For Immediate Release
Contact: John L. Flynn
Chief Financial Officer
703-478 5830
email: jflynn@fairchild.com
THE FAIRCHILD CORPORATION (NYSE:FA) ANNOUNCES FISCAL 2003 RESULTS AND PURSUIT OF NEW ACQUISITIONS
Dulles, Virginia (September 24, 2003) The Fairchild Corporation (NYSE: FA) announced today that it is continuing to pursue worldwide acquisition opportunities in diverse business segments. Eric Steiner, President and Chief Operating Officer of The Fairchild Corporation, stated: "We are pursing acquisition opportunities in a variety of industries and locations throughout the world. Based upon our experience and past successes with acquisitions and business opportunities, we expect that these efforts will provide us with a strong foundation for the long term."
Fairchild's cash and investments were $121.9 million at June 30, 2003, as compared to $21.1 million at June 30, 2002. Fairchild has also successfully reduced its debt by $485.1 million to $6.7 million on June 30, 2003, as compared to $491.8 million on June 30, 2002. The reduction in debt decreased the Company's net interest expense by $16.8 million in fiscal 2003. These efforts reflect the sale of Fairchild's fastener business to Alcoa for $657 million in cash, which was completed on December 3, 2002, and significantly lessen the Company's dependence on the Aerospace industry. The Company reported a net loss of $53.2 million, or $2.12 per share, for its year ended June 30, 2003. The net loss included $9.9 million of interest expense for the write-off of deferred loan fees due to early repayment of our debt, a $7.7 million decrease in the fair market value adjustment of our position in a ten-year $100 million interest rate contract, and goodwill impairment of $6.6 million.
About The Fairchild Corporation
The Fairchild Corporation is engaged in the aerospace distribution business which stocks and distributes a wide variety of parts to aircraft operations and aerospace companies providing aircraft parts and services to customers worldwide. The Fairchild Corporation also owns and operates a shopping center located in Farmingdale, New York. Additional information is available on The Fairchild Corporation web site (www.fairchild.com).
This news release may contain forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933, as amended, and Section 21-E of the Securities Exchange act of 1934, as amended. The Company's actual results could differ materially from those set forth in the forward-looking statements, as a result of the risks associated with the Company's business, changes in general economic conditions, and changes in the assumptions used in making such forward-looking statements.
THE FAIRCHILD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended | Twelve Months Ended | ||||
REVENUE: | 06/30/03 | 06/30/02 | 06/30/03 | 06/30/02 | |
Net sales | $ 18,257 | $ 17,878 | $ 68,820 | $ 76,531 | |
Rental revenue | 2,435 | 1,776 | 8,699 | 7,159 | |
20,692 | 19,654 | 77,519 | 83,690 | ||
COSTS AND EXPENSES: | |||||
Cost of goods sold | 15,028 | 14,548 | 54,792 | 61,059 | |
Cost of rental revenue | 1,638 | 1,210 | 5,665 | 4,917 | |
Selling, general & administrative | 7,534 | 9,027 | 61,344 | 39,594 | |
Other (income) expense, net | (1,410) | 1,126 | (2,581) | (4,293) | |
Impairment charges | 6,726 | 3,061 | 6,726 | 3,435 | |
29,516 | 28,972 | 125,946 | 104,712 | ||
OPERATING LOSS | (8,824) | (9,318) | (48,427) | (21,022) | |
Interest expense | 4,355 | 12,636 | 38,460 | 49,650 | |
Interest income | (816) | (933) | (9,969) | (4,304) | |
Net interest expense | 3,539 | 11,703 | 28,491 | 45,346 | |
Investment income (loss) | (618) | (742) | (20) | (992) | |
Increase (decrease) in fair market value of interest rate contract | (1,925) | (3,587) | (7,673) | (4,567) | |
Loss from continuing operations before taxes | (14,906) | (25,350) | (84,611) | (71,927) | |
Income tax benefit | (1,745) | 39 | (446) | 16,047 | |
Equity in earnings (loss) of affiliates, net | (807) | (38) | (1,066) | (138) | |
Minority interest, net | 39 | - | 39 | - | |
Loss from continuing operations | (17,419) | (25,349) | (86,084) | (56,018) | |
Earnings from discontinued operations, net | (4,718) | 17,301 | 3,108 | 46,070 | |
Loss on disposal of discontinued operations, net | (10,298) | - | 29,784 | - | |
Cumulative effect of change in accounting for goodwill | - | - | - | (144,600) | |
NET LOSS | $ (32,435) | $ (8,048) | $ (53,192) | $ (154,546) | |
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE: | |||||
Loss from continuing operations | $ (0.69) | $ (1.01) | $ (3.42) | $ (2.23) | |
Earnings from discontinued operations, net | (0.19) | 0.69 | 0.12 | 1.83 | |
Loss on disposal of discontinued operations, net | (0.41) | - | 1.17 | - | |
Cumulative effect of change in accounting for goodwill | - | - | - | (5.75) | |
NET LOSS | $ (1.29) | $ (0.32) | $ (2.11) | $ (6.15) | |
Weighted average shares outstanding: | 25,184 | 25,162 | 25,170 | 25,155 | |
Revenues | |||||
Aerospace Distribution Segment | $ 16,201 | $ 14,974 | $ 59,608 | $ 63,298 | |
Aerospace Manufacturing Segment | 2,031 | 2,904 | 9,187 | 13,233 | |
Real Estate Operations Segment | 2,435 | 1,776 | 8,699 | 7,159 | |
Corporate and Other | 25 | - | 25 | - | |
Total | $ 20,692 | $ 19,654 | $ 77,519 | $ 83,690 | |
Operating Income (Loss) | |||||
Aerospace Distribution Segment | $ (5,507) | $ 532 | $ (4,143) | $ 2,579 | |
Aerospace Manufacturing Segment | (1,086) | (4,876) | (2,494) | (6,276) | |
Real Estate Operations Segment | 696 | 475 | 2,735 | 1,550 | |
Corporate and Other | (2,926) | (5,449) | (44,525) | (18,875) | |
Total | $ (8,823) | $ (9,318) | $ (48,427) | $ (21,022) |
