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Avantair, Inc. Reports Fiscal 2013 Second Quarter Financial Results

Stocks in this article: AAIR

Conference Call

Chairman and Chief Executive Officer Steven Santo, President Stephen Wagman and Chief Financial Officer Carla Stucky will hold a conference call with the financial community on Tuesday, February 12, 2013 at 5 p.m. 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 or 1-847-619-6547 U.S. Toll. For international callers, dial: 1-847-619-6547. When prompted, give Confirmation Number: 34223850 or ask for "Avantair's Second Quarter Fiscal 2013 Earnings Conference Call." The live conference call will also be webcast on the company's website at under the Investors section.

A telephonic replay of the conference call may be accessed approximately two hours after the call through March 13, 2013, by dialing 1-888-843-7419 U.S. Toll Free or 1-630-652-3042 U.S. Toll. For international callers, dial: 1-630-652-3042. When prompted key in the Passcode: 34223850#.

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 (in thousands):

  Three Months Ended December 31, Six Months Ended December 31,
  2012 2011 2012 2011
Net Loss  $ (1,563)  $ (916)  $ (2,532)  $ (3,096)
Depreciation and amortization  1,137  1,148  2,588  2,078
Interest expense  815  1,240  1,806  2,296
Stock-based compensation  159  181  313  355
Employee termination and other costs  (31)  28  69  28
Loss on sale of asset  --   --   477  -- 
Voluntary stand down costs 1  1,209  --   1,209  -- 
Non cash settlement 2  1,056  --   1,056  -- 
Interest and other income  (12)  (14)  (30)  (80)
Gain on sale of asset  (22)  --   (22)  -- 
Change in fair value of derivative liabilities  (59)  --   (59)  -- 
Gain on receipt of used share  (180)    (180)  
Gain on debt extinguishment  --   --   --   (439)
Adjusted EBITDA  $ 2,509  $ 1,667  $ 4,695  $ 1,142

1On October 25, 2012, the Company made an announcement regarding the voluntary stand down of its operations in order to complete a comprehensive review of records and supporting maintenance documentation and an inspection of its aircraft fleet. The effect of the operational stand down negatively impacted the Company's cash receipts, liquidity and retention of program participants. Separate of charter and costs associated with retention of program participants, the Company incurred approximately $1.2 million for consulting, FAA, furlough, legal, communication and other costs. The non-recurring costs related to the voluntary stand down have been added back in the calculation of Adjusted EBITDA.

2On February 6, 2013, the Company entered into a settlement with a large stockholder and its related parties. The settlement involved the Company issuing $1.1 million in senior secured convertible promissory notes and warrants to purchase approximately 4.2 million shares of common stock. During the period ended December 31, 2012, the Company accrued $1.1 million of G&A expense associated with this settlement. This settlement is for claims related to the Company not maintaining the effectiveness of its Registration Statement under a certain October 26, 2009 Registration Rights Agreement The non-recurring expense associated with the settlement has been added back in the calculation of Adjusted EBITDA. 

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 United States 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.

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