Aviation Sales Company Announces Second Quarter and Six Month Results of Operations.

Business Editors

MIRAMAR, Fla.--(BUSINESS WIRE)--Aug. 14, 2000

Aviation Sales Company (NYSE:AVS) today announced its results of operations for the quarter and six months ended June 30, 2000. Revenues for the 2000 second quarter were $164.7 million, compared to $166.8 million for the quarter ended June 30, 1999 ($156.6 million with adjustments to reflect transactions in the Company's redistribution operation that were incorrectly accounted for in the 1999 second quarter and six months financial statements as originally presented). Revenues for the first six months of 2000 were $339.2 million, compared to $333.3 million for the first six months of 1999 ($316.5 million, with adjustments).

The Company incurred a loss from continuing operations during the three and six months ended June 30, 2000 of $22.3 million and $24.6 million, respectively. The Company had income from continuing operations of $8.5 million and $15.8 million for the three and six months ended June 30, 1999, respectively. Included in the 2000 loss was a one-time charge of $6.6 million relating to a writedown of the value of the three A-300 aircraft that the Company is presently selling. As previously announced, the Company has entered into agreements to sell the three A-300 aircraft which it owns for $12.0 million each. The sale of the first aircraft was completed on August 14, 2000 and the sales of the two remaining aircraft are expected to be completed in September 2000. Also included in the 2000 operating results is a $7.9 million charge relating to a valuation allowance that the Company has recorded on its deferred income tax assets. Additionally, results for the periods ended June 30, 2000 were adversely impacted by a substantial increase in interest and other charges, which includes amortization of bank fees, which increased from $8.4 million and $17.1 million, respectively, for the 1999 three and six month periods, to $15.2 million and $28.6 million, respectively, for the comparative 2000 periods.

As previously announced, in August 2000, the Company entered into an agreement to sell the assets of its manufacturing operations for $41.0 million (subject to adjustment). Completion of the sale is subject to certain conditions, including the receipt of governmental approvals, and the sale is expected to close during the third quarter. As a result of the contemplated sale, the Company has restated its financial statements to account for its manufacturing operations as discontinued operations and the Company has taken a one-time, second quarter 2000 pre-tax charge of $9.2 million relating to the loss on the disposal of this business.

The Company's net loss for the three and six month periods ended June 30, 2000 were $31.3 million ($2.08 per diluted share) and $32.9 million ($2.19 per diluted share), respectively, compared to net income of $9.5 million, or $0.71 per diluted share and $17.4 million, or $1.31 per diluted share for the comparative 1999 periods.

Dale S. Baker, the Company's Chairman and CEO, stated: "The one-time charges taken in the second quarter of 2000 relate to two of the steps in our plan to significantly reduce our debt in the near term. Completion of the sale of the assets of Kratz-Wilde and Apex Manufacturing, along with the completion of the recently announced sale of the three A-300 aircraft which we own, one of which we completed the sale of today, will be important milestones in our debt reduction plan and will move us toward returning our company to financial health. We are also continuing to explore the sale of other assets, including our Dixie Bearings new parts distribution operation, and we are continuing our efforts to bring down inventory levels in our redistribution operation. We expect that as a result of all of these steps, we will see a substantial reduction in our debt over the next 60 to 90 days."

The Company also announced that it has filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2000 with the U.S. Securities and Exchange Commission.

Aviation Sales Company is a leading independent provider of fully integrated aviation maintenance and inventory services, including aircraft heavy maintenance, component repair and overhaul, leasing, the distribution of aircraft spare parts and the manufacture of new components for major commercial airlines, original equipment manufacturers and maintenance and repair facilities.

This release contains certain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. A number of factors, including those identified below, could adversely affect the Company's ability to obtain these results: available capital to continue to support and further expand the Company's operations, the Company's ability to acquire adequate inventory and to obtain favorable pricing for such inventory, competitive pricing for the Company's products and services, increased competition in the aircraft spare parts redistribution and MR&O markets, the ability to consummate suitable acquisitions, the continuing ability to effectively integrate acquisitions, economic factors which affect the airline industry, and changes in government regulations. 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.