FIRST AVIATION ANNOUNCES RECORD SALES AND PROFITS
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WESTPORT, CONNECTICUT, September 14, 2001 - First Aviation Services Inc.
(NASDAQ: FAVS), a leading provider of services to the aerospace industry
worldwide, today announced record revenues for the second quarter of $27.6
million and record gross profit for the quarter of $5.7 million.
For the quarter ended July 31, 2001, net sales increased 14.7% from $24.0
million for the second quarter of the prior year. Gross profit for the quarter
increased 6.3% from $5.4 million reported in the prior year. Operating income,
before corporate expenses, more than doubled to $0.7 million from $0.3 million
in the prior year.
Mr. Michael C. Culver, President and CEO of First Aviation Services, noted "The
continued growth of API, despite a very difficult economic environment, is
gratifying. It speaks to the Company's commitment to providing its customers
with great value, that being excellent parts availability at reasonable prices.
With the addition of a logistics contract and the Superior engine product line
in the third quarter we will continue to grow both domestically and
internationally. "
Income from continuing operations for the quarter was $0.01 per share, as
compared to a loss of $0.01 for the prior year quarter.
During the three months ended July 31, 2001 the Company recorded a credit, net
of applicable income taxes, of $0.7 million, or $0.10 per share related to the
disposal of discontinued operations. The credit is due to the reduction of
accruals previously recorded in connection with the disposition of a
discontinued operation.
For the first half of the fiscal year ending January 31, 2002 net sales
increased 14.6% to $53.1 million from $46.4 million reported for the first half
of the last fiscal year. Gross profit for the same periods increased 7.8% to
$10.9 million from $10.1 million reported in the prior year.
Mr. Aaron P. Hollander, Chairman of the Board added, "A strong balance sheet
with approximately $33 million of cash continues to enable us to make
opportunistic acquisitions and invest in new service offerings."
First Aviation, located in Westport, Connecticut is a worldwide leader in
providing services to aircraft operators of some of the most widely used
commercial and general aviation aircraft. Its operations include Aerospace
Products International Inc. ("API").
API, based in Memphis, Tennessee, is a leader in the supply of aerospace
products and services worldwide. In addition to the product lines it
distributes, API offers supply chain management services, overhaul and repair
services for brakes and starter/generators, and builds custom hose assemblies.
With locations in the U.S., Canada and Asia Pacific, plus partners throughout
the world, API continues to be the fastest growing supplier of aviation products
and inventory management solutions in the industry.
The Company will host a conference call to discuss second quarter earnings and
recent events at a later date.
More information about First Aviation can be found on the World Wide Web at
http://www.firstaviation.com and, http://www.apiparts.com.
Forward-Looking Statements
Information included in this release may contain 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 the Company's current expectations concerning future events and results.
Such forward-looking statements, including those concerning the Company's
expectations, involve known and unknown risks, uncertainties and other factors,
some of which are beyond the Company's control, that may cause the Company's
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. In evaluating such
statements, as well as the future prospects of the Company, specific
consideration should be given to various factors, including the events of
September 11, 2001 and the outcome or results thereof, which are unknown to
management at this time, the Company's ability to obtain parts from its
principal suppliers on a timely basis, market and economic conditions, the
effects of fuel costs on the Company's customers, aircraft operators and freight
carriers utilized by the Company, the ability to consummate suitable
acquisitions, and other items that are beyond the Company's control and may
cause actual results to differ from management's expectations.
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Contact: John A. Marsalisi
Vice President & Chief Financial Officer
First Aviation Services Inc.
(203) 291-3303
(See attached financial information)
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share amounts)
(unaudited)
Three Months Six Months
Ended July 31, Ended July 31,
-------------- --------------
2001 2000 2001 2000
---- ---- ---- ----
Net sales $27,564 $ 24,039 $53,136 $ 46,374
Cost of sales 21,875 18,685 42,238 36,261
------------- ------------ ------------- ------------
Gross profit 5,689 5,354 10,898 10,113
Selling, general and administrative expenses 4,982 5,043 9,716 9,574
------------- ------------ ------------- ------------
Operating income before corporate expenses 707 311 1,182 539
Corporate expenses 731 829 1,312 1,576
------------- ------------ ------------- ------------
Operating loss from continuing operations (24) (518) (130) (1,037)
Net interest income and other 113 367 325 898
Minority interest in subsidiary (11) (11) (21) (21)
------------- ------------ ------------- ------------
Income (loss) before income taxes 78 (162) 174 (160)
(Provision) benefit for income taxes (8) 91 (17) 102
------------- ------------ ------------- ------------
Income (loss) from continuing operations 70 (71) 157 (58)
Loss from discontinued operations, net of benefit for - (291) - (419)
income taxes of $150 and $216, respectively
Income from disposal of subsidiary, net of provision for 707 - 707 -
income taxes of $405 and $405, respectively
------------- ------------ ------------- ------------
Net income (loss) $ 777 $ (362) $ 864 $ (477)
============= ============ ============= ============
First Aviation Services Inc.
Consolidated Condensed Statements of Operations (continued)
(in thousands, except share amounts)
(unaudited)
Three Months Six Months
Ended July 31, Ended July 31,
-------------- --------------
2001 2000 2001 2000
---- ---- ---- ----
Basic net income (loss) per common share:
Income (loss) from continuing operations $ 0.01 $ (0.01) $ 0.02 $ (0.01)
Loss from discontinued operations - (0.04) - (0.05)
Income from disposal of subsidiary 0.10 - 0.10 -
--------------- -------------- --------------- ---------------
Basic net income (loss) per common share $ 0.11 $ (0.05) $ 0.12 $ (0.06)
=============== ============== =============== ===============
Shares used in computation of basic net income 7,194,419 7,682,082 7,190,502 7,833,311
(loss) per common share
=============== ============== =============== ===============
Net income (loss) per common share -
assuming dilution:
Income (loss) from continuing operations $ 0.01 $ (0.01) $ 0.02 $ (0.01)
Loss from discontinued operations - (0.04) - (0.05)
Income from disposal of subsidiary 0.10 - 0.10 -
--------------- -------------- --------------- ---------------
Net income (loss) per common share $ 0.11 $ (0.05) $ 0.12 $ (0.06)
- assuming dilution
=============== ============== =============== ===============
Shares used in computation of net income (loss) 7,211,742 7,682,082 7,199,785 7,833,311
per common share - assuming dilution
=============== ============== =============== ===============
First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands)
July 31, January 31,
2001 2001
-------------------------------------
(Unaudited) *
Assets
Current assets:
Cash and cash equivalents $ 32,914 $ 31,855
Trade receivables 16,655 15,860
Inventories 23,112 21,803
Deferred and refundable income taxes, 3,905 4,849
prepaid expenses and other
--------------- ---------------
Total current assets 76,586 74,367
Plant and equipment, net 4,419 4,638
Goodwill, net 1,676 1,709
--------------- ---------------
$ 82,681 $ 80,714
=============== ===============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 14,411 $ 13,496
Accrued liabilities 2,288 4,321
Income taxes payable 1,910 2,120
Revolving line of credit and current 250 11,757
portion of obligations under capital leases
--------------- ---------------
Total current liabilities 18,859 31,694
Revolving line of credit 14,000 -
Minority interest 1,041 1,041
Obligations under capital leases 23 147
--------------- ---------------
Total liabilities 33,923 32,882
Stockholders' equity:
Common stock 91 91
Additional paid-in capital 38,615 38,625
Retained earnings 20,340 19,476
Treasury stock (10,288) (10,360)
--------------- ---------------
Total stockholders' equity 48,758 47,832
--------------- ---------------
Total liabilities and stockholders' equity $ 82,681 $ 80,714
=============== ===============
*Balances were derived from the audited balance sheet as of January 31, 2001
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