company report final v1.3

7/27/2019 Company Report Final V1.3

1/12


2/12

Air Choice One - Annual Report 2

Message

From

CEO

Key

Figures

03

04 07

08

09 10

Financial

Report

Operations

Review

2012

Highlights

Marketing

& HR

Review


3/12


Key Figures

FY 2012

................................

2012 has been a year of transformation for AirChoice One - from revamping our aging fleet ofaircraft to diversifying into the cargo and carrental market.

We have led a determined growth strategy in2012, aiming to consolidate our existing routes,whilst expanding into new routes and beyond,serving a multitude of businesses,manufacturing companies and public bodies inthe process. We have also seized upon a

number of opportunities presented to us,expanding into the car rental and cargoindustry which both produced profits in thefinal quarter of 2012. We see these ventures ascomplementary to our core offering, and we areconfident they will continue to develop as asource of value for our shareholders, andultimately our customers.

Our aggressive expansion plans have seenrevenues increase by 163% to $13 million. In

quarter three we began to see a strong returnon our investments, delivering an incrediblyhealthy net profit of over $200,000.

However, the unexpected winter weathertowards the end of the year which affected theairline industry as a whole, along with ourdecision to replace our aging fleet of aircraft, ledus to report an underlying yearly net loss of$166,926. Our long term strategy has requiredAir Choice One to re-invest its profits into the

business, meaning dividends havent beenfeasible in 2012. Whilst so, the increase in ourshare price reflects the understanding that AirChoice One is well positioned for the future.

Our positive cash flow and strong asset base,along with our network of loyal and valuedcustomers, also stands us in good stead to

deliver excellent profits and shareholder valuein the coming years.

Without our dedicated and reliable employees,the growth plan devised at the start of the yearwouldnt have been possible. In the face of

continued internal growth, our growingworkforce has not faltered on quality, helpingour business achieve a record 98.4% reliabilityrating. They have consistently exceeded thehigh expectations customers come to expect

from Air Choice One, and for this reason, ourpeople are our greatest asset.

Leading onto my personal highlight of the year;we were awarded the prestigious Commuter

Airline of the Region award 2012. Recognitionof this kind is something we can all take pride in for it demonstrates our unparalleledcommitment to our customers. It is a testamentas to how much Air Choice One has grown in ayear, and I look forward to the future.

Net Revenue: $13M 163%

Net Profit: -$166,000 -288%

Stock Price: $24.72 24%

Shaun Sims

CEO

2012,

a year oftransformation

Message from the CEO

Shaun Sims

CEO


4/12


Financial Statements

Income Report:

2012 2011 % Change

Net Revenue $13,018,902 $4,943,368 163%

Expenditure $13,178,905 $4,795,144 175%

Profit/loss before tax -$166,926 $148,224 -213%

Tax paid $0 $59,288 -100%

Net profit/loss -$166,926 $88,936 -288%

Dividends paid $0 $8,000 -100%

Profits retained -$166,926 $80,936 -306%

Asset Report:

2012 2011 % Change

Total value of assets $7,286,000 $2,482,089 194%

Total value of liabilities $6,669,604 $794,070 740%

Amount of common

stock

198,571 150,000 32%

Value of common stock $2,600,000 $1,500,000 73%

Retained earnings $21,093 $188,019 -89%

Total equity $2,621,093 $1,688,019 55%


5/12


Financial Review

OverallReview

Air Choice One in the 2012 financial year has delivered a positive

financial performance, despite continuing macroeconomic

challenges, growing competition and a consistent increase the

price of oil. Our strategy for growth began to have positive financial

impact in quarter three, with net profits of over $200,000. However, our

long term decision to replace our inefficient, aging fleet of aircraft, along

with disruptive winter weather, led us to report a net loss of $166,926

for the year. We have however established a solid foundation for

profitability in the future as well as for further expansion. Moreover,

having diversified into the car rental and cargo market which produced

promising profits of $15,544 in the final quarter of 2012, we expect

these undertaking to become a source of important revenue and profit.

TurnoverandProfit

In 2012 revenues grew considerably in line with our expansion strategy which included

diversification into the cargo and car rental market. Despite a profitable quarter two and

three, our decision to replace our Beechcraft aircraft along with higher operating costs

led us to report a total net loss of $166,926 for 2012.

Dividends

Our expansion in 2012 has been fuelled by a combination of stock sales, loans and

retained profit. Consequently, the payment of dividends hasnt been feasible in 2012.

With an expected return to profitability in 2013, we plan to reward shareholders for

their investment in the coming year.

2011 2012

Q4 Q1 Q2 Q3 Q4

Net

Profit

$22,234 -$234,185 $26,295 $207,747 -$166,783

Michele Granata

Finance Director


6/12


$7,286,000

$2,004,697

Fixed Assets

Current Assets

Assets

The total value of assets

increased consistently during

this year passing from 2,5 to 7,3

million dollars, for a total

increase of 4,8 million. This rise

was driven both by current

assets as well as fixed assets.

The change in current assets is

due to the account receivables,

which has grown following the

positive trend of the revenue.

However, the main driver of the

asset increase is the fixed assets value which is essentially composed by the plane we

own. At the moment, we directly own one Embraer Brasilia and two British Aereo 31,

which have a higher quality and value respect from the three Beechcraft we had at the

beginning of the year.

Debt and Liabilities

Given our growth strategy, the value of our liabilities has increased over the course of

2012. A 5.4 million dollar long term loan was utilised to fund our growth and fleet

renewal. Our close and effective financial management of Air Choice One is reflected in

our current ratio being higher than the industry average of 1.69, meaning we are well

versed to meet our current liabilities.

Retained Earnings and Equity

The retained earnings are slightly lower than the previous year. This is a consequence of

the entrance into new markets and routes, as well as in the cargo market and in the auto

rental business that has taken a couple of quarters before becoming profitable. The total

number of stocks has also risen since we issued 1.1 million dollars of shares in three

tranches in quarters one, two and four. At the end of 2012, we had 198,571 shares

outstanding for a total value of, at the time of issue, 2.6 million dollars. The share price is

24.72 dollars, respect from 20 at the end of 2011, and we are confident that the

following year will show another consistent improvement.


7/12


Operational Review

2012 has been a year of aggressive market expansion, meaning anoverhaul of previous operations to bring the company in line with

its new strategic direction. The changes initiated were to support

long term financial success. From an operational perspective, our

new strategy has seen positive results in the 2012 financial year :

Aircraft reliability has increased from 92% to 98.4% Our network of routes has tripled in size Our fleet has grown by 133%

Routes

Achieving a balance of simultaneous growth and retention of

our existing routes has been a priority of the department in

2012. We have secured services in our longstanding routes,

however through a process of continual assessment of our

existing and potential routes pulled back on those less

lucrative. We have taken advantage of the lack of major

airlines servicing commuter routes by establishing a presence in the new fast growing

market for foreign business these routes open new challenges for the company along

with the opportunity to develop and expand our core competencies. We will continue to

strategically assess opportunities for expansion in 2013 with a view to servicing over 23

routes by the end of 2013.

Fleet

Expansion has both given theopportunity and required an extensivere-examination of our aircrafts. In orderto meet our targets for reliability andperceived quality this year has brought atotal overhaul and investment intobetter quality aircrafts. We have introduced the British Aero 31 to replace our older andless competitive Beechcraft fleet as well as investing into larger and more efficient longhaul carriers.

Aircraft QuantityOwned

QuantityLeased

British Aero 31 2 3

Bmbraer Brasilia 1 1

Brenda Palmgren

Operations Director


8/12


Key FiguresYear 2012

Turnovermillion pounds15

Flights per quarter

Reliability Team Members

Passengers Aircrafts in operations

1192 7

99%


9/12


2012 has seen Air Choice One invest significant amounts in

advertising and promotional schemes aimed at retaining our

existing customers in an ever growing competitive environment,

whilst also supporting our expansion into new routes, the cargo

industry and the car rental market.A number of exciting

advertising initiatives were launched,

employing a wide range of media - from

billboards to newspapers. Our We

Want You advertising initiative

deployed in regional newspapers has

been particularly successful in

developing a profitable customerbase.

2013 will see sustained investment in

our marketing activities as we look to solidify our existing

customer base, whilst ensuring expansion into new areas is

properly supported.

2012 was a year of continuous investment in the standards of

training we offer. Our employees are recognised as our best and

fundamental resource and head office works very closely with

representatives from different areas and regions We work

proactively in many ways to ensure that our people practices are

congruent with Air Choice One mission, vision, and culture.We acknowledge our responsibilities and dedicate as much time,energy and financial resources as possible to ensure that our

company is a healthy workplace. We remain absolutely committed

being an exciting and attractive place to work for our 192

employees. In such a competitive environment as the airline

industry, our company rely more than ever on its men and women,

they are our strength toward success. Thus, I would really like to thank all members of

the Air Choice One team for the great job we did together last year and I hope it will

continue on the same virtuous path.

Raphalle Le

Tanneur

Jessica ZhangMarketing Director


10/12


January

Cargo

In reaction to the current externalenvironment we have taken advantage

of the diversification prospects within

the cargo industry. Whilst this has taken

longer than expected to deliver the

forecast profits, we believe that it will

grow to be an important secondary

revenue stream. We will continue to

monitor the profitability of this venture,

as with all our ventures making harddecisions where necessary.

MarchCorporate Social Responsibility

2012 has seen continued investment

in our Educate the Nation campaign,

aimed at providing internships and

educational courses for the youth in the

communities we operate. At Air Choice

One our long term growth strategy

recognises the need for investment insuch facilities, and we remain committed

to this cause.

May

Commuter Airline of the Region

In May 2012, Air Choice One won thecoveted and prestigious Commuter

Airline of The Region Award recognition of our excellence, customerservice and expansion into commutertowns and cities across regional America.All of our staff can be proud of thisachievement, and we are confident thisaward is the first of of many more tocome.

2012

Highlights


11/12


Closing remark from the CEO

Our shareholders can look forward to the future with optimism and confidence asthe strategic investments undertaken by Air Choice One return to deliver positivefinancial profits once again.

We will continue to place the customer at the heart of Air Choice One, as webelieve such a strategy will ensure continued, sustainable growth andprofitability.

In the year ahead, we will be further improving our flights and services withadditional exciting initiatives, while continuing to invest in our people, who areour greatest asset.

There will be only one choice in 2013 Air Choice One.

Shaun Sims

CEO

July

Car Rental Business

In addition to our core strategy of

commuter flights, we made a $200,000

investment, spread over eight quarters,

into the lucrative car rental market.

This opportunity has offered our

customers a more integrated travelling

solution delivering value to customers

and shareholders alike.

We continue to grow our fleet of carsand rental locations, and our strategy in

2013 will focus on solidifying and

growing this venture.

September

Customer Review

James:

Check-in was flawless as was boarding.The flight attendants were attentive,

friendly and very knowledgeable. The

Captain's announcements were also

informative, confirming the time of

arrival on the plane. The on-board

drinks service was speedy and efficient.

Overall, it was an excellent experience.

I would totally recommend Air Choice

One on this route and in fact I havealready booked my next flight with this

company.


12/12


An electronic copy of this report is available at:

www.airchoiceone.com/annualreport2012

Printed on 100% recycled paper

Air Choice One

38507 Long Street

Newark, California 94260

USA

T (800) 866-2436F (501) 608-5889www airchoiceone com

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http://www.airchoiceone.com/annualreport2012http://www.airchoiceone.com/annualreport2012

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