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EXHIBIT 99.1
KELLSTROM
INDUSTRIES, INC.
FOR IMMEDIATE RELEASE
KELLSTROM INDUSTRIES COMPLETES ACQUISITION OF PARTS RESALE BUSINESS OF
AVIATION SALES, MAKING KELLSTROM THE WORLD'S
LEADING AVIATION INVENTORY MANAGEMENT COMPANY
Sunrise, Florida - December 4, 2000 -- Kellstrom Industries, Inc. ("Kellstrom")
(Nasdaq: KELL) today announced that it has completed the acquisition of the
aircraft and engine parts resale business of Aviation Sales Company ("AVS")
(NYSE:AVS), which had formerly been operated as Aviation Sales Distribution
Services Company ("AVSDC"). Pursuant to the definitive agreement signed in
September, Kellstrom and AVS have also formed a joint venture ("KAV") to acquire
AVSDC's inventory, and KAV has entered into an exclusive agreement with
Kellstrom for the sale of its inventory over the next five years, providing for
consignment fees of up to 35% (together the "Transaction").
Kellstrom has financed the Transaction with funding from Key Partners LLC and
Bank of America, N.A. Advisors for Kellstrom and AVS in this Transaction were
Deutsche Banc Alex. Brown and Salomon Smith Barney, respectively.
Oscar Torres, Kellstrom's Chief Financial Officer, pointed out certain changes
since the two companies entered into an agreement to proceed with the
Transaction: "Under the revised terms, Kellstrom's cash investment in the
Transaction and related costs, at closing, has been reduced to approximately $30
million from approximately $50 million. Kellstrom will lease rather than
purchase certain operational equipment and AVS's parts distribution facility in
Pearland, TX and its main 545,000 square foot facility in Miramar, Florida. The
purchase price of the inventory to be paid by KAV as of November 30, 2000, is
approximately $149 million, versus $168 million as originally estimated.
Kellstrom's investment in KAV is $13.7 million instead of $20 million. Bank of
America's loan to KAV will be approximately $106 million rather than $120
million."
Zivi R. Nedivi, Kellstrom's President & CEO stated, "With today's announcement,
Kellstrom has emerged as the world's leading independent inventory management
company in the aviation industry. As previously reported:
o We are assuming certain contracts, specifically those that expand our
customer base, broaden our distribution channels and/or increase our
market share.
o We will experience nominal inventory overlap, making this a highly
complementary acquisition that gives us critical mass, industry stature,
and a complete and comprehensive breadth of products.
o We are bringing on board AVSDC's experienced personnel."
Mr. Nedivi went on to say, "We expect to achieve significant operational savings
by consolidating the acquired business with our Solair and Commercial Engine
Divisions at the Miramar facility, under the direction of our new COO, Scott
Kalister who recently joined us after a 22 year tenure with Raytheon. Once
completed, Kellstrom will be comprised of two business units: Commercial and
Military. We also plan to limit low-profit activities, which would initially
reduce the revenue of the acquired business, but allow us to focus on higher
margin, value-added programs."
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Kellstrom Industries, Inc. News Release Page 2
December 4, 2000
Yoav Stern, Kellstrom's Chairman of the Board added, "The unique structure of
the Transaction was achieved through the strong support of Bank of America,
which helped us finance the inventory purchase for KAV, without adding debt to
Kellstrom's balance sheet. Kellstrom is now going to focus on bringing KAV's
inventory to market in the most efficient way, while at the same time
integrating the operations of AVSDC with Kellstrom. As pleased as we are by the
Transaction, we are equally delighted by the cooperation agreement that is now
in place between AVS and us. Kellstrom will be supplying parts and providing
comprehensive inventory management services to AVS and its customers, and we
will utilize AVS's MR&O operations for readily accessible, high-quality
maintenance work."
Kellstrom Industries, Inc. is a leader in delivering innovative and value added
nose-to-tail programs in the fields of inventory control and supply chain
management to the international aviation market. This is achieved by uniting
cutting edge information technology with quality assurance methodology. The
Company specializes in providing engines and parts for large turbo-fan engines
manufactured by CFMI, General Electric, Pratt & Whitney and Rolls Royce, in
addition to components for the aircraft they power. Kellstrom is also a leading
inventory management and components provider of engines and parts for large
military transport aircraft, jet fighters and helicopters. The Company is an
approved supplier to an international customer base including major domestic and
international airlines, military air forces, original equipment manufacturers
and engine overhaul shops.
THE COMPANY, FROM TIME TO TIME, MAY DISCUSS FORWARD-LOOKING INFORMATION. THIS
PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING
STATEMENTS ARE BASED ON MANY ASSUMPTIONS AND FACTORS, AND ARE SUBJECT TO MANY
CONDITIONS, INCLUDING THE COMPANY'S CONTINUING ABILITY TO EFFECTIVELY INTEGRATE
THE ACQUIRED BUSINESS, ACQUIRE ADEQUATE INVENTORY AND TO OBTAIN FAVORABLE
PRICING FOR SUCH INVENTORY, THE ABILITY TO ARRANGE FOR THE REPAIR OF AIRCRAFT
ENGINES BY THIRD-PARTY CONTRACTORS PRIOR TO RESALE OR LEASE, COMPETITIVE PRICING
FOR THE COMPANY'S PRODUCTS, CUSTOMER CONCENTRATION, DEMAND FOR THE COMPANY'S
PRODUCTS WHICH DEPENDS UPON THE CONDITION OF THE AIRLINE INDUSTRY, ABILITY TO
COLLECT RECEIVABLES, GOVERNMENT REGULATION, AND THE EFFECTS OF INCREASED
INDEBTEDNESS AS A RESULT OF THE COMPANY'S BUSINESS ACQUISITIONS. EXCEPT FOR THE
HISTORICAL INFORMATION CONTAINED IN THIS RELEASE, ALL FORWARD-LOOKING STATEMENTS
ARE ESTIMATES BY THE COMPANY'S MANAGEMENT AND ARE SUBJECT TO VARIOUS RISKS AND
UNCERTAINTIES THAT MAY BE BEYOND THE COMPANY'S CONTROL AND MAY CAUSE RESULTS TO
DIFFER FROM MANAGEMENT'S CURRENT EXPECTATIONS. 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.
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CONTACT:
Kellstrom Industries, Inc. (954) 845-0427 KELL'S INVESTOR RELATIONS COUNSEL:
Zivi R. Nedivi, Pres. & CEO The Equity Group Inc.
Yoav Stern, Chairman of the Board Linda Latman (212) 836-9609
Oscar Torres, Chief Financial Officer Bob Goldstein (212) 371-8660
Michael Shokouhi, Director of WWW.THEEQUITYGROUP.COM
Investor Relations
WWW.KELLSTROM.COM
