Court Approves Kellstrom Industries, Inc. Asset Sale to an Entity Controlled by Inverness Management LLC.

Business Editors

MIRAMAR, Fla.--(BUSINESS WIRE)--May 20, 2002

Transaction is Expected to Close In A Few Weeks

Kellstrom Industries, Inc. ("Kellstrom") announced that Judge Mary Walrath of the United States Bankruptcy Court for the District of Delaware approved the proposed sale of Kellstrom's aviation inventory management business to KIAC, Inc. ("KIAC"), an entity controlled by Inverness Management LLC ("Inverness").

KIAC increased its original bid by $5 million to $55 million in cash, and was approved as the successful bidder at the section 363 sale hearing by the United States Bankruptcy Court for the District of Delaware. The cash payment will be funded with equity from Inverness and other investors and a senior secured debt facility agented by GE Capital.

Inverness is a privately held investment firm, based in Greenwich, Connecticut, which provides equity for acquisitions, recapitalizations and companies seeking additional capital. Inverness invests primarily in out-of-favor industries and has experience investing in the aviation services industry. Inverness manages private equity funds with over $350 million of committed capital, provided primarily by large institutional investors.

James C. Comis, III, Managing Director of Inverness, stated, "Upon our purchase of Kellstrom's aviation inventory management business, the company will be one of the most strongly capitalized competitors in the industry. We believe that the sound financial footing of the company will enable its customers and vendors to trade with us with confidence."

Yoav Stern, Chairman of the Board of Kellstrom stated, "With today's announcement, the sale is moving forward. Our business plan, as originally envisioned and frequently shared with our customers and vendors, is on schedule. We expect the transaction to close shortly. As previously reported, KIAC will retain substantially all of the management and employees of Kellstrom. The sale of Kellstrom's other non-operational assets, primarily real estate, will be accomplished through confirmation of a plan to maximize recovery to creditors."

Zivi R. Nedivi, President and CEO, noted, "During the sale process, we remained focused on our core business, value-added inventory management services for the aviation after-market. We have all of the resources in terms of access to capital, talent, inventory and technology to serve our 1200 commercial and defense oriented customers worldwide."

Kellstrom is a leading aviation inventory management company. Its principal business is the purchasing, overhauling (through subcontractors), reselling and leasing of aircraft parts, aircraft engines and engine parts. Headquartered in Miramar, Florida, Kellstrom specializes in providing: engines and engine parts for large turbo fan engines manufactured by CFM International, General Electric, Pratt & Whitney and Rolls Royce; aircraft parts and turbojet engines and engine parts for large transport aircraft and helicopters; and aircraft components including flight data recorders, electrical and mechanical equipment and radar and navigation equipment.

Statements in this release may be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on many assumptions and factors, and are subject to many conditions, including the ability of the Company to successfully: operate pursuant to the terms of the DIP financing; fund its working capital needs through the expiration of the DIP financing and thereafter; consummate the transaction with KIAC in a timely manner; comply with all the closing conditions needed in order to consummate the transaction with KIAC; complete the Chapter 11 process in a timely manner; fund and execute its business plan; continue to operate in the ordinary course and manage its relationships with its creditors, lenders, note holders, vendors and suppliers, employees and customers given the Company's financial condition; limit the amount of time the Company's management and officers devote to restructuring, in order to also allow them to run the business and implement its business strategy and retain a number of its key senior managers and other employees to implement the Company's business and financial strategy; establish competitive pricing for its products; sell and market its products particularly in light of the reduced demand for the Company's products due to the downturn in the airframe and engine parts after-market, the impact of the September 11, 2001 terrorist acts, and the current difficulties facing the commercial aviation industry and the general economy. All forward-looking statements are estimates by the Company's management and are subject to various risks and uncertainties that may be beyond its control and may cause results to differ from management's current expectations. Certain of these risks are described above and in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's annual and quarterly reports. Copies of the Company's SEC filings 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.