<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ x ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarterly Period Ended March 31, 1998
OR
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Transition Period from ______ to ______
COMMISSION FILE NUMBER 333-46335
TRISTAR AEROSPACE CO.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2665751
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2527 Willowbrook Road
Suite 200
Dallas, Texas 75220-4420
(Address of principal executive offices)
214-956-3400
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year if changed since last
report)
Indicate by check mark whether registrant (1) has filed all reports required by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes No X
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Number of shares outstanding at June 11, 1998
Common Stock, $.01 par value 16,992,742
<PAGE>
TRISTAR AEROSPACE CO.
FORM 10-Q
Quarter Ended March 31, 1998
TABLE OF CONTENTS
PART I -- FINANCIAL INFORMATION
Item
1. Financial Statements
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II -- OTHER INFORMATION
1. Legal Proceedings
2. Changes in Securities and Use of Proceeds
5. Other Information
6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, September 30,
1998 1997
--------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 5,158 $ 4,764
Accounts receivable, net 29,700 24,305
Inventories, net 86,133 69,085
Other assets 1,845 1,526
-------- --------
Total current assets 122,836 99,680
Property & equipment, net 2,015 1,623
Intangibles & other assets, net 8,770 8,932
-------- --------
Total assets $133,621 $110,235
-------- --------
-------- --------
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 22,847 $ 18,308
Accrued liabilities & other 6,763 9,768
-------- --------
Total current liabilities 29,610 28,076
Long-term debt 63,000 49,000
Stockholders' equity
Common stock, $.01 par value, 40,000,000 shares authorized 166 166
Additional paid-in capital 21,455 21,101
Retained Earnings 19,390 11,892
-------- --------
Total stockholders' equity 41,011 33,159
-------- --------
Total liabilities & stockholders' equity $133,621 $110,235
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these condensed, consolidated
financial statements.
<PAGE>
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Six Months
Ended March 31, Ended March 31,
------------------------ -----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 45,768 $ 34,531 $ 88,404 $ 65,496
Cost of goods sold 30,998 23,800 60,415 44,808
--------- --------- --------- ---------
Gross Profit 14,770 10,731 27,989 20,688
Selling, general & administrative expenses 7,107 5,023 13,146 9,470
Compensation expense of stock options - - 354 -
--------- --------- --------- ---------
Operating Income 7,663 5,708 14,489 11,218
Interest and other expense
Interest Expense 1,284 1,300 2,489 2,847
Other Income (32) (2) (83) (2)
--------- --------- --------- ---------
Income before Taxes 6,411 4,410 12,083 8,373
Provision for income taxes 2,436 1,662 4,585 3,181
--------- --------- --------- ---------
Net Income $ 3,975 $ 2,748 $ 7,498 $ 5,192
--------- --------- --------- ---------
--------- --------- --------- ---------
Earnings per share:
Basic $ 0.24 $ 0.18 $ 0.45 $ 0.34
Diluted $ 0.22 $ 0.18 $ 0.41 $ 0.34
Weighted average shares outstanding:
Basic 16,583 15,679 16,583 15,395
Diluted 18,158 15,679 18,158 15,395
</TABLE>
The accompanying notes are an integral part of these condensed, consolidated
financial statements.
<PAGE>
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months
Ended March 31,
---------------------
1998 1997
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,498 $ 5,192
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 713 715
Provision for doubtful accounts (30) 550
Provision for excess and obsolete inventories 1,169 1,073
Compensation expense of stock options 354 --
Changes in operating assets and liabilities
(Increase) decrease in accounts receivable (5,365) (5,409)
(Increase) decrease in inventories (18,216) 217
(Increase) decrease in other assets (448) (171)
Increase (decrease) in accounts payable & accrued expenses 1,534 2,248
-------- -------
Net cash provided by (used in) operating activities (12,792) 4,415
-------- -------
Cash flows from investing activities:
Capital expenditures (814) (215)
-------- -------
Net cash provided by (used in) investing activities (814) (215)
-------- -------
Cash flows from financing activities:
Borrowings on revolving facility 14,000 5,700
Payments on revolving facility -- (10,500)
-------- -------
Net cash provided by (used in) financing activities 14,000 (4,800)
-------- -------
Net increase (decrease) in cash 394 (600)
Cash, beginning of period 4,764 1,522
-------- -------
Cash, end of period $ 5,158 $ 922
-------- -------
-------- -------
Supplemental cash flow information:
Cash paid for interest $ 2,458 $ 2,128
Cash paid for income taxes 4,747 --
</TABLE>
The accompanying notes are an integral part of these condensed, consolidated
financial statements.
<PAGE>
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q under Section
13 of the Securities Exchange Act of 1934 filed pursuant to Rule 13a - 13 and
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, the accompanying condensed consolidated financial
statements contain all the adjustments (consisting of normal recurring
accruals) necessary for a fair statement of the Company's financial position
as of March 31, 1998 and September 30, 1997, and the results of operations
and cash flows for the three and six month periods ended March 31, 1998 and
1997. The results of operations for the three and six month periods ended
March 31, 1998 and 1997 are not necessarily indicative of the results to be
expected for the full fiscal year. The condensed consolidated financial
statements should be read in conjunction with the financial statements and
accompanying notes contained in the Company's prospectus dated April 30, 1998.
NOTE 2 - SUBSEQUENT EVENT
In December 1997, 158,000 options were issued to an executive at a discount
from the fair market value at the date of grant. Of the shares, 31,600 became
exercisable immediately and the Company recorded additional compensation
expense of $354,000 for the three month period ended December 31, 1997. The
remaining 126,400 options vested when the Company's initial public offering
was completed in April, 1998, which will result in compensation expense of
$1,133,000 to be recorded in the third quarter of 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in the Form 10-Q under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" may constitute
"forward-looking statements" within the meaning of the Private Litigation
Reform Act of 1995. Such forward looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of TriStar Aerospace Co. ("Company") to
be materially different from any future results, performance or achievements
expressed or implied by such forward looking statements. Such factors
include, among others, the following: competition; dependence on the
commercial aircraft industry; customer concentration; availability of
hardware; success of operating initiatives; adverse publicity; changes in
business strategy; availability and terms of capital; labor and employee
benefit costs; changes in government regulations; risks associated with
international business; and other factors referenced in the Company's
prospectus dated April 30, 1998.
GENERAL
The Company is both a leading distributor of aerospace fasteners, fastening
systems and related hardware and a leading provider of customized inventory
management services to original equipment manufacturers of aircraft and
aircraft components, to commercial airlines and aircraft maintenance, repair
and overhaul facilities. In fiscal year 1997 approximately 59% of the
Company's revenues were derived from traditional distribution sales and
services ("conventional sales") and approximately 41% of the Company's
revenues were derived from sales of as a result the Company's long-term
inventory management agreements ("JIT services"). For the six months ended
March 31, 1998 conventional sales and JIT services represented 59% and 41% of
revenues, respectively.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
REVENUES
Revenues increased $11.2 million, or 32.5%, to $45.8 million for the three
month period ended March 31, 1998 compared to $34.5 million for the same
period in 1997. The Company's revenues have increased primarily due to an
expansion of service levels under certain JIT agreements and growth in
customer demand resulting from increased aircraft build rates.
GROSS PROFIT
Gross profit increased $4.0 million, or 37.6%, to $14.8 million for the three
month period ended March 31, 1998, compared to $10.7 million for the same
period in 1997. The increase in gross profit was primarily due to an
increase in revenues as noted above. Gross margin as a percentage of sales
increased to 32.3%
<PAGE>
for the three months ended March 31 1998 compared to 31.1% for the same
period in 1997. The increase in gross margin as a percentage of sales was
due mainly to reduced freight expense and a lower provision for excess and
obsolete inventory as a result of the Company's ability to better manage
inventory turnover.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased $2.1 million, or
41.5%, to $7.1 million for the three months ended March 31, 1998, compared to
$5.0 million for the same period in the prior year. The increase was
primarily due to increased personnel costs related to building the management
team and providing support for initiatives to improve the effectiveness of
operations and administration necessary to support the growth in revenues.
NET INCOME
Net income increased $1.2 million, or 44.7%, to $4.0 million, or $0.22 per
diluted share, for the three months ended March 31, 1998, compared to $2.7
million, or $0.18 per diluted share, for the same period in the 1997. The
increase in net income was primarily due to an increase in revenues and gross
margins, which was somewhat offset by an increase in selling, general and
administrative expenses.
SIX MONTHS ENDED MARCH 31, 1998 AND 1997
REVENUES
Revenues increased $22.9 million, or 35.0%, to $88.4 million for the six
month period ended March 31, 1998 compared to $65.5 million for the same
period in 1997. The Company's revenues have increased primarily due to an
expansion of service levels under certain JIT agreements and growth in
customer demand resulting from increased aircraft build rates.
GROSS PROFIT
Gross profit increased $7.3 million, or 35.3%, to $28.0 for the six month
period ended March 31, 1998, compared to $20.7 million for the same period in
1997. The increase in gross profit was primarily due to an increase in
revenues as noted above. Gross margin as a percentage of sales was 31.7% for
the six months ended March 31, 1998 compared to 31.6% for the same period
in 1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses (including compensation expense
of stock options) increased $4.0 million, or 42.6%, to $13.5 million for the
six months ended March 31, 1998, compared to $9.5 million for the same period
in 1997. The increase was primarily due to increased personnel costs related
to building the management team and providing support for initiatives to
improve the effectiveness of operations and administration necessary to
support the growth in revenues.
INTEREST EXPENSE
Interest expense decreased by $0.4 million, or 12.6% to $2.5 million for the
six months ended March 31, 1998 as compared to $2.9 million for the same
period in 1997. The decrease in interest expense was primarily due to a
decrease in the interest rate applicable under the Company's Credit Facility
in the period ended March 31, 1998 as compared to the same period in 1997.
NET INCOME
Net income increased $2.3 million, or 44.4%, to $7.5 million, or $0.41 per
diluted share, for the six months ended March 31, 1998 as compared to $5.2
million, or $0.34 per diluted share, for the same period in 1997. The
increase in net income was primarily due to an increase in revenues and a
reduction in interest expense offset somewhat by an increase in selling,
general and administrative expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements consist primarily of working capital
needs, capital expenditures and scheduled payments of interest and principal
due to borrowings under the Company's Credit Agreement. The Company funds
its liquidity requirements through cash flows from operations and a revolving
credit facility under the Credit Agreement.
<PAGE>
The Company's working capital (current assets minus current liabilities) has
increased $21.6 million, or 30.2%, to $93.2 million as of March 31, 1998,
compared to $71.6 million as of September 30, 1997. Working capital
requirements have increased mainly as a result of higher accounts receivable
($5.4 million) and inventory ($18.2 million) levels needed to support the
growth in revenues during the six months ended March 31, 1998 in addition to
expanding inventory in response to expected future aircraft build rates.
Capital expenditures and interest paid were $0.8 million and $2.5 million,
respectively, for the six months ended March 31, 1998 as compared to $0.2
million and $2.1 million, respectively, for the same period in 1997.
The Company borrowed $14.0 million under its $30 million revolving credit
facility during the six months ended March 31, 1998 to fund its operations
and capital expenditures leaving an available revolver balance of $16.0
million. Management believes that the Company's current cash position, cash
flows from operations, and available borrowing capacity will be sufficient to
fund its planned operations and capital expenditures for the remainder of
fiscal 1998. Actual results may differ from this forward-looking statement.
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Item 5 below.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
See Item 5 below.
ITEM 5. OTHER INFORMATION
On May 8, 1998, the National Labor Relations Board conducted an election of
the Company's warehouse employees pursuant to a petition filed on March 25,
1998 seeking a vote for the Transport Worker's Union of America to organize
and represent such employees for collective bargaining purposes. On May 18,
1998, the National Labor Relations Board certified the May 8th election with
78 employees voting against representation by the Union and 15 employees
voting for representation by the Union. Pursuant to this election, the
Transport Worker's Union of America will not organize and represent the
Company's warehouse employees for collective bargaining purposes. The
Company previously provided details concerning the petition filed by the
National Labor Relations Board in its prospectus dated April 30, 1998.
On June 12, 1998, the Company entered into a Settlement Agreement with
Textron Aerospace Fasteners ("TAF"), a division of Textron, Inc., in
settlement of the matters raised by a complaint filed by TAF in the United
States District Court for the Western District of Tennessee, alleging that
the Company improperly used certain trademarks held by TAF in connection with
the sale of certain products to certain of the Company's customers. The
Company was not required to make any monetary payments to TAF in connection
with the Settlement Agreement. Details concerning the complaint filed by TAF
were disclosed in the Company's prospectus dated April 30, 1998.
On May 5, 1998, the Company and certain of its stockholders completed the
initial public offering of 13,276,858 shares of common stock of the Company
at a price to the public of $16.00 per share. The Company received no
proceeds from the offering other than $301,009 pursuant to the exercise of
options by one of the selling stockholders to purchase 204,768 shares at a
price of $1.47 per share. Proceeds thereof were used by the Company for
working capital purposes. With respect to the issuance of its common stock
pursuant to the option exercise, the Company relied upon the exemption to
registration provided by Section 4(2) of the Securities Act relating to the
transactions by an issuer, not involving any public offering. For further
details concerning this transaction, see the Company's Prospectus dated April
30, 1998.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 10.33 - Fourth Amendment to Credit Agreement dated February 9,
1998, among the Company and Bankers Trust Company, as agent.
Exhibit 27.1 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the three months ended March 31,
1998.
TRISTAR AEROSPACE CO. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRISTAR AEROSPACE CO.
(Registrant)
Date: June 12, 1998 By: /s/ P. QUENIIN BOURJEAURD
-----------------------------------
P. Queniin Bourjeaurd
President & Chief Executive
Officer
Date: June 12, 1998 By: /s/ DOUGLAS E. CHILDRESS
-----------------------------------
Douglas E. Childress
Executive Vice President and
Chief Financial Officer
<PAGE>
FOURTH AMENDMENT
FOURTH AMENDMENT (the "Amendment"), dated as of February 9, 1998,
among MAPLE LEAF AEROSPACE, INC. ("Parent"), AEROSPACE ACQUISITION CORP.
("Holdings"), TRI-STAR AEROSPACE, INC. (f/k/a AEROSPACE MERGER SUB I, INC.)
("Tri-Star Holdings"), TRI-STAR AEROSPACE CO. (the "Borrower"), the financial
institutions party to the Credit Agreement referred to below (the "Banks")
and Bankers Trust Company, as Agent. All capitalized terms used herein and
not otherwise defined shall have the respective meanings provided such terms
in the Credit Agreement.
WITNESSETH:
WHEREAS, Parent, Holdings, Tri-Star Holdings, the Borrower, the
Banks and the Agent are parties to a Credit Agreement, dated as of September
19, 1996, (as amended from time to time, the "Credit Agreement"); and
WHEREAS, the parties hereto wish to amend certain provisions of
the Credit Agreement as herein provided;
NOW, THEREFORE, it is agreed:
1. The first paragraph of the Credit Agreement is hereby amended
by deleting the reference to "(the "Borrower")" contained therein.
2. Section 9.02 of the Credit Agreement is hereby amended by (i)
deleting the word "and" at the end of clause (k) thereof, (ii) deleting the
period at the end of clause (l) thereof and inserting "; and" in lieu thereof
and (iii) inserting the following new clause (m) immediately following clause
(l) thereof:
"(m) the Borrower and/or Tri-Star Inventory Management Service, Inc.
may be merged with and into Tri-Star Holdings pursuant to a restructuring
to be effected in preparation for an initial public offering of common
stock of Parent, PROVIDED that, (i) in the event the Borrower is merged
into Tri-Star Holdings, (x) immediately upon the consummation of such
merger, Tri-Star
<PAGE>
Holdings shall assume all Obligations and responsibilities of the
Borrower under the Credit Agreement (including, without limitation, all
indemnity obligations under Sections 1.10. 1.11, 2.05, 4.04, 12.07 and
13.01) and shall become the Borrower for all purposes of the Credit
Agreement, whereupon Tri-Star Holdings will be released from its
obligations under the Parents Guaranty without any further action on the
part of the parties hereto, (y) Tri-Star Holdings shall provide the Agent
with all approvals and documentation (including, without limitation,
resolutions of the Board of Directors of Tri-Star Holdings) reasonably
requested by the Agent or the Required Banks in connection with such merger
and all such approvals and documentation shall be satisfactory to the
Agent, and (z) the security interests granted to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Security Documents in
the assets of the Borrower so transferred shall remain in full force and
effect and perfected (to at least the same extent as in effect prior to
such transfer) and Tri-Star Holdings shall take all actions necessary in
the reasonable opinion of the Agent and the Required Banks to preserve such
security interests and (ii) in the event that Tri-Star Inventory Management
System, Inc. is merged into Tri-Star Holdings, the security interests
granted to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Documents in the assets of Tri-Star Inventory
Management System, Inc. so transferred shall remain in full force and
effect and perfected (to at least the same extent as in effect prior to
such transfer) and Tri-Star Holdings shall take all actions necessary in
the reasonable opinion of the Agent and the Required Banks to preserve such
security interests. At any time following a merger pursuant to clause (i)
above, Parent may change its name to "TriStar Aerospace Co.", PROVIDED that
the security interests granted to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Security Documents in the assets of
Parent shall remain in full force and effect and perfected (to at least the
same extent as in effect prior to such transfer) and Parent shall take all
actions necessary in the reasonable opinion of the Agent and the Required
Banks to preserve such security interests."
3. Section 11 of the Credit Agreement is hereby amended by (i)
deleting the definition of "Borrower" contained therein and (ii) inserting
the following new definition in lieu thereof:
"Borrower" shall mean (i) at any time prior to a merger of
TriStar Aerospace Co. with and into Tri-Star Holdings, with Tri-Star
Holdings emerging as the surviving corporation, Tri-Star Aerospace Co.
and (ii) at any time thereafter, Tri-Star Holdings.
-2-
<PAGE>
4. Section 11 of the Credit Agreement is hereby further amended
by (i) inserting immediately following the reference to "shall mean,"
contained in the definition of "Change of Control Event" appearing therein,
the following text: "(i) prior to the consummation of any initial public
offering of Parent common stock and an election pursuant to Section 9.02(m),"
and (ii) inserting the following new language immediately prior to the period
at the end of said definition: "and (ii) at any time after the consummation
of an initial public offering and an election pursuant to Section 9.02(m), at
any time and for any reason whatsoever, (a) Parent shall cease to own
directly 100% on a fully diluted basis of the economic and voting interest in
Holdings' capital stock or (b) Holdings shall cease to own directly 100% on a
fully diluted basis of the economic and voting interest in Tri-Star Holdings'
capital stock or (c) any Management Participant shall cease individually to
own on a fully diluted basis in the aggregate at least 45% of the economic
and voting interest in Parent's capital stock as such Management Participant
owned immediately upon giving effect to such initial public offering or (f)
any Person or "group" (within the meaning of Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, as in effect on the Effective Date, other
than Odyssey and its Affiliates and the Management Participants, shall (A)
have acquired beneficial ownership exceeding the lesser of (1) 20% on a fully
diluted basis of the voting and/or economic interest in Parent's capital
stock or (2) a higher percentage of the voting and/or economic interest in
Parent's capital stock on a fully diluted basis than is then held by the
Management Participants or (B) obtained the power (whether or not exercised)
to elect a majority of Parent's directors or (g) the Board of Directors of
Parent shall cease to consist of a majority of Continuing Directors or (h) a
"change of control" or similar event shall occur as provided in any Existing
Indebtedness Agreement.
5. Section 11 of the Credit Agreement is hereby further amended
by (i) deleting the definition of "Management Participants" contained therein
and (ii) inserting the following new definition in lieu thereof:
"Management Participants" shall mean Quentin Bourjeaurd and
Charles Balchunas so long such individuals are employed by Parent or
any of its Subsidiaries
6. In order to induce the Banks to enter into this Amendment,
each of Parent, Holdings, Tri-Star Holdings and the Borrower hereby
represents and warrants that (i) the representations, warranties and
agreements contained in Section 7 of the Credit Agreement are true and
correct in all material respects on and as of the Fourth Amendment Effective
Date (as defined below) (except with respect to any representations and
warranties limited by their terms to a specific date, which shall be true and
correct in all material respects as of such date) and (ii) there exists no
Default
-3-
<PAGE>
or Event of Default on the Fourth Amendment Effective Date: in each case both
before and after giving effect to this Amendment.
7. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
8. This Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with each of Holdings, Parent, the Borrower
and the Agent.
9. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.
10. This Amendment shall become effective on the date (the "Fourth
Amendment Effective Date") when each of Parent, Holdings, Tri-Star Holdings,
the Borrower, and each Bank shall have signed a copy hereof (whether the same
or different copies) and shall have delivered (including by way of facsimile)
the same to the Agent at the Notice Office.
11. From and after the Fourth Amendment Effective Date, all
references in the Credit Agreement and the other Credit Documents to the
Credit Agreement shall be deemed to be references to such Credit Agreement as
modified hereby.
* * * *
-4-
<PAGE>
IN WITNESSES WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date
first above written.
MAPLE LEAF AEROSPACE, INC.
By: /s/ Doug Childress
----------------------------------
Title: Treasurer, CFO
Executive VP of Finance
AEROSPACE ACQUISITION CORP.
By: /s/ Doug Childress
----------------------------------
Title: Treasurer, CFO
Executive VP of Finance
TRI-STAR AEROSPACE INC.
By: /s/ Doug Childress
----------------------------------
Title: Treasurer, CFO
Executive VP of Finance
TRI-STAR AEROSPACE CO.
By: /s/ Doug Childress
----------------------------------
Title: Treasurer, CFO
Executive VP of Finance
BANKERS TRUST COMPANY
By: /s/ Gregory P. Shefrin
----------------------------------
Title: GREGORY P. SHEFRIN
VICE PRESIDENT
-5-
<PAGE>
PRIME INCOME TRUST
By:
-----------------------------
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and
Research, as Investment
Advisor
By: /s/ Scott H. Page
-----------------------------
Title: Scott H. Page
Vice President
KEYBANK N.A.
By: /s/ Sharon F. Weinstein
-----------------------------
Title: SHARON F. WEINSTEIN
VICE PRESIDENT
LASALLE NATIONAL BANK
By: /s/ Steven Cohen
-----------------------------
Title: FIRST VICE PRESIDENT
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By:
-----------------------------
Title:
-6-
<PAGE>
MERRILL LYNCH PRIME RATE PORTFOLIO
By:
-----------------------------
Title:
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Thomas C. Hunt
-----------------------------
Title: THOMAS C. HUNT
ASSISTANT PORTFOLIO MANAGER
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ Jeffrey W. Maillet
-----------------------------
Title: JEFFREY W. MAILLET
SR. VICE PRES. &
DIRECTOR
-7-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TRISTAR
AEROSPACE CO. AND SUBSIDIARIES FORM 10-Q AS OF MARCH 31, 1998 AND FOR THE THREE
MONTHS AND SIX MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 5,158
<SECURITIES> 0
<RECEIVABLES> 30,219
<ALLOWANCES> 519
<INVENTORY> 86,133
<CURRENT-ASSETS> 122,836
<PP&E> 2,921
<DEPRECIATION> 906
<TOTAL-ASSETS> 133,621
<CURRENT-LIABILITIES> 29,610
<BONDS> 63,000
0
0
<COMMON> 166
<OTHER-SE> 40,845
<TOTAL-LIABILITY-AND-EQUITY> 133,621
<SALES> 88,404
<TOTAL-REVENUES> 88,404
<CGS> 60,415
<TOTAL-COSTS> 13,500
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,489
<INCOME-PRETAX> 12,083
<INCOME-TAX> 4,585
<INCOME-CONTINUING> 7,498
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,498
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0.41
</TABLE>
