Aviall Announces Fourth Quarter and Full Year Results.Business Editors & High Tech Writers DALLAS--(BUSINESS WIRE)--Feb. 12, 2002 Aviall, Inc. (NYSE NYSE See: New York Stock Exchange : AVL (Automatic Vehicle Location) See mobile positioning. ) today reported financial results for its fourth quarter and full year ended December December: see month. 31, 2001: Highlights -- Earned $0.02 in the fourth quarter of 2001 and $0.51 per share for the full year from continuing operations, excluding unusual charges -- Increased gross profit as a percentage of net sales to its highest level in 2001 -- Signed a new exclusive ten-year estimated $3 billion contract in late December with Rolls-Royce for worldwide aftermarket parts support for the widely-used military-oriented T56/501-D series engine -- Relocated Aviall Services' central warehouse ahead of schedule, under-budget ($1.4 million versus the planned $2.0 million) and with no business disruption -- Received two additional e-commerce excellence awards from prominent technology publications - a total of three distinguished awards in 2001. Fourth Quarter Results Fourth quarter 2001 income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $0.02 per share, excluding unusual charges. The Company's fourth quarter 2001 results included $8.9 million of unusual charges primarily related to aviation industry changes resulting from the September September: see month. 11th terrorist attacks. These charges included $7.0 million related to writedowns for excess and obsolete inventories Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. for older generation commercial aircraft retired after September 11th as well as a general aviation-related product line intangible write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. ; $1.2 million for unfavorable leases and doubtful accounts resulting from the economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. after the September 11th attacks On September 11, 2001, in the deadliest case of domestic Terrorism in the history of the United States, a group of 19 terrorists hijacked four U.S. airliners for use as missiles against targets in New York City and Washington, D.C. ; and $0.7 million of non-capitalizable financing costs incurred in connection with the Company's new capital structure. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight in fourth quarter 2001 were $114.1 million, 9% below net sales from the prior year quarter, yet we believe significantly better than industry average declines. In terms of business unit performances, overall sales at Aviall Services fell $10.7 million largely due to the precipitous decline of component parts ordering by domestic airlines. At Inventory Locator LOCATOR, civil law. He who leases or lets a thing to hire to another. His duties are, 1st. To deliver to the hirer the thing hired, that he may use it. 2d. To guaranty to the hirer the free enjoyment of it. 3d. Service (ILS ILS In currencies, this is the abbreviation for the Israeli Shekel. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) fourth quarter sales of $6.6 million were essentially flat. Despite unusual industry events after September 11th, ILS's performance was consistent with earlier projections for a trend reversal of year-over-year revenue declines. Gross profit of $26.7 million for the fourth quarter 2001 was down $1.8 million, or 6%, from the fourth quarter 2000 gross profit of $28.5 million, although gross profit as a percentage of sales increased slightly to 23.4%. Selling and administrative expenses were up $2.1 million versus fourth quarter 2000 due largely to $1.4 million of expense related to moving Aviall Services' central warehouse. However, excluding these move-related expenses, overall SG&A fell $0.4 million from third quarter 2001 owing largely to the results of continuing implementation of business process reengineering See reengineering. within several departments. The net earnings from continuing operations for the fourth quarter of 2001 were $0.4 million, excluding the impact of unusual items. After the application of the unusual charges, the Company had an overall fourth quarter net loss from continuing operations of $4.9 million, or $0.27 per share, versus net earnings from continuing operations of $3.1 million, or $0.17 per share, in the fourth quarter of 2000. The total net loss for the fourth quarter of 2001 was $5.9 million, or $(0.32) per share, including an extraordinary loss of $1.0 million, or $(0.06) per share, associated with replacing the Company's credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities and a gain of $0.01 per share from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Full-Year Overview Net income for 2001 from continuing operations was $0.51 per share, excluding unusual items. After the impact of unusual items, net earnings for the full year ended December 31, 2001, were $2.8 million, or $0.14 per share, compared to $11.6 million, or $0.64 per share in 2000. Despite the aviation industry downturn following September 11th, net sales for the full year 2001 were $506.2 million, up 4% compared to net sales of $485.9 million in 2000. Gross profit was $116.7 million in 2001, a 5% increase over the $111.3 million achieved in 2000. Excluding the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. move expenses, selling and administrative expenses in 2001 grew $4.0 million, or 5%, due to planned development expenses for the Company's e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. initiatives and integration of the new Honeywell In 1927, the Minneapolis Honeywell Regulator Company was formed as a merger of Alfred Butz' temperature control company (1885) and Mark Honeywell's water heater company (1906). In 1957, Honeywell, along with Ratheon, introduced one of the first computers in the U.S., the Datamatic 1000. and Rolls-Royce Rolls-Royce is a British brand, it may refer to:
Review and Outlook "Notwithstanding the tragic events of September 11th and their impact on our industry, I am pleased with the many positives strides made by Aviall in 2001," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. E. Fulchino, Aviall's chairman, president and chief executive officer. "In addition to a strengthened management team and new technology offerings, and the strategic opportunity afforded by our new Rolls-Royce T56 contract, the year contained many other positive developments. These included year-over-year growth in revenues; the successful award of the industry's largest contracts from Honeywell and Rolls-Royce; three distinguished awards for e-commerce excellence and customer satisfaction; excellent progress redefining internal business processes to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. with new advanced technologies; improved selling and administrative cost administrative cost Managed care A cost incurred by the 'business' end of a health care facility or university–eg, staffing and personnel costs, nursing home and hospital administration, insurance, and overhead expenses. Cf Indirect costs. efficiencies; a steady stream of record accesses and subscriber adoption of new applications to the ILS electronic marketplace; the successful relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. to a state-of-the-art central warehouse facility and headquarters operation at DFW DFW Dallas/Ft Worth, TX, USA - Dallas Ft Worth International (Airport Code) DFW Department of Fish and Wildlife DFW David Foster Wallace DFW Drug-Free Workplace DFW Down For Whatever (song by Pretty Young Things) International Airport; and the creation of a new capital structure to support growth and working capital needs." Fulchino continued, "While Aviall has been hurt along with the aviation industry due to the shock caused by the September 11th aftermath, the Company has continued to benefit from its core strengths - our global scope and coverage, product depth and market diversity. While our post-September 11th airline-related segment experienced double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. fourth quarter declines, several of our geographic areas did manage to grow. Looking forward, the addition of the Rolls-Royce T56/501-D series engine parts to our extensive product base will broaden our Aviall Services unit by enabling the military/government segment to exceed 40% of total 2002 revenues. Also, ILS successfully implemented new modules within their new `Contact to Contract' next generation system and had better than anticipated customer adoption of its new technology offerings." Fulchino added, "The September 11th events certainly impacted our bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. results, both immediately and in the fourth quarter, but Aviall did not stand still nor look to pull back. Instead we chose to pursue aggressively new growth opportunities. Notwithstanding the industry's perilous condition late in the year, Aviall positioned itself as a stronger value provider through more "just in time" service level commitments, enhanced OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and customer technology support, and on-site on-site adj. Done or located at the site, as of a particular activity: on-site monitoring of a production run; an on-site film shoot. inventory management assistance. While the fourth quarter results are not attractive when viewed on a stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." basis, the one-time nature of the unusual items; the tighter cost controls put in place; the recent indications of increased activity apparently taking hold in the airline segment; and the significant new product line additions (Honeywell and Rolls-Royce T56) made in 2001, provide seeds of optimism for 2002 and beyond." In closing, Fulchino added, "During 2001, Aviall continued its momentum which we will build on for the future. With the strategic addition of new product lines and a new capital structure to support this growth, the Company is well-positioned to build upon Aviall's many strengths." Aviall will host a conference call on Tuesday Tuesday: see week. , February 12, 2002, at 10 a.m. ET. The conference call can be accessed by calling (800) 937-6980 (toll free) or (706) 679-5454 (toll) and referencing ID#3135872. A replay will be available until 6 p.m. ET on Tuesday, February 19, 2002, at (800) 642-1687 (toll-free) or (706) 645-9291 (toll). About Aviall, Inc. Aviall, Inc. (NYSE: AVL) is a leading solution provider of aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. supply-chain management services for the aviation and marine industries. As the world's largest independent provider of new aviation parts and related aftermarket services, the Aviall Services business unit markets and distributes products for more than 180 manufacturers and distributes approximately 90,000 line items from our customer service centers located in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe and Asia-Pacific. Aviall Services also supports a full line of aviation batteries, hoses, wheels and brake services. The Inventory Locator Service (ILS) business unit, headquartered in Memphis, Tennessee For the ancient Egyptian capital, see . Memphis is a city in the southwest corner of Tennessee, and the county seat of Shelby County. Memphis rises above the Mississippi River on the 4th Chickasaw Bluff just below the mouth of the Wolf River. , provides information and facilitates commerce via its global electronic marketplace to enable subscribers to buy and sell commercial aviation and marine parts, equipment and services. Additional information on Aviall is available via Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.aviall.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The statements contained in this release that are not historical facts are forward-looking statements (as such term is defined in the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995). Actual results may differ materially from those expected in the forward-looking statements. These forward-looking statements involve risks and uncertainties, including pricing pressures, shifts in market demand, general economic conditions and other factors including, among others, those that affect flight activity in commercial, business and general aviation, the business activities of the Company's customers and suppliers and developments in information and communication technology. IMPORTANT INFORMATION Aviall filed a definitive proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. with the SEC on February 8, 2002 in connection with the proposals to be voted upon at the Special Meeting of Stockholders to be held on March 15, 2002. Aviall intends to mail the definitive proxy statement on or about February 14, 2002 to each stockholder of record on the record date. Aviall urges its stockholders to read the definitive proxy statement because it contains important information about the proposals to be voted upon at the Special Meeting. Stockholders of Aviall and other investors may obtain a free copy of Aviall's definitive proxy statement and other documents filed with the SEC by visiting the SEC's website at www.sec.gov. Free copies of Aviall's definitive proxy statement and other documents filed with the SEC may also be obtained by sending a written request to Aviall at P.O. Box 619408, Dallas, Texas “Dallas” redirects here. For other uses, see Dallas (disambiguation). The City of Dallas (pronounced [ˈdæl.əs] or [ˈdæl. 75261, Attention: Shareholder Services or by calling Aviall at (972) 586-1703. Aviall and its directors and executive officers may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies in favor of upon the side of; favorable to; for the advantage of. See also: favor the proposals to be voted upon at the Special Meeting. These directors include Paul E. Fulchino, Peter J. Clare, Allan M. Holt holt n. Archaic A wood or grove; a copse. [Middle English, from Old English.] holt Noun the lair of an otter [from , Donald R. Muzyka, Richard J. Schnieders, Jonathan M. Schofield, Arthur E. Wegner and Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. N. Whitman, and these executive officers include Paul E. Fulchino, Jeffrey J. Murphy, Cornelius Van Den Handel, Charles M. Kienzle, Dan Komnenovich and Bruce Langsen. Stockholders may obtain additional information about the interests of the participants by reading the definitive proxy statement.
AVIALL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
Three months ended Twelve months ended
December 31, December 31,
-----------------------------------------
2001 2000 2001 2000
Net sales $114,056 124,802 506,160 485,920
Cost of sales 87,350 96,346 389,466 374,656
-----------------------------------------
Gross profit 26,706 28,456 116,694 111,264
Operating and other expenses:
Selling and administrative
expenses 23,145 21,086 90,107 84,765
Unusual items (a) 8,861 - 9,787 -
Interest expense 2,783 2,004 10,291 8,407
-----------------------------------------
Earnings (loss) from
continuing operations before
income taxes (8,083) 5,366 6,509 18,092
Provision (benefit) for income
taxes (b) (3,169) 2,232 3,046 7,526
-----------------------------------------
Earnings (loss) from
continuing operations (4,914) 3,134 3,463 10,566
Discontinued operations:
Gain on disposal (net of
income tax expense of $193
in 2001 and $572 in 2000)(c) 78 919 322 1,062
-----------------------------------------
Earnings from discontinued
operations 78 919 322 1,062
-----------------------------------------
Earnings (loss) before
extraordinary item (4,836) - 3,785 -
Extraordinary item (net of
income tax benefit of
$582) (d) (1,026) - (1,026) -
-----------------------------------------
Net earnings (loss) $(5,862) 4,053 2,759 11,628
=========================================
Basic and diluted net earnings
(loss) per share: (e)
Earnings (loss) from
continuing operations $(0.27) 0.17 0.18 0.58
Earnings from discontinued
operations 0.01 0.05 0.02 0.06
Extraordinary item (0.06) - (0.06) -
-----------------------------------------
Net earnings (loss) $(0.32) 0.22 0.14 0.64
-----------------------------------------
Weighted average common
shares 18,387,352 18,332,662 18,380,975 18,313,401
Basic and diluted net
earnings per share from
continuing operations
before unusual items $0.02(f) 0.17 0.51(f) 0.58
(a) The $9.8 million unusual item in 2001 was primarily related to the
aviation industry changes resulting from the September 11th
terrorist attacks. It consists of a $7.0 million inventory
writedown of older generation aircraft as well as a general
aviation product line intangible writedown; $2.1 million for
unfavorable leases and doubtful accounts and $0.7 million of
noncapitalized financing costs incurred with the new capital
structure.
(b) Due to the Company's large U.S. federal tax loss carryforwards,
cash tax payments are substantially lower than the provision
recorded. Cash tax payments were $0.2 million and $1.9 million for
the three months and twelve months ended December 31, 2001,
respectively.
(c) The $0.3 million and $1.1 million gain from discontinued
operations in 2001 and 2000, respectively, resulted from changes
in estimates for certain retained liabilities.
(d) The extraordinary item in 2001 resulted from the write-off of the
unamortized debt issuance cost related to the bank debt repayment
associated with the December 2001 refinancing.
(e) Diluted earnings per share were antidilutive in 2001. Therefore,
diluted earnings per share is presented equal to basic earnings
per share.
(f) Assumes a 43% effective tax rate.
AVIALL, INC.
SELECTED BALANCE SHEET ACCOUNTS
(Dollars in thousands)
December 31, December 31,
2001 2000
------------ --------------
Cash $ 2,526 4,865
Receivables $ 75,134 83,395
Inventories $ 241,635 134,156
Deferred tax asset $ 71,211 72,299
Accounts payable $ 51,090 66,657
Debt $ 200,854 90,422
Convertible preferred stock $ 40,161 -
Shareholders' equity $ 194,842 191,674
SEGMENT INFORMATION
(Dollars in thousands)
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
Net Sales 2001 2000 2001 2000
---------
Aviall Services $107,482 118,162 479,673 457,931
ILS 6,574 6,640 26,487 27,989
------------------------------------------------
Total net sales $114,056 124,802 506,160 485,920
================================================
Profit
------
Aviall Services $ 2,900 7,023 24,229 21,483
ILS 2,516 2,706 10,310 12,636
------------------------------------------------
Reportable segment
profit 5,416 9,729 34,539 34,119
Corporate (1,855) (2,359) (7,952) (7,620)
Interest expense (2,783) (2,004) (10,291) (8,407)
Unusual items (8,861) - (9,787) -
------------------------------------------------
Earnings (loss) from
continuing
operations before
income taxes $ (8,083) 5,366 6,509 18,092
================================================
DEPRECIATION AND AMORTIZATION
(Dollars in thousands)
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
2001 2000 2001 2000
----------------------------------------------
Depreciation $ 1,504 1,096 5,050 4,187
Amortization 1,532 1,077 5,605 4,366
Debt issue cost 281 227 975 679
----------------------------------------------
$ 3,317 2,400 11,630 9,232
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