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SOURCE: First Aviation Services Inc.
Third Quarter Results Announced by First Aviation
WESTPORT, CT--(Marketwire - November 19, 2009) - First Aviation Services Inc. (
SG&A expense was reduced by 8.0% and 13.6% in the current year quarter and nine months periods respectively versus the prior year three and nine month periods ended October 31, 2008. Corporate charges were 1.8% higher in the current year three month period versus the prior year and 5.3% lower for the nine month period compared to the same period in the prior year. Interest expense was approximately 18% lower in the current nine month period compared to the prior year.
On November 9, 2009, First Aviation Services Inc. announced that it has
entered into definitive agreement with Kelly Aerospace, Inc. to acquire the
business of Kelly Aerospace Turbine Rotables, Inc. through a newly formed
subsidiary named Aerospace Turbine Rotables, Inc. (AeTR). FAvS has
separately entered into definitive agreement to acquire the propeller
overhaul repair business of Limco-Piedmont Inc. through a newly formed
subsidiary Piedmont Propulsion Systems, LLC (PPS). These transactions will
also result in Limco-Piedmont acquiring approximately 37% of FAvS' common
stock in the form of newly issued non-voting shares, plus preferred stock
and Limco-Piedmont guaranteeing certain debt required to finance the
purchase of AeTR. Limco-Piedmont is a subsidiary of TAT Technologies Ltd.
(
Mr. Aaron Hollander, Chairman and CEO of First Aviation, said: "We are very pleased with the results in the quarter despite an extremely challenging environment. The company has responded aggressively to the economic impact of the recession as we continue to stay focused on cost containment, customer service enhancement and the expansion of our supply chain management business. We look forward to Aerospace Turbine Rotables, Inc. and Piedmont Propulsion Systems, LLC joining the First Aviation family and expanding the capabilities we provide our customers. We expect the transactions to close in the coming weeks."
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.
Please see our important forward-looking statement at www.favs.com/forward
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
Three months ended
October 31,
2009 2008
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(unaudited) (unaudited)
Net sales $ 28,924 $ 29,581
Cost of sales 23,790 24,094
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Gross profit 5,134 5,487
Selling, general and administrative expenses 3,987 4,810
Corporate expenses 391 384
----------- -----------
Income (loss) from operations 756 293
Net interest income (expense) (365) (361)
Foreign currency transaction gain 28 (5)
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Earnings (loss) before income taxes 419 (73)
Provision for income taxes - (7)
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Net earnings (loss) $ 419 $ (80)
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(EBIDTA) Earnings before taxes depreciation and
amortization $ 1,062 $ 655
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Basic net earnings (loss) per share, and net
earnings (loss) per share - assuming dilution:
Basic net earnings (loss) per share $ 0.06 $ (0.01)
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Net earnings (loss) per share - assuming dilution $ 0.06 $ (0.01)
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Weighted average shares outstanding - basic 7,477,000 7,422,000
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Weighted average shares outstanding - assuming
dilution 7,477,000 7,422,000
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First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
Nine months ended
October 31,
2009 2008
----------- -----------
(unaudited) (unaudited)
Net sales $ 81,240 $ 88,152
Cost of sales 67,604 71,535
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Gross profit 13,636 16,617
Selling, general and administrative expenses 11,633 14,811
Corporate expenses 1,083 1,144
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Income (loss) from operations 920 662
Net interest income (expense) (818) (1,001)
Foreign currency transaction gain 36 (3)
----------- -----------
Loss before income taxes 138 (342)
Provision for income taxes - (15)
----------- -----------
Net loss $ 138 $ (357)
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(EBIDTA) Earnings before taxes depreciation and
amortization $ 1,835 $ 1,857
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Basic net loss per share, and net loss per
share - assuming dilution:
Basic net earnings (loss) per share $ 0.02 $ (0.05)
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Net earnings (loss) per share - assuming dilution $ 0.02 $ (0.05)
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Weighted average shares outstanding - basic 7,477,000 7,422,000
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Weighted average shares outstanding - assuming
dilution 7,477,000 7,422,000
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First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands, except per share amounts)
Oct 31, 2009 Jan 31, 2009
----------- -----------
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 1,025 $ 1,304
Trade receivables, net 17,039 14,492
Inventory, net 32,459 29,471
Prepaid expenses and other 2,259 1,362
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Total current assets 52,782 46,629
Plant and equipment, net 2,385 3,253
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Total Assets $ 55,167 $ 49,882
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 15,073 $ 11,651
Accrued compensation and related expenses 268 290
Other accrued liabilities 1,435 1,034
Revolving line of credit 21,201 20,630
Notes payable 1,032 537
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Total current liabilities 39,009 34,142
Related Party - JEM III LLC 2,338 2,246
Notes payable, less current portion 37 -
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Total liabilities 41,384 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 37,815 38,288
Accumulated deficit (16,660) (16,761)
Accumulated other comprehensive income 342 229
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21,588 21,847
Less: Treasury stock, at cost, 1,501,708
and 1,601,130 shares, respectively (7,805) (8,353)
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Total stockholders' equity 13,783 13,494
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Total liabilities and stockholders' equity $ 55,167 $ 49,882
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First Aviation Services Inc.
Consolidated Condensed Statements of Cash Flows (Unaudited)
(in thousands)
Nine months ended
October 31,
2009 2008
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities
Net income (loss) $ 138 $ (357)
Adjustments to reconcile net loss to net
cash used in operating activities - non-cash
expense (income):
Depreciation and amortization 915 1,195
Equity based compensation 74 28
(Increase) decrease in working capital assets:
Trade receivables (2,547) 2,210
Inventory (2,988) (83)
Prepaid expenses and other (897) (672)
Increase (decrease) in working capital
liabilities:
Accounts payable 3,422 (2,713)
Accrued compensation and related expenses,
and other accrued liabilities 379 (645)
----------- -----------
Net cash used in operating activities (1,504) (1,037)
Cash flows from investing activities
Purchases of plant and equipment (47) (621)
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Net cash used in investing activities (47) (621)
Cash flows from financing activities
Borrowings (repayments), net on revolving line of
credit 571 3,614
Repayments on notes payable & other short term
debt 587 (411)
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Net cash provided by (used in) financing
activities 1,158 3,203
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Effect of exchange rate changes on cash and cash
equivalents 114 (443)
Net decrease in cash and cash equivalents (279) 1,102
Cash and cash equivalents at beginning of period 1,304 750
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Cash and cash equivalents at end of period $ 1,025 $ 1,852
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James Howell
Chief Financial Officer
Aerospace Products International, Inc.
(203) 291-3300