Flight International Group’s annual financial report is more than a month late because its accountants want to be paid in advance before finishing it, the aviation company’s president said.
Frank C. Wright Jr., Flight’s president and chief executive officer, confirmed that accounting firm BDO Seidman stopped work on Flight’s 10-K annual filing to federal regulators, which was due July 31. He would not say how much money Flight owes the firm, or when the report might be issued.
The annual report is completed in draft form, Wright said, but Seidman ”wants their bill paid before they issue their opinion.”
A spokeswoman for the Richmond office of BDO Seidman said industry regulations prohibited the company from discussing its relationship with a client.
Flight has also vacated some of the space it leased at Newport News/Williamsburg International Airport terminal to save money, another executive said.
Russell M. Lanning, Flight’s executive vice president and chief operating officer, said the company consolidated some of its flight school operations in a separate building it already rents to save ”tens of thousands of dollars a year” in rent.
Airport officials declined to comment on the move.
Securities Exchange Commission rules require publicly-traded companies to report their year-end results within 90 days of the end of the fiscal year. Flight’s fiscal year ended in April 30, which means it was required to file its report by July 31.
Flight filed for a 15-day filing extension on July 29, according to the SEC’s public reference department.
SEC spokesman John Heine said a company that does not file a report by the end of the 15-day extension period could be found in violation of securities law and could be subject to a civil lawsuit brought by the SEC or investors. Heine said he could not comment on whether the SEC was planning any action against Flight.
The annual report delay is the latest problem to hit Newport News-based Flight, which makes its living flying training missions for the military.
Four members of Flight’s board of directors quit at the beginning of the month after being asked to defer their salaries.
The loss of a $99 million U.S. Air Force contract in September 1991 forced Flight to trim its fleet by nearly 70 percent, and cut its work force nearly in half to around 250 people.
The company was dropped from the computerized national over-the-counter stock exchange, NASDAQ, in July because it had insufficient net worth. Flight has lost $12.7 million in the first nine months of its last fiscal year on revenue of $27.3 million.
Wright has said he expects the company’s fortunes to turn around next year, when a $250 million training contract with the U.S. Navy begins. The contract is for five years, with three additional option years.
The company won the contract, originally awarded to competitor Sabreliner Corp. of St. Louis, after suing the Navy last year.
The Navy argued at the time that Flight was financially incapable of performing the contract, but Flight countered by obtaining a certificate of competency from the Small Business Administration stating it could do the work.
A Navy spokeswoman, in a written statement responding to Daily Press questions, said Flight has not met its deadlines for providing the service with quarterly updates on its plans for taking over the Navy training contract next January.
Her statement said the Navy was aware Flight was late in filing its annual report with the SEC, but said that ”is not a part of contract administration” with the Navy.
The spokeswoman said Sabreliner could perform the training contract if Flight could not.