EX-99.1 2 d418790dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

LOGO

AVANTAIR, INC. REPORTS FISCAL 2012 AND FOURTH QUARTER

FINANCIAL RESULTS

CLEARWATER, Fla. – September 28, 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 fiscal 2012 full year and fourth quarter, which ended June 30, 2012.

Fourth Quarter Fiscal 2012 Performance:

 

   

Total number of revenue-generating flight hours flown for the fourth quarter ended June 30, 2012 increased by 1.0% to 11,290, compared with 11,181 hours flown in the fiscal 2011 fourth quarter.

 

   

Total revenue for the fourth quarter ended June 30, 2012 decreased 4.3% to $42.5 million compared to $44.4 million in the fiscal 2011 fourth quarter.

 

   

Non-GAAP Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation, employee termination and other costs, gain on sale of asset, and gain on debt extinguishment) increased by 34% to $736,000, compared to $555,000 in the fourth quarter of fiscal 2011.

 

   

Net loss attributable to common stockholders for the fourth quarter ended June 30, 2012 was ($2.6) million, or ($.10) per share, based on 26.5 million weighted average shares outstanding, and included $74,000 related to employee termination and other costs. This compared with a net loss attributable to common stockholders of ($1.9) million, or ($0.07) per share, based on 26.4 million weighted average shares outstanding in the fourth quarter of fiscal 2011.

 

   

Cash and cash equivalents were $5.3 million as of June 30, 2012 compared to $5.6 million as of June 30, 2011.

Full Year Fiscal 2012 Performance:

 

   

Total number of revenue-generating flight hours flown for the fiscal year ended June 30, 2012 increased by 4.8% to 45,346, compared with 43,278 hours flown in the fiscal year ended June 30, 2011.

 

   

Total revenue for the fiscal year ended June 30, 2012 grew 6.2% to $174.0 million compared to $163.9 million for the fiscal year ended June 30, 2011.

 

   

Non-GAAP Adjusted EBITDA for the fiscal year ended June 30, 2012 increased by 207% to $3.2 million, compared to ($3.0) million for the fiscal year ended June 30, 2011.


   

Net loss attributable to common stockholders for the fiscal year ended June 30, 2012 was ($8.0) million, or ($.30) per share, based on 26.5 million weighted average shares outstanding. The year-to-date net loss included $957,000 related to employee termination and other costs, $439,000 related to a gain on debt extinguishment and $628,000 related to a gain on the sale of an asset. This compared to a net loss attributable to common stockholders of ($13.6) million, or ($0.52) per share, based on 26.4 million weighted average shares outstanding for the fiscal year ended June 30, 2011.

Steven Santo, Chief Executive Officer of Avantair said, “During fiscal 2012, we undertook a series of cost saving initiatives, which together with higher revenue, helped to reduce our net loss by 46% from the prior year. We realize there is still much work to do and we are focused on reducing our costs without impacting safety and customer service, the company’s highest priorities.”

Stephen Wagman, President of Avantair said, “Today’s filing of our Form 10-K includes the restated financials for fiscal year 2011 and the quarters in fiscal years 2011 and 2012. I am confident the measures taken to address the underlying causes of the restatements in our earlier financial statements were completed prior to today’s filing. Our Adjusted EBITDA for Q4 2012 and fiscal 2012 includes a one-time charge of $1.0 million for a change in estimate related to the treatment of pilot training costs. This charge is not an add-back to our Adjusted EBITDA.”

Conference Call

Chief Executive Officer Steven Santo, President Stephen Wagman and Chief Financial Officer Carla Stucky will hold a conference call with the financial community on Monday, October 1, 2012 at 5 p.m. 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: 1-800-447-0521 U.S. Toll Free or 1-847-413-3238 U.S. Toll. For international callers, dial 1-847-413-3238. When prompted, give Confirmation Number: 33421257 or ask for “Avantair’s Fiscal 2012 and Fourth Quarter Financial Results 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 October 19, 2012, by dialing 1-888-843-7419 U.S. Toll Free or 1-630-652-3042 US Toll. For international callers, dial 1-630-652-3042. When prompted key in the Passcode: 33421257#.


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 (in thousands):

 

     Three Months Ended
June 30,
    For the Years Ended
June 30,
 
     2012     2011
(Restated)
    2012     2011
(Restated)
 

Net Loss

   $ (2,299   $ (1,550   $ (6,616   $ (12,169

Add:

        

Depreciation and amortization

     1,824        870        4,997        4,219   

Interest expense

     970        1,087        4,346        4,588   

Stock-based compensation

     186        168        720        441   

Employee termination and other costs

     74        —          957        —     

Subtract:

        

Interest and other income

     (15     (20     (129     (70

Gain on sale of asset

     (4     —          (628     —     

Gain on debt extinguishment

     —          —          (439     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     736        555        3,208        (2,991
  

 

 

   

 

 

   

 

 

   

 

 

 

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.

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. 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.

About Avantair

Avantair, the sole North American provider of fractional shares, leases and flight hour 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.

Company Contacts:

Avantair, Inc.

Stephen Wagman, President

727-538-7909

swagman@avantair.com

Avantair, Inc.

Carla Stucky, Chief Financial Officer

727-538-7976

cstucky@avantair.com


AVANTAIR, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (In Thousands, Except Share Data)

 

     As of June 30,  
      2012     2011
(Restated)
 

ASSETS

    

Current Assets

    

Cash and cash equivalents

   $ 5,302      $ 5,643   

Accounts receivable, net of allowance of $1,340 and $231, respectively

     11,707        12,136   

Inventory

     155        297   

Current portion of aircraft costs related to fractional share sales

     8,458        20,544   

Prepaid expenses and other current assets

     3,830        5,135   
  

 

 

   

 

 

 

Total current assets

     29,452        43,755   
  

 

 

   

 

 

 

Long-Term

    

Aircraft costs related to fractional share sales, net of current portion

     1,691        9,952   

Property and equipment, net

     40,136        36,942   

Cash - restricted

     2,226        2,362   

Deposits on aircraft

     7,193        9,418   

Goodwill

     1,141        1,141   

Other assets

     9,443        5,008   
  

 

 

   

 

 

 

Total long-term assets

     61,830        64,823   
  

 

 

   

 

 

 

Total assets

   $ 91,282      $ 108,578   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

    

Current Liabilities

    

Accounts payable

   $ 9,051      $ 5,652   

Accrued liabilities

     6,393        6,471   

Customer deposits

     3,115        2,082   

Short-term debt

     12,000        13,000   

Current portion of long-term debt

     4,652        7,856   

Current portion of deferred revenue related to fractional aircraft share sales

     9,995        23,513   

Unearned management fee, flight hour card and membership revenue

     60,015        51,437   
  

 

 

   

 

 

 

Total current liabilities

     105,221        110,011   
  

 

 

   

 

 

 

Long-Term Liabilities

    

Long-term debt, net of current portion

     13,753        8,198   

Deferred revenue related to fractional aircraft share sales, net of current portion

     8,179        17,834   

Deferred revenue related to club membership revenue, net of current portion

     213        1,354   

Other liabilities

     2,465        2,486   
  

 

 

   

 

 

 

Total long-term liabilities

     24,610        29,872   
  

 

 

   

 

 

 

Total liabilities

     129,831        139,883   
  

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

    

Series A convertible preferred stock, $.0001 par value, authorized 300,000 shares; 152,000 shares issued and outstanding

     14,799        14,708   
  

 

 

   

 

 

 

STOCKHOLDERS’ DEFICIT

    

Preferred stock, $.0001 par value, authorized 700,000 shares; none issued

     —          —     

Common stock, Class A, $.0001 par value, 75,000,000 shares authorized, 26,497,468 and 26,418,246 shares issued and outstanding, respectively

     3        3   

Additional paid-in capital

     57,830        57,212   

Accumulated deficit

     (111,181     (103,228
  

 

 

   

 

 

 

Total stockholders’ deficit

     (53,348     (46,013
  

 

 

   

 

 

 

Total liabilities and stockholders’ deficit

   $ 91,282      $ 108,578   
  

 

 

   

 

 

 


AVANTAIR, INC. AND SUBSIDIARIES

Consolidated Statements of Operations (In Thousands, Except Share Data)

 

     For the Three Months Ended June 30,     For the Years Ended June 30,  
      2012     2011
(Restated)
    2012     2011
(Restated)
 

Revenues

        

Fractional aircraft shares sold

   $ 4,787      $ 7,570      $ 26,528      $ 33,544   

Lease revenue

     788        133        2,469        142   

Management and maintenance fees

     21,288        19,259        83,910        75,205   

Flight hour card and club membership revenue

     8,569        9,282        34,089        30,726   

Flight activity and other ancillary billing

     5,158        4,277        19,999        14,673   

Other revenue

     1,882        3,842        6,994        9,601   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     42,472        44,363        173,989        163,891   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

        

Cost of fractional aircraft shares sold

     4,009        6,849        23,301        29,345   

Cost of flight operations

     20,135        18,006        75,263        71,573   

Cost of fuel

     9,289        8,859        36,440        30,724   

General and administrative expenses

     7,130        8,764        30,321        29,595   

Selling expenses

     1,359        1,498        6,176        6,086   

Depreciation and amortization

     1,824        870        4,997        4,219   

Employee termination and other costs

     74        —          957        —     

Gain on sale of asset

     (4     —          (628     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     43,816        44,846        176,827        171,542   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (1,344     (483     (2,838     (7,651
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expenses)

        

Interest and other income

     15        20        129        70   

Interest expense

     (970     (1,087     (4,346     (4,588

Gain on debt extinguishment

     —          —          439        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expenses

     (955     (1,067     (3,778     (4,518
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (2,299     (1,550     (6,616     (12,169

Preferred stock dividend and accretion of expenses

     (311     (368     (1,428     (1,477
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (2,610   $ (1,918   $ (8,044   $ (13,646
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss per common share:

        

Basic and diluted

   $ (0.10   $ (0.07   $ (0.30   $ (0.52
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding:

        

Basic and diluted

     26,496,409        26,416,798        26,464,749        26,389,758