FIRST AVIATION ANNOUNCES RECORD REVENUE AND
GROSS PROFIT
WESTPORT, CONNECTICUT, December 6, 2000 - First Aviation Services Inc. (NASDAQ:
FAVS), a leading provider of services to the aerospace industry worldwide, today
announced record quarterly sales of $25.6 million and record gross profit of
$5.0 million.
Net sales increased 21.7% for the quarter ended October 31, 2000 from $21.1
million for the third quarter of the prior year. Gross profit for the quarter
increased 27.3% from $3.9 million reported in the prior year. Gross margin
increased to 19.6% versus 18.7% for the third quarter of the prior fiscal year.
Mr. Michael C. Culver, President and CEO of First Aviation Services, noted that
"During the quarter we experienced sales and gross profit growth in all our
product lines. We are especially pleased to see continued improvement in gross
margin."
The Company's net loss from continuing operations for the quarter ended October
31, 2000 was $0.05 per share compared to a net loss from continuing operations
of $0.03 per share for the same period of the prior fiscal year. Excluding the
loss from AeroV, its e-commerce subsidiary, and certain out of the ordinary
legal expenses, the Company earned $0.01 per share for the quarter.
For the nine months ended October 31, 2000, net sales increased 19.7% to $70.9
million versus $59.2 million reported for the comparable period of the prior
year. Gross profit over the same time period increased 24.9% to $14.0 million
from $11.2 million, while gross margin increased to 19.7% from 18.9%.
The Company's net loss from continuing operations for the nine months ended
October 31, 2000 was $0.11 per share compared to a net loss of $0.06 per share,
before a non-recurring charge, for the same period of the prior fiscal year.
Without the expenses associated with AeroV, start-up expenses incurred in
connection with the Company's Asia Pacific and European operations, as well as
certain legal expenses related to legacy matters, the Company estimates that its
net income for the nine months ended October 31, 2000 would have been $0.06 per
share, an improvement of $0.12 per share over the same period of the prior
fiscal year.
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Results of operations for the three and nine months ended October 31, 1999 have
been restated in order to reflect the disposition of a former subsidiary. During
the three months ended October 31, 2000 the Company had net income related to
the discontinued operation of approximately $1.0 million, or $0.13 per share, as
a result of the finalization of income taxes relating to the sale. In the third
quarter of the prior fiscal year, income from the discontinued operation
amounted to $1.9 million or $0.21 per share.
Mr. Culver added, "We have continued to demonstrate our ability to grow while
maintaining one of the strongest balance sheets in the sector. With
approximately $35 million of cash, or $4.50 per share, and credit facilities in
place, we are in a position to enhance value through opportunistic acquisitions
and continued investment in new service offerings and international expansion."
First Aviation, located in Westport, Connecticut is a worldwide leader in
providing services to aircraft operators of some of the most widely used
military, commercial and general aviation aircraft. Its operations include
Aerospace Products International (API) and AeroV Inc. (AeroV).
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 logistics services and 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 global partners throughout the world,
API continues to be the fastest growing supplier of aviation products and
inventory management solutions in the industry. AeroV, based in Westport,
Connecticut, is a mission-critical procurement platform developed exclusively
for the aerospace industry that delivers value to every user, providing a
practical tool for capturing the benefits of e-commerce without disrupting
current business practices and processes. The AeroV System integrates with
legacy systems, giving every company the ability to communicate using full SPEC
2000 and ANSI X.12 messaging without costly set-up fees or downtime.
The Company will host a conference call to discuss third quarter earnings on
December 7, 2000 at 10:00 am EST. Interested parties should call 1 (800)
865-4435 before 9:45 am EST on December 7, 2000.
More information about First Aviation can be found on the World Wide Web at
http://www.firstaviation.com and apiparts.com and aerov.com.
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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 Company's
ability to obtain parts from its principal suppliers on a timely basis, market
conditions, 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)
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First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended October 31, Ended October 31,
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 25,628 $ 21,053 $ 70,856 $ 59,175
Cost of sales 20,616 17,115 56,876 47,984
--------- --------- --------- ---------
Gross profit 5,012 3,938 13,980 11,191
Selling, general and administrative expenses 4,494 3,422 12,922 10,037
E-commerce initiative 582 - 1,218 -
--------- --------- --------- ---------
Operating income before corporate expenses and
non-recurring charge (64) 516 (160) 1,154
Corporate expenses 876 440 2,452 1,603
Non-recurring charge - 410 - 410
--------- --------- --------- ---------
Operating loss from continuing operations (940) (334) (2,612) (859)
Net interest income (expense) and other 321 (152) 1,218 (448)
Minority interest in subsidiaries 61 (7) 40 (31)
--------- --------- --------- ---------
Loss before benefit for income taxes (558) (493) (1,354) (1,338)
Benefit for income taxes 192 197 510 535
--------- --------- --------- ---------
Net loss from continuing operations (366) (296) (844) (803)
Net income from discontinued operation, net of provision for income
taxes of $-, $391, $- and $645, for the three and nine months
ended October 31, 2000 and 1999, respectively. 979 1,890 979 5,170
--------- --------- --------- ---------
Net income $ 613 $ 1,594 $ 135 $ 4,367
========= ========= ========= =========
Basic net income (loss) per common share and net income
(loss) per share - assuming dilution:
Net loss from continuing operations per common share $ (0.05) $ (0.03) $ (0.11) $ (0.09)
Net income from discontinued operation per common share 0.13 0.21 0.13 0.57
--------- --------- --------- ---------
Basic net income per common share and net income per common
share - assuming dilution $ 0.08 $ 0.18 $ 0.02 $ 0.48
========= ========= ========= ==========
Shares used in computation of net income per common share and
net income per common share - assuming dilution 7,687,661 9,016,039 7,784,426 9,008,448
========= ========= ========= =========
</TABLE>
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First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
October 31, January 31,
2000 2000
----------- -----------
(unaudited) *
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 34,932 $ 50,104
Trade receivables, net 16,368 13,810
Inventories 19,985 14,142
Deferred income taxes, prepaid expenses and other 3,886 2,582
----------- -----------
Total current assets 75,171 80,638
Plant and equipment, net 6,170 3,980
Goodwill, net 1,725 1,774
----------- -----------
Total assets $ 83,066 $ 86,392
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 12,195 $ 8,264
Other accrued liabilities 3,915 7,908
Income taxes payable 1,683 6,858
Revolving line of credit and current portion of
obligations under capital leases 11,764 163
----------- -----------
Total current liabilities 29,557 23,193
Revolving line of credit - 7,900
Minority interest 1,170 1,041
Obligations under capital leases 214 115
----------- -----------
Total liabilities 30,941 32,249
Stockholders' equity:
Common stock 91 91
Additional paid-in capital 38,736 38,615
Retained earnings 21,442 21,306
Treasury stock (8,144) (5,869)
----------- -----------
Total equity 52,125 54,143
----------- -----------
$ 83,066 $ 86,392
=========== ===========
</TABLE>
*Balances were derived from the audited balance sheet as of January 31, 2000.
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