a slowdown in worldwide cargo tonnage and shipments.
Revenues from government contract services decreased 5.7% in the current period to $6.8 million from $7.2 million in the year ago period due to the loss of the Yokota, Japan contract in September 2001 and lower weather observation and forecasting revenues from fewer contracts, partially offset by new contracts added in fiscal 2001 and in the current period. The Yokota, Japan contract provided $1.4 million or 18.7% of total revenues during the quarter ended December 31, 2000 and $5.1 million or 17.6% of total revenues during fiscal year 2001. Gross margin from government contract services in the current period increased 12.2% to $1.7 million from $1.5 million last year due to higher margins.
Selling, general and administrative expenses increased 17.1% to $2.5 million in the current period from $2.1 million a year ago due to a litigation settlement of $383,000 in the current period. See Note 4.
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Provision for bad debts decreased 83.0% in the current period to $0.2 million from $1.1 million a year ago primarily due to lower sales in the current period and lower reserve requirements.
Depreciation and amortization expense was $2.6 million in the current period compared to $2.5 million a year ago.
Interest expense decreased by 24.1% in the current period to $1.5 million from $1.9 million a year ago due to lower interest rates and lower average outstanding debt.
Costs and expenses of stock offering of $985,000 related to fees associated with a contemplated public and private offering of Mercfuel common stock. The Company was unable to complete the offering and charged the costs to expense during the quarter ended December 31, 2001. The Company expects to pursue various financing options with respect to Mercfuel.
Loss on sale of property was $71,000 in the current period and is primarily related to the sale of real estate located in Miami.
Income tax expense approximated 39% of pre-tax income in both periods reflecting the expected effective annual tax rate.
Income from discontinued operations was $77,000 in the year ago period net of income tax benefit of $50,000 and was related to RPAs operations.
Six Months Ended December 31, 2001 compared to December 31, 2000.
Revenues decreased 20.2% to $195.8 million from $245.5 million in the prior year primarily due to lower fuel prices in the current period. Gross margin decreased 18.6 % to $15.9 million from $19.5 million a year ago primarily due to declines from Cargo operations and fuel sales. The declines were, in part, caused by the slow down in the airline industry resulting from the events of September 11, 2001.
Revenues from fuel sales represented 60.8% of total revenues in the current period compared to 67.2% of total revenue a year ago. Revenues from fuel sales decreased 27.8% to $119.1 million from $164.9 million last year. The decrease in revenues from fuel sales was primarily due to a decrease of 25% in the price of fuel sold and, to a lesser extent, a decrease of 3.5% in the volume of fuel sold. The volume decline was, in part, caused by the slow down in the airline industry resulting from the events of September 11, 2001. Gross margin from fuel sales decreased 28.2% in the current period to $3.3 million from $4.5 million a year ago. The decrease in gross margin from fuel sales was primarily due to lower margins per gallon based on a change in customer mix.
Revenue from FBOs decreased 6.5% to $47.1 million from $50.3 million a year ago due to a reduction of approximately 5% each in the price and volume of fuel sold. Gross margin decreased 5.4% to $7.4 million from $7.8 million in the year ago period due primarily to the impact the events of September 11, 2001 had on operations in September 2001.
Revenues from cargo operations decreased 6.6% to $14.7 million from $15.7 million a year ago. Revenues were lower in cargo handling, brokerage and GSA due to softness in the marketplace causing a decline in revenues from existing customers. Gross margin from cargo operations decreased 64.3% to
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$1.5 million from $4.1 million in the year ago period primarily due to lower revenues and partially due to higher operating costs, primarily lease costs, associated with cargo handling.
Revenues from government contract services increased 3.1% to $15.0 million from $14.5 million in the year ago period. The increase in revenues from government contract services was primarily due to the addition of new contracts during the last twelve months, partially offset by lower weather and forecasting revenue from fewer contracts and the loss of the Yokota, Japan contract in September 2001. The Yokota, Japan contract provided $3.2 million or 21.9% of total revenues for the six months ended December 31, 2000. Gross margin from government contract services in the current period increased 22.1% to $3.7 million from $3.1 million last year due to higher margins and higher revenue.
Selling, general and administrative expenses in the current period increased 6.7% to $4.4 million from $4.2 million in the year ago period to due settlement of litigation. See Note 4.
Provision for bad debts decreased 59.3% in the current period to $0.8 million from $1.9 million in the year ago period due to lower sales in the current period and lower reserve requirements.
Depreciation and amortization expense was $5.0 million in each period.
Interest expense decreased 22.5% in the current six months to $3.0 million from $3.9 million a year ago due to lower interest rates and lower average outstanding borrowings.
Costs and expenses of stock offering of $985,000 related to fees associated with a contemplated public and private offering of Mercfuel common stock. The Company was unable to complete the offering and charged the costs to expense during the quarter ended December 31, 2001. The Company expects to pursue various financing options with respect to Mercfuel.
Loss on sale of property was $71,000 in the current period and is related to the sale of real estate in Miami.
Income tax expense approximated 39.0% of pretax income in both periods reflecting the expected effective annual tax rate.
Liquidity and Capital Resources:
The events of September 11, 2001 had a significant impact on the aviation industry and, as a result, have impacted the Companys operations as well. However, at this time, the Companys operations are returning to normal levels. In view of the uncertainty of the ultimate impact upon the aviation industry, the long-term impact to the Companys customers and operations cannot be determined at this time.
On March 7, 2001, the Company announced its plan to create an independent publicly traded company, MercFuel, Inc. (MercFuel). MercFuel was organized in Delaware on October 27, 2000 as a wholly owned subsidiary of the Company. On January 1, 2001, the Company transferred to MercFuel, the
14
assets and liabilities of its Fuel Sales division. On May 16, 2001 and amended twice thereafter, MercFuel filed a registration statement related to the proposed sale of 1,200,000 shares of common Stock (the Offering). On April 30, 2001, MercFuel agreed to sell 239,942 shares of common stock in a private placement at a per share price of $4.35. Due to market conditions, the Company was not able to complete the Offering and the proceeds of the private placement are expected to be returned. The Company incurred $985,000 of expenses associated with the proposed offering and private placement which were expensed in the quarter ending December 31, 2001. The Company has also elected to withdraw MercFuels application for registration of its common stock; depending on market conditions and other factors, the Company may re-file a registration statement at a later point in time. The Company may pursue various financing options with respect to MercFuel.
Mercury has historically financed its operations primarily through operating cash flow, bank debt and various public and private placements of bonds and subordinated debt. Mercurys cash balance at December 31, 2001 was $3,215,000.
Net cash provided by operating activities was $2.0 million for the period ended December 31, 2001. During this period, the primary sources of net cash provided by operating activities was income from continuing operations plus depreciation and amortization totaling $6.0 million, a decrease in accounts receivable of $8.7 million and a decrease in inventory of $0.9 million. The primary use of cash from operating activities in this period was a decrease in accounts payable and accrued expenses and other current liabilities of $12.0 million and an increase in prepaid expenses and other current assets of $2.8 million.
Net cash provided by investing activities was $0.1 million during the current period. During this period, the primary source of cash provided by investing activities was proceeds from sale of property totaling $2.1 million. The primary use of cash from investing activities was additions to property, equipment and leaseholds totaling $2.2 million.
Net cash used in financing activities was $7.1 million during the current period due to a reduction in long-term debt.
Net cash provided by Discontinued Operations was $4.3 million in the current period primarily due to the sale of RPA on July 3, 2001.
The Companys senior secured bank credit facility consists of a $35.0 million Revolver, a term loan with an outstanding balance of $8.9 million at December 31, 2001 and an acquisition facility with an outstanding balance of $17.4 million at December 31, 2001. At December 31, 2001, there was $1.25 million outstanding under the Revolver. The agreement contains provisions that require the maintenance of certain financial ratios including minimum tangible net worth (as defined), minimum profitability levels, maximum leverage and minimum debt service coverage and quick ratios and limitations on annual capital expenditures. Additionally, the Company is prohibited from paying dividends in excess of $400,000 per year. These facilities mature in March 2004.
On September 10, 1999, the Company issued, in a private placement, a $24.0 million senior Subordinated 12% Note (the Note) due 2006 with detachable warrants to purchase 503,126 shares of the Companys common stock exercisable at $6.50 per share for seven years. On November 16, 2001, Company agreed to reduce the exercise price to $5.50 per share. The Note agreement contains
15
covenants that, among other matters, limit senior indebtedness, the disposition of assets and unfunded capital expenditures. The covenants also included a ratio test for interest coverage, leverage, fixed charge coverage and debt service. On November 16, 2001 and effective September 30, 2001, the Company received a waiver pertaining to the interest coverage test and the agreement was amended by reducing the ongoing interest coverage test. The Company was in compliance with the loan covenants at December 31, 2001.
In the event that fuel prices increase significantly for an extended period of time, the Companys liquidity could be adversely affected unless the Company is able to increase vendor credit or increase lending limits under its revolving credit facility. The Company believes, however its revolver and vendor credit should provide it with sufficient liquidity in the event of a major temporary surge in oil prices.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
There has been no material change during the quarter ended December 31, 2001 from the disclosures regarding market risk presented in the Companys Annual Report on Form 10-K for the year ended June 30, 2001.
Forward-Looking Statements
Statements contained in this Quarterly Report on Form 10-Q which are not historical facts are forward-looking statements. In addition, Mercury, from time-to-time, makes forward-looking statements concerning its expected future operations and performance and other developments. Such forward-looking statements are necessarily estimates reflecting Mercurys best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements. While it is impossible to identify all such factors, factors which could cause actual results to differ materially from those estimated by Mercury include, but are not limited to, risks associated with acquisitions, the financial condition of customers, non-renewal of contracts, government regulation, as well as operating risks, general conditions in the economy and capital markets, and other factors which may be identified from time-to-time in Mercurys Securities and Exchange Commission filings and other public announcements.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In April 2000, Mercury filed a collection action against AER Global Logistics (AER) in the state of New York. AER filed a counterclaim for $1.0 million alleging among other things, tortious interference with contract. Mercury believes that this claim is without merit, and accordingly, does not believe this matter will have a significant impact on it financial position or operating results.
On April 3, 2001 Mercury received notice of an action filed by Skylink Express, Inc. in the Superior Court of Justice Ontario, Canada against Excel Cargo, Inc. and others for damages to aircraft occurring in November 30, 1999 and January 10, 2000 at Mirabel International Airport Quebec for a total amount of $2.5 million Canadian ($1.65 million U.S) plus interest and fees. Mercury does not
16
believe the outcome of this claim will have a significant impact on its financial position or operating results.
On November 30, 2001, the Company received notice of a counter-complaint filed by UPS against the Company and a third party seeking indemnification and reimbursement in the amount of $470,000 for the costs incurred as a result of the fuel spill at the Ontario, CA Airport. The Company has provided a response to UPS denying such claim and on September 28, 2001, filed a lawsuit seeking reimbursement for damages. Mercury does not believe the outcome of this claim will have a significant impact on its financial position or operating results.
In October 2001, Mercury received notice that the California Court of Appeals had rejected its appeal in the matter of Koye Fernandez v. Mercury Air Group, Inc. The case was settled in January 2002.
Item 2. Change in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
On November 07, 2001, the Company held its annual meeting of Shareholders.
All of the Companys directors were re-elected at the meeting by the following votes:
Name | For | Against | Abstain Broker Non-Vote | |||||||||
Dr. Phillip Fagan Jr. |
5,734,234 | 397,201 | -0- | |||||||||
Joseph A. Czyzyk |
5,564,153 | 567,282 | -0- | |||||||||
Frederick H. Kopko |
5,734,234 | 397,201 | -0- | |||||||||
Harold T. Bowling |
5,734,234 | 397,201 | -0- | |||||||||
Gary J. Feracota |
5,734,234 | 397,201 | -0- | |||||||||
In addition, approval of the 2001 Stock Incentive Plan was adopted by the following votes:
For | Against | Abstain Broker Non-Vote | ||||||
2,902,526 |
1,120,400 | 2,108,509 |
Item 5. Other Information
None
17
Item 6 | (a) Exhibits and Exhibit List | |
(b) Reports on Form 8-K |
Exhibit | ||
No. | Description | |
2.1 | Agreement and Plan of Merger adopted January 9, 2001.(17) | |
2.2 | Certificate of Merger.(17) | |
3.1 | Bylaws of Company adopted January 9, 2001.(17) | |
3.2 | Certificate of Incorporation.(17) | |
4.1 | Loan Agreement between California Economic Development Financing Authority and Mercury Air Group, Inc. relating to $19,000,000 California Economic Development Financing Authority Variable Rate Demand Airport Facilities Revenue Bonds, Series 1998 (Mercury Air Group, Inc. Project) dated as of April 1, 1998.(2) | |
4.2 | Securities Purchase Agreement dated September 10, 1999 by and among Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund, L.P.(12) | |
4.3 | Amendment No. 1 dated as of September 30, 2000 by and between J.H. Whitney Mezzanine, L.P. and Mercury Air Group, Inc. to the Securities Agreement.(16) | |
4.4 | Waiver and Consent Agreement dated as of December 29, 2000 among Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund, L.P.(17) | |
4.5 | Waiver and Consent Agreement dated as of July 2, 2001 among Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund, L.P.(18) | |
4.6 | Waiver Agreement dated as of September 25, 2001 among Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund, L.P.(18) | |
4.7 | Amendment No. 2 dated as of September 30, 2001 by and between J.H. Whitney Mezzanine, L.P. and Mercury Air Group, Inc. to the Securities Purchase Agreement.(19) | |
4.8 | Amended and Restated J.H. Whitney Mezzanine Fund, L.P. Warrant.(19) | |
4.9 | Waiver Agreement dated as of November 26, 2001 among Mercury Air Group, Inc. and J. H. Whitney Mezzanine, L.P. | |
4.10 | Waiver Agreement dated as of December 21, 2001 among Mercury Air Group, Inc. and J. H. Whitney Mezzanine, L.P. | |
10.1 | Companys 1990 Long-Term Incentive Plan.(4)* | |
10.2 | Companys 1990 Directors Stock Option Plan.(1)* | |
10.3 | Lease for 6851 West Imperial Highway, Los Angeles, California.(3) | |
10.4 | Memorandum Dated September 15, 1997 regarding Summary of Officer Life Insurance Policies with Benefits Payable to Officers or Their Designated Beneficiaries.(8)* | |
10.5 | Employment Agreement dated November 15, 1994 between the Company and Joseph Czyzyk.(9)* | |
10.6 | Non-Qualified Stock Option Agreement dated March 21, 1996, by and between Frederick H. Kopko and Mercury Air Group, Inc.(6)* | |
10.7 | Companys 1998 Long-Term Incentive Plan.(10)* | |
10.8 | Companys 1998 Directors Stock Option Plan.(10)* |
18
Exhibit | ||
No. | Description | |
10.9 | Amendment to Employment Agreement by and between Mercury Air Group, Inc. and Joseph A. Czyzyk dated October 15, 1998.(11)* | |
10.10 | Amendment No. 2 to Employment Agreement by and between Mercury Air Group, Inc. and Joseph A. Czyzyk dated April 12, 1999.(11)* | |
10.11 | Revolving Credit and Term Loan Agreement dated as of March 2, 1999 by and among Mercury Air Group, Inc., The Banks listed on Schedule 1 thereto, and The Fleet National Bank f/k/a BankBoston, N.A., as Agent.(11) | |
10.12 | First Amendment to Revolving Credit and Term Loan Agreement dated as of September 10, 1999.(14) | |
10.13 | Second Amendment to Revolving Credit and Term Loan Agreement dated as of March 31, 2000.(14) | |
10.14 | Third Amendment, Waiver and Consent to Revolving Credit and Term Loan Agreement dated as of August 11, 2000.(14) | |
10.15 | The Companys 401(k) Plan consisting of CNA Trust Corporation. Regional Prototype Defined Contribution Plan and Trust and Adoption Agreement.(14)* | |
10.16 | Amendment No. 3 to Employment Agreement by and between Mercury Air Group, Inc. and Joseph A. Czyzyk dated September 11, 2000.(15)* | |
10.17 | Employment Agreement dated July 31, 2000 between the Company and Dr. Philip J. Fagan.(15)* | |
10.18 | Fourth Amendment to Revolving Credit and Term Loan Agreement dated as of November 14, 2000.(16) | |
10.19 | Amendment No. 1 to Mercury Air Group, Inc. 1998 Long-Term Incentive Option Plan as of August 22, 2000.(16)* | |
10.20 | Amendment No. 1 to Mercury Air Group, Inc. 1998 Directors Stock Option Plan as of August 22, 2000.(16)* | |
10.21 | Limited Waiver letter Agreement to Revolving Credit and Term Loan Agreement dated as of September 21, 2001.(18) | |
10.22 | Fifth Amendment to Revolving Credit and Term Loan Agreement dated as June 7, 2001.(19) | |
10.23 | Limited Consent letter Agreement to Revolving Credit and Term Loan Agreement dated as of September 30, 2001.(19) | |
10.24 | 2001 Mercury Air Group, Inc. Stock Incentive Plan(20) | |
10.25 | Limited Waiver and Consent to Revolving Credit and Term Loan Agreement dated as of December 31, 2001. | |
99.1 | Partnership Agreement dated as of July 27, 2000 of CFK Partners by and among Philip J. Fagan, M.D., Frederick H. Kopko, Jr. and Joseph A. Czyzyk.(13) |
* | Denotes managements contract or compensation plan or arrangement | |
(1) | Such document was previously filed as Appendix A to the Companys Proxy Statement for the December 10, 1993 Annual Meeting of Shareholders and is incorporated herein by reference. |
19
(2) | All such documents were previously filed as Exhibits to the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 and are incorporated herein by reference. | |
(3) | All such documents were previously filed as Exhibits to the Companys Registration Statement No. 33-39044 on Form S-2 and are incorporated herein by reference. | |
(4) | Such document was previously filed as Appendix A to the Companys Proxy Statement for the December 2, 1992 Annual Meeting of Shareholders. | |
(5) | All such documents were previously filed as Exhibits to the Companys Registration Statement No. 33-65085 on Form S-1 and are incorporated herein by reference. | |
(6) | All such documents were previously filed as Exhibits to the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 and are incorporated herein by reference. | |
(7) | All such documents were previously filed as Exhibits to the Companys Report on Form 8-K filed September 13, 1996 and are incorporated herein by reference. | |
(8) | Such document was previously filed as an Exhibit to the Companys Annual Report on Form 10-K for the year ended June 30, 1997 and is incorporated herein by reference. | |
(9) | All such documents were previously filed as an Exhibit to the Companys Annual Report on Form 10-K for the year ended June 30, 1998 and is incorporated herein by reference. | |
(10) | Such document was previously filed as Appendix A to the Companys Proxy Statement for the December 3, 1998 Annual Meeting of Shareholders and incorporated herein by reference. | |
(11) | All such documents were previously filed as an Exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 and incorporated herein by reference. | |
(12) | All such documents were previously filed as an Exhibit to the Companys Annual Report on Form 10-K for the year ended June 30, 1999 and is incorporated herein by reference. |
20
(13) | Such document was previously filed as an Exhibit to the Companys current Report on Form 8-K on August 11, 2000 and is incorporated herein by reference. | |
(14) | All such documents were previously filed as an Exhibit to the Companys Annual Report on Form 10-K for the year ended June 30, 2000 and is incorporated herein by reference. | |
(15) | All such documents were previously filed as an Exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 and incorporated herein by reference. | |
(16) | All such documents were previously filed as an Exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ended December 31, 2000 and incorporated herein by reference. | |
(17) | All such documents were previously filed as an Exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 and incorporated herein by reference. | |
(18) | All such documents were previously filed as an Exhibit to the Companys Annual Report on Form 10-K for the year ended June 30, 2001 and is incorporated herein by reference. | |
(19) | All such documents were previously filed as an Exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 and incorporated herein by reference. | |
(20) | Such document was previously filed as Appendix A to the Companys Proxy Statement for the November 7, 2001 Annual Meeting of Shareholders and incorporated herein by reference. |
(b) Reports on Form 8-K:
None |
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Mercury Air Group, Inc. Registrant |
/s/ JOSEPH CZYZYK | |
Joseph Czyzyk Chief Executive Officer |
/s/ RANDY AJER | |
Randy Ajer Principal Financial and Accounting Officer |
Date: February 11, 2002
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