Exhibit 99.1
First Aviation Announces Record Sales in the Third Quarter
WESTPORT, Conn.--(BUSINESS WIRE)--Dec. 15, 2003--First Aviation
Services Inc. (NASDAQ: FAVS), one of the premier suppliers of products
and services to the aerospace industry worldwide, today announced
record sales in the third quarter. Net income was at break even in the
third quarter of the current year, compared to net income of $0.02 per
share for the third quarter of the prior year.
For the nine months ended October 31, 2003 the Company incurred a
net loss of $0.01 per share, compared to a net loss of $0.37 for the
nine months ended October 31, 2002. Prior year results included a loss
of $0.38 per share related to the adoption of a new accounting
principle related to goodwill.
A summary of results is as follows:
-- Cash provided by operating activities for the nine months
ended October 31, 2003, was $2.6 million. Cash on hand at
October 31, 2003 increased $2.6 million from year-end to $28.6
million, or $3.94 per share, and stockholders' equity
increased $0.4 million from year-end to $36.5 million, or
$5.02 per share.
-- Net sales for the three months ending October 31, 2003,
increased $1.2 million or 4.3% to $27.8 million compared to
$26.6 million for the comparable period of the prior year, due
to increased sales of general aviation parts, and sales of
services. Gross profit for the three months ending October 31,
2003 was level with the same period of the prior year at $5.1
million, primarily due to sales of products with lower gross
margins, and increased promotional activities and freight.
"We saw an increase in general aviation sales in the 3rd quarter,"
said Michael Culver, President and CEO of First Aviation. "The
Company's efforts and investments to increase sales revenue have
started to produce results. We will be undertaking various initiatives
to improve our business."
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 third quarter
results on December 17, 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, at a minimum, 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, and other items that are
beyond the Company's control may cause actual results to differ from
management's expectations. In addition, specific consideration should
be given to the various factors 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, and the various factors described in this
release. The Company disclaims any obligation or undertaking to
provide any updates or revisions to any forward-looking statement to
reflect any change in our expectations or any change in events,
conditions, or circumstances on which the forward-looking statement is
based.
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share amounts)
(unaudited)
Three months ended Nine months ended
October 31, October 31,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net sales $27,756 $26,611 $78,639 $77,775
Cost of sales 22,650 21,480 63,852 63,046
---------- ---------- ---------- ----------
Gross profit 5,106 5,131 14,787 14,729
Selling, general and
administrative expenses 4,532 4,306 13,119 12,859
Corporate expenses 668 647 1,907 1,881
---------- ---------- ---------- ----------
Income (loss) from
operations (94) 178 (239) (11)
Net interest income and
other 57 31 146 130
Minority interest in
subsidiary (10) (11) (31) (31)
---------- ---------- ---------- ----------
Income (loss) before
income taxes (47) 198 (124) 88
Benefit (provision) for
income taxes 64 (77) 42 (34)
---------- ---------- ---------- ----------
Income (loss) before
cumulative effect of
accounting change 17 121 (82) 54
Cumulative effect of
accounting change, net of
benefit for income taxes
of $922 - - - (2,735)
---------- ---------- ---------- ----------
Net income (loss) $17 $121 $(82) $(2,681)
========== ========== ========== ==========
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) $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 $(0.01) $(0.37)
========== ========== ========== ==========
Weighted average shares
outstanding - basic 7,273,961 7,227,860 7,262,272 7,220,492
========== ========== ========== ==========
Weighted average shares
outstanding - assuming
dilution 7,286,529 7,227,860 N/A 7,226,723
First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands, except share amounts)
October 31, January 31,
2003 2003
------------------------------
(unaudited) (a)
Assets
Current assets:
Cash and cash equivalents $28,636 $26,013
Trade receivables, net of
allowance for doubtful
accounts of $1,553 and $1,656,
respectively 14,271 13,454
Inventory, net of allowance for
obsolete and slow moving
inventory of $997 and $997,
respectively 19,790 20,617
Prepaid expenses and other 848 1,318
--------------- --------------
Total current assets 63,545 61,402
Plant and equipment, net 3,137 3,639
--------------- --------------
$66,682 $65,041
=============== ==============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $10,866 $10,324
Accrued compensation and related
expenses, and other accrued
liabilities 2,606 2,073
Income taxes payable 1,155 1,009
--------------- --------------
Total current liabilities 14,627 13,406
Revolving line of credit 14,500 14,500
Minority interest in subsidiary 1,041 1,041
--------------- --------------
Total liabilities 30,168 28,947
Stockholders' equity:
Common stock, $0.01 par value,
25,000,000 shares authorized,
7,276,305 and 7,250,710 shares
outstanding, respectively 91 91
Additional paid-in capital 38,390 38,445
Retained earnings 7,461 7,543
Accumulated other comprehensive
income (loss) 311 (96)
--------------- --------------
46,253 45,983
Less: Treasury stock, at cost (9,739) (9,889)
--------------- --------------
Total stockholders' equity 36,514 36,094
--------------- --------------
Total liabilities and stockholders'
equity $66,682 $65,041
=============== ==============
(a) Balances were derived from the audited balance sheet as of
January 31, 2003.
CONTACT: First Aviation Services Inc.
Robert G. Costantini, 203-291-3300