Aviation Sales Company Reports Record Second Quarter Results.MIAMI--(BUSINESS WIRE)--July 28, 1998--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 results for the second quarter ending June June: see month. 30, 1998. Second quarter 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 56.8% to $91.1 million, from $58.1 million for the same period last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 45.9% to $12.4 million, compared with $8.5 million for the same period last year. Net income increased 11.6% to $4.8 million or $0.50 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 with 1997 second quarter net income of $4.3 million, or $0.45 per diluted share. The 1998 second quarter results were negatively impacted by non-recurring 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. of $760,000 or $0.05 per diluted share (after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) related to the Company's pending merger transaction with Whitehall Whitehall, cities, United States Whitehall. 1 City (1990 pop. 20,572), Franklin co., central Ohio, a suburb of Columbus; inc. 1948. Manufactures include water coolers and packaged meats. Corporation, and were positively impacted by the contribution of recent acquisitions and strong internal growth. Gross profit increased 48.1% to $26.8 million for the quarter ended June 30, 1998, compared with $18.1 million for the same period last year. 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. decreased to 29.4% for the 1998 second quarter from 31.2% for the 1997 second quarter, and remains in line with the 29.8% gross profit margin reported for the first quarter of 1998. For the six months ended June 30, 1998, operating revenues rose 53.6% to $173.6 million from $113.0 million for the six months ended June 30, 1997. Operating income increased 58.2% to 23.1 million from 14.6 million during the first six months of 1997. Income before extraordinary item for the six months ended June 30, 1998 was $9.2 million or 26.0% higher than the 1997 period. The Company recorded an extraordinary charge (net of income taxes) of $0.6 million or $0.06 per diluted share in the 1998 first quarter related to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of deferred financing costs associated with the debt repaid with the proceeds from the $165 million senior subordinated notes offering completed on February 17, 1998. Gross profit increased 54.8% to $51.4 million for the six months ended June 30, 1998, compared with $33.2 million for the same period last year. Gross profit margin for the 1998 second quarter increased to 29.6% from 29.4% for the six months ended June 30, 1997. Dale S. Baker, chairman and chief executive officer, commented "The second quarter of 1998 represents the eighth consecutive quarter of record performance since completing our initial public offering. In addition to the 30% incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenue contributions from our Kratz-Wilde and Caribe Aviation acquisitions for 1998, our results benefited from strong internal sales growth, which reached 26% for both the second quarter and first half of 1998. From this solid operating foundation, we look forward to the completion of our merger with Whitehall." The Company's operating expenses increased $4.8 million to $14.4 million for the second quarter of 1998 compared to $9.6 million for the second quarter of 1997. After adjustment for the Whitehall merger expenses, operating expenses as a percentage of operating revenues decreased from 16.5% for the second quarter of 1997 to 15.0% for the second quarter of 1998, due largely to economies of scale. Operating expenses for the six months ended June 30, 1998, after adjustment for the merger expenses, were $27.0 million or 15.6% of operating revenues compared with $18.6 million or 16.5% for the same period last year. The Company will hold its annual stockholders meeting on Thursday, July 30, 1998. At the meeting the Company's stockholders will vote on, among other matters, the Company's proposed merger with Whitehall Corporation. Whitehall Corporation will hold its special stockholders meeting to vote on the merger on July 31, 1998. Assuming the merger is approved by the stockholders of both corporations, the merger is expected to close shortly thereafter. Aviation Sales Company is a recognized worldwide leader in the 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. manufacturing, overhaul and 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. market, selling parts for Boeing, McDonnell Douglas McDonnell Douglas was a major American aerospace manufacturer and defense contractor, producing a number of famous commercial and military aircraft. It merged with Boeing in 1997 to form The Boeing Company. , Lockheed and Airbus aircraft, and Pratt & Whitney, General Electric and Rolls Royce Rolls Royce the millionaire’s vehicle. [Trademarks: Brewer Dictionary, 928] See : Luxury jet engines. Offering inventory management services, including purchasing services, repair management, warehouse management, aircraft disassembly dis·as·sem·ble v. dis·as·sem·bled, dis·as·sem·bling, dis·as·sem·bles v.tr. To take apart: disassemble a toaster. v.intr. 1. services and consignment The delivery of goods to a carrier to be shipped to a designated person for sale. A Bailment of goods for sale. A consignment is an arrangement resulting from a contract in which one person, the consignor, either ships or entrusts goods to another, the and leasing of aircraft spare parts, Aviation Sales Company is a leader in Total Inventory Solutions(R) designed to meet the diverse needs of its customers. Aviation Sales Company also manufactures certain aircraft parts for sale to original equipment manufacturers, including precision engine parts, and provides certain aircraft repair services at its FAA licensed repair facilities. 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 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. 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. (Tables Follow) -0-
Financial Data
Condensed Statements of Income
Aviation Sales Company and
Subsidiaries Periods Ended June 30
Three Months Six Months
Millions, except earnings 1998(2) 1997(1) 1998(2) 1997(1)
per share
Operating Revenues $ 91.1 $ 58.1 $ 173.6 $ 113.0
Cost of Sales 64.3 40.0 122.2 79.8
Gross Profit 26.8 18.1 51.4 33.2
Gross Margin 29.4% 31.2% 29.6% 29.4%
Operating Expenses
Operating, Selling &
Administration 13.1 8.9 25.9 17.2
Depreciation & Amortization 1.3 0.7 2.4 1.4
Total Operating Expenses 14.4 9.6 28.3 18.6
15.8% 16.5% 16.3% 16.5%
Income from Operations 12.4 8.5 23.1 14.6
Interest Expense and Other 4.5 1.5 8.1 2.6
Income Tax Expense 3.1 2.7 5.8 4.7
Income Before Extraordinary Item 4.8 4.3 9.2 7.3
Extraordinary Item, Net of Taxes - - 0.6 -
Net Income $ 4.8 $ 4.3 $ 8.6 $ 7.3
Diluted Earnings Per Share:
Income Before
Extraordinary Item $ 0.50 $ 0.45 $ 0.95 $ 0.77
Extraordinary Item,
Net of Taxes - - $ 0.06 -
Net Income $ 0.50 $ 0.45 $ 0.89 $ 0.77
Average Common Shares and Common
Share Equivalents Outstanding
- Diluted 9.75 9.46 9.68 9.46
Common Stock Prices, per share
High 41 25.875 44.75 25.875
Low 34.875 21.25 33.125 21.25
Quarterly Close 39.625 24.5 39.625 24.5
(1) The three and six month periods ended June 30, 1997 have been restated to reflect the results of operations of Aerocell Structures, Inc. and Apex Manufacturing, Inc. which were acquired in 1997 and were accounted for using the pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. method of accounting. (2) Included in the three and six month periods ended June 30, 1998 are the results of operations of Kratz-Wilde Machine Company and Caribe Aviation, Inc., acquired October 16, 1997 and March 6, 1998, respectively. These acquisitions were accounted for using the purchase method of accounting. -0-
Financial Data (cont.)
Condensed Balance Sheet
Aviation Sales Company and Subsidiaries
June 30, December 31,
Millions 1998 1997
Assets
Current Assets
Cash and Cash Equivalents $ 2.2 $ 5.0
Accounts Receivable, net 71.4 66.6
Inventories 188.5 139.3
Other Current Assets 3.7 5.1
Total Current Assets 265.8 216.0
Equipment on Lease, net 29.2 22.8
Property and Equipment, net 30.1 20.5
Goodwill, net 26.7 17.7
Other Assets 17.0 8.0
Total Assets $ 368.8 $ 285.0
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable & Accrued Expenses $ 33.8 $ 34.5
Current Maturities - Debt 40.8 98.7
Total Current Liabilities 74.6 133.2
Deferred Revenue 1.8 1.0
Notes Payable - Long Term 15.5 52.6
Bonds Payable, net 164.0 -
Shareholders' Equity 112.9 98.2
Total Liabilities & Stockholders' Equity $ 368.8 $ 285.0
CONTACT: Aviation Sales Company, Miami
Dale S. Baker, Chairman/Chief Executive Officer
305/599-6619
Joseph E. Civiletto, Chief Financial Officer
305/599-6693
Home Page Address: http://www.avsales.com
Corporate News on the Net:
http://www.businesswire.com/cnn/avs.htm
or
Morgen-Walke Associates, June Filingeri/Jennifer Angell
Media contact: Miriam Adler, 212/850-5600
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