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Avantair, Inc. Reports Fiscal 2013 Second Quarter Financial Results

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Avantair's future financial or business performance, strategies and expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" and similar expressions. Avantair cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and Avantair assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. In addition to factors previously disclosed in Avantair's filings with the Securities and Exchange Commission ("SEC") and those as may be identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: general economic and business conditions in the U.S. and abroad, changing interpretations of accounting principles, generally accepted in the U.S., changes in market acceptance of the company's products, inquiries and investigations and related litigation, fluctuations in customer demand, management of rapid growth, intensity of competition. The information set forth herein should be read in light of such risks. Avantair does not assume any obligation to update the information contained in this press release.

Avantair's filings with the SEC, accessible on the SEC's website at http://www.sec.gov, discuss these factors in more detail and identify additional factors that can affect forward-looking statements.

About Avantair

Avantair, the sole North American provider of fractional shares, leases and flight hour cards in the Piaggio Avanti aircraft, and the only publicly traded stand-alone private aircraft operator, is headquartered in Clearwater, FL, with approximately 400 employees. Avantair offers private travel solutions for individuals and businesses traveling within its service area, which includes the continental U.S., Canada, the Caribbean and Mexico, at a fraction of the cost of whole aircraft ownership. The company currently manages a fleet of 56 aircraft. For more information about Avantair, please visit: www.avantair.com .

The Avantair, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=14936

     
AVANTAIR, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in Thousands, Except Share Data)
     
     
ASSETS December 31, 2012 June 30, 2012
  (Unaudited) (Audited)
     
Current Assets    
Cash and cash equivalents  $ 1,400  $ 5,302
Accounts receivable, net of allowance of $1,046 and $1,340, respectively  9,091  11,707
Inventory  111  155
Current portion of aircraft costs related to fractional share sales  3,960  8,458
Prepaid expenses and other current assets  7,075  3,830
Total current assets  21,637  29,452
     
Long-Term Assets    
Aircraft costs related to fractional share sales, net of current portion  585  1,691
Property and equipment, net  38,552  40,136
Cash - restricted  2,267  2,226
Deposits on aircraft  7,334  7,193
Goodwill  1,141  1,141
Other assets  10,052  9,443
Total long-term assets  59,931  61,830
     
Total assets  $ 81,568  $ 91,282
     
LIABILITIES AND STOCKHOLDERS' DEFICIT    
     
Current Liabilities    
Accounts payable  $ 9,415  $ 9,051
Accrued liabilities  10,698  6,393
Customer deposits  3,514  3,115
Short-term debt  5,679  12,000
Current portion of long-term debt  3,745  4,652
Current portion of deferred revenue related to fractional aircraft share sales  4,938  9,995
Unearned management fee, flight hour card and membership revenue  52,649  60,015
Total current liabilities  90,638  105,221
     
Long-Term Liabilities    
Long-term debt, net of current portion  16,934  13,753
Senior secured convertible promissory notes  742  -- 
Derivative liabilities  3,051  -- 
Deferred revenue related to fractional aircraft share sales, net of current portion  6,089  8,179
Deferred revenue related to membership revenue, net of current portion  31  213
Other liabilities  2,769  2,465
Total long-term liabilities  29,616  24,610
     
Total liabilities  120,254  129,831
     
COMMITMENTS AND CONTINGENCIES    
     
Series A convertible preferred stock, $.0001 par value, authorized 300,000 shares; 152,000 shares issued and outstanding  14,845  14,799
     
STOCKHOLDERS' DEFICIT    
Preferred stock, $.0001 par value, authorized 700,000 shares; none issued or outstanding  --   -- 
Common stock, Class A, $.0001 par value, 75,000,000 shares authorized, 40,903,717 and 26,497,468 shares issued and outstanding, respectively  4  3
Additional paid-in capital  60,884  57,830
Accumulated deficit  (114,419)  (111,181)
Total stockholders' deficit  (53,531)  (53,348)
     
Total liabilities and stockholders' deficit  $ 81,568  $ 91,282
         
AVANTAIR, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations 
(Amounts in Thousands, Except Share Data)
(Unaudited)
         
  Three Months Ended December 31, Six Months Ended December 31,
  2012 2011 2012 2011
         
Revenue        
Fractional aircraft shares sold  $ 2,764  $ 6,774  $ 6,824  $ 13,616
Lease revenue  1,084  596  1,982  951
Management and maintenance fees  22,079  20,994  43,697  41,267
Flight hour card and club membership revenue  5,100  8,767  13,852  17,762
Flight activity and other ancillary billing  3,460  4,611  9,467  9,435
Other revenue  1,005  1,206  2,543  2,890
         
Total revenue  35,492  42,948  78,365  85,921
         
Operating expenses        
Cost of fractional aircraft shares sold  2,313  5,808  5,841  12,415
Cost of flight operations  19,381  19,073  40,643  38,451
Cost of fuel  6,229  9,336  16,019  18,999
General and administrative expenses  6,900  5,606  12,135  11,691
Selling expenses  584  1,639  1,610  3,578
Depreciation and amortization  1,137  1,148  2,588  2,078
Employee termination and other costs  (31)  28  69  28
Gain on receipt of used share  (180)  --   (180)  
Gain on sale of asset  (22)  --   (22)  -- 
Loss on sale of asset  --   --   477  -- 
Total operating expenses  36,311  42,638  79,180  87,240
         
Income (loss) from operations  (819)  310  (815)  (1,319)
         
Other income (expenses)        
Interest and other income  12  14  30  80
Interest expense  (815)  (1,240)  (1,806)  (2,296)
Change in fair value of derivative liabilities  59  --   59  -- 
Gain on debt extinguishment  --   --   --   439
Total other income (expenses)  (744)  (1,226)  (1,717)  (1,777)
         
Net loss  (1,563)  (916)  (2,532)  (3,096)
         
Preferred stock dividend and accretion of expenses  (384)  (373)  (749)  (745)
Net loss attributable to common stockholders  $ (1,947)  $ (1,289)  $ (3,281)  $ (3,841)
         
Loss per common share:        
Basic and diluted  $ (0.06)  $ (0.05)  $ (0.11)  $ (0.15)
         
Weighted-average common shares outstanding:        
Basic and diluted 32,848,369  26,450,305 29,755,264  26,436,770
CONTACT: Avantair, Inc.
         Stephen Wagman, President
         727-538-7909
         swagman@avantair.com
         
         Avantair, Inc.
         Carla Stucky, Chief Financial Officer
         727-538-7976
         cstucky@avantair.com

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