Wednesday, February 19, 2003
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Wednesday, February 19, 2003 |
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World Airways posts big 2002 revenue increase Peachtree City's World Airways, Inc. last week announced financial results for the quarter and year ended December 31, 2002. Revenues for the quarter ended December 31, 2002, increased 21.6 percent to $100.1 million from $82.3 million in the fourth quarter of 2001. The revenue increase in the 2002 fourth quarter was due principally to an increase in both commercial and military cargo business. Passenger flying under the contract with the U.S. Air Force's Air Mobility Command (USAF) remained at a consistent level for the fourth quarter of 2002 compared to the same period in the prior year. Total block hours increased 28.9%, to 10,604 in the fourth quarter of 2002 compared to 8,224 for the same period in 2001. The net loss based on operations for the 2002 fourth quarter was $4.8 million compared to $9.4 million for the 2001 fourth quarter. After adjustment for the current year return and prior year receipt of the Airline Stabilization Act Grant Funds, the net loss for the 2002 fourth quarter was $6.8 million, or $0.61 per share, compared to a net loss of $4.4 million, or $0.40 per share, for the 2001 fourth quarter. Per share results were computed on the basis of 11.1 and 10.9 million weighted average shares outstanding for the fourth quarters of 2002 and 2001, respectively. The fourth quarter of 2002 included two non-routine transactions that had a negative impact on financial results. They were: Returning to the federal government $2.0 million of grant funds received under the Air Transportation Safety and System Stabilization Act (Stabilization Act). The 2001 fourth quarter results included the benefit of a $5.1 million grant under the Stabilization Act, to help offset losses resulting from the terrorist attacks on the United States. This grant was included as a credit to operating expenses in the 2001 statement of operations. The Department of Transportation subsequently conducted a review of the company's grant application and concluded that it had overpaid World Airways by $2.0 million. The Company has agreed to return the $2.0 million in grant funds in 2003, and it has included this amount as an expense in the fourth quarter of 2002. Recording a $1.7 million liability for estimated losses based upon contractual lease costs (reduced by estimated sub-lease rentals) that will continue to be incurred for the remaining term of the company's lease agreement for office space at its former headquarters in Herndon, Virginia. After relocating its headquarters to Atlanta in 2001, the company sublet its Herndon office space to a tenant that did not make timely rental payments to the company in 2002. Revenues for 2002 rose to $384.5 million from $317.9 million in 2001, a 21 percent increase. Net income for the year ended December 31, 2002, was $2 million, or $0.18 per share, versus a net loss of $26 million, or $2.42 per share, for the year ended December 31, 2001. Per share results were computedon the basis of 11.1 and 10.8 million weighted average shares outstanding for 2002 and 2001, respectively. The company reported that it ended 2002 with cash and cash equivalents of $21.5 million compared to $19.5 million at the end of 2001. According to Hollis Harris, chairman and CEO, "The evidence of a solid and well-constructed business plan was clearly demonstrated in 2002, as we reported profitability in three of the four quarters and for the year. We achieved a $28 million turnaround, from the $26 million net loss in 2001, which included the $5.1 million benefit from the government grant, to $2 million net earnings in 2002. "This is validation of, validates our commitment to increasing and diversifying our revenue base and reducing our cost structure. This is especially noteworthy as the economy has continued to weaken and many of our competitors have suffered. He continued, "I'm especially proud that we achieved or exceeded virtually all of our operating and financial targets this year. We converted two convertible aircraft to full freighters in 2002, in response to the increase in cargo business. Our cargo business, in fact, increased from 12 percent of total revenues in 2001 to 20 percent in 2002."
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