Midnight Mike
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http://biz.yahoo.com/djus/030228/1009000365_1.html
Atlas Air Says SEC Formalized Investigation Into Accounting
Friday February 28, 10:09 am ET
PURCHASE, N.Y. (Dow Jones)--Atlas Air Worldwide Holdings Inc. doesn't expect to complete its ongoing re-audit of its 2001 and 2002 results by the end of the first quarter, and the freight carrier said the Securities and Exchange Commission (News - Websites) has formalized its investigation into the accounting restatement.
The company also announced it is taking steps to reduce or defer lease payments, while negotiating an extension to bank default waivers that expire in about a month. With Chief Executive Richard Shuyler focused on securing financial commitments, the company has named Jeffrey Erickson acting president.
Atlas Air decided in October to re-audit the financial results after reviewing its financial records and accounting policies since hiring Ernst & Young in April to replace Arthur Andersen. An Atlas Air spokeswoman said the re-audit was proving to be "complex," but declined to describe the review's findings beyond the October announcement, in which the company said adjustments were needed in the areas of inventory obsolescence, maintenance expense and allowance for bad debts.
The company said it plans to cooperate with the SEC's now formal investigation, which began as an informal inquiry the day after Atlas disclosed the need for a restatement. The SEC has requested certain documents, Atlas said.
Atlas Air won't file with the SEC its Form 10-Q for the third quarter or its 10-K for the full year until the reaudit is complete.
The failure to provide its third-quarter financial statement to lenders by March 31 would constitute an event of default, which is presently waived until that date. Atlas said in an 8-K filing Friday that if lenders choose to accelerate payment of debt, the company might have to consider a debt restructuring or the sale of some or all assets, among several options.
Atlas said fourth-quarter operating revenue rose 45.8% to $413.7 million, primarily due to the $140.9 million revenue contribution from Polar Air Cargo, a scheduled-service carrier that was acquired last year from a General Electric Co. (NYSE:GE - News) unit. Strong military and commercial charter demand created by labor disruptions at West Coast ports also drove the revenue growth.
The Atlas spokeswoman declined to provide bottom-line results for the quarter or year.
As of Dec. 31, Atlas' cash and investment balance was $254.9 million, down from $350 million a year earlier. Long-term debt, including the current portion, was at $930.6 million, and total future payments of long-term lease obligations stood at $3.7 billion.
Atlas Air has begun negotiating to reduce or defer lease payments on six Boeing aircraft, having already missed six payments. The company received one notice of lease termination and is returning that aircraft.
In addition, Boeing agreed to delay the delivery of one 747-400 aircraft, previously scheduled for delivery in October 2003, until September 2006. That was Atlas' only outstanding delivery obligation.
The holding company's new acting president, Erickson, became president and chief operating officer of the Atlas Air Inc. (NYSE:CGO - News) unit in August. The Atlas spokeswoman said the position might become permanent.
Atlas hopes to announce a new chief financial officer soon, she added, from a current roster of candidates both within and outside the company. Douglas Carty left in early December to become the financial chief at Laidlaw Inc. .
New York Stock Exchange (News - Websites)-listed shares recently traded at $1.09, unchanged from Thursday's close and recovered somewhat from a 52-week low of 82 cents set on Tuesday. The stock traded as high as $14.75 in the past year, on March 13.
-Pamela Tate; Dow Jones Newswires; 201-938-5400
Atlas Air Says SEC Formalized Investigation Into Accounting
Friday February 28, 10:09 am ET
PURCHASE, N.Y. (Dow Jones)--Atlas Air Worldwide Holdings Inc. doesn't expect to complete its ongoing re-audit of its 2001 and 2002 results by the end of the first quarter, and the freight carrier said the Securities and Exchange Commission (News - Websites) has formalized its investigation into the accounting restatement.
The company also announced it is taking steps to reduce or defer lease payments, while negotiating an extension to bank default waivers that expire in about a month. With Chief Executive Richard Shuyler focused on securing financial commitments, the company has named Jeffrey Erickson acting president.
Atlas Air decided in October to re-audit the financial results after reviewing its financial records and accounting policies since hiring Ernst & Young in April to replace Arthur Andersen. An Atlas Air spokeswoman said the re-audit was proving to be "complex," but declined to describe the review's findings beyond the October announcement, in which the company said adjustments were needed in the areas of inventory obsolescence, maintenance expense and allowance for bad debts.
The company said it plans to cooperate with the SEC's now formal investigation, which began as an informal inquiry the day after Atlas disclosed the need for a restatement. The SEC has requested certain documents, Atlas said.
Atlas Air won't file with the SEC its Form 10-Q for the third quarter or its 10-K for the full year until the reaudit is complete.
The failure to provide its third-quarter financial statement to lenders by March 31 would constitute an event of default, which is presently waived until that date. Atlas said in an 8-K filing Friday that if lenders choose to accelerate payment of debt, the company might have to consider a debt restructuring or the sale of some or all assets, among several options.
Atlas said fourth-quarter operating revenue rose 45.8% to $413.7 million, primarily due to the $140.9 million revenue contribution from Polar Air Cargo, a scheduled-service carrier that was acquired last year from a General Electric Co. (NYSE:GE - News) unit. Strong military and commercial charter demand created by labor disruptions at West Coast ports also drove the revenue growth.
The Atlas spokeswoman declined to provide bottom-line results for the quarter or year.
As of Dec. 31, Atlas' cash and investment balance was $254.9 million, down from $350 million a year earlier. Long-term debt, including the current portion, was at $930.6 million, and total future payments of long-term lease obligations stood at $3.7 billion.
Atlas Air has begun negotiating to reduce or defer lease payments on six Boeing aircraft, having already missed six payments. The company received one notice of lease termination and is returning that aircraft.
In addition, Boeing agreed to delay the delivery of one 747-400 aircraft, previously scheduled for delivery in October 2003, until September 2006. That was Atlas' only outstanding delivery obligation.
The holding company's new acting president, Erickson, became president and chief operating officer of the Atlas Air Inc. (NYSE:CGO - News) unit in August. The Atlas spokeswoman said the position might become permanent.
Atlas hopes to announce a new chief financial officer soon, she added, from a current roster of candidates both within and outside the company. Douglas Carty left in early December to become the financial chief at Laidlaw Inc. .
New York Stock Exchange (News - Websites)-listed shares recently traded at $1.09, unchanged from Thursday's close and recovered somewhat from a 52-week low of 82 cents set on Tuesday. The stock traded as high as $14.75 in the past year, on March 13.
-Pamela Tate; Dow Jones Newswires; 201-938-5400
