SOURCE: First Aviation Services Inc.
FAVS Announces Second Quarter Results
WESTPORT, CT--(Marketwire - October 23, 2009) - First Aviation Services Inc. (
SG&A expense was reduced by 16.2% in both the current year quarter and six months periods versus the prior year three and six month periods ended July 31, 2008. Corporate charges were 5.1% and 8.8% lower, respectively, in the current year three and six month periods versus the prior year. Interest expense was approximately 29% lower in the current six month period compared to the prior year.
Mr. Aaron Hollander, Chairman and CEO of First Aviation, said: "The company has responded aggressively to the economic impact of the recession, but the full benefit of the initiatives over the past months and strategic partnerships the company has forged have yet to be fully realized. The exclusive logistics services agreement the company announced in July with Cirrus Aircraft represents a major milestone in the expansion of our long-term Supply Chain Management Programs with leading aerospace OEMs worldwide. We continue to stay focused on cost containment, customer service enhancement and the expansion of our supply chain management business."
First Aviation and its principal operating subsidiary Aerospace Products International, Inc. ("API"), headquartered in Memphis, Tennessee, is a leading provider of services to the aviation industry worldwide. With locations in the U.S., Canada, Asia Pacific, and China plus partners throughout the world, services to the aviation industry include the sale of aircraft parts and components, the provision of supply chain management services, and overhaul and repair services.
More information about First Aviation can be found on the Company's and API's websites, which are located at http://www.favs.com and http://www.apiworldwide.com.
Forward-Looking Statements
Certain statements discussed in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. Such forward-looking statements, including those concerning our expectations, involve known and unknown risks, uncertainties and other factors, some of which are beyond the Company's control, that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others: our ability to obtain parts and components from principal suppliers on a timely basis; depressed domestic and international market and economic conditions; especially those currently facing the aviation industry as a whole, including terrorism and terrorism related impacts, the impact of changes in fuel and other freight related costs, major adverse weather related effects such as hurricanes impacting our customer base, relationships with customers, the ability of our customers to meet their financial obligations to us, our ability to obtain and service supply chain management contracts, changes in regulations or accounting standards, the ability to consummate suitable acquisitions and expand, the loss of the use of facilities and distribution hub in Southaven, Mississippi, significant failure of our computer systems, telephone systems or networks, and other items that are beyond our control and may cause actual results to differ from management's expectations. The Company undertakes no obligation to update any forward-looking statements or cautionary factors except as required by law.
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share and per share amounts)
Three months ended
July 31,
2009 2008
------------ ------------
(unaudited) (unaudited)
Net sales $ 25,884 $ 29,923
Cost of sales 21,496 24,575
------------ ------------
Gross profit 4,388 5,348
Selling, general and administrative expenses 3,861 4,607
Corporate expenses 373 393
------------ ------------
Income (loss) from operations 154 348
Net interest income (expense) (255) (329)
Foreign currency transaction gain 1 -
------------ ------------
Earnings (loss) before income taxes (100) 19
Provision for income taxes - (4)
------------ ------------
Net earnings (loss) $ (100) $ 15
============ ============
(EBIDTA) Earnings before taxes depreciation and
amortization $ 476 $ 754
============ ============
Basic net earnings (loss) per share, and net
earnings (loss) per share - assuming dilution:
Basic net earnings (loss) per share $ (0.01) $ 0.00
============ ============
Net earnings (loss) per share - assuming
dilution $ (0.01) $ 0.00
============ ============
Weighted average shares outstanding - basic 7,554,191 7,457,546
============ ============
Weighted average shares outstanding - assuming
dilution 7,554,191 7,457,546
============ ============
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share and per share amounts)
Six months ended
July 31,
2009 2008
----------- -----------
(unaudited) (unaudited)
Net sales $ 52,315 $ 59,422
Cost of sales 43,814 49,168
----------- -----------
Gross profit 8,501 10,254
Selling, general and administrative expenses 7,646 9,126
Corporate expenses 693 760
----------- -----------
Income (loss) from operations 162 368
Net interest income (expense) (453) (638)
Foreign currency transaction gain 8 -
----------- -----------
Loss before income taxes (283) (270)
Provision for income taxes - (8)
----------- -----------
Net loss $ (283) $ (278)
=========== ===========
(EBIDTA) Earnings before taxes depreciation and
amortization $ 771 $ 1,186
=========== ===========
Basic net loss per share, and net loss per share
- assuming dilution:
Basic net loss per share $ (0.04) $ (0.04)
=========== ===========
Net loss per share - assuming dilution $ (0.04) $ (0.04)
=========== ===========
Weighted average shares outstanding - basic 7,544,541 7,433,370
=========== ===========
Weighted average shares outstanding - assuming
dilution 7,544,541 7,433,370
=========== ===========
First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands, except share and per share amounts)
July 31, January 31,
2009 2009
------------ ------------
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 1,827 $ 1,304
Trade receivables, net of allowance for
doubtful accounts of $951 and
$1013, respectively 13,214 14,492
Inventory, net of allowance for obsolete
and slow moving inventory of
$4,096 and $4,425, respectively 33,360 29,471
Prepaid expenses and other 1,369 1,362
------------ ------------
Total current assets 49,770 46,629
Plant and equipment, net 2,677 3,253
------------ ------------
Total Assets $ 52,447 $ 49,882
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 14,188 $ 11,651
Accrued compensation and related expenses 160 290
Other accrued liabilities 1,305 1,280
Revolving line of credit 21,025 20,630
Notes payable 464 537
------------ ------------
Total current liabilities 37,142 34,388
Related Party - JEM III LLC 2,000 2,000
Notes payable, less current portion - -
------------ ------------
Total liabilities 39,142 36,388
Stockholders' equity:
Common stock, $0.01 par value, 10,000,000
shares authorized, 9,135,699
shares issued 91 91
Additional paid-in capital 38,029 38,288
Accumulated deficit (17,112) (16,761)
Accumulated other comprehensive income 348 229
------------ ------------
21,356 21,847
Less: Treasury stock, at cost, 1,544,460
and 1,601,130 shares, respectively (8,051) (8,353)
------------ ------------
Total stockholders' equity 13,305 13,494
------------ ------------
Total liabilities and stockholders' equity $ 52,447 $ 49,882
============ ============
First Aviation Services Inc.
Consolidated Condensed Statements of Cash Flows (Unaudited)
(in thousands)
Six months ended
July 31,
2009 2008
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities
Net loss $ (283) $ (278)
Adjustments to reconcile net loss to net
cash used in operating activities - non-cash
expense (income):
Depreciation and amortization 610 833
Equity based compensation 43 28
(Increase) decrease in working capital assets:
Trade receivables 1,278 2,334
Inventory (3,889) (3,220)
Prepaid expenses and other (7) 188
Increase (decrease) in working capital
liabilities:
Accounts payable 2,469 (241)
Accrued compensation and related expenses,
and other accrued liabilities (105) (618)
----------- -----------
Net cash used in operating activities 116 (974)
Cash flows from investing activities
Purchases of plant and equipment (34) (440)
----------- -----------
Net cash used in investing activities (34) (440)
Cash flows from financing activities
Borrowings (repayments), net on revolving line of
credit 395 1,598
Repayments on notes payable (73) (176)
----------- -----------
Net cash provided by (used in) financing
activities 322 1,422
----------- -----------
Effect of exchange rate changes on cash and cash
equivalents 119 (125)
Net decrease in cash and cash equivalents 523 (117)
Cash and cash equivalents at beginning of period 1,304 750
----------- -----------
Cash and cash equivalents at end of period $ 1,827 $ 633
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James Howell
Chief Financial Officer
Aerospace Products International, Inc.
(203) 291-3300