UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
SEPTEMBER 17, 1999
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
COMMISSION FILE NUMBER 1-11775
AVIATION SALES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 65-0665658
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
6905 NW 25TH STREET
MIAMI, FLORIDA 33122
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(305) 592-4055
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N.A.
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 5. OTHER EVENTS.
On September 17, 1999, Aviation Sales Company (the "Company") issued a
press release commenting on the Company's expected third quarter and 1999 fiscal
year results of operations. A copy of the press release is attached to this Form
8-K as an Exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
----------- -----------
99 Press Release of the Company dated
September 17, 1999
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AVIATION SALES COMPANY
/s/ DALE S. BAKER
-----------------------------
Date: September 22, 1999 Dale S. Baker, President
3
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99 Press Release of the Company dated September 17, 1999
EXHIBIT 99
AVIATION SALES COMPANY COMMENTS ON EXPECTED 1999 RESULTS
1999 EPS EXPECTED TO GROW BETWEEN 15% AND 17%
MIAMI--(BUSINESS WIRE)--SEPT. 17, 1999--AVIATION SALES COMPANY (NYSE:AVS) today
commented on its expected third quarter and 1999 results of operations. The
Company stated that it anticipates 1999 per share earnings growth to be in a
range of 15% to 17% compared to 1998 earnings per share, and that based upon
this level of growth, the Company expects fully diluted earnings per share to be
between $.48 and $.50 on revenues of approximately $170 million for the third
quarter of 1999 and $2.30 and $2.35 on revenues of approximately $718 million
for the 1999 fiscal year.
Dale S. Baker, Chairman and Chief Executive Officer, stated "We continue to be
pleased with the performance of our core distribution and MR&O operations.
However, the results in our manufacturing and flight surfaces repair operations
will not meet our plan for the 1999 third quarter and fiscal year. We believe
that the drop in Boeing's production levels are starting to be felt through the
supply chain, and while we had anticipated this slow down in our manufacturing
operations during the fourth quarter of 1999 and into the year 2000, we did not
anticipate some of the order cancellations and delivery push-outs which we have
experienced to date during the third quarter. Further, in our flight surfaces
repair and overhaul operation, we have had higher expense levels than we
anticipated. These expenses were primarily in conjunction with investments that
we made in new facilities and equipment to support future growth in this
business. These issues will impact our third quarter and 1999 fiscal year
results by approximately $.17 to $.18 per diluted share for the 1999 third
quarter and $.26 to $.28 per diluted share for the 1999 fiscal year."
Mr. Baker continued: "During 1998, we purchased five (5) A300 aircraft for
conversion from passenger to cargo configuration. Two of these airplanes have
been converted to date, with the third scheduled for completion by the end of
the third quarter. Our 1999 business plan had projected that two of these
aircraft would be leased during the third quarter and that all three of these
aircraft would be leased during the fourth quarter. While we are in discussions
with several parties interested in leasing these aircraft, the timing of
potential transactions is likely to be delayed from what we anticipated, thereby
adversely impacting our 1999 third quarter and full-year operating results by
approximately $.02 and $.05 per diluted share, respectively. On the other hand,
consistent with our plan, we expect one of our A300 aircraft that has not yet
been converted to cargo configuration to be sold during the third quarter. We
remain confident in the long term value of our investment in the A300 aircraft
and view the impact of this issue to simply be one of timing."
(more)
1
<PAGE>
The Company also commented on the status of the six new facilities it is
currently developing. As previously reported, the Company anticipated opening
six new facilities during the third quarter of 1999. Mr. Baker commented: "Our
new Winston-Salem MRO facility, which will perform aircraft C and D checks,
received its FAA certificate last week and received very high marks from the FAA
during the certification process. The first aircraft is already in work at the
facility, with a second aircraft scheduled to begin maintenance next week. We
expect this facility will continue to add new aircraft and customers during the
fourth quarter of 1999. Our new MRO facilities in Dallas, Minneapolis and
Greensboro, our new manufacturing facility in Juarez, Mexico and our new
distribution sales office in Amsterdam, should contribute to our operating
revenues and income during the fourth quarter. However, costs resulting from
delays in opening these new facilities will negatively impact our anticipated
third quarter and fiscal 1999 operating results by approximately $.03 and $.02
per diluted share, respectively."
The Company also reported that slightly higher interest rates during the third
quarter and higher borrowings than were anticipated (incurred to support
continued revenue growth, the acquisition of Kitty Hawk's Oscoda, Michigan
maintenance facility and to fund costs relating to the development of new
facilities) will adversely impact 1999 third quarter and fiscal year operating
results by approximately $.07 and $.14 per diluted share, respectively.
Mr. Baker commented: "We have been very active in our review and consideration
of merger and acquisition opportunities. However, while we have explored
numerous potential transactions, we have not recently found acquisition targets
at prices at which we believed it made sense for our business. This, in part,
has led us to adopt a strategy of build vs. buy to accomplish part of our future
growth; hence the development of several of our new facilities. Additionally, we
actively negotiated during the third quarter with two large transaction
partners. While these discussions have been positive, we believe that given the
recent activity in the market price of our common stock, these transactions will
probably not be possible at this time. As a result, we anticipate recognizing
approximately $500,000 of one-time professional fees as an expense during the
third quarter."
Mr. Baker continued: "We are pleased how the market has reacted to and accepted
our Total Inventory Management ("TIM") and Total Aircraft Maintenance ("TAM")
product strategy. We recently completed the first ten heavy C-checks for one of
the top U.S. air carriers and we reduced their average time in maintenance from
42 to 28 days per aircraft. We did this by controlling both the parts support
and repair and the aircraft maintenance. The benefits to our customer were
substantial and we are confident that our TIM/TAM product delivers true value to
our customers and will continue to deliver meaningful long term opportunities
for our company."
(more)
2
<PAGE>
Aviation Sales Company is a leading independent provider of fully integrated
aviation inventory and maintenance services, including aircraft heavy
maintenance, component repair and overhaul, leasing, the distribution of
aircraft spare parts and the manufacture of new components for major commercial
airlines, original equipment manufacturers and maintenance and repair facilities
throughout the world.
Except for historical information contained herein, this release contains
certain forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties, which may cause
the Company's actual results in future periods to differ materially from
forecasted results. A number of factors, including those identified below, could
adversely affect the Company's ability to obtain these results: the Company's
ability to acquire adequate inventory and to obtain favorable pricing for such
inventory, competitive pricing for the Company's products and services,
increased competition in the aircraft spare parts redistribution and MRO
markets, the ability to consummate suitable acquisitions, the continuing ability
to effectively integrate acquisitions, economic factors which affect the airline
industry, and changes in government regulations. Certain of these risks are
described in the Company's filings with the Securities and Exchange Commission
(SEC). Copies of the Company's SEC filings are available from the SEC or may be
obtained upon request from the Company. The Company does not undertake any
obligation to update the information contained herein, which speaks only as of
this date.
- ------------------------------------------------------------------------
Contact:
Aviation Sales Company
Dale S. Baker, 305/599-6619
(Chairman/Chief Executive Officer)
or
Morgen-Walke Associates
Gordon McCoun/Jennifer Angell, 212/850-5600
Media contact:
Eileen King/Stacey Reed, 212/850-5600\
3
