Aviation Distributors Inc. Reports 1998 Year-End Results.

LAKE FOREST, Calif.--(BUSINESS WIRE)--May 19, 1999--

Aviation Distributors Inc. (OTC BB:ADIN) Wednesday reported its results from operations for the year ended Dec. 31, 1998.

Revenues for the year ended Dec. 31, 1998, were $28,432,571, reflecting a decrease of 27 percent when compared with revenues of $38,963,959 for the prior year. The company recorded a net loss for the year of $5,795,772, or a loss of $1.85 per basic and diluted share, as compared with net income of $404,492, or 14 cents per basic and diluted share, recorded for the prior year.

The decrease in revenues during the year was the direct result of reduced access to credit while the company was going through a restructuring. The higher revenues recorded a year ago were due in part to several large transactions contributing $3.9 million in sales. The net loss for the year was partially the result of a decrease in revenues and reduction in gross profits as compared with the prior year.

The net loss for the year was primarily attributed to the continuation of certain nonrecurring expenses, extraordinarily higher interest expenses and an increase in selling, general and administrative expenses. More specifically, the larger portion of the nonrecurring expenses were legal, accounting and other professional expenses related to the settling of a class-action litigation brought against the company in October 1997.

Other nonrecurring expenses included auditing and accounting expenses related to the company's restating and preparing financial reports for 1996 and 1997. Higher interest expenses were attributed to loan fees related to obtaining new financing as well as late payment penalties on the financing secured.

The increase in selling, general and administrative expenses was primarily due to increases in professional and consulting expenses, appraisal costs, higher bank charges related to credit facility revisions, and higher occupancy and facility operating costs.

Revenues for the year were derived primarily from sales of distributed services and company-owned inventory. Distributed services include inventory management and the brokering of consignment sales, as well as the brokerage of other related transactions. Sales from distributed services represented approximately 85 percent of total revenues for the year as compared with 80 percent a year ago.

Sales from company-owned inventory represented approximately 14 percent of total revenues as compared with 20 percent a year ago. The decrease in the percentage of sales of company-owned inventory was primarily due to several large sales in 1997.

Commenting on the announcement, Saleem Naber, president and chief executive officer of Aviation Distributors, stated: "Clearly our sales and operating performance over the past 12 months was of no surprise to management, our shareholders and others monitoring our progress. Being restricted of access from additional credit for most of the year had reduced our ability to purchase marketable inventories and larger aircraft components, each of which could have been re-sold at respectable margins.

"While we have been temporarily burdened by a number of constraining issues throughout the year and therefore have not realized the sales growth desired, we believe that we have not lost our position in the marketplace and expect to see marketshare gains similar to previous years in the near-term since the aircraft parts redistribution market remains healthy worldwide. In summary, we believe we have reached a turning point and are optimistic about current and near-term sales and operating performance," added Naber.

Citing key accomplishments in 1998, Naber remarked: "Of key importance in returning to normal operations, we completed our audits and the restatement of financial reports for 1997 and 1996. Additionally, we settled the class-action lawsuit filed against the company over a year ago.

"And finally, signaling our strengthened relationship with our bank, we negotiated an increase in our existing credit facility from $15 to $20 million and set in additional provisions which are expected to increase the availability of funds for working capital.

"Now, with the shareholder settlement finalized, a major reduction in nonrecurring expenses, our financial reporting current and an improved credit facility, we are poised for increases in sales this year. And finally, management wishes to take this opportunity to thank and publicly acknowledge the admirable and patient sales and administrative personnel who have stood behind the company during this past 18 months. We wish also to extend our gratitude to our shareholders for their continued support," Naber concluded.

Aviation Distributors is one of the world's 10-largest aircraft part redistributors and inventory management service providers to major commercial airlines worldwide with agents in the United States, the United Kingdom, throughout Europe, Australia, India, Jordan, Indonesia and Chile, with its headquarters in Lake Forest.

Statements in this news release that relate to future plans, financial results or projections, events or performance are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The company's actual results and financial position could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including, but not limited to, the price and availability of aircraft parts and other materials, successful execution of the company's expansion plans, impact of competition, the availability of additional financing, and other risks and uncertainties described fully in the company's Form 10-KSB filed with the Securities and Exchange Commission. Copies of the most recent 10-KSB are available from Aviation Distributors' Investor Relations department. -0-

                      AVIATION DISTRIBUTORS INC.
                    SELECTED FINANCIAL INFORMATION
                           (Audited Results)

OPERATIONS DATA:
                                          Year Ended Dec. 31,
                                         1998            1997

Total net sales                     $ 28,432,571    $ 38,963,959
Cost of sales                         22,596,436      29,608,994
Gross profit                           5,836,135       9,354,965

Selling, general & admi                    --         620,000
Nonrecurring expenses                  1,311,153         968,052
IncoGain (loss) on disposal of assets       (148,666common
 shares outstanding                    3
                      AVIATION DISTRIBUTORS INC.
                    SELECTED FINANCIAL INFORMATION
                           (Audited Results)

BALANCE SHEET DATA:
                                                    Dec. 31,
                                                      1998

Restricted cash                                   $     8,171
Accounts receivable, net                            4,767,470
Notes receivable, current portion                   1,276,750
Inventories                                         9,356,386
Other current assets                                1,093,182
  Total current assets                             16,501,959
Property and equipment, net                           645,907
Other assets                                          438,069
  Total Assets                                    $17,585,935

Accounts payable                                  $ 3,120,953
Lines of credit                                    12,791,538
Long-term debt, current portion                     1,911,057
Other current liabilities                           1,235,229
Current liabilities                                19,058,777
Other liabilities                                     620,995
Shareholders' equity (deficit)                     (2,093,837)
Total liabilities and shareholder equity          $17,585,935