Banner Aerospace records 127 percent increase in second quarter net income.

WASHINGTON--(BUSINESS WIRE)--Nov. 8, 1996--Banner Aerospace (NYSE:BAR) today reported a 127 percent increase in net income for the second quarter ended Sept. 30, 1996.

Net income for the three-month preiod was $1.7 million, or $0.07 per share, compared to $732,000, or $0.04 per share, for the same period ended Sept. 30, 1995. Sales for the three-month period ended Sept. 30, 1996 were $84.1 million, an increase of approximately 27 percent over the $66.5 million reported last year.

For the six months ended Sept. 30, 1996, Banner's net income was $3.0 million, or $0.13 per share, a 106 percent increase over the $1.4 million, or $0.08 per share, earned in the six months ended Sept. 30, 1995. Sales for the six months ended Sept. 30, 1996 increased 40 percent to $178.4 million compared to $127.1 million for the six months ended Sept. 30, 1995.

Warren D. Persavich, chief financial officer, noted that further substantial increases in sales for the current fiscal year are being stimulated by the increased build rate of new aircraft. This market activity positions Banner to actively pursue strategic and synergistic acquisitions which are currently in the advanced stages of negotiation.

Persavich also said that the transfer of inventories from both Adams Industries and Burbank Aircraft to Banner's new, state-of-the-art distribution center in Salt Lake City, Utah was completed in the September quarter and will begin providing benefits during the remainder of the fiscal year. The results for the three months and six months ended Sept. 30, 1996 included costs of $300,000 and $1.3 million, respectively, related to the move and set up of inventories at the distribution center and associated with severance costs in California which are not expected to be incurred in the second half.

Persavich said, "Our performance is directly related to the resurgence of the aerospace industry and positioning of the Company to take advantage of opportunities during this upward industry cycle. Our backlog, rates of shipments and incoming orders have experienced double digit increases. The acquisition of Harco, a specialty fastener distribution company acquired in March 1996, also contributed significantly to our results."

Persavich added, "The success in integrating Harco into our hardware group has encouraged us to provide further resources to expand this segment of our business.

"Sales throughout the Company, stimulated by the rebound in the industry, resulted in significant gains for the three and six months ended Sept. 30, 1996. Those gains contributed to an increase in operating income of almost 30 percent for the quarter ended Sept. 30, 1996. Solair had significant sales increases in both North America and the Asia Pacific market. In addition, Burbank Aircraft recorded substantial gains for both the three and six month periods which resulted from the previous awards of several new multi-year contracts from airline customers," 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. -0-

                      BANNER AEROSPACE, INC.
                            (NYSE: BAR)

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

                                Three Months            Six Months
Period ended Sept. 30,       1996          1995     1996          1995

Net sales                   $ 84,107    $ 66,490   $178,383   $127,123
Cost of sales                 58,514      46,788    127,588     89,800
  Gross profit                25,593      19,702     50,795     37,323
Selling, general and
  administrative expenses     19,612      15,353     39,955     29,227
 Operating income              5,981       4,349     10,840      8,096
Interest expense, net          3,197       3,127      5,869      5,692
  Income from operations
    before taxes on income     2,784       1,222      4,971      2,404
Provision for taxes
 on income                     1,120         490      1,990        960
  Net income                $  1,664     $   732   $  2,981   $  1,444

Earnings per common share   $   0.07     $  0.04   $   0.13   $   0.08

Weighted average number
 of shares                    23,405      18,002     23,405     18,002
-0-
Consolidated Balance Sheets
Sept. 30, 1996 and March 31, 1996
(in thousands)

                      Sept. 30,         March 31,
                        1996              1996
ASSETS
Current Assets
  Receivables        $56,958            $57,006
  Inventories        227,185            204,595
  Other               13,762             10,665
    Total            297,905            272,266

Net fixed assets      13,541             13,108
Other assets          33,000             32,835
                    $344,446           $318,209

                     Sept. 30,         March 31,
                        1996              1996

LIABILITIES & EQUITY
Current Liabilities
  Accounts payable  $ 36,541          $  42,233
  Other liabilities   20,110             21,011
    Total             56,651             63,244

Long-term debt       141,711            111,900
Other                    412                462
Stockholders'
  equity             145,672            142,603
                    $344,446          $ 318,209

CONTACT: Banner Aerospace

Warren D. Persavich, 703/478-5790