North Central Airlines Financial Annual Report 1979

FINANCIAL REPORT
FOR THE THREE MONTHS ENDED MARCH 31, 1 979
-
NORTH CENTRAL AIRLINES, INC.
balance sheets
(unaudited-in thousands)
ASSETS
March 31
CURRENT ASSETS
1979
Cash and short-term investments . .. . ........ ...... $ 27,607
Accounts receivable, less allowances . . . . . . . . . . . . . . 32,898
Flight equipment parts and supplies . . . . . . . . . . . . . . . 6,724
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . 8,677
75,906
PROPERTY AND EQUIPMENT -at cost
Flight equipment. . .......... . . . .. ....... .. .... . ... 238,834
Ground property and equipment . .. . . ... .. . .. .. .. .. 35,636
Improvements to leased property . . . . . . . . . . . . . . . . . . 7,288
281 ,758
Less accumulated depreciation, amortization . . . . . . . 78,760
202,998
Advance payments on equipment . . . . . . . . . . . . . . . . . . 26,994
DEFERRED CHARGES, OTHER ASSETS
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
229,992
4,710
$310,608
Current maturities of long-term debt .. .. ........... $ 16,129
Short-term notes payable ...... . ..... . ....... . .. . . .
Accounts payable ................................ .
Interline payables and tickets outstand ing . .. . . .... .
Accrued compensation, taxes, other .... .. . . ... .. . .
5,000
12,977
21 ,382
22,747
78,235
LONG-TERM OBLIGATIONS ... . ............... .. ... 136,779
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,028
144,807
STOCKHOLDERS' EQUITY
Common stock, $.20 par value ................... . .
Add itional paid- in capital .. . . . .................... .
Retained earnings . .......... . .... . ........ . ...... .
Treasury stock- at cost .............. . ........... .
2,506
18,430
67,010
(380)
87,566
$310,608
1978
$ 16,311
26,139
6,276
8,353
57,079
185,063
25,338
6,052
216,453
72,418
144,035
19,772
163,807
3,562
$224,448
$ 18,198
4,000
9,712
13,663
18,418
63,991
87,174
5,216
92,390
2,493
18,210
47,744
(380)
68,067
$224,448
statements or earnings
(unaudited-in thousands)
Three Months Ended March 31
OPERATING REVENUES 1979
Passenger . . ......... .. .................... . . . .... $ 67,461 $
Freight and express . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,057
Public service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,664
Mail...... ... .... . . . . . ....................... . .... 948
Non-scheduled service and other ................. .
OPERATING EXPENSES
Flying operations .. .. .. ....... . .................. .
Maintenance ... . . .. . .. ... . . ... ....... .... .. . ..... .
Aircraft and traffic servicing . . ......... . ......... .
Passenger service . .. ..... .... .... . .. ........ . .... .
Reservations, advertising and sales . .. ... ......... .
General and administrative ....................... .
Other transport-related expenses ................. .
Depreciation and amortization ... . . . .............. .
Operating profit ... .. . . . . . ...... ... ... . .. .. ... .
INTEREST AND OTHER
EXPENSES (INCOME)-net . .. .. . ............. . . . .
Earnings before income taxes ... . .. ... . . . .... .
5,336
81,466
27,681
9,452
17,730
6,140
8,106
3,906
299
4,836
78,150
3,316
2,947
369
INCOME TAXES .. . ... . . . .. .. . . .... . ..... .... .... ... ___
3_1
NET EARNINGS . ... ... .. . .. . . . .. .. ....... .. . . $ 338
===
NET EARNINGS PER SHARE . . . . . . . . . . . . . . . . . $ .03
traffic statistics
Passengers ............................................. .
Passenger miles .................................... ..
Avai lable seat miles ............................... .
Passenger load factor .......................... ..
Cargo ton miles .................................... ..
Revenue plane miles ............................ ..
Scheduled miles completed ................ ..
Three Months Ended March 31
1979
1,780,000
596,811 ,000
1,127,183,000
52.9%
4,721,000
11,466,000
94.2%
1978
1,441 ,000
416,781,000
798,711 ,000
52.2%
3,627,000
8,895,000
96.9%
$
1978
47,554
3,806
3,395
778
5,887
61,420
19,552
7,838
14,038
4,233
5,836
2,955
274
3,887
58,613
2,807
1,992
815
55
760
$ .06
Change
23.5%
43.2
41 .1
1.3
30.2
28.9
(2.8)
to our stockholders=
Substantial growth marked North Central's perfor-
mance in the first three months of 1979. Revenues jumped
33 percent to $81.5 million-a new high-and passenger
miles climbed a record 43 percent to 597 million.
Although the airline experienced the worst flying
weather in a decade, we are pleased to report a profit of
$338,000 for the first quarter, which is traditionally a
break-even or loss period.
Gains achieved by the company are due to nonstop
flights on 16 new long-haul routes, increased capacity
from additional DC-9-50 jets, and the favorable response to
discount fares. Financial results were adversely affected
by major disruptive winter storms in both January and
February, plus oil shortages which boosted jet fuel costs
by $1.5 million.
With revenues at $81.5 million and operating expenses
of $78.2 million, up 33 percent, the company showed an
operating profit of $3.3 million. Last year, the operating
profit was $2.8 million. Interest and other expenses rose to
$2.9 million, and taxes were virtually unchanged. The
$338,000 net profit compares with $760,000 for the first
quarter of 1978.
Further expansion is already underway. On April 29,
North Central inaugurated new Chicago-Houston service
with four daily flights over the 925-mile route, and also
added a prime-time round trip in the Detroit-Houston
market. Two new 130-passenger DC-9-50 jets were de-
livered in April, and a third is arriving in June, bringing the
company's fleet to 61 jet-powered aircraft. Four more
DC-9-50s will be delivered later this year. Nonstop flights
between Minneapolis/St. Paul and Washington , D.C.
(National Airport) are to begin June 25, and the airline will
then be serving 104 cities on its 24,200-mile route system.
The proposed merger of North Central and Southern
Airways to form Republic Airlines is nearing completion.
On April 26, the Civil Aeronautics Board instructed its staff
to prepare an opinion approving the merger. The written
order, which the CAB requested by May 10, must then be
affirmed by the President of the United States.
This is an exciting and challenging time for North
Central. Tremendous opportunities exist in the current
regulatory environment. Traffic growth on the airline's
expanded system and a general fare adjustment will
increase revenues. With these gains and strict cost
control, the company expects a good second quarter and
excellent earnings for the year.
HAL N. CARR
Chairman of the Board
April 30, 1979
Sincerely,
~~
BERNARD SWEET
President and
Chief Executive Officer
NORTH CENTRAL AIRLINES
~ 7500 NORTHLINER DRIVE
MINNEAPOLIS, MINNESOTA 55450
100%
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