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World Airways meets its revenue goals for the second quarter

Peachtree City’s World Airways announced that it expects to meet its previously stated goal for both total revenues and military revenues for the second quarter of 2004. The company had estimated $110 to $120 million in total revenues for the quarter ending June 30 and $80 to $90 million in military revenues.

Based on preliminary, unaudited results, World expects that operating income should be between $3.3 million and $3.5 million.

The preliminary results for the quarter are subject to the company’s management and independent auditors’ customary quarterly review procedures. The company also reiterated that it should report net profitability for the sixth consecutive quarter.

The two major components affecting operating income were one-time personnel costs and higher-than-anticipated medical claims for the quarter.

Randy Martinez, president and chief executive officer stated, “We are pleased to report strong revenues and continued success in our strategy to diversify our business, as evidenced by two new commercial cargo clients, EVA Airways and China Airlines. We are, however, disappointed to have to revise our operating income guidance for the quarter.”

The personnel costs, totaling approximately $900,000, were primarily associated with contractual obligations arising from the retirement of the company’s former chairman/CEO. The company also experienced unusually high medical costs in the 2004 second quarter due to several catastrophic claims, and as a result had to increase its medical claims accrual by nearly $900,000.

Gil Duarte, chief financial officer, commented, “Over the course of the quarter, we reviewed an upward trend in employee medical claims and therefore took appropriate action to limit our future exposure. We will continue to monitor these expenses closely, and will adjust our accrual for the third quarter if warranted.”

World Airways plans to issue its financial results for the second quarter after the market close tomorrow.