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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 30, 2003
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AVIALL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-12380 65-0433083
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
2750 REGENT BOULEVARD 75261
DFW AIRPORT, TEXAS (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (972) 586-1000
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
The following exhibit is furnished with this Form 8-K
99.1 Press Release dated July 30, 2003
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 30, 2003, Aviall, Inc. (the "Company") issued a press release
announcing its financial results for the quarter ended June 30, 2003. The press
release is furnished as Exhibit 99.1 to this report and is incorporated by
reference herein (the "Press Release").
The Press Release contains "non-GAAP financial measures" as defined in
Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). In the Press Release, the Company has provided
reconciliations of the non-GAAP financial measures to the most directly
comparable financial measures calculated and presented in accordance with
generally accepted accounting principles ("GAAP") in the United States.
In the Press Release, the percentage increase in the Company's net
sales from the second quarter of 2002 to the second quarter of 2003 is a
non-GAAP financial measure, because included in the Company's calculation of the
percentage increase in net sales from the second quarter of 2002 is
approximately $36.0 million of Rolls-Royce Model T56 ("RR T56") engine parts
sales made directly by Rolls-Royce to the U.S. military during the RR T56
transition program, which ended in June 2002 (the "Net Sales Percentage
Increase"). The Company received its full contractual margin from Rolls-Royce on
these sales and would have booked these sales, but for the time required to
transition shipments to the U.S. military from Rolls-Royce to the Company. The
Company assumed responsibility for direct shipments to the U.S. military on
Rolls-Royce's behalf at the end of the RR T56 transition program. As a result,
management believes that including the approximately $36.0 million of sales made
directly by Rolls-Royce in calculating the percentage increase in the Company's
net sales provides a more appropriate reference point for second quarter 2002
year-over-year comparisons than calculating the percentage increase on a GAAP
basis.
The operating income margin of 7.3% along with the 1% year-over-year
increase in the Company's second quarter operating income are also non-GAAP
financial measures because the operating income used to calculate the margin and
the increase excludes the effect of a software impairment charge of $1.7
million. Management believes that the exclusion of this charge in calculating
the operating income margin and percentage increase in operating income provides
a useful analysis of ongoing trends in operating income and a more appropriate
reference point for second quarter 2002 year-over-year comparisons than similar
calculations prepared in accordance with GAAP.
The Press Release also includes pro forma earnings per share for the
second quarter of 2003 and the six months ended June 30, 2003. The pro forma
earnings per share information has been prepared assuming the following two
events were consummated prior to January 1, 2002: (i) the sale of $200 million
of 7 5/8% Senior Notes due 2011 and the related discharge of Aviall Services'
14% Senior Notes due 2007 and reduction of the outstanding balance on Aviall
Services' revolving credit facility (the "Debt Discharge") and (ii) the
lowering of the conversion price of the Company's Series D Senior Convertible
Participating Preferred Stock (the "Series D Preferred Stock") and the
subsequent conversion of all of the outstanding shares of Series D Preferred
Stock into 11,100,878 shares of the Company's common stock (the "Conversion
Event"). The pro forma earnings per share calculation excludes the effect of the
previously reported quarterly payment-in-kind dividend on the Series D Preferred
Stock, the deemed dividend, the noncash charges related to the Debt Discharge
and the Conversion Event, pro forma interest expense and all adjustments
required by the two-class method of reporting earnings per share that the
Company has used since December 2001. Management believes that the pro forma
earnings per share presentation is beneficial to investors to provide
information on how these consummated transactions would have affected the
Company's historical financial statements had they occurred at an earlier date.
The information in this Form 8-K, including the exhibit, shall not be
deemed "filed" for purposes of Section 18 of the Exchange Act, and is not
incorporated by reference into any filing of the Company, whether made before or
after the date hereof, regardless of any general incorporation language in such
filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AVIALL, INC.
By: /s/ Colin M. Cohen
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Name: Colin M. Cohen
Title: Vice President and Chief
Financial Officer
Date: July 30, 2003
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press Release dated July 30, 2003