Banner Aerospace Earnings for Fiscal Year 1997 increase over 375 percent.

WASHINGTON, D.C.--(BUSINESS WIRE)--May 22, 1997--

Increased Sales, Expanded Market Share, Acquisitions Drive Growth

Banner Aerospace (NYSE: BAR), today reported fiscal year 1997 earnings of $7.5 million, or $0.32 per share, an increase in net income of over 375 percent from the fiscal year ended March 31, 1996.

Net income for fiscal year 1996 was $1.6 million, or $0.09 per share.

Fourth quarter net income for the three months ended March 31, 1997 was $2.9 million, or $0.12 per share, compared to $49,000, or $0.01 share for the comparable quarter in 1996.

Net sales for the fiscal year ended March 31, 1997 increased 35 percent to a record $389.1 million from $287.9 million recorded last year. Fourth quarter net sales also set a new record, growing by 28 percent to $113.7 million from $88.7 million recorded in the three months ended March 31, 1996.

Banner's chief executive officer, Jeffrey J. Steiner, commented, "The revitalization of the aerospace industry has produced a direct, positive and substantial impact on Banner's operations. Accelerated build rates of new aircraft, increased airline profits, significant increases in revenue passenger miles, regional airline growth and freight tonnage have all contributed to the stimulation of sales throughout all our operating subsidiaries.

"This growth has come from our diversified customer base including commercial airlines, original equipment manufacturers, maintenance, repair and overhaul customers, regional airlines, and fixed-base operators. International sales again followed an aggressive growth trend increasing 24 percent to $113.9 million and continue to represent approximately one-third of total net sales. Exclusive, long- term, single-source contracts with large customers such as American Airlines, Delta Air Lines, Northwest Airlines, KLM, and Rohr have contributed significantly to our internal growth," he said.

Steiner noted that Banner's strategic acquisitions, including Harco and PB Herndon, both specialty fastener distributors, contributed substantially to fiscal year growth.

He also reported that Banner entered into an agreement in fiscal 1997 with two financial institutions to sell and lease back up to $35 million in jet engines and that during fiscal 1997 a sale and leaseback of $9.4 million in engines was completed. The gain of $2.8 million on this sale will be recorded over the five-year lease period enhancing the profitability of fiscal 1998 and beyond.

Steiner said that although earnings in fiscal 1997, and particularly the fourth quarter, improved significantly from the previous year, Banner management expects to see additional improvement as further efficiencies are achieved at the Salt Lake City distribution center and upon the integration of recent acquisitions into the Banner Aerospace Fastener Group.

"The achievement of efficiencies in fiscal 1997 was impaired as a result of running parallel computer systems and the move and consolidation of Burbank Aircraft and Harco into a new common facility. These increased efficiencies must be attained to reach the Company's return on investment goals," he concluded

Banner Aerospace is a diversified family of companies providing the aviation community with reliable, single source solutions through a global distribution network delivering hardware, rotables and engines to the original equipment manufactures and aftermarkets in the commercial, regional, and corporate sectors of the aviation industry.

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Consolidated Statements of Income
(in thousands, except per share data)

                             Three months              Twelve months
Period ended March 31,      l997        l996         l997       l996

Net sales                 $113,742    $88,735     $389,111    $287,880
Cost of sales               80,779     67,145      279,041     209,609
  Gross profit              32,963     21,590      110,070     78,271
Selling, general and
 administrative expenses    24,363     18,882       84,557     64,704
  Operating income           8,600      2,708       25,513     13,567
Interest expense, net        3,841      2,629       13,090     10,972
  Income from operations
   before taxes on income    4,759         79       12,423      2,595
Provision for taxes
  on income                  1,900         30        4,970      1,040
  Net income                $2,859        $49       $7,453     $1,555

Earnings per common share    $0.12      $0.01        $0.32      $0.09

Weighted average number
  of shares                 23,408     18,283       23,408     18,283


Consolidated Balance Sheets
March 31, 1997 and March 31, 1996
(in thousands)

              March 31,     March 31,
                1997        1996
ASSETS
Current assets
 Receivables     64,382     57,006
 Inventories    253,781     204,595
 Other           22,682      10,665
 Total          340,845     272,266
Long-term debt  165,148     111,900
Net fixed assets 15,334      13,108
Other assets     37,722      32,835
               $393,901    $318,209

                       March 31,    March 31,
                         1997         1996
LIABILITIES & EQUITY
Current liabilities
Accounts payable        38,864       42,233
Other liabilities       31,323       21,011
Total                   70,187       63,244
Long-term debt         165,148      111,900
Other                    8,371          462
Stockholders' equity   150,195      142,603
                      $393,901     $318,209

CONTACT: Warren D. Persavich

Chief Financial Officer

703/478-5790