EX-99.1 2 a03445exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1

(MERCURY AIR GROUP LOGO)   —NEWS RELEASE—
Company Contact:
 Joseph Czyzyk
Mercury Air Group, Inc.
(310) 827-2737 		  Investor Relations:
 David Herbst/Amado Zavada
The MWW Group
(213) 486-6560 ext.317

Mercury Air Group, Inc. Reports First Quarter Results

Los Angeles, CA (November 12, 2004) — 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 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