B/E Aerospace Reports Record Earnings From Operations and Record New Orders; Confirms Outlook for Very Significant Revenue Growth in Second Half.

WELLINGTON, Fla.--(BUSINESS WIRE)--Sept. 17, 1998--B/E Aerospace, Inc. (Nasdaq-NMS:BEAV) today announced record revenues and operating earnings for its fiscal 1999 second quarter ended August 29, 1998.

Net sales for the fiscal 1999 second quarter were an all-time record for any quarter in the Company's history reaching $156,352,000, up 30 percent versus fiscal 1998 second quarter sales of $119,843,000. Second quarter gross profit of $59,600,000 (38.1% of sales) was up 35 percent from the fiscal 1998 second quarter level of $44,149,000 (36.8% of sales). For the 1999 second quarter, adjusted to exclude acquisition-related expenses, B/E reported record operating earnings of $23,869,000, a 290-basis-point improvement and an increase of 60 percent over the prior year. As previously reported, in connection with acquisitions of SMR and ALC, the Company recorded a charge of $70,902,000 in the current period for the write-off of in-process research and development and acquisition-related expenses. Earnings and earnings per share (diluted) before the acquisition-related expenses were $12,620,000 and 50 cents for the period, an increase of 56 percent and 47 percent, respectively, over the prior year's results of $8,077,000 and 34 cents per share (diluted). Full details of the Company's reported results for both the second quarter and six months, including acquisition-related expenses are shown on the financial table accompanying this release.

Sales for the first six months of fiscal 1999 were $296,343,000, up 27 percent from the fiscal 1998 first half. Likewise, gross profit for the first six months of fiscal 1999 of $111,480,000 was up 31 percent versus the prior year of $85,212,000, while the gross margin expanded to 37.6% of sales versus 36.5% reported last year. For the 1999 first half, adjusted to exclude acquisition-related expenses, B/E reported earnings of $21,490,000, or 87 cents per share (diluted), versus $15,020,000, or 64 cents per share (diluted), in fiscal 1998, year-over-year increase of 43 percent and 36 percent, respectively.

The Company has recorded acquisition-related charges aggregating $169,155,000 in fiscal 1999 for the acquisition of in-process research and development and acquisition-related expenses associated with the Puritan-Bennett Aerospace Systems Co., Aircraft Modular Products, SMR Aerospace and Aerospace Lighting Corporation transactions. Due to the Securities and Exchange Commission's recent emphasis on business combination accounting, the Company is consulting with the SEC staff regarding the allocation of purchase price of these acquisitions. These discussions could affect the timing and amounts of future amortization expense.

Chief Executive Officer Robert J. Khoury stated, "During the last 18 months, the Company has had the most successful program award experience in its history having been awarded approximately $765 million worth of seating and galley systems orders alone, led by seven of the top 10 airlines in the world. More than $215 million of orders have been received during the past three months alone. The book-to-bill ratio during the second quarter was 1.39 to 1, and at August 30, 1998, the Company's backlog was a record $700 million."

"Approximately two-thirds of the Company's revenues are derived from refurbishment, retrofit, spares and service revenues. We anticipate that these aftermarket revenues as a percentage of total revenues will continue to increase over the next several years as airlines complete the retrofit of the cabin interiors in their fleets. In addition, the combined strength of the aftermarket, the composition of our backlog and related expected follow-on orders, as well as the continued contributions from our acquisitions are all positives, which have contributed to our performance during the quarter and lead us to remain confident in our outlook for a much stronger second half for the Company."

B/E Aerospace, Inc. designs, develops, manufactures, sells and services a broad line of passenger cabin interior products for both commercial and general aviation aircraft, including seating products, cabinetry, passenger entertainment systems, a full line of passenger and crew oxygen and protective breathing equipment, passenger service systems and components and a complete line of food and beverage preparation and storage equipment. The Company also provides a broad range of interior reconfiguration services and products as a prime vendor to commercial airlines. B/E Aerospace is the world's leading supplier of cabin interior products and services, serving virtually all the world's airlines, aircraft manufacturers and business jet owners.

This press release contains forward-looking statements that involve risks and uncertainties. The Company's actual experience may differ materially from that anticipated in such statements. Factors that might cause such a difference include, but are not limited to, those discussed in the Company's filings with the Securities and Exchange Commission, including its most recent Form 10-Q, proxy statement and Form 10-K/A, and in "Risk Factors" in its amended Form S-3 filed on September 11, 1998 relating to the registration of the Company's common stock, as well as future events that have the effect of reducing the Company's available operating income and cash balances, such as unexpected operating losses, delays in the integration of the Company's acquired businesses, delivery of the Company's MDDS interactive video system, customer delivery requirements, new or expected refurbishments or capital expenditures or cash expenditures related to possible future acquisitions. -0-

                       B/E Aerospace, Inc.
              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)

(In thousands, except per share data)
                     Three Months Ended          Six Months Ended

                 Aug. 29,        Aug. 30,       Aug. 29,    Aug. 30,
                    1998           1997           1998              1997
Net sales           $156,352          $119,843         $296,343    $233,689
Cost of sales             96,752            75,694          184,863     148,477
Gross profit             59,600            44,149          111,480      85,212
 -- Percent               38.1%              36.8%             37.6%         36.5%
OPERATING EXPENSES:
Selling, general
 and administrative  19,042            15,032           37,041      27,935
Research,
 development and
 engineering             12,770            11,542           24,742      22,550
Amortization              3,919             2,676            7,360        5,529
In-process research
 and development,
 acquisition-related
 and other expenses  70,902                --           169,155           --
 Total Operating
 Expenses            106,633            29,250           238,298     56,014
Operating earnings
 (loss)            (47,033)            14,899         (126,818)     29,198
 -- Percent                nm              12.4%               nm         12.5%
Interest expense,
 net                      8,664             5,401            16,446     11,531
Earnings (loss)
 before income
 taxes                   (55,697)             9,498         (143,264)     17,667
Income taxes              2,585             1,421             4,401        2,647
Net earnings
 (loss)           $(58,282)           $ 8,077        $(147,665)    $15,020

Basic earnings
 (loss) per
 share                  $  (2.37)           $   .36         $  (6.20)    $   .68
Weighted average
 common shares             24,575            22,269            23,822     22,103

Diluted net
 earnings (loss)
 per share          $  (2.37)           $   .34         $  (6.20)    $   .64
Weighted average
 common and
 potentially
 dilutive common
 shares              24,575            23,527            23,822     23,493