Aviation Sales Company Reports Record Fourth Quarter And 1998 Revenues And Net Income.MIAMI Miami, cities, United States Miami (mīăm`ē, –ə). 1 City (1990 pop. 358,548), seat of Dade co., SE Fla., on Biscayne Bay at the mouth of the Miami River; inc. 1896. , Fla.--(BUSINESS WIRE)--Feb. 9, 1999--Aviation Sales Company (NYSE NYSE See: New York Stock Exchange :AVS (Audio Video Coding Standard) A video compression technique developed by Chinese companies and supported by the Chinese government. Expected to provide better compression than MPEG-2, AVS was created to avoid paying royalties to the MPEG licensors, which are outside ) today announced record revenues and net income for the quarter and year ended December December: see month. 31, 1998. Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. rose 55.2% to $500.8 million, from $322.5 million for the year ended December 31, 1997. Operating revenues for the fourth quarter of 1998 rose 71.2% to $163.8 million, from $95.7 million for the same period in 1997. Net income for 1998 was $25.5 million ($2.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), compared to $4.8 million ($0.39 per diluted share) for 1997, and net income for the fourth quarter of 1998 was $8.1 million ($0.64 per diluted share), compared to a 1997 fourth quarter loss of $1.2 million (a loss of $0.10 per diluted share). Increases in operating revenues for both the fourth quarter and year ended December 31, 1998 reflect continued strong internal growth and the contribution of the acquisitions completed by the Company during 1998. Gross profit increased 62.0% to $41.0 million for the fourth quarter of 1998, compared with $25.3 million for the same period last year, and the gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the 1998 fourth quarter was 25.0%, compared to 26.4% for the 1997 fourth quarter. Gross profit for 1998 was $128.1 million, an increase of 64.6% over 1997 gross profit of $77.8 million. The gross profit margin for 1998 was 25.6%, compared to 24.1% for 1997. Increases in gross profit margin for fiscal 1998 reflect the substantial turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in the Company's heavy maintenance operations, which were acquired by the Company in a transaction accounted for as a pooling of interest Noun 1. pooling of interest - an accounting method used in the merging of companies; the balance sheets are added together item by item; this method is tax-free in July, 1998 as part of the Company's acquisition of Whitehall Corporation. The decrease in gross profit for the fourth quarter of 1998 compared to 1997 reflects the increase in the percentage of the Company's business derived from its Maintenance, Repair and Overhaul Maintenance, Repair and Overhaul or MRO is a multi-billion dollar industry which works on international authorization rules to deliver a safe airline operation and to assure reliability and availability of customer fleets. (MRO MRO In currencies, this is the abbreviation for the Mauritanian Ouguiya. 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. ) operations, which generally operate at a lower gross profit margin than the Company's redistribution re·dis·tri·bu·tion n. 1. The act or process of redistributing. 2. An economic theory or policy that advocates reducing inequalities in the distribution of wealth. business. On September 22, 1998, the Company acquired Triad International Maintenance Corporation ("TIMCO TIMCO Triad International Maintenance Company (Oscoda, Michigan) ") in a transaction accounted for as a purchase, further increasing the amount of the Company's business associated with its MRO operations. During the 1998 fourth quarter, TIMCO's operations were consolidated with the Company's other heavy aircraft maintenance operations under the TIMCO banner. Dale S. Baker, chairman and chief executive officer, commented, "The fourth quarter of 1998 represents the tenth consecutive quarter of strong growth since we completed our initial public offering. We believe that the growth in our operating profitability is being driven by the strong turnaround in our heavy maintenance operations acquired in connection with our acquisition of Whitehall, by contributions associated with our TIMCO operation since it was acquired, as well as by overall customer acceptance of our Total Inventory Management - TIM TIM Timothy TIM Technical Interchange Meeting TIM Transient Intermodulation Distortion TIM Time Is Money TIM The Invisible Man (movie) TIM Telecom Italia Mobile (Italian cellular provider) and Total Aircraft Maintenance - TAM strategy." Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for fiscal 1998 were $66.7 million, compared to $52.8 million for fiscal 1997. Operating expenses for the fourth quarter of 1998 were $21.3 million, compared to $18.6 million for the comparable 1997 period. While operating expenses increased for both the fiscal 1998 and fourth quarter 1998 periods compared to the same periods in 1997, operating expenses as a percentage of operating revenues decreased dramatically from period to period, due in part to the economics of scale achieved as a result of the substantial increases in operating revenues. Aviation Sales Company is a leading independent provider of fully integrated aviation inventory and maintenance services, including aircraft heavy maintenance, component repair and overhaul, leasing, the distribution of aircraft spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. and the manufacture of new components for major commercial airlines, original equipment manufacturers and maintenance and repair facilities throughout the world. Except for historical information contained herein, this release contains certain 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. that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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: the Company's ability to acquire adequate inventory and to obtain favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. pricing for such inventory, competitive pricing for the Company's products and services, increased competition in the aircraft spare parts redistribution and MRO markets, the ability to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. 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 10- K filings with the Securities and Exchange Commission (SEC). Copies of the Company's 10-K and 10-Q 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. -0-
Financial Data (Unaudited)
Condensed Statements of Income
Aviation Sales Company and Subsidiaries
Periods Ended December 31
Three Months(1) Twelve Months(1)
Millions, except earnings
per share 1998 1997 1998 1997
Operating Revenues $163.8 $95.7 $500.8 $322.5
Cost of Sales 122.8 70.4 372.7 244.7
Gross Profit 41.0 25.3 128.1 77.8
Gross Margin 25.0% 26.4% 25.6% 24.1%
Operating Expenses 21.3 18.6 66.7 52.8
13.0% 19.4% 13.3% 16.4%
Income from Operations 19.7 6.7 61.4 25.0
12.0% 7.0% 12.3% 7.8%
Interest Expense and Other 6.2 4.5 18.9 13.0
Income Tax Expense 5.4 3.4 16.4 7.2
Income (Loss) Before
Extraordinary Item 8.1 (1.2) 26.1 4.8
Extraordinary Item,
Net of Taxes - - 0.6 -
Net Income (Loss) $8.1 $(1.2) $25.5 $4.8
Diluted Earnings (Loss)
Per Share:
Income (Loss) Before
Extraordinary Item $0.64 $(0.10) $2.06 $0.39
Extraordinary Item,
Net of Taxes - - $0.05 -
Net Income (Loss) $0.64 $(0.10) $2.01 $0.39
Average Common Shares and Common
Share Equivalents
Outstanding - Diluted 12.78 12.55 12.70 12.45
Common Stock Prices, per share
High 40 5/8 38 15/16 44 3/4 38 15/16
Low 26 1/4 30 3/8 24 20 1/2
Period Close 40 5/8 37 5/8 40 5/8 37 5/8
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(1) The three and twelve month periods ended December 31, 1997 have
been restated to reflect the results of operations of Apex
Manufacturing, Inc. which was acquired in December, 1997 and was
accounted for using the pooling of interests method of accounting.
The twelve month period ended December 31, 1997 was restated to
reflect the results of operations of Aerocell Structures, Inc., which
was acquired in September, 1997 and was accounted for using the
pooling of interests method of accounting. The three and twelve
month periods ended December 31, 1997 and the twelve months ended
December 31, 1998 have also been restated to reflect the results of
operations of Whitehall Corporation, which was acquired in July 1998
and was accounted for using the pooling of interests method of
accounting. Included in the three and twelve month periods ended
December 31, 1998 are the post-acquisition results of operations of
Kratz-Wilde Machine Company, Caribe Aviation, Inc. and Triad
International Maintenance Corporation, acquired in October 1997,
March 1998 and on September 22, 1998, respectively. These
acquisitions were accounted for using the purchase method of
accounting.
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