Exhibit 99.1
First Aviation Announces First Quarter Net Income
WESTPORT, Conn.--(BUSINESS WIRE)--June 3, 2003--First Aviation
Services Inc. (NASDAQ: FAVS), one of the premier suppliers of products
and services to the aerospace industry worldwide, today announced
profits for its first quarter, with income before cumulative effect of
accounting change of $0.02 per share, compared to $0.01 per share in
the prior year. Net income was $0.02 per share, compared to a net loss
of $0.37 per share in the first quarter of the prior year, after the
accounting change.
Highlights are as follows:
-- Net sales increased 2.4% to $25.6 million compared to $25.0
million in the prior year.
-- Gross profit increased 4.3% to $4.9 million compared to $4.7
million in the prior year.
-- Corporate expenses decreased 11.6% to $0.5 million compared to
$0.6 million in the prior year.
-- Income before income taxes increased 53.9% to $0.2 million
compared to $0.1 million in the prior year.
-- Net income increased to $0.1 million, compared to a loss of
$2.7 million in the prior year. (Prior year results included a
net charge of $2.7 million relating to the write off goodwill
upon adoption of Financial Accounting Standards No. 142.)
-- Cash on hand at April 30, 2003 increased from year-end to 27.1
million, or $3.73 per share, and book value increased from
year-end to $36.4 million, or $5.01 per share.
Michael Culver, President and CEO of First Aviation, said "We were
pleased with first quarter results, which were in-line with our
expectations. The industry still is facing many challenges that
present the company with long term opportunities."
First Aviation, located in Westport, Connecticut, and its
principal operating subsidiary, Aerospace Products International Inc.
("API"), based in Memphis, Tennessee, is one of the premier suppliers
of products and services worldwide to manufacturers and aircraft
operators of some of the most widely used commercial and general
aviation aircraft. In addition to its parts and components supply
services, API is a leading provider of supply chain management and
customized third party logistics services and technology solutions,
including inventory management services. API also offers 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 one of the
premier suppliers of aviation products, supply chain management
services and technology solutions in the industry.
The Company will host a conference call to discuss first quarter
results during the week of June 9, 2003. A separate announcement will
be issued for that purpose.
More information about First Aviation can be found on the World
Wide Web at http://www.favs.com and, http://www.apiparts.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 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. Such risks, uncertainties and other
important factors include, among others: the Company's ability to
obtain parts and components from its principal suppliers on a timely
basis; depressed domestic and international market and economic
conditions; especially those currently facing the aviation industry as
a whole; the impact of changes in fuel and other freight related
costs; relationships with its customers; the ability of the Company's
customers to meet their financial obligations to the Company; the
ability to obtain and service supply chain management contracts;
changes in regulations or accounting standards; the ability to
consummate suitable acquisitions and expand; other items that are
beyond the Company's control may cause actual results to differ from
management's expectations; and other factors as are described in Item
7, (Management's Discussion and Analysis of Financial Condition and
Results of Operations) in the Company's Annual Report on Form 10-K for
the year ended January 31, 2003. In addition, specific consideration
should be given to the various factors described in this release.
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share amounts)
(unaudited)
Three months ended April 30,
2003 2002
----------- -----------
Net sales $25,605 $24,998
Cost of sales 20,731 20,324
----------- -----------
Gross profit 4,874 4,674
Selling, general and administrative expenses 4,266 4,014
----------- -----------
Operating income before corporate expenses 608 660
Corporate expenses 490 554
----------- -----------
Income from operations 118 106
Net interest income and other 89 32
Minority interest in subsidiary (10) (10)
----------- -----------
Income before income taxes 197 128
Provision for income taxes (77) (50)
----------- -----------
Income before cumulative effect of accounting
change 120 78
Cumulative effect of accounting change, net of
benefit for income taxes of $922 - (2,735)
----------- -----------
Net income (loss) $120 $(2,657)
=========== ===========
Basic net income (loss) per share, and net
income (loss) per share - assuming dilution:
Income before cumulative effect of
accounting change $0.02 $0.01
Cumulative effect of accounting change - (0.38)
----------- -----------
Basic net income (loss) per share, and net
income (loss) per share - assuming dilution $0.02 $(0.37)
=========== ===========
Weighted average shares outstanding - basic 7,251,355 7,204,107
=========== ===========
Weighted average shares outstanding -
assuming dilution 7,258,903 7,230,763
First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands, except share amounts)
April 30, January 31,
2003 2003
-----------------------
(unaudited) *
Assets
Current assets:
Cash and cash equivalents $27,095 $26,013
Trade receivables, net of allowance for
doubtful accounts of $1,767 and $1,656,
respectively 12,666 12,978
Inventory, net of allowance for obsolete
and slow moving inventory of $997,
respectively 20,323 20,617
Prepaid expenses and other 2,220 1,794
----------- -----------
Total current assets 62,304 61,402
Plant and equipment, net 3,434 3,639
----------- -----------
$65,738 $65,041
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $10,780 $10,324
Accrued compensation and related
expenses, and other accrued liabilities 1,883 2,073
Income taxes payable 1,136 1,009
----------- -----------
Total current liabilities 13,799 13,406
Revolving line of credit 14,500 14,500
Minority interest in subsidiary 1,041 1,041
----------- -----------
Total liabilities 29,340 28,947
Stockholders' equity:
Common stock, $0.01 par value, 25,000,000
shares authorized, 7,251,370 and
7,250,710 shares outstanding,
respectively 91 91
Additional paid-in capital 38,445 38,445
Retained earnings 7,663 7,543
Accumulated other comprehensive income
(loss) 84 (96)
----------- -----------
46,283 45,983
Less: Treasury stock, at cost (9,885) (9,889)
----------- -----------
Total stockholders' equity 36,398 36,094
----------- -----------
Total liabilities and stockholders' equity $65,738 $65,041
=========== ===========
* Balances were derived from the audited balance sheet as of January
31, 2003.
CONTACT: First Aviation Services Inc.
Michael D. Davidson, 203/291-3300
Chief Financial Officer