GBA, AAI Revenue report [Archive]

View Full Version : GBA, AAI Revenue report

rotormatic

11-27-2003, 02:33 AM

Net Earnings During the three months ended September 30, 2003, the Company continued to record losses as it continued the transition toward full marketing and manufacturing of the Hawk Gyroplane series, and as it manufactured and sold AAI modification kits and continued designing of the SparrowHawk Gyroplane. For the three months ended September 30, 2003, the net loss from operations was $841,000, the net loss was $4,320,000, and the net loss applicable to common stockholders was $4,320,000. Comparatively, for the three months ended September 30, 2002, the net loss from operations was $955,000, the net loss was $1,245,000, and the net loss applicable to common stockholders was $3,882,000. In FY 2002, the additional net loss applicable to common stockholders is due to accretion in the value of the Series B 15% Cumulative Redeemable Non-Voting Preferred Stock and dividends on that stock. The increase in the net loss in FY 2003 over FY 2002 is due primarily to the reclassification of the Series B 15% Cumulative Redeemable Non-Voting Preferred Stock as a long-term liability, which resulted in the classification of associated dividends and accretion as interest cost. Liquidity and Capital Resources The Company's subsidiary, AAI, set up in FY 2003, has entered the market for both modification kits to improve the stability of small gyroplanes produced by other manufacturers, and the home built market with its own SparrowHawk two-seat gyroplane. These markets typically make substantial advance down payments on orders, which will accelerate AAI's ability to become cash flow positive. Furthermore, AAI is continuing the process of setting up an extensive dealer network for the sale and product support of these modification kits and of its own SparrowHawk Gyroplane kit. Fees from dealership sales and advance customer deposits for future deliveries of modification kits and SparrowHawk Gyroplane kits are contributing significantly to AAI's initial cash flow. At September 30, 2003, advance deposits from customers of AAI amounted to $485,000, which are included in the balance sheet under the caption "Deferred revenue". Meanwhile, as previously reported, following the economic downturn and its impact on the aerospace industry of 9/11, the Company's fund-raising activities in the venture capital market were seriously impaired, resulting in active development of its Hawk 4 Gyroplane for commercial certification being deferred. The Company, however, continues actively to seek sales and funding for Public Use applications of the Hawk 4 as well as the SparrowHawk. In the face of continuing fund-raising difficulties, in FY 2002 and FY 2003, the Company successfully approached many of its principal vendors requesting that they accept a stretching out of payments beyond their normal terms. As a result, the Company is servicing much of its pre-November 2001, obligations to vendors utilizing a combination of repayment plans which include monthly payments for smaller vendor liabilities and promissory notes for larger vendor liabilities. Certain of the promissory notes have expired and are thus technically in default. The Company is, however, in negotiation with those vendors and is seeking to reach agreement with each vendor either to extend the existing note or to a payment plan satisfactory to the parties. During the first quarter of FY 2004, $202,000 was raised through the sale of equity. The Company also has raised $126,000 (net of reduction) in Notes Payable. Increases in accrued expenses also reduced cash requirements by $726,000, and of this amount $150,000 was the deferral of officer salaries. This funding was, however, insufficient to offset a further deterioration in the Company's working capital deficit (net of amounts owed to current and former officers) from $10.9 million at June 30, 2003, to $11.6 million at September 30, 2003. As a result the Company has continued to fall behind in payments to its creditors, including tax obligations to the Federal and State governments. Discussions with potential investors, each of which would enable these obligations to be met, are ongoing and the Company is working toward an early resolution. The Company is seeking to raise sufficient funds during fiscal year 2004 to enact its new business plan that relies heavily on sales of the American Autogyro SparrowHawk and sales of the Hawk 4 Gyroplane to Public Use government entities. The Company is currently in the process of concluding an agreement that provides to the Company additional funding through the issuance of Series B preferred stock in an amount that the Company expects will enable it to satisfy essentially all of its obligations in default at the end of the quarter. In addition, this funding will enable work to be recommenced to complete the testing of the Hawk 4 for Public Use applications and to pursue sales and funding of its gyrodyne applications. There can be no guarantee or assurance that the Company will be successful in its ability to generate revenue or to raise capital at favorable rates or at all. Management does not anticipate that revenues or expenses will be materially affected by inflation during fiscal year 2004.

ToddP

11-27-2003, 03:30 AM

Rotormatic, Thanks for the informative report on GBA.  It appears there are some very serious concerns regarding cash flows.  Are there any forward looking projections or estimates in regards to certification of the Hawk IV?  I understand this will be related to funding but in a best case scenario, what could be expected?   It is quite obvious they will never erase an 11 million dollar deficit by selling $25,000.00 sparrowhawks.  The Hawk IV at $1 million each is obviously the key to this companies future.   I sincerely hope that the future pans out for GBA.  I hate to see a group of people pour all the resources and energy into a project and not eventually see the fruits of their labor.  A commercially viable gyrocopter will open alot of eyes. Also, rotormatic could you provide your real name?  Certainly in a report of this nature a real name allows us to ensure its validity. Todd Powell

rotormatic

11-27-2003, 04:31 AM

For validity, see: http://biz.yahoo.com/e/031119/gnba.ob10qsb.html

Mayfield

11-27-2003, 05:32 AM

Rotormatic, The next 10Q will be out on about the 15th of January for the period ending 31 December. All public companies are fully reporting as they should be. I suspect, although AAI is doing very well, that the "Consolidated Financials" will still show losses for the GBA family of companies for quite a while. GBA has been in business for 19 years this coming February.  I have been with the company since 1995.  It sure feels good to be: 1.  Selling a high quality product into the market. 2.  Assuredly saving lives. 3.  Producing an evolutionary gyroplane. As always, if you, or anyone else, has ideas on how we can make our aircraft even safer, I'll be glad to hear them. Jim Mayfield President American Autogyro Inc. "Stability is not an opinion"

Mayfield

11-27-2003, 05:51 AM

Rotormatic, I forgot to add, you can get a more complete financial disclosure at www.edgar-online.com That web site is the "official" place where quarterly and annual reports are filed. Also, if you have any specific questions about GBA or AAI operations, I'll be glad to answer them. I'm a little pressed for time right now it being Thanksgiving, but if you've not done so you might consider posting your findings on Norm's forum as well. Regards, Jim Mayfield "Stability is not an opinion"

Chuck_Ellsworth

11-27-2003, 11:16 AM

Jim : I have watched you and your company for some time now. I have even visited Groen Bros. You have my admiration and support for what you are doing for the industry. Also after much soul searching and thought I have decided to build one of Rons Little Wing Gyros with a radial engine. My intent is to  start a small Gyro flight school up here in the land of socialism.. ;D I still have my RAF and will eventually re build it, and it will be using your upgrade. I just wanted to let you know my thoughts... I want us to co operate in the name of safety, because when I require recurrent training and an Instructor renewal, hopefully you will be doing it. Chuck E.

r.coplen

11-27-2003, 02:23 PM

Rotomatic, I normally don't get put off by posts on the "Rotary Wing Form" but I find your's to be of the lowest intent.   You are hidding behind your "Rotomatic" identity and won't even stand up for who you really represent or what you stand for. Many companies have cash flow problems when bring new products to markets. But that is part of what it takes sometimes to get a good new product to market.  AAI is the first American company to begin high production of a stable, safe  gyroplane to be sold into the market  for many many years.  I know it is on line for the first delieveries within 30 to 45 days.  There has been almost 50 million dollars invested in Groen Brother Aviation Inc , parent company of American Autogyro Inc. and I know that they are by far the leading gyroplane research and developement  company in the world.     I am a dealer for the "Hawk 4" and the SparrowHawk.   In the last year have received myself requests for the "Hawk 4"s from law inforcement agencies in more than 20 states.   I know many of the other dealers have received requests for this aircraft too. At present AAI is bring a stable, safe, and fun gyroplane into a market looking for this type of aircraft.  They are also developing a number of new CFI's and new dealers to provide the training, sales and service that is needed for the gyroplane aviation industry.  As in all thing worth doing it is not easy,  but the rewards in user safety and enjoyment are more than worth the 15 years of effort and investment.

ToddP

11-27-2003, 03:48 PM

Randy, I was hoping he would come forward and offer his name, that was the main intent of my original post.  Unless he comes forward and offers him name, we can only assume he figures this is an attempt to discredit the company.   I only hope that GBA can weather the high costs of startup and become the first successful manufacturer of certified gyrocopters.  I applaud the efforts of GBA and the committment they have made.   Now that his name has been asked for, and not given, it obviously is not an oversight, he's only throwing stones.   Todd

Aussie_Paul

11-28-2003, 01:38 PM

Randy and Todd, I agree wholeheartedly with your last posts.  Aussie Paul.

Whirlydog

12-01-2003, 04:56 AM

I just wanted to say "WAY TO GO" to *Jim Mayfield. *You showed that GBA/AAI are not easily *moved from other's scare tactics. I loved it when you said "If you've not done so you might consider posting your findings on Norm's forum as well". *A true sign that GBA has nothing to hide, and are here to *stay. *Keep up the good work and you shall indeed reap the benifits. * Shawn

Udi

12-02-2003, 08:34 AM

If the purpose of "rotomatic" was to make GBA/AAI look bad, than he should try harder than that.  Like for any other start-up company nowadays, money is hard to come by, but the markets are turning around and investors are coming back.  GBA will complete certification of Hawk 4 in due time and will become the first manufacturer of modern FAA certificated commercial gyroplanes in the world.   AAI will soon become the leading manufacturer of gyroplane kits for the homebuilt market in the US.  You’ve got to be blind if you can’t see that.  But AAI is more than just a kit manufacturer.  AAI, in my humble opinion, will revolutionize the reality of sport gyroplane flying in the US.  The AAI network of dealers and CFIs will make professional gyroplane instruction much more accessible to people all over the states.  Availability of professional instruction, coupled with new and safe gyroplane designs will allow this sport to enter the mainstream of sport aviation.  Gyroplanes will one day become as common as ultralights, trikes, and paraplanes. The whole gyroplane "community" in the US (including other “stable” gyroplane manufacturers) will benefit from this progress, and I really hope nothing is going to slow it down.  My only regret is that AAI hasn't started this progress 10 or 20 years ago.   GO AAI!!! Udi-