Exhibit 99.(c)(27)
MERCURY FINANCIAL PROJECTIONS
DATED MARCH 1, 2005
THESE FINANCIAL PROJECTIONS WERE SUBMITTED TO IMPERIAL CAPITAL IN CONNECTION WITH IMPERIAL CAPITAL’S OPINION. PLEASE BE ADVISED THAT THE PROJECTIONS WERE PREPARED ONLY FOR THE USE OF IMPERIAL CAPITAL, AND ARE NOT TO BE USED BY ANY OTHER PERSON OR ENTITY. IN ADDITION, THE PROJECTIONS SPEAK AS OF THE DATE THEREOF, AND MERCURY DOES NOT INTEND TO UPDATE SUCH PROJECTIONS.
Mercury Air Group
Financial Assumptions
MercFuel: | Assumptions | |||
Commercial volume growth | Assumes no major additions or losses of any major accounts. The projections assume organic growth with existing customers at 6.0% per year. | |||
Corporate volume growth | Assumes Corporate volume growth at 16% annually over the period as MercFuel focuses on the time share market. | |||
Annual fuel price increase | The inherently volatile nature of fuel prices makes it difficult to project future revenues. These projections are being generated at a time when fuel prices are increasing dramatically. Given that no forward fuel pricing projections are available, the Company assumes prices remain constant. | |||
Margin per gallon | Assumes historical gross margin per gallon. There is no mathematical relationship/ratio of fuel prices to margin. | |||
DSO held flat at 29 days | Customers continue to want increased terms and credit lines putting pressure on the receivables days outstanding. | |||
DPO held flat | Assumes that the amount of credit and days to pay our suppliers remains constant. The current trend from suppliers is to reduce MercFuel's credit limits and terms. | |||
AirCargo | ||||
Sales Growth | Higher volumes projected as imports continue to increase. | |||
Cost of Sales Increase | Higher costs associated with the volume growth. | |||
Operating Expense Increase | Operating expenses are projected to grow at the same or higher rate as the sales growth due to labor and arriving flight inefficiencies. | |||
DSO held flat at 75 days | Assumes no changes to the existing process for billing and collections. | |||
Maytag | ||||
Sales Growth | Assumes retention of existing contracts. Increase based on cost of living adjustments and addition of small contracts. | |||
Cost of Sales | Assumes new contracts are won at a lower margin. | |||
SG&A | Assumes increases based on inflation and insurance costs. | |||
Corporate | ||||
SG&A | Fiscal year 2005 SG&A expenses do not include extraordinary expenditures associated with a lawsuit, severance costs, increased insurance premiums and Sarbanes Oxley 404 costs. The factors for the outyears were based on projected increases in insurance and personnel costs. |
Mercury Air Group, Inc.
Comparative Statement of Financial Position
For the Periods ending :
(all amounts in thousands of US Dollars)
Actual | ||||||||||||||||||||||||
FY2004 | As of | FY2005 | FY2006 | FY2007 | FY2008 | |||||||||||||||||||
Actual | 31-Dec-04 | Projection | Projection | Projection | Projection | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current Assets | ||||||||||||||||||||||||
Cash | $ | 4,690 | $ | 6,316 | $ | 1,270 | $ | 1,000 | $ | 1,000 | $ | 1,000 | ||||||||||||
Accounts Receivable | 50,974 | 56,912 | 61,570 | 68,077 | 73,132 | 78,453 | ||||||||||||||||||
Inventories | 1,165 | 1,619 | 1,334 | 1,427 | 1,500 | 1,500 | ||||||||||||||||||
Prepaid Expenses and Other | 5,696 | 3,657 | 4,585 | 4,628 | 4,450 | 4,450 | ||||||||||||||||||
Deferred Income Tax | 1,451 | 1,451 | 1,451 | 1,451 | 1,451 | 1,451 | ||||||||||||||||||
Total Current Assets | 63,976 | 69,955 | 70,210 | 76,583 | 81,533 | 86,854 | ||||||||||||||||||
Non Current Assets | ||||||||||||||||||||||||
Prop Plnt & equip, net | 10,349 | 7,564 | 7,182 | 6,459 | 5,736 | 5,013 | ||||||||||||||||||
Restricted Cash | 24,403 | 8,418 | 6,764 | 6,764 | 6,764 | 6,764 | ||||||||||||||||||
Other | 7,229 | 8,144 | 8,144 | 8,130 | 7,730 | 7,578 | ||||||||||||||||||
Total Non-Current Assets | 41,981 | 24,126 | 22,090 | 21,353 | 20,230 | 19,355 | ||||||||||||||||||
Total Assets | $ | 105,958 | $ | 94,081 | $ | 92,300 | $ | 97,936 | $ | 101,763 | $ | 106,209 | ||||||||||||
Liabilities & Shareowners Equity | ||||||||||||||||||||||||
Current Liabilities | ||||||||||||||||||||||||
Accts Payable | 32,784 | 36,390 | 39,349 | 42,375 | 45,018 | 47,557 | ||||||||||||||||||
Accrued Exp | 11,825 | 8,558 | 8,457 | 8,763 | 8,473 | 8,473 | ||||||||||||||||||
Income Tax Payable | 769 | 0 | 1,219 | 390 | 424 | 595 | ||||||||||||||||||
Current Portion of LTD | 139 | 1,021 | 1,137 | 1,137 | 1,137 | 1,137 | ||||||||||||||||||
Total Current Liabilities | 45,516 | 45,969 | 50,163 | 52,665 | 55,052 | 57,762 | ||||||||||||||||||
Non-Current Liabilities | ||||||||||||||||||||||||
Long Term Debt | 18,459 | 21,221 | 15,270 | 18,619 | 18,966 | 19,342 | ||||||||||||||||||
Senior Subordinated Note | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Deferred Income Taxes | 0 | 0 | (38 | ) | (38 | ) | (38 | ) | (38 | ) | ||||||||||||||
Other | 9,569 | 10,722 | 8,612 | 7,595 | 7,595 | 7,595 | ||||||||||||||||||
Total Non-Current Liabilities | $ | 28,028 | $ | 31,943 | $ | 23,844 | $ | 26,176 | $ | 26,523 | $ | 26,899 | ||||||||||||
Total Liabilities | $ | 73,545 | $ | 77,912 | $ | 74,006 | $ | 78,841 | $ | 81,575 | $ | 84,661 | ||||||||||||
Shareowner’s Equity | ||||||||||||||||||||||||
Pref Stock | 518 | 468 | 486 | 522 | 558 | 594 | ||||||||||||||||||
Common Stock | 30 | 31 | 31 | 31 | 31 | 31 | ||||||||||||||||||
APIC | 20,737 | 21,473 | 21,473 | 21,473 | 21,473 | 21,473 | ||||||||||||||||||
Translation Adj | (46 | ) | 194 | 194 | (42 | ) | (42 | ) | (42 | ) | ||||||||||||||
Notes Rec | (3,302 | ) | (2,983 | ) | (2,783 | ) | (2,390 | ) | (1,997 | ) | (1,604 | ) | ||||||||||||
Treasury Stock | (120 | ) | (43 | ) | (43 | ) | (43 | ) | (43 | ) | (43 | ) | ||||||||||||
Retained Earnings | 14,596 | (2,971 | ) | (1,065 | ) | (455 | ) | 208 | 1,139 | |||||||||||||||
Dividends Declared | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
Total Shareowners Equity | 32,413 | 16,169 | 18,294 | 19,096 | 20,188 | 21,548 | ||||||||||||||||||
Total Liabilities & Shareowners Equity | $ | 105,958 | $ | 94,081 | $ | 92,300 | $ | 97,936 | $ | 101,763 | $ | 106,209 | ||||||||||||
Mercury Air Group, Inc.
Comparative Statement of Earnings
For the 12 Month Periods Ending:
(all amounts in thousands of US Dollars)
FY 2005 | FY 2006 | FY 2007 | FY 2008 | |||||||||||||
Projection | Projection | Projection | Projection | |||||||||||||
Revenue | ||||||||||||||||
Maytag | 20,999 | 21,980 | 22,639 | 23,318 | ||||||||||||
MercFuels | 537,474 | 628,383 | 684,142 | 746,243 | ||||||||||||
Cargo | 43,839 | 46,306 | 48,913 | 51,668 | ||||||||||||
Total Rev | 602,312 | 696,669 | 755,694 | 821,229 | ||||||||||||
Cost of Sales | ||||||||||||||||
Maytag | 16,573 | 17,856 | 18,677 | 19,229 | ||||||||||||
MercFuels | 529,555 | 620,048 | 675,343 | 736,779 | ||||||||||||
Cargo | 39,441 | 41,572 | 43,955 | 46,353 | ||||||||||||
Cost of Sales | 585,569 | 679,475 | 737,975 | 802,361 | ||||||||||||
Gross Margin | ||||||||||||||||
Maytag | 4,426 | 4,124 | 3,962 | 4,089 | ||||||||||||
MercFuels | 7,919 | 8,335 | 8,799 | 9,464 | ||||||||||||
Cargo | 4,398 | 4,734 | 4,958 | 5,314 | ||||||||||||
Gross Margin | $ | 16,743 | $ | 17,193 | $ | 17,719 | $ | 18,867 | ||||||||
Gross Margin % | 2.78 | % | 2.47 | % | 2.34 | % | 2.30 | % | ||||||||
Provision for Bad Debt | 1,383 | 1,477 | 1,560 | 1,772 | ||||||||||||
SG&A | 10,366 | 10,729 | 11,051 | 11,493 | ||||||||||||
Gain(Loss) on Investment | 0 | 0 | 0 | 0 | ||||||||||||
Other Income | 0 | 0 | 0 | 0 | ||||||||||||
EBITDA | $ | 4,994 | $ | 4,988 | $ | 5,108 | $ | 5,602 | ||||||||
Depreciation | 2,511 | 2,679 | 2,723 | 2,723 | ||||||||||||
Interest and Other | 1,143 | 1,310 | 1,298 | 1,353 | ||||||||||||
Pre-Tax Oper Earnings | $ | 1,340 | $ | 999 | $ | 1,087 | $ | 1,527 | ||||||||
Income Tax Expense | 523 | 390 | 424 | 595 | ||||||||||||
effect tax rate | 39.00 | % | 39.00 | % | 39.00 | % | 39.00 | % | ||||||||
Net Income Before Extraordinary Items | $ | 818 | $ | 609 | $ | 663 | $ | 931 | ||||||||
Extraord Items/FBO Sale | 958 | 0 | 0 | 0 | ||||||||||||
Net Income | $ | 1,775 | $ | 609 | $ | 663 | $ | 931 | ||||||||
Mercury Air Group, Inc.
Comparative Statement of Cash Flow
For the Quarterly Periods:
(all amounts in thousands of US Dollars)
FY2005 | FY2006 | FY2007 | FY2008 | |||||||||||||
Projection | Projection | Projection | Projection | |||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES | ||||||||||||||||
Net Income | $ | 818 | $ | 609 | $ | 663 | $ | 931 | ||||||||
Less: Income(loss) from Disc Op | 958 | 0 | 0 | 0 | ||||||||||||
Income from Continuing Operations | 1,775 | 609 | 663 | 931 | ||||||||||||
Adj to derive cash flow from operating activities | 0 | 0 | 0 | 0 | ||||||||||||
(Gain)loss on asset sale | �� | 0 | 0 | 0 | 0 | |||||||||||
Bad debt expense | 0 | 0 | 0 | 0 | ||||||||||||
Depreciation and amort | 2,511 | 2,679 | 2,723 | 2,723 | ||||||||||||
Deferred Income Tax | 0 | 0 | 0 | 0 | ||||||||||||
Deferred Rent | 0 | 0 | 0 | 0 | ||||||||||||
Exp Related to Remeasurement of Stock options | 0 | 0 | 0 | 0 | ||||||||||||
Exp Related to Amort. Of Executive Stock Plan | 0 | 0 | 0 | 0 | ||||||||||||
Asset Impairment loss | 0 | 0 | 0 | 0 | ||||||||||||
Amort of Deferred Gain | (1,654 | ) | (1,017 | ) | 0 | 0 | ||||||||||
CFK Realty | 2,656 | 0 | 0 | 0 | ||||||||||||
Changes in operating assets and liab | 0 | 0 | 0 | |||||||||||||
Accts Rec | (10,596 | ) | (6,507 | ) | (5,055 | ) | (5,321 | ) | ||||||||
Inventories | (169 | ) | (93 | ) | (73 | ) | 0 | |||||||||
Prepaid Expenses & oth current assets | 1,111 | (43 | ) | 178 | 0 | |||||||||||
Accounts Payable | 6,566 | 3,025 | 2,643 | 2,539 | ||||||||||||
Income Taxes Payable | 372 | (840 | ) | 34 | 171 | |||||||||||
Accrued exp and other liab | (3,289 | ) | 316 | (288 | ) | (1 | ) | |||||||||
Net Cash provided(used) by operations | ($717 | ) | ($1,870 | ) | $ | 826 | $ | 1,042 | ||||||||
CASH FLOW FROM INVESTING ACTIVITIES | ||||||||||||||||
(Increase)decrease to other assets | (915 | ) | 14 | 400 | 152 | |||||||||||
(Increase)decrease to restricted cash | 17,639 | 0 | 0 | 0 | ||||||||||||
(Increase)decrease in notes receivable | 519 | 393 | 393 | 393 | ||||||||||||
Acquisition of business, net | 0 | 0 | 0 | 0 | ||||||||||||
Proceeds from sale of assets | 0 | 0 | 0 | 0 | ||||||||||||
Additions to prop, equip and leaseholds | (2,000 | ) | (1,956 | ) | (2,000 | ) | (2,000 | ) | ||||||||
Net cash provided by (used in) investing | $ | 15,243 | ($1,549 | ) | ($1,207 | ) | ($1,455 | ) | ||||||||
CASH FLOW FROM FINANCING ACTIVITIES | ||||||||||||||||
Proceeds from LTD | 1,976 | 4,350 | 1,347 | 1,376 | ||||||||||||
Reduction LTD | (3,423 | ) | (1,000 | ) | (1,000 | ) | (1,000 | ) | ||||||||
Capitalized loan fee | 0 | 0 | 0 | 0 | ||||||||||||
Proceeds from issuance of Common Stk | 814 | 0 | 0 | 0 | ||||||||||||
Other | (17,313 | ) | (200 | ) | 35 | 36 | ||||||||||
Net cash provided by (used for) financing act | ($17,947 | ) | $ | 3,150 | $ | 382 | $ | 412 | ||||||||
Net cash provided by (used for) Disc Oper | 0 | 0 | 0 | 0 | ||||||||||||
NET INCREASE(DECREASE) IN CASH AND CASH EQUIV | ($3,420 | ) | ($269 | ) | $ | 0 | ($1 | ) | ||||||||
Mercury Air Group, Inc.
Summary of Long-Term Debt
As of June 30, 2002 through 2008
(all amounts in thousands of Dollars
As of June 30, 2004 | As of June 30, 2005 | As of June 30, 2006 | As of June 30, 2007 | As of June 30, 2008 | ||||||||||||||||||||||||||||||||||||||||
Current | Non-Current | Current | Non-Current | Current | Non-Current | Current | Non-Current | Current | Non-Current | |||||||||||||||||||||||||||||||||||
Debt before BofA Revolver | �� | |||||||||||||||||||||||||||||||||||||||||||
CFK Realty | 86 | 2,923 | ||||||||||||||||||||||||||||||||||||||||||
Salem 5 | 32 | 634 | 32 | 602 | 32 | 570 | 32 | 538 | 32 | 506 | ||||||||||||||||||||||||||||||||||
CEDFA IRB | 0 | 14,000 | 1,000 | 12,500 | 1,000 | 11,500 | 1,000 | 10,500 | 1,000 | 9,500 | ||||||||||||||||||||||||||||||||||
Col. National | 19 | 232 | 19 | 192 | 19 | 152 | 19 | 112 | 19 | 72 | ||||||||||||||||||||||||||||||||||
Total | $ | 137 | $ | 17,789 | $ | 1,051 | $ | 13,294 | $ | 1,051 | $ | 12,222 | $ | 1,051 | $ | 11,150 | $ | 1,051 | $ | 10,078 | ||||||||||||||||||||||||
B of A Revolver | 0 | 0 | 0 | 1,976 | — | 6,397 | — | 7,816 | — | 9,264 | ||||||||||||||||||||||||||||||||||
Total Debt | $ | 137 | $ | 17,789 | $ | 1,051 | $ | 15,270 | $ | 1,051 | $ | 18,619 | $ | 1,051 | $ | 18,966 | $ | 1,051 | $ | 19,342 | ||||||||||||||||||||||||
LOC’s | 15,500 | 14,500 | 13,500 | 12,500 | $1M reduction for CEDFA | |||||||||||||||||||||||||||||||||||||||
Interest Rates | ||||||||||||||||||||||||||||||||||||||||||||
Salem 5 | 5.60 | % | 5.60 | % | 5.60 | % | 5.60 | % | 5.60 | % | 5.60 | % | 5.60 | % | 5.60 | % | ||||||||||||||||||||||||||||
CEDFA IRB | 1.80 | % | 1.80 | % | 1.80 | % | 1.80 | % | 1.80 | % | 1.80 | % | 1.80 | % | 1.80 | % | ||||||||||||||||||||||||||||
Col. National | 9.14 | % | 9.14 | % | 9.14 | % | 9.14 | % | 9.14 | % | 9.14 | % | 9.14 | % | 9.14 | % | ||||||||||||||||||||||||||||
BofA Revolver | 5.00 | % | 5.00 | % | 6.00 | % | 6.00 | % | 6.50 | % | 6.50 | % | 6.50 | % | 6.50 | % | ||||||||||||||||||||||||||||
LOC’s | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | ||||||||||||||||||||||||||||
Interest Expense Calculation | ||||||||||||||||||||||||||||||||||||||||||||
Salem 5 | 1.8 | 34.6 | 1.8 | 32.8 | 1.8 | 31.0 | 1.8 | 29.2 | ||||||||||||||||||||||||||||||||||||
CEDFA IRB | 9.0 | 238.5 | 18.0 | 216.0 | 18.0 | 198.0 | 18.0 | 180.0 | ||||||||||||||||||||||||||||||||||||
Col. National | 1.7 | 19.4 | 1.7 | 15.7 | 1.7 | 12.1 | 1.7 | 8.4 | ||||||||||||||||||||||||||||||||||||
BofA Revolver | 49.4 | 251.2 | 461.9 | 555.1 | ||||||||||||||||||||||||||||||||||||||||
LOC’s | 232.5 | 217.5 | 202.5 | 187.5 | ||||||||||||||||||||||||||||||||||||||||
Total | 12.5 | 574.4 | 21.5 | 733.2 | 21.5 | 905.5 | 21.5 | 960.2 | ||||||||||||||||||||||||||||||||||||
Note: Used Average for year | 586.9 | 754.7 | 927.0 | 981.8 |