DECRANE AIRCRAFT HOLDINGS, INC.
2361 Rosecrans Ave., Suite 180
El Segundo, CA 90245
TRADED: NASDAQ: DAHX
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
Robert A. Rankin Karen Taylor Moira Conlon
Chief Financial Officer General Information Investor/Analyst Contact
(310) 725-9123 (310) 442-0599 (310) 442-0599
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FOR IMMEDIATE RELEASE
NOVEMBER 3, 1997
DECRANE AIRCRAFT HOLDINGS SIGNS DEFINITIVE AGREEMENT TO ACQUIRE AUDIO
INTERNATIONAL--NATION'S LARGEST INDEPENDENT PROVIDER
OF AUDIO SYSTEMS FOR CORPORATE AVIATION MARKET
Acquisition Highlights:
- Marks DeCrane's entry into $6 billion corporate business jet
market
- Adds new "Blue Chip" clients-- Bombardier, Dassault, Raytheon,
Jet Aviation, K-C Aviation
- Expected to be accretive to 1998 earnings
- Margin improvement opportunities on a combined basis
EL SEGUNDO, CALIFORNIA, NOVEMBER 3, 1997 -- DeCrane Aircraft Holdings
(NASDAQ: DAHX), a leading manufacturer of avionics components and an avionics
systems integrator for the commercial aircraft industry, today announced the
signing of a definitive agreement to purchase Audio International Inc.
("Audio"), denoting DeCrane's entry into the fast growing corporate aviation
services market. Chairman and Chief Executive Officer, R. Jack DeCrane, said
he expects the acquisition to contribute to revenue growth and be accretive
to 1998 earnings. Structured as a cash for stock transaction, other terms of
the acquisition were not disclosed. Closing of the acquisition is expected
to occur by mid-November.
--more--
DECRANE AIRCRAFT HOLDINGS, INC.
ADD 1
COMPLEMENTS STRATEGY, FULL- SERVICE CABIN AVIONICS PROVIDER
"Strategically," DeCrane said, "Audio's business fundamentals are highly
complementary to our company's existing systems integration and components
operations. Bringing Audio's products and services under the DeCrane
umbrella creates the final business segment needed for us to become the
largest full service provider of cabin management systems for the corporate
market, while simultaneously giving DeCrane a third strategic leg for
growth."
Continued DeCrane, "In line with our strategy to grow through acquisitions,
Audio International meets each of our key criteria. Specifically, Audio
dominates its market niche with a #1 market leading position, which we
estimate at approximately 45% of the high-end corporate jet market, and
enjoys low cost producer status. Equally important, it has long-standing
relationships with a "blue chip" customer base which represents an
opportunity for us to cross-sell our other products and services." Added
DeCrane, "Looking ahead, becoming a major player in the corporate business
jet services market positions us to grow our company even more rapidly
through acquisitions, as this market niche is highly fragmented with other
attractive consolidation and acquisition opportunities which we intend to
explore."
AUDIO INTERNATIONAL IS INDUSTRY LEADER, STRONG REVENUE GROWTH EXPECTED
Audio International, an Arkansas-based privately held firm founded in 1986,
is the nation's largest and leading independent provider of premium,
customized aircraft entertainment and cabin management products and systems
for the high-end corporate jet market. With in-house engineering,
development and manufacturing capabilities, Audio's range of products and
services include stereo systems, video monitors, amplifiers, chimes and
paging devices, headphone systems and all passenger switch and other
controls, like cabin light and climate, used in the aircraft cabin.
Audio International Chief Executive Officer, Bobby Brown, said, "We look
forward to being a part of DeCrane. As we continued to experience increased
demand for our services, we were seeking out a partner who could bring the
resources we needed to capitalize upon these enormous growth opportunities.
DeCrane fit the profile perfectly with its in-flight entertainment components
expertise and its systems integration capability at Hollingsead."
Continued Brown, "Typically, our sales are directly with the original
equipment manufacturers, including Bombardier, Raytheon and Dassault, or the
major business jet aircraft outfitters like K-C Aviation (a division of
Kimberly Clark), Bombardier's new completion center in Montreal, and Jet
Aviation. Our products can be found on nearly all corporate and
head-of-state aircraft costing in the range of $10 million to $40 million.
Presently, our content per aircraft can be as much as $250,000, a level we
envision growing in conjunction with the industry's desire for turnkey
suppliers, growing demand for more sophisticated audio systems and as we
introduce new products for these
--more--
aircraft." Audio International will operate as a wholly-owned subsidiary of
DeCrane. DeCrane said, "We are exceptionally pleased to have added
additional management talent and strength to our organization as a result of
this acquisition. Bobby Brown will continue as Chief Executive Officer and
Rick Marsh, one of Audio's founders, will remain President. We also wish to
extend a warm welcome to the other Audio professionals and staff to our
company."
FAVORABLE INDUSTRY FUNDAMENTALS, POISED TO BENEFIT FROM SURGE IN NEW DELIVERIES
Over the next ten years, it is estimated that over 5,300 new business jets
valued at $60 billion will be delivered. Deliveries for 1997 to 2001 are
projected at 2,300 aircraft, a 61% increase over the previous five year
period. Several trends are fueling the industry's revitalization with more
rapid industry growth on the horizon. Specifically, favorable industry
trends expected to support the company's continued fast growth are the
introduction of new and more efficient aircraft, a dramatic increase in the
popularity of fractional aircraft ownership, a decline in the availability of
pre-owned aircraft and a surge in charter operators. Fractional owners, 80%
of which are new to business aviation, could account for up to 15% of the
market in 1998. The availability of pre-owned aircraft has declined by over
30% in the last two years, and half of that inventory is older, slower moving
aircraft.
Except for historical information contained herein, this document contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements involve known and unknown
risks and uncertainties that may cause the Company's actual results or
outcomes to be materially different from those anticipated and discussed
herein. Further, the Company operates in an industry sector where securities
values may be volatile and may be influenced by regulatory and other factors
beyond the Company's control. Important factors that the Company believes
might cause such differences are discussed in the cautionary statements
accompanying the forward-looking statements in the Company's Prospectus,
dated April 16, 1997, filed with the Securities and Exchange Commission and
subsequent filings. In assessing forward-looking statements contained
herein, readers are urged to read carefully all cautionary statements
contained in those filings with the Securities and Exchange Commission.
DeCrane Aircraft Holdings, Inc. is a leading manufacturer of avionics
components and a provider of avionics systems integration services in certain
niche markets of the commercial aircraft industry. The Company's products
and services typically are utilized to provide an interface between an
aircraft and its avionics systems.
For more information about DeCrane Aircraft Holdings, Inc. via facsimile
simply call 1-800-PRO-INFO and dial client code "DAHX".
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