EX-99.1 2 d350747dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

LOGO

AVANTAIR, INC. REPORTS FISCAL 2012 THIRD QUARTER

FINANCIAL RESULTS

Quarterly Revenue Increases 9.9% to $40.1 Million from Year-Ago Period

CLEARWATER, Fla. – May 10, 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 third quarter and nine-month periods which ended March 31, 2012.

Third Quarter Fiscal 2012 Performance:

 

 

Total revenue grew 9.9% to $40.1 million compared to $36.5 million in the fiscal 2011 third quarter.

 

 

Total number of revenue-generating flight hours flown increased by 6.1% to 11,237, compared with 10,594 hours flown in fiscal 2011 third 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 81% to $1.7 million, compared to $940,000 in the third quarter of fiscal 2011.

 

 

Net loss attributable to common stockholders was ($1.1) million, or ($.04) per share, based on 26.5 million weighted average shares outstanding, and included $883,000 related to employee termination and other costs, and a $624,000 gain on the sale of an asset. This compared with a net loss attributable to common stockholders of ($1.3) million, or ($0.05) per share, based on 26.4 million weighted average shares outstanding in the third quarter of fiscal 2011.

 

 

Cash and cash equivalents were $7.1 million as of March 31, 2012 compared to $5.6 million as of June 30, 2011.

Year-to-Date Fiscal 2012 Performance:

 

 

Total revenue for the nine months ended March 31, 2012 grew 7.1% to $116.6 million compared to $108.9 million for the nine months ended March 31, 2011.

 

 

Total number of revenue-generating flight hours flown increased by 6.1% to 34,056, compared with 32,096 hours flown in the year-ago period.

 

 

Non-GAAP Adjusted EBITDA increased by 218% to $3.3 million, compared to ($2.8) million in the same nine month period one year ago.

 

 

Net loss attributable to common stockholders was ($4.4) million, or ($.17) per share, based on 26.5 million weighted average shares outstanding. The year-to-date net loss included $883,000 related to employee termination and other costs, $439,000 related to a gain on debt extinguishment and $624,000 related to a gain on the sale of an asset. This compared to a net loss attributable to common stockholders of ($10.9) million, or ($0.41) per share, based on 26.4 million weighted average shares outstanding in the same nine month period one year ago.


Steven Santo, Chief Executive Officer of Avantair said, “Though these results are better than one year ago and our prior quarter, we are not satisfied and will continue to focus on taking appropriate actions to achieve sustainable and growing profitability. During our recent quarter, we undertook a series of actions in the sales and finance areas of our business, which we believe will improve our operating results.”

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, Thursday, May 10, 2012 at 5 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: 32341639 or ask for “Avantair’s Fiscal 2012 Third 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 May 24, 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: 32341639#.

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     Nine Months Ended  
     March 31,     March 31,  
     2012     2011     2012     2011  

Net Loss

   $ (730,138   $ (956,567   $ (3,304,667   $ (9,837,240

Add:

        

Depreciation and amortization

     990,293        794,941        2,953,254        3,313,297   

Interest expense

     1,080,255        1,034,484        3,376,711        3,501,015   

Stock-based compensation

     178,876        82,447        533,531        272,327   

Employee termination and other costs

     883,331        —          883,331        —     

Subtract:

        

Interest and other income

     (33,002     (15,763     (113,478     (49,916

Gain on sale of asset

     (624,179     —          (624,179     —     

Gain on debt extinguishment

     —          —          (438,621     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 1,745,436      $ 939,542      $ 3,265,882      $ (2,800,517
  

 

 

   

 

 

   

 

 

   

 

 

 

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 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.


Company Contacts:

Avantair, Inc.

Stephen Wagman, EVP and CFO

727-538-7909

swagman@avantair.com


AVANTAIR, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

ASSETS

 

     March 31,      June 30,  
     2012      2011  
     (Unaudited)         

Current Assets

     

Cash and cash equivalents

   $ 7,145,852       $ 5,643,305   

Accounts receivable, net of allowance for doubtful accounts of $790,776 and $231,357, respectively

     11,111,690         12,202,020   

Inventory

     386,686         442,634   

Current portion of aircraft costs related to fractional share sales

     11,709,364         20,770,142   

Prepaid expenses and other current assets

     7,113,573         7,012,555   
  

 

 

    

 

 

 

Total current assets

     37,467,165         46,070,656   
  

 

 

    

 

 

 

Long-Term Assets

     

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

     2,890,723         9,913,793   

Property and equipment, at cost, net of accumulated depreciation and amortization of $22,026,824 and $21,235,649 respectively

     38,473,434         36,733,929   

Cash - restricted

     2,225,410         2,361,851   

Deposits on aircraft

     7,187,253         9,500,988   

Deferred maintenance on aircraft engines

     369,610         266,087   

Goodwill

     1,141,159         1,141,159   

Other assets

     9,111,253         4,950,035   
  

 

 

    

 

 

 

Total long-term assets

     61,398,842         64,867,842   
  

 

 

    

 

 

 

Total assets

   $ 98,866,007       $ 110,938,498   
  

 

 

    

 

 

 


AVANTAIR, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

     March 31,     June 30,  
     2012     2011  
     (Unaudited)        

Current Liabilities

    

Accounts payable

   $ 9,156,434      $ 5,908,979   

Accrued liabilities

     11,909,195        6,181,807   

Customer deposits

     3,424,258        2,082,160   

Short-term debt

     12,000,000        13,000,000   

Current portion of long-term debt

     5,403,857        7,856,117   

Current portion of deferred revenue related to fractional aircraft share sales

     13,353,125        23,550,037   

Unearned management fee, flight hour card and club membership revenue

     51,648,155        51,437,316   
  

 

 

   

 

 

 

Total current liabilities

     106,895,024        110,016,416   
  

 

 

   

 

 

 

Long-Term Liabilities

    

Long-term debt, net of current portion

     12,398,853        8,198,326   

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

     9,698,343        18,014,232   

Unearned club membership revenue, net of current portion

     377,161        1,353,618   

Other liabilities

     2,635,076        2,658,945   
  

 

 

   

 

 

 

Total long-term liabilities

     25,109,433        30,225,121   
  

 

 

   

 

 

 

Total liabilities

     132,004,457        140,241,537   
  

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

    

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

     14,776,356        14,708,088   
  

 

 

   

 

 

 

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, 26,489,603 and 26,418,246 shares issued and outstanding, respectively

     2,650        2,642   

Additional paid-in capital

     57,662,128        57,212,099   

Accumulated deficit

     (105,579,584     (101,225,868
  

 

 

   

 

 

 

Total stockholders’ deficit

     (47,914,806     (44,011,127
  

 

 

   

 

 

 

Total liabilities and stockholders’ deficit

   $ 98,866,007      $ 110,938,498   
  

 

 

   

 

 

 


AVANTAIR, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     March 31,     March 31,  
     2012     2011     2012     2011  

Revenue

        

Fractional aircraft shares sold and lease revenue

   $ 8,879,476      $ 7,729,333      $ 23,548,667      $ 25,705,734   

Management and maintenance fees

     21,354,850        18,713,993        62,621,620        55,946,175   

Flight hour card and club membership revenue

     7,757,594        8,029,167        25,520,225        21,443,660   

Other revenue

     2,063,298        2,016,100        4,953,385        5,759,678   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     40,055,218        36,488,593        116,643,897        108,855,247   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

        

Cost of fractional aircraft shares sold

     7,133,247        6,618,110        19,403,825        22,255,800   

Cost of flight operations

     17,607,526        16,328,921        52,349,977        51,671,193   

Cost of fuel

     4,550,333        4,112,436        14,220,687        12,648,324   

General and administrative expenses

     7,831,064        7,244,888        23,119,515        20,799,106   

Selling expenses

     1,366,488        1,327,143        4,817,542        4,553,668   

Depreciation and amortization

     990,293        794,941        2,953,254        3,313,297   

Employee termination and other costs

     883,331        —          883,331        —     

Gain on debt extinguishment

     —          —          (438,621     —     

Gain on sale of asset

     (624,179     —          (624,179     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     39,738,103        36,426,439        116,685,331        115,241,388   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     317,115        62,154        (41,434     (6,386,141
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expenses)

        

Interest and other income

     33,002        15,763        113,478        49,916   

Interest expense

     (1,080,255     (1,034,484     (3,376,711     (3,501,015
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expenses

     (1,047,253     (1,018,721     (3,263,233     (3,451,099
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (730,138     (956,567     (3,304,667     (9,837,240

Preferred stock dividend and accretion of expenses

     (372,311     (364,326     (1,117,318     (1,109,054
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (1,102,449   $ (1,320,893   $ (4,421,985   $ (10,946,294
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss per common share:

        

Basic and diluted

   $ (0.04   $ (0.05   $ (0.17   $ (0.41
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding:

        

Basic and diluted

     26,489,424        26,406,574        26,454,261        26,380,798