Mercury Air Group, Inc. Reports First Quarter Results LOS ANGELES,
Nov. 12 /PRNewswire-FirstCall/ -- Mercury Air Group, Inc.
(AMEX:MAX), reported net income for the three-month period ended
September 30, 2004 of $64,000, or $0.02 per basic and diluted
share, $4,000 less than the income from continuing operations, net
of taxes, reported for the same period last year of $68,000, or
$0.02 per basic and diluted share. For the first quarter of fiscal
2004, the Company reported a net loss of $302,000, or $0.10 per
basic and diluted share, which included a loss from discontinued
operations, net of taxes, of $370,000, or $0.12 per basic and
diluted share. Revenue from continuing operations for the first
quarter of fiscal 2005 was $125,491,000 as compared to revenue from
continuing operations of $79,710,000 for the same period last year,
an increase of $45,781,000 or 57.4%. The increase in revenue from
continuing operations is primarily due to the higher aviation fuel
prices driven by higher worldwide petroleum product prices. The
Company's gross margin from continuing operations for the first
quarter of fiscal 2005 was $4,291,000, an increase of $780,000, or
22.2%, as compared to the gross margin from continuing operations
of $3,511,000 in the first quarter of fiscal 2004. "Without the
significant financing costs associated with our prior high levels
of debt, we are pleased to report relatively stable earnings from
continuing operations on a comparable quarter to quarter basis,"
said Joseph Czyzyk, President and CEO of Mercury Air Group, Inc.
Revenue for the Company's MercFuel, Inc. ("MercFuel") subsidiary
was $108,804,000 on sales volume of 74,429 thousand gallons, or 809
thousand gallons per day, in the first quarter of fiscal 2005 as
compared to sales revenue of $64,990,000 on sales volume of 64,270
thousand gallons, or 699 thousand gallons per day, for the first
quarter last year. MercFuel's average per gallon aviation fuel
sales price in the first quarter of fiscal 2005 was $1.462 as
compared to last year's first quarter per gallon average aviation
fuel sales price of $1.011. MercFuel realized sales volume
increases in both the commercial sales unit, where sales volume
increased 7,335 thousand gallons, or 13%, to 63,616 thousand
gallons, and in the corporate and fractional ownership aviation
unit, where sales volume increased 2,824 thousand gallons, or
35.3%, to 10,813 thousand gallons. The Company's Mercury Air Cargo,
Inc. ("Air Cargo") subsidiary had revenue of $11,190,000 in the
first quarter of fiscal 2005, an increase of $2,296,000 or 25.8%
from last year's first quarter revenue of $8,894,000. Air Cargo's
gross margin was $1,326,000 in the first quarter of fiscal 2005
versus a gross margin of $773,000 in the first quarter of fiscal
2004. Air Cargo handled increased tonnage in both its warehouse
handling and its cargo management operations. The cargo warehouse
tonnage throughput was 45.5 million tons in the first quarter of
fiscal 2005 as compared to 36.1 million tons during the same period
last year. The tonnage of air freight managed by the cargo
management operations was 2.7 million tons during the first quarter
of fiscal 2005 as compared to 1.8 million tons during the same
period last year. Maytag Aircraft Corporation ("Maytag"), Mercury's
subsidiary engaged in government services, had revenue of
$5,363,000 in the first quarter of fiscal 2005 as compared to
$5,826,000 in the first quarter of fiscal 2004 resulting in gross
margin of $1,311,000 in the first quarter of fiscal 2005,
essentially unchanged from the gross margin of $1,312,000 for the
first quarter of fiscal 2004. The first quarter results for fiscal
2004 include a loss from discontinued operations, net of taxes, of
$370,000. The Company sold the stock in Mercury Air Centers, Inc.
("Air Centers") to Allied Capital in April 2004. The loss from
discontinued operations is comprised of the results from operations
from Air Centers for the quarter less the debt service costs
recognized during the quarter on the debt repaid with the proceeds
from the sale. 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 OPERATIONS All amounts in
thousands, except per share amounts (Unaudited) Three Months Ended
September 30, 2004 2003 Sales and revenues: Sales $108,934 $64,990
Service revenues 16,557 14,720 Total sales and revenues 125,491
79,710 Costs and expenses: Cost of sales 106,040 62,449 Operating
expenses 15,160 13,750 Total costs and expenses 121,200 76,199
Gross margin (excluding depreciation and amortization) 4,291 3,511
Expenses (income): Selling, general and administrative 2,711 2,281
Provision for bad debts 277 360 Depreciation and amortization 635
713 Interest expense 327 260 Interest and other income (223) (209)
Asset impairment loss 626 -- Total expenses (income) 4,353 3,405
Income (loss) from continuing operations before minority interest
and income tax expense (62) 106 Minority interest 181 6 Income from
continuing operations before income tax expense 119 112 Income tax
expense 55 44 Income from continuing operations, net of taxes 64 68
Loss from discontinued operation, net of tax benefit of $237,000
for the three months ended September 30, 2003 -- (370) Net income
(loss) 64 (302) Accrued preferred stock dividends 9 9 Net income
(loss) applicable to common stockholders $55 $(311) Income (loss)
per common share: Basic: From continuing operations, net of taxes
$0.02 $0.02 From discontinued operations, net of taxes -- (0.12)
Net income (loss) per share $0.02 $(0.10) Diluted: From continuing
operations, net of taxes $0.02 $0.02 From discontinued operations,
net of taxes -- (0.12) Net income (loss) per share $0.02 $(0.10)
MERCURY AIR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS All amounts in thousands September 30, June 30, 2004 2004
(Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents
$12,297 $4,690 Restricted cash -- 15,414 Trade accounts receivable,
net of allowance for doubtful accounts 55,911 50,974 Inventories
2,869 1,165 Prepaid expenses and other current assets 7,874 5,696
Deferred income taxes 1,450 1,451 TOTAL CURRENT ASSETS 80,401
79,390 PROPERTY, EQUIPMENT AND LEASEHOLDS - net 8,025 10,349 NOTES
RECEIVABLE, net of allowance for doubtful accounts 516 521 DEFERRED
INCOME TAXES 611 611 GOODWILL 4,403 4,389 OTHER INTANGIBLE ASSETS,
NET 650 700 RESTRICTED CASH 9,062 8,989 OTHER ASSETS, NET 1,218
1,008 TOTAL ASSETS $104,886 $105,957 LIABILITIES, MANDATORILY
REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable $38,857 $33,552 Accrued expenses and
other current liabilities 7,448 11,825 Current portion of long-term
debt 54 139 TOTAL CURRENT LIABILITIES 46,359 45,516 LONG-TERM DEBT
14,850 17,790 DEFERRED GAIN 10,224 8,130 OTHER LONG TERM LIABILITY
502 669 DEFERRED RENT 1,100 1,257 MINORITY INTEREST -- 182 TOTAL
LIABILITIES 73,035 73,544 MANDATORILY REDEEMABLE PREFERRED STOCK
527 518 STOCKHOLDERS' EQUITY: Common stock 28 30 Additional paid-in
capital 19,929 20,737 Retained earnings 14,650 14,596 Accumulated
other comprehensive income (loss) 68 (46) Treasury stock (140)
(120) Notes receivable from officers (3,211) (3,302) TOTAL
STOCKHOLDERS' EQUITY 31,324 31,895 TOTAL LIABILITIES, MANDATORILY
REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY $104,886
$105,957 MERCURY AIR GROUP, INC. SELECTED BUSINESS SEGMENT DATA All
dollar amounts in thousands (Unaudited) Three Months Ended
September 30, 2004 2003 Revenue MercFuel $108,804 $64,990 Mercury
Air Cargo 11,190 8,894 Maytag Aircraft 5,363 5,826 Other 134 --
Total revenue $125,491 $79,710 Gross margin MercFuel $1,640 $1,426
Mercury Air Cargo 1,326 773 Maytag Aircraft 1,311 1,312 Other 14 --
Total gross margin $4,291 $3,511 Depreciation and amortization
MercFuel $121 $115 Mercury Air Cargo 384 458 Maytag Aircraft 81 81
Other 49 59 Total depreciation and amortization $635 $713 Sales
volume (thousands of gals) MercFuel Commercial Aviation 63,616
56,281 Corporate/Fractional Ownership 10,813 7,989 Total 74,429
64,270 Cargo tonnage (thousands of tons) Warehouse handling 45,525
36,074 Cargo management 2,686 1,801 Total 48,211 37,875 Company
Contact: Joseph Czyzyk Mercury Air Group, Inc. (310) 827-2737 Media
Contact: David Herbst / Amado Zavala MWW Group (213) 486-6560
DATASOURCE: Mercury Air Group, Inc. CONTACT: Joseph Czyzyk of
Mercury Air Group, Inc., +1-310-827-2737; or Media, David Herbst,
or Amado Zavala of MWW Group, +1-213-486-6560, for Mercury Air
Group, Inc. Web site: http://www.mercuryairgroup.com/
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