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Delaware
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26-1631624
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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PART I. FINANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II. OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 6.
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2014
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2013
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2014
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2013
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||||||||
REVENUES
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$
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149,618
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$
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138,904
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$
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293,211
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$
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282,183
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OPERATING EXPENSES
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||||||||
Salaries, wages and benefits
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40,895
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41,964
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83,960
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85,273
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Maintenance, materials and repairs
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23,168
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25,005
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48,047
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47,139
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Depreciation and amortization
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27,142
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21,765
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52,121
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42,685
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Fuel
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14,014
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12,440
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26,274
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26,801
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Rent
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6,924
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6,791
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14,234
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13,570
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Travel
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4,419
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4,772
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8,992
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9,499
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||||
Landing and ramp
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2,576
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1,972
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5,314
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6,037
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Insurance
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1,573
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1,396
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2,778
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2,907
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Other operating expenses
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10,790
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8,630
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19,538
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17,690
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131,501
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124,735
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261,258
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251,601
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OPERATING INCOME
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18,117
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14,169
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31,953
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30,582
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OTHER INCOME (EXPENSE)
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Interest income
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24
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18
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43
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39
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Interest expense
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(3,481
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)
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(3,554
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)
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(7,304
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)
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(6,686
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)
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Net gain on derivative instruments
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31
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|
452
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330
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742
|
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||||
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(3,426
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)
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(3,084
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)
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(6,931
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)
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(5,905
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)
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EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
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14,691
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11,085
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25,022
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24,677
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INCOME TAX EXPENSE
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(5,393
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)
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(4,170
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)
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(9,202
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)
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(9,261
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)
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EARNINGS FROM CONTINUING OPERATIONS
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9,298
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6,915
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15,820
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15,416
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EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES
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211
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(1
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422
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(2
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)
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NET EARNINGS
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$
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9,509
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$
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6,914
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$
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16,242
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$
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15,414
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||||||||
BASIC EARNINGS PER SHARE
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||||||||
Continuing operations
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$
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0.14
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$
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0.11
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$
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0.25
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$
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0.24
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Discontinued operations
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0.01
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—
|
|
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—
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|
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—
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||||
TOTAL BASIC EARNINGS PER SHARE
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$
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0.15
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$
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0.11
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$
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0.25
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$
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0.24
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DILUTED EARNINGS PER SHARE
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Continuing operations
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$
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0.14
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$
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0.11
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$
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0.24
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$
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0.24
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Discontinued operations
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0.01
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—
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0.01
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—
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||||
TOTAL DILUTED EARNINGS PER SHARE
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$
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0.15
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$
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0.11
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$
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0.25
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$
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0.24
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||||||||
WEIGHTED AVERAGE SHARES
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Basic
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64,285
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64,050
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64,217
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63,931
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Diluted
|
65,207
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64,859
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65,174
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64,692
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2014
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2013
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2014
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2013
|
||||||||
NET EARNINGS
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$
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9,509
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$
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6,914
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$
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16,242
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$
|
15,414
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OTHER COMPREHENSIVE INCOME (LOSS):
|
|
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Defined Benefit Pension
|
—
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1,958
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(1
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)
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3,916
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Defined Benefit Post-Retirement
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(504
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)
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(834
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)
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(1,008
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)
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(1,668
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)
|
||||
Gains and Losses on Derivatives
|
(7
|
)
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|
(8
|
)
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(14
|
)
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(16
|
)
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||||
|
|
|
|
|
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|
|
||||||||
TOTAL COMPREHENSIVE INCOME, net of tax
|
$
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8,998
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$
|
8,030
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$
|
15,219
|
|
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$
|
17,646
|
|
|
June 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
ASSETS
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|
||||
CURRENT ASSETS:
|
|
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|
||||
Cash and cash equivalents
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$
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23,763
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$
|
31,699
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Accounts receivable, net of allowance of $863 in 2014 and $717 in 2013
|
57,126
|
|
|
52,247
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|
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Inventory
|
9,777
|
|
|
9,050
|
|
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Prepaid supplies and other
|
12,810
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|
|
9,730
|
|
||
Deferred income taxes
|
13,957
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|
|
13,957
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|
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Aircraft and engines held for sale
|
1,015
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|
|
2,995
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TOTAL CURRENT ASSETS
|
118,448
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|
119,678
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|
||
Property and equipment, net
|
809,810
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|
|
838,172
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|
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Other assets
|
38,214
|
|
|
21,143
|
|
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Pension assets, net of obligations
|
18,862
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|
|
14,855
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|
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Intangibles
|
4,755
|
|
|
4,896
|
|
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Goodwill
|
34,395
|
|
|
34,395
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|
||
TOTAL ASSETS
|
$
|
1,024,484
|
|
|
$
|
1,033,139
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
33,971
|
|
|
$
|
34,818
|
|
Accrued salaries, wages and benefits
|
21,061
|
|
|
23,163
|
|
||
Accrued expenses
|
10,121
|
|
|
9,695
|
|
||
Current portion of debt obligations
|
24,027
|
|
|
23,721
|
|
||
Unearned revenue
|
9,487
|
|
|
8,733
|
|
||
TOTAL CURRENT LIABILITIES
|
98,667
|
|
|
100,130
|
|
||
Long term debt
|
328,103
|
|
|
360,794
|
|
||
Post-retirement obligations
|
29,985
|
|
|
30,638
|
|
||
Other liabilities
|
64,134
|
|
|
62,740
|
|
||
Deferred income taxes
|
118,335
|
|
|
109,869
|
|
||
TOTAL LIABILITIES
|
639,224
|
|
|
664,171
|
|
||
Commitments and contingencies (Note G)
|
|
|
|
||||
STOCKHOLDERS’ EQUITY:
|
|
|
|
||||
Preferred stock, 20,000,000 shares authorized, including 75,000 Series A Junior Participating Preferred Stock
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share; 75,000,000 shares authorized; 64,939,895 and 64,618,305 shares issued and outstanding in 2014 and 2013, respectively
|
649
|
|
|
646
|
|
||
Additional paid-in capital
|
526,023
|
|
|
524,953
|
|
||
Accumulated deficit
|
(110,571
|
)
|
|
(126,813
|
)
|
||
Accumulated other comprehensive loss
|
(30,841
|
)
|
|
(29,818
|
)
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
385,260
|
|
|
368,968
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
1,024,484
|
|
|
$
|
1,033,139
|
|
|
|
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2014
|
|
2013
|
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net earnings from continuing operations
|
$
|
15,820
|
|
|
$
|
15,416
|
|
Net earnings (loss) from discontinued operations
|
422
|
|
|
(2
|
)
|
||
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
52,121
|
|
|
42,685
|
|
||
Pension and post-retirement
|
(1,585
|
)
|
|
3,530
|
|
||
Deferred income taxes
|
9,047
|
|
|
9,111
|
|
||
Amortization of stock-based compensation
|
1,286
|
|
|
1,275
|
|
||
Amortization of DHL promissory note
|
(3,100
|
)
|
|
(3,100
|
)
|
||
Net gain on derivative instruments
|
(330
|
)
|
|
(742
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(4,619
|
)
|
|
4,023
|
|
||
Inventory and prepaid supplies
|
(3,713
|
)
|
|
1,689
|
|
||
Accounts payable
|
(976
|
)
|
|
(2,243
|
)
|
||
Unearned revenue
|
(2,334
|
)
|
|
(3,079
|
)
|
||
Accrued expenses, salaries, wages, benefits and other liabilities
|
96
|
|
|
(2,964
|
)
|
||
Pension and post-retirement assets
|
(4,660
|
)
|
|
(15,239
|
)
|
||
Other
|
(2,041
|
)
|
|
(2,329
|
)
|
||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
55,434
|
|
|
48,031
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(23,508
|
)
|
|
(72,841
|
)
|
||
Proceeds from property and equipment
|
1,404
|
|
|
1,310
|
|
||
Investment in nonconsolidated affiliate
|
(15,000
|
)
|
|
—
|
|
||
NET CASH (USED IN) INVESTING ACTIVITIES
|
(37,104
|
)
|
|
(71,531
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Principal payments on long term obligations
|
(44,285
|
)
|
|
(32,625
|
)
|
||
Proceeds from borrowings
|
15,000
|
|
|
60,000
|
|
||
Reimbursement of hanger construction costs
|
3,019
|
|
|
1,615
|
|
||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
|
(26,266
|
)
|
|
28,990
|
|
||
|
|
|
|
||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(7,936
|
)
|
|
5,490
|
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
31,699
|
|
|
15,442
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
23,763
|
|
|
$
|
20,932
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
||||
Interest paid, net of amount capitalized
|
$
|
7,118
|
|
|
$
|
6,417
|
|
Federal alternative minimum and state income taxes paid
|
$
|
565
|
|
|
$
|
666
|
|
SUPPLEMENTAL NON-CASH INFORMATION:
|
|
|
|
||||
Debt extinguished
|
$
|
3,100
|
|
|
$
|
3,100
|
|
Accrued capital expenditures
|
$
|
1,184
|
|
|
$
|
9,947
|
|
Boeing 767 and 757 aircraft and flight equipment
|
10 to 20 years
|
Support equipment
|
5 to 10 years
|
Vehicles and other equipment
|
3 to 8 years
|
•
|
Level 1:
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
•
|
Level 2:
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3:
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include items where the determination of fair value requires significant management judgment or estimation.
|
|
CAM
|
|
Total
|
||||
Carrying value as of December 31, 2013
|
$
|
34,395
|
|
|
$
|
34,395
|
|
Carrying value as of June 30, 2014
|
$
|
34,395
|
|
|
$
|
34,395
|
|
|
|
Customer
|
|
Airline
|
|
|
||||||
|
|
Relationships
|
|
Certificates
|
|
Total
|
||||||
Carrying value as of December 31, 2013
|
|
$
|
1,896
|
|
|
$
|
3,000
|
|
|
$
|
4,896
|
|
Amortization
|
|
(141
|
)
|
|
—
|
|
|
(141
|
)
|
|||
Carrying value as of June 30, 2014
|
|
$
|
1,755
|
|
|
$
|
3,000
|
|
|
$
|
4,755
|
|
As of June 30, 2014
|
Fair Value Measurement Using
|
|
Total
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents—money market
|
$
|
20
|
|
|
$
|
4,310
|
|
|
$
|
—
|
|
|
$
|
4,330
|
|
Total Assets
|
$
|
20
|
|
|
$
|
4,310
|
|
|
$
|
—
|
|
|
$
|
4,330
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
|
$
|
—
|
|
|
$
|
(2,185
|
)
|
|
$
|
—
|
|
|
$
|
(2,185
|
)
|
Total Liabilities
|
$
|
—
|
|
|
$
|
(2,185
|
)
|
|
$
|
—
|
|
|
$
|
(2,185
|
)
|
As of December 31, 2013
|
Fair Value Measurement Using
|
|
Total
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents—money market
|
$
|
20
|
|
|
$
|
301
|
|
|
$
|
—
|
|
|
$
|
321
|
|
Total Assets
|
$
|
20
|
|
|
$
|
301
|
|
|
$
|
—
|
|
|
$
|
321
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
|
$
|
—
|
|
|
$
|
(2,515
|
)
|
|
$
|
—
|
|
|
$
|
(2,515
|
)
|
Total Liabilities
|
$
|
—
|
|
|
$
|
(2,515
|
)
|
|
$
|
—
|
|
|
$
|
(2,515
|
)
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Aircraft and flight equipment
|
$
|
1,247,913
|
|
|
$
|
1,236,225
|
|
Support equipment
|
49,733
|
|
|
51,179
|
|
||
Vehicles and other equipment
|
1,759
|
|
|
1,771
|
|
||
Leasehold improvements
|
1,143
|
|
|
1,154
|
|
||
|
1,300,548
|
|
|
1,290,329
|
|
||
Accumulated depreciation
|
(490,738
|
)
|
|
(452,157
|
)
|
||
Property and equipment, net
|
$
|
809,810
|
|
|
$
|
838,172
|
|
|
June 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Unsubordinated term loan
|
$
|
123,750
|
|
|
$
|
131,250
|
|
Revolving credit facility
|
173,000
|
|
|
190,500
|
|
||
Aircraft loans
|
50,730
|
|
|
55,015
|
|
||
Promissory note due to DHL, unsecured
|
4,650
|
|
|
7,750
|
|
||
Total long term obligations
|
352,130
|
|
|
384,515
|
|
||
Less: current portion
|
(24,027
|
)
|
|
(23,721
|
)
|
||
Total long term obligations, net
|
$
|
328,103
|
|
|
$
|
360,794
|
|
Airline
|
Labor Agreement Unit
|
Percentage of
the Company’s
Employees
|
ABX
|
International Brotherhood of Teamsters
|
14.5%
|
ATI
|
Air Line Pilots Association
|
5.9%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
Pension Plans
|
|
Post-Retirement Healthcare Plan
|
|
Pension Plans
|
|
Post-Retirement Healthcare Plan
|
||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
69
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120
|
|
|
$
|
138
|
|
Interest cost
|
9,879
|
|
|
8,989
|
|
|
71
|
|
|
66
|
|
|
19,758
|
|
|
17,978
|
|
|
142
|
|
|
132
|
|
||||||||
Expected return on plan assets
|
(11,528
|
)
|
|
(11,498
|
)
|
|
—
|
|
|
—
|
|
|
(23,056
|
)
|
|
(22,996
|
)
|
|
—
|
|
|
—
|
|
||||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
(872
|
)
|
|
(1,413
|
)
|
|
—
|
|
|
—
|
|
|
(1,744
|
)
|
|
(2,826
|
)
|
||||||||
Amortization of net (gain) loss
|
—
|
|
|
3,074
|
|
|
80
|
|
|
104
|
|
|
(1
|
)
|
|
6,148
|
|
|
160
|
|
|
208
|
|
||||||||
Net periodic benefit cost
|
$
|
(1,649
|
)
|
|
$
|
565
|
|
|
$
|
(661
|
)
|
|
$
|
(1,174
|
)
|
|
$
|
(3,299
|
)
|
|
$
|
1,130
|
|
|
$
|
(1,322
|
)
|
|
$
|
(2,348
|
)
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
|||||||||
Expiration Date
|
Stated
Interest
Rate
|
|
Notional
Amount
|
|
Market
Value
(Liability)
|
|
Notional
Amount
|
|
Market
Value
(Liability)
|
|||||
May 9, 2016
|
2.020
|
%
|
|
61,875
|
|
|
(1,590
|
)
|
|
65,625
|
|
|
(1,988
|
)
|
June 30, 2017
|
1.183
|
%
|
|
61,875
|
|
|
(595
|
)
|
|
65,625
|
|
|
(527
|
)
|
|
|
Defined Benefit Pension
|
|
Defined Benefit Post-Retirement
|
|
Gains and Losses on Derivative
|
|
Total
|
||||
Balance as of March 31, 2013
|
|
(119,644
|
)
|
|
3,443
|
|
|
30
|
|
|
(116,171
|
)
|
Amounts reclassified from accumulated other comprehensive income:
|
|
|
|
|
|
|
|
|
||||
Actuarial costs (reclassified to salaries, wages and benefits)
|
|
3,074
|
|
|
104
|
|
|
—
|
|
|
3,178
|
|
Negative prior service cost (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
(1,413
|
)
|
|
—
|
|
|
(1,413
|
)
|
Hedging gain (reclassified to interest expense)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
Income Tax (Expense) or Benefit
|
|
(1,116
|
)
|
|
475
|
|
|
5
|
|
|
(636
|
)
|
Other comprehensive income (loss), net of tax
|
|
1,958
|
|
|
(834
|
)
|
|
(8
|
)
|
|
1,116
|
|
Balance as of June 30, 2013
|
|
(117,686
|
)
|
|
2,609
|
|
|
22
|
|
|
(115,055
|
)
|
|
|
|
|
|
|
|
|
|
||||
Balance as of December 31, 2012
|
|
(121,602
|
)
|
|
4,277
|
|
|
38
|
|
|
(117,287
|
)
|
Amounts reclassified from accumulated other comprehensive income
|
|
|
|
|
|
|
|
|
||||
Actuarial costs (reclassified to salaries, wages and benefits)
|
|
6,148
|
|
|
208
|
|
|
—
|
|
|
6,356
|
|
Negative prior service cost (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
(2,826
|
)
|
|
—
|
|
|
(2,826
|
)
|
Hedging gain (reclassified to interest expense)
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
Income Tax (Expense) or Benefit
|
|
(2,232
|
)
|
|
950
|
|
|
10
|
|
|
(1,272
|
)
|
Other comprehensive income (loss), net of tax
|
|
3,916
|
|
|
(1,668
|
)
|
|
(16
|
)
|
|
2,232
|
|
Balance as of June 30, 2013
|
|
(117,686
|
)
|
|
2,609
|
|
|
22
|
|
|
(115,055
|
)
|
|
|
Defined Benefit Pension
|
|
Defined Benefit Post-Retirement
|
|
Gains and Losses on Derivative
|
|
Total
|
||||
Balance as of March 31, 2014
|
|
(31,073
|
)
|
|
741
|
|
|
2
|
|
|
(30,330
|
)
|
Amounts reclassified from accumulated other comprehensive income:
|
|
|
|
|
|
|
|
|
||||
Actuarial costs (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
80
|
|
|
—
|
|
|
80
|
|
Negative prior service cost (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
(872
|
)
|
|
—
|
|
|
(872
|
)
|
Hedging gain (reclassified to interest expense)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
Income Tax (Expense) or Benefit
|
|
—
|
|
|
288
|
|
|
4
|
|
|
292
|
|
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
(504
|
)
|
|
(7
|
)
|
|
(511
|
)
|
Balance as of June 30, 2014
|
|
(31,073
|
)
|
|
237
|
|
|
(5
|
)
|
|
(30,841
|
)
|
|
|
|
|
|
|
|
|
|
||||
Balance as of December 31, 2013
|
|
(31,072
|
)
|
|
1,245
|
|
|
9
|
|
|
(29,818
|
)
|
Amounts reclassified from accumulated other comprehensive income
|
|
|
|
|
|
|
|
|
||||
Actuarial costs (reclassified to salaries, wages and benefits)
|
|
(1
|
)
|
|
160
|
|
|
—
|
|
|
159
|
|
Negative prior service cost (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
(1,744
|
)
|
|
—
|
|
|
(1,744
|
)
|
Hedging gain (reclassified to interest expense)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
Income Tax (Expense) or Benefit
|
|
—
|
|
|
576
|
|
|
8
|
|
|
584
|
|
Other comprehensive income (loss), net of tax
|
|
(1
|
)
|
|
(1,008
|
)
|
|
(14
|
)
|
|
(1,023
|
)
|
Balance as of June 30, 2014
|
|
(31,073
|
)
|
|
237
|
|
|
(5
|
)
|
|
(30,841
|
)
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2014
|
|
June 30, 2013
|
||||||||||
|
Number of
Awards
|
|
Weighted
average
grant-date
fair value
|
|
Number of
Awards
|
|
Weighted
average
grant-date
fair value
|
||||||
Outstanding at beginning of period
|
1,477,762
|
|
|
$
|
5.83
|
|
|
1,463,272
|
|
|
$
|
5.97
|
|
Granted
|
467,567
|
|
|
7.52
|
|
|
627,488
|
|
|
5.73
|
|
||
Converted
|
(186,179
|
)
|
|
7.50
|
|
|
(392,748
|
)
|
|
4.87
|
|
||
Expired
|
(4,300
|
)
|
|
7.64
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(17,800
|
)
|
|
6.26
|
|
|
(7,200
|
)
|
|
6.82
|
|
||
Outstanding at end of period
|
1,737,050
|
|
|
$
|
6.10
|
|
|
1,690,812
|
|
|
$
|
6.13
|
|
Vested
|
415,550
|
|
|
$
|
5.28
|
|
|
441,812
|
|
|
$
|
4.90
|
|
|
Three Months Ending
|
|
Six Months Ending
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Earnings from continuing operations
|
$
|
9,298
|
|
|
$
|
6,915
|
|
|
$
|
15,820
|
|
|
$
|
15,416
|
|
Weighted-average shares outstanding for basic earnings per share
|
64,285
|
|
|
64,050
|
|
|
64,217
|
|
|
63,931
|
|
||||
Common equivalent shares:
|
|
|
|
|
|
|
|
||||||||
Effect of stock-based compensation awards
|
922
|
|
|
809
|
|
|
957
|
|
|
761
|
|
||||
Weighted-average shares outstanding assuming dilution
|
65,207
|
|
|
64,859
|
|
|
65,174
|
|
|
64,692
|
|
||||
Basic earnings per share from continuing operations
|
$
|
0.14
|
|
|
$
|
0.11
|
|
|
$
|
0.25
|
|
|
$
|
0.24
|
|
Diluted earnings per share from continuing operations
|
$
|
0.14
|
|
|
$
|
0.11
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
Three Months Ending
|
|
Six Months Ending
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Total revenues:
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
40,590
|
|
|
$
|
39,362
|
|
|
$
|
81,225
|
|
|
$
|
78,331
|
|
ACMI Services
|
111,304
|
|
|
106,604
|
|
|
219,900
|
|
|
217,920
|
|
||||
All other
|
36,493
|
|
|
26,951
|
|
|
63,301
|
|
|
53,205
|
|
||||
Eliminate inter-segment revenues
|
(38,769
|
)
|
|
(34,013
|
)
|
|
(71,215
|
)
|
|
(67,273
|
)
|
||||
Total
|
$
|
149,618
|
|
|
$
|
138,904
|
|
|
$
|
293,211
|
|
|
$
|
282,183
|
|
Customer revenues:
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
17,839
|
|
|
$
|
17,845
|
|
|
$
|
36,253
|
|
|
$
|
36,181
|
|
ACMI Services
|
111,304
|
|
|
106,604
|
|
|
219,900
|
|
|
217,920
|
|
||||
All other
|
20,475
|
|
|
14,455
|
|
|
37,058
|
|
|
28,082
|
|
||||
Total
|
$
|
149,618
|
|
|
$
|
138,904
|
|
|
$
|
293,211
|
|
|
$
|
282,183
|
|
Depreciation and amortization expense:
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
20,328
|
|
|
$
|
14,803
|
|
|
$
|
38,673
|
|
|
$
|
29,319
|
|
ACMI Services
|
7,191
|
|
|
6,692
|
|
|
14,026
|
|
|
12,830
|
|
||||
All other
|
(377
|
)
|
|
270
|
|
|
(578
|
)
|
|
536
|
|
||||
Total
|
$
|
27,142
|
|
|
$
|
21,765
|
|
|
$
|
52,121
|
|
|
$
|
42,685
|
|
Segment earnings (loss):
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
10,667
|
|
|
$
|
17,214
|
|
|
$
|
25,107
|
|
|
$
|
34,087
|
|
ACMI Services
|
309
|
|
|
(9,093
|
)
|
|
(6,737
|
)
|
|
(14,497
|
)
|
||||
All other
|
4,108
|
|
|
2,607
|
|
|
7,125
|
|
|
4,788
|
|
||||
Net unallocated interest expense
|
(424
|
)
|
|
(95
|
)
|
|
(803
|
)
|
|
(443
|
)
|
||||
Net gain on derivative instruments
|
31
|
|
|
452
|
|
|
330
|
|
|
742
|
|
||||
Pre-tax earnings from continuing operations
|
$
|
14,691
|
|
|
$
|
11,085
|
|
|
$
|
25,022
|
|
|
$
|
24,677
|
|
|
June 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Assets:
|
|
|
|
||||
CAM
|
$
|
776,655
|
|
|
$
|
808,987
|
|
ACMI Services
|
156,466
|
|
|
141,664
|
|
||
Discontinued operations
|
952
|
|
|
294
|
|
||
All other
|
90,411
|
|
|
82,194
|
|
||
Total
|
$
|
1,024,484
|
|
|
$
|
1,033,139
|
|
|
Three Months Ending
|
|
Six Months Ending
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues from Continuing Operations:
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
40,590
|
|
|
$
|
39,362
|
|
|
$
|
81,225
|
|
|
$
|
78,331
|
|
ACMI Services
|
|
|
|
|
|
|
|
||||||||
Airline services
|
88,657
|
|
|
89,920
|
|
|
176,164
|
|
|
183,077
|
|
||||
Reimbursable
|
22,647
|
|
|
16,684
|
|
|
43,736
|
|
|
34,843
|
|
||||
Total ACMI Services
|
111,304
|
|
|
106,604
|
|
|
219,900
|
|
|
217,920
|
|
||||
Other Activities
|
36,493
|
|
|
26,951
|
|
|
63,301
|
|
|
53,205
|
|
||||
Total Revenues
|
188,387
|
|
|
172,917
|
|
|
364,426
|
|
|
349,456
|
|
||||
Eliminate internal revenues
|
(38,769
|
)
|
|
(34,013
|
)
|
|
(71,215
|
)
|
|
(67,273
|
)
|
||||
Customer Revenues
|
$
|
149,618
|
|
|
$
|
138,904
|
|
|
$
|
293,211
|
|
|
$
|
282,183
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Pre-Tax Earnings (Loss) from Continuing Operations:
|
|
|
|
|
|
|
|
||||||||
CAM, inclusive of interest expense
|
$
|
10,667
|
|
|
$
|
17,214
|
|
|
$
|
25,107
|
|
|
$
|
34,087
|
|
ACMI Services
|
309
|
|
|
(9,093
|
)
|
|
(6,737
|
)
|
|
(14,497
|
)
|
||||
Other Activities
|
4,108
|
|
|
2,607
|
|
|
7,125
|
|
|
4,788
|
|
||||
Net unallocated interest expense
|
(424
|
)
|
|
(95
|
)
|
|
(803
|
)
|
|
(443
|
)
|
||||
Net gain on derivative instruments
|
31
|
|
|
452
|
|
|
330
|
|
|
742
|
|
||||
Pre-Tax Earnings from Continuing Operations
|
14,691
|
|
|
11,085
|
|
|
25,022
|
|
|
24,677
|
|
||||
Less Net gain on derivative instruments
|
(31
|
)
|
|
(452
|
)
|
|
(330
|
)
|
|
(742
|
)
|
||||
Adjusted Pre-Tax Earnings
|
$
|
14,660
|
|
|
$
|
10,633
|
|
|
$
|
24,692
|
|
|
$
|
23,935
|
|
|
ACMI
Services
|
|
CAM
|
|
Total
|
||||
In-service aircraft
|
|
|
|
|
|
||||
Aircraft owned
|
|
|
|
|
|
||||
Boeing 767-200
|
13
|
|
|
21
|
|
|
34
|
|
|
Boeing 767-300
|
5
|
|
|
—
|
|
|
5
|
|
|
Boeing 757-200
|
4
|
|
|
—
|
|
|
4
|
|
|
Boeing 757-200 Combi
|
4
|
|
|
—
|
|
|
4
|
|
|
Total
|
26
|
|
|
21
|
|
|
47
|
|
|
Carrying value
|
|
|
|
|
$
|
665,772
|
|
||
Operating lease
|
|
|
|
|
|
||||
Boeing 767-200
|
4
|
|
|
—
|
|
|
4
|
|
|
Boeing 767-300
|
2
|
|
|
—
|
|
|
2
|
|
|
Total
|
6
|
|
|
—
|
|
|
6
|
|
|
Carrying value
|
|
|
|
|
$
|
782
|
|
||
Other aircraft
|
|
|
|
|
|
||||
Boeing 767 available or staging for lease
|
—
|
|
|
4
|
|
|
4
|
|
10.1
|
Form of Restricted Stock Unit Award Agreement under Air Transport Service Group, Inc. 2005 Amended and Restated Long-Term Incentive Plan. (1)
|
|
|
10.2
|
Third Amendment to Credit Agreement and First Amendment to Guarantee and Collateral Agreement, dated May 6, 2014, by and among Cargo Aircraft Management, Inc., as Borrower, Air Transport Services Group, Inc., each of the Guarantors party thereto, each of the financial institutions party thereto as "Lenders", and SunTrust Bank, as Administrative Agent, filed herewith.
|
|
|
31.1
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
31.2
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
32.2
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 12, 2014.
|
|
|
|
|
AIR TRANSPORT SERVICES GROUP, INC.,
|
|
|
|
|
a Delaware Corporation
|
|
|
|
|
Registrant
|
|
|
|
|
|
|
|
|
|
/S/ JOSEPH C. HETE
|
|
|
|
|
Joseph C. Hete
|
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
Date:
|
August 5, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ QUINT O. TURNER
|
|
|
|
|
Quint O. Turner
|
|
|
|
|
Chief Financial Officer (Principal Financial Officer
|
Date:
|
August 5, 2014
|
|
|
and Principal Accounting Officer)
|
Level
|
Total Leverage Ratio
|
Applicable Margin for Eurodollar Rate Loans
|
Applicable Margin for Base Rate Loans
|
Commitment Fee for Revolver
|
I
|
Greater than or equal to 2.50x
|
2.25%
|
1.25%
|
0.35%
|
II
|
Less than 2.50x but greater than or equal to 2.00x
|
2.00%
|
1.00%
|
0.30%
|
III
|
Less than 2.00x but greater than or equal to 1.50x
|
1.75%
|
0.75%
|
0.25%
|
IV
|
Less than 1.50x but greater than or equal to 1.00x
|
1.50%
|
0.50%
|
0.20%
|
V
|
Less than 1.00x
|
1.25%
|
0.25%
|
0.20%
|
Date
|
Installment Amount
|
June 30, 2012
|
$1,875,000
|
September 30, 2012
|
$1,875,000
|
December 31, 2012
|
$1,875,000
|
March 31, 2013
|
$1,875,000
|
June 30, 2013
|
$3,750,000
|
September 30, 2013
|
$3,750,000
|
December 31, 2013
|
$3,750,000
|
March 31, 2014
|
$3,750,000
|
June 30, 2014
|
$3,750,000
|
September 30, 2014
|
$3,750,000
|
December 31, 2014
|
$3,750,000
|
March 31, 2015
|
$3,750,000
|
June 30, 2015
|
$3,750,000
|
September 30, 2015
|
$3,750,000
|
December 31, 2015
|
$3,750,000
|
March 31, 2016
|
$3,750,000
|
June 30, 2016
|
$3,750,000
|
September 30, 2016
|
$3,750,000
|
December 31, 2016
|
$3,750,000
|
March 31, 2017
|
$3,750,000
|
June 30, 2017
|
$3,750,000
|
September 30, 2017
|
$3,750,000
|
December 31, 2017
|
$3,750,000
|
March 31, 2018
|
$3,750,000
|
June 30, 2018
|
$3,750,000
|
September 30, 2018
|
$3,750,000
|
December 31, 2018
|
$3,750,000
|
March 31, 2019
|
$3,750,000
|
Term Facility Final
Maturity Date
|
All amounts outstanding
in respect of the Term
Loans”
|
|
REGIONS BANK, as a Lender
|
|
|
|
|
|
|
|
By:
/s/ Jose Mazariegos
|
|
Name: Jose Mazariegos
|
|
Title: Senior Vice President
|
|
|
|
|
|
JPMORGAN CHASE BANK, N.A., as a Lender
|
|
|
|
|
|
|
|
By:
/s/ John B. Middelberg
|
|
Name: John B. Middelberg
|
|
Title: SVP
|
|
|
|
|
|
BANK OF AMERICA, N.A., as a Lender
|
|
|
|
|
|
|
|
By:
/s/ Joseph R. Jackson
|
|
Name: Joseph R. Jackson
|
|
Title: Vice President
|
|
|
|
|
|
PNC BANK, N.A., as a Lender
|
|
|
|
|
|
|
|
By:
/s/ C. Joseph Richardson
|
|
Name: C. Joseph Richardson
|
|
Title: Senior Vice President
|
|
|
|
|
|
BRANCH BANKING AND TRUST COMPANY,
as a Lender
|
|
|
|
|
|
|
|
By:
/s/ Brent Walser
|
|
Name: Brent Walser
|
|
Title: Assistant Vice President
|
|
|
|
|
|
COMPASS BANK, as a Lender
|
|
|
|
|
|
|
|
By:
/s/ Jeffrey W. Powell
|
|
Name: Jeffrey W. Powell
|
|
Title: Sr. Vice President
|
|
|
|
|
|
THE NORTHERN TRUST COMPANY,
as a Lender
|
|
|
|
|
|
|
|
By:
/s/ Peter J. Hallan
|
|
Name: Peter J. Hallan
|
|
Title: Vice President
|
|
|
|
|
|
THE PRIVATE BANK AND TRUST COMPANY, as a Lender
|
|
|
|
|
|
|
|
By:
/s/ Nick Fadel
|
|
Name: Nick Fadel
|
|
Title: Managing Director
|
|
|
|
|
|
STELLARONE BANK, as a Lender
|
|
|
|
|
|
|
|
By:
/s/ Judson G. Foster
|
|
Name: Judson G. Foster
|
|
Title: SVP
|
|
|
|
|
|
ATLANTIC CAPITAL BANK, as a Lender
|
|
|
|
|
|
|
|
By:
/s/ H. Glenn Little
|
|
Name: H. Glenn Little
|
|
Title: SVP
|
|
|
|
|
|
TRISTATE CAPITAL BANK, as a Lender
|
|
|
|
|
|
|
|
By:
/s/ Michael P. Morris
|
|
Name: Michael P. Morris
|
|
Title: Senior Vice President
|
|
|
|
|
1.
|
This Certificate is furnished pursuant to Section 8.1(c) of the Credit Agreement, dated as of May 9, 2011, among Cargo Aircraft Management, Inc., a Florida corporation (the “
Borrower
”), Holdings, the several Lenders from time to time party thereto and SunTrust Bank, as Administrative Agent for the Lenders, (as in effect on the date of this Certificate, being herein called the “
Credit Agreement
”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings set forth in the Credit Agreement.
|
2.
|
Schedule 1 attached hereto correctly sets forth the calculations required to establish whether Holdings and its Subsidiaries were in compliance with Sections 9.12, 9.13, 9.14 and 9.15 of the Credit Agreement for the Fiscal [Quarter] [Year] ended ______, 201_.
|
3.
|
On the date hereof, no Default or Event of Default has occurred and is continuing.
|
4.
|
The Total Leverage Ratio for the Test Period ended ______ __, 201_ was ________.
|
5.
|
The Fixed Charge Coverage Ratio for the Test Period ended ______ __, 201_ was ________.
|
6.
|
The Consolidated EBITDA for the Test Period ended ______ __, 201_ was ________
|
7.
|
The Collateral to Outstanding Loan Value Ratio as of ______ __, 201_ was ________.
|
8.
|
The Collateral to Total Exposure Ratio as of ______ __, 201_ was ________.
|
Title:
|
Chief Financial Officer of Air
|
Name
|
Office
|
Signature
|
______________________
|
______________________
|
______________________
|
______________________
|
______________________
|
______________________
|
|
|
|
1.
|
I have reviewed this report on Form 10-Q of Air Transport Services Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ JOSEPH C. HETE
|
Joseph C. Hete
|
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Air Transport Services Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ QUINT O. TURNER
|
Quint O. Turner
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/
S
/ JOSEPH C. HETE
|
Joseph C. Hete
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ QUINT O. TURNER
|
Quint O. Turner
Chief Financial Officer
|