DeCrane Aircraft Reports Strong Fourth Quarter and Year-end Results.EL SEGUNDO El Segundo (ĕl sēgŭn`dō), industrial city (1990 pop. 15,223), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1917. Its products include navigation and computer systems, aircraft parts, office machines, telephone apparatus, and , Calif.--(BUSINESS WIRE)--March 3, 1998--DeCrane Aircraft Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : DAHX), a leading manufacturer of avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. components and an avionics systems integrator An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. for the commercial aircraft industry, today announced strong demand for its products and services, together with overall growth in the commercial aircraft industry that resulted in a 27.1% revenue increase and 57.9% improvement in pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per share for the quarter. For the year, revenues advanced 67.3% while pro forma earnings per share rose 120.0%. Chairman and Chief Executive Officer, R. Jack DeCrane, said, "Fourth quarter and our full year results continue to demonstrate the effectiveness of our strategy of providing a full service capability to our customers. Increases in penetration of the commercial aircraft retrofit ret·ro·fit v. ret·ro·fit·ted or ret·ro·fit, ret·ro·fit·ting, ret·ro·fits v.tr. 1. To provide (a jet, automobile, computer, or factory, for example) with parts, devices, or equipment not in and aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. , steady increases in the volume of our sales, strong demand by the original equipment markets, and solid growth in our private labeling program all contributed to our 1997 performance. In view of the current business environment, our outlook for 1998 is strong." Financial Results For the three months ended December December: see month. 31, 1997, revenues increased 27.1% to $28.0 million from $22.0 million during the fourth quarter of 1996. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. during the 1997 fourth quarter advanced to $3.4 million, a 57.6% gain from $2.2 million in the comparable year-ago quarter. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma income as adjusted grew $.7 million to $1.7 million, or $.30 per share, versus $1.0 million, or $.19 per share, in the prior year's quarter. For the year-ended December 31, 1997, revenues improved 67.3% to $108.9 million from $65.1 million in the comparable period of 1996. Operating profit improved 182.2% to $12.0 million versus $4.3 million for the 1996 year-end. For the full year, pro forma income as adjusted rose 137.7% to $6.2 million, or $1.10 per share, compared to $2.6 million, or $.50 per share, in 1996. Key Performance Factors DeCrane stated, "Our components business realized significant growth during the quarter versus the 1996 fourth quarter primarily due to the continuing original equipment upturn driven by new aircraft production rate increases, growth in our private labeling program and strong demand for our display products. Similarly, increased demand for our capabilities by the in-flight entertainment In-flight entertainment (IFE) refers to the entertainment available to aircraft passengers during a flight. After World War II commercial aviation flights became a daily event in which entertainment was requested by passengers to help the time pass. equipment manufacturers yielded strong advances in our systems integration business." Continued DeCrane, "Also, we are very excited about the addition of Audio International, which has proven itself to be highly complementary to our existing operations and is providing cross-selling opportunities. As the new aircraft they are "specified on", which were certified See certification. in late 1997 or will be certified by mid- mid- pref. Middle: midbrain. 1998, come on stream we expect Audio to have a positive and significant impact on 1998 results." DeCrane further noted the savings from the rationalization rationalization, in psychology: see defense mechanism. of the AMP facility with its existing facilities in El Segundo, California
El Segundo is a city in Los Angeles County, California on the Santa Monica Bay, incorporated on January 18, 1917. The population was 16,033 at the 2000 census. and Lugano, Switzerland helped drive improvements in the company's profitability. Systems Integration DeCrane's systems integration group made continuing advances during the quarter, realizing steady revenue growth, along with further advances in building and diversifying its customer base. The company reported that it initiated development under its contracts with Securaplane and Walter Kidde Walter Kidde (March 7 1877 – February 9, 1943) (IPA pronunciation: [kɪdə]) was the court appointed trustee of the bankrupt New York, Susquehanna and Western Railway from July 24, 1937 until his death in 1943. for Southwest Airlines This article is about the American airline. For the former Japanese airline, see Japan Transocean Air. For the British airline, see Air Southwest. Southwest Airlines Co. and Northwest Airlines, respectively. Already underway are programs with Daimler Benz, The Network Connection, Hamilton Standard Hamilton Standard, a famous aircraft propeller parts supplier, was formed in 1929 when United Aircraft & Transport Corporation consolidated Hamilton Aero Manufacturing and Standard Steel Propeller into the Hamilton Standard Propeller Corporation. for Air Canada and Northwest Airlines, and the KLM KLM Kaiserliche Marine (Enigma: Rising Tide game) KLM Koninklijke Luchtvaart Maatschappij (Royal Dutch Airlines) KLM Klub Langer Menschen (German: Tall Person Club) , Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Marconi and Smith Industries Program, all of which contributed to advances made during the quarter and are proceeding as planned. Results for the systems integration group also include the contribution from Audio International. DeCrane said, "In systems integration, one of our key competitive advantages is our position as the only player in the industry that can provide in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. all four aspects of systems integration -- engineering, FAA certification, kit manufacturing and installation services. This capability has greatly facilitated our ability to establish relationships with practically all of the key major in-flight entertainment providers." Continued DeCrane, "Another priority for us is to further penetrate the safety and navigation markets, areas we think are ready for substantial and rapid growth. Already, we have made significant advances in these areas with our smoke detection and fire suppression suppression /sup·pres·sion/ (su-presh´un) 1. the act of holding back or checking. 2. sudden stoppage of a secretion, excretion, or normal discharge. 3. contracts at Northwest and Southwest Airlines. Also, we have established a relationship with BF Goodrich for smoke detection and fire suppression." Components-- Contacts, Connectors, Harness Assemblies and Displays DeCrane reported improved results from its components sales with a 13.1% increase for the quarter due to ongoing demand from its core base of aerospace clients, notably Boeing, Amphenol, AMP and ITT ITT Initial Teacher Training (UK) ITT I Think That ITT Invitation To Tender ITT Individual Time Trial (professional cycling) ITT Intention-To-Treat ITT In This Thread (forums) . Results for the quarter also include a 27.4% growth in revenues from Aerospace Display Systems. The company further noted improvements in its operating profit margins Operating profit margin The ratio of operating profit to net sales. , which highlight the positive impact from greater economies of scale as volume increases combined with the impact from the integration of the AMP facility with the companies other existing facilities." DeCrane remarked, "Identifying ways to improve our margins remains a key priority for us. Looking forward, we anticipate additional profit margin improvements from increased utilization of our facilities, as well as from the benefits from the inclusion of Audio International. We are proud that operating profit as a percent of revenues improved to 12.1% versus 9.8% in the previous year's quarter." Capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. At December 31, 1997, the company reported $99.1 million in total assets, $37.4 million in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and $39.5 million in stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. . The debt to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. ratio was 48.6%. The company further reported $24.0 million available under its $60.0 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, which in February was increased to $75.0 million. DeCrane reported $24.8 million of working capital. Bookings For the quarter, bookings increased 5.7% to $29.6 million versus $28.1 million in the fourth quarter of 1996. The modest increase in bookings reflect the continued softness in orders for Boeing, both direct and indirect, as a result of their previously announced production delays. Outlook DeCrane stated, "Continued growth in world air travel, as measured by changes in revenue passenger miles Revenue passenger miles (RPMs) is a measure of a passenger traffic for an airline flight, bus, or train calculated by multiplying the total number of revenue-paying passengers aboard the vehicle by the distance traveled measured in miles. and in load factors, supports the very strong growth outlook for the aerospace industry overall. Demand for new aircraft remains strong with Boeing and Airbus announcing a 38.3% increase in new aircraft deliveries for 1998 to 787 aircraft, up from 569 aircraft in 1997. This is after taking into consideration the recent slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in orders reported by Boeing and the potential impact from softness in demand from weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. Asian
markets." Added DeCrane, "We also expect strong growth to
continue in the corporate jet market as major new high-end corporate
aircraft, such as the Lear 45 and the Global Express, are certified and
come on stream with our product."
Added DeCrane, "We are also seeing a pick-up in selection of in-flight entertainment equipment by airlines with British Airways British Airways in full British Airways PLC International passenger airline based in London. In 1936 British Airways Ltd. was founded through the merger of three smaller airlines. and Qantas selecting Rockwell Collins Rockwell Collins, Inc. (NYSE: COL) is a large United States-based international company headquartered in Cedar Rapids, Iowa, primarily providing aviation and information technology systems, solutions, and services to governmental agencies and aircraft manufacturers. and United selecting BE Aerospace. We are now working with five of the six in-flight entertainment vendors." Except for historical information contained herein, this document contains 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. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements involve known and unknown risks and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by regulatory and other factors beyond the Company's control. Important factors that the Company believes might cause such differences are discussed in the cautionary statements accompanying the forward-looking statements in the Company's Prospectus, dated April 16, 1997, filed with the Securities and Exchange Commission and subsequent filings. In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary statements contained in those filings with the Securities and Exchange Commission. DeCrane Aircraft Holdings, Inc. is a leading manufacturer of avionics components and a provider of avionics systems integration services in certain niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. of the commercial aircraft industry. The Company's products and services typically are utilized to provide an interface between an aircraft and its avionic a·vi·on·ics n. 1. (used with a sing. verb) The science and technology of electronics and the development of electronic devices as applied to aeronautics and astronautics: systems. For more information about DeCrane Aircraft Holdings, Inc. via facsimile simply call 1-800-PRO-INFO and dial client code "DAHX". -0-
DECRANE AIRCRAFT HOLDINGS, INC.
Consolidated Income Statements
(In thousands, except per share data)
Three Months Twelve Months
Ended December 31, Ended December 31,
1997 1996 (1) 1997 1996
(Unaudited)
Revenues $ 28,016 $ 22,040 $108,903 $ 65,099
Cost of sales 19,583 16,036 80,247 49,392
-------- -------- -------- --------
Gross profit 8,433 6,004 28,656 15,707
Operating expenses 5,033 3,846 16,661 11,456
-------- -------- -------- --------
Operating profit 3,400 2,158 11,995 4,251
Other expenses
Interest expense 556 1,427 3,154 4,248
Other expenses 1 4 243 108
-------- -------- -------- --------
Income (loss) before
income taxes and
extraordinary charge 2,843 727 8,598 (105)
Provision for
income taxes 1,153 447 3,344 712
-------- -------- -------- --------
Income (loss)
before
extraordinary item 1,690 280 5,254 (817)
Extraordinary loss
from debt
refinancing, net of
income tax benefit -- -- (2,078) --
-------- -------- -------- --------
Net income (loss) 1,690 280 3,176 (817)
Adjustment to
redemption value
of mandatorily
redeemable common
stock warrants -- (4,825) (2,203) (4,320)
Cumulative
convertible
preferred stock
dividends -- (376) (442) (1,220)
-------- -------- -------- --------
Net income (loss)
applicable to
common stockholders $
$ 1,690 $ (4,921) $ 531 $ (6,357)
======== ======== ======== ========
Pro forma, as
adjusted (Unaudited)
Income per common
share (diluted) (2) $ .30 $ .19 $ 1.10 $ .50
Income applicable
to common
stockholders (3) $ 1,690 $ 1,036 $ 6,154 $ 2,589
Weighted average
number of common
and dilutive common
equivalent shares
outstanding (4) 5,630 5,558 5,606 5,209
(See accompanying notes)
DECRANE AIRCRAFT HOLDINGS, INC.
Notes to Consolidated Income Statements
-------------------------------------------------------------------------------
Notes:
(1) Certain reclassifications have been made to the prior
quarters' presentation to conform to the 1997 presentation.
(2) Computed based upon pro forma income applicable to common
stockholders (Note 3) and pro forma as if the following had
occurred as of the beginning of each period presented: (i)
the 3.53 for 1 reverse stock split and the recapitalization
described in the Company's Prospectus; and (ii) the sale by
the Company of 2,700,000 shares of common stock in its
initial public offering as described in the Company's
Prospectus.
(3) For 1997, pro forma for the sale by the Company of 2,700,000
shares of common stock in its initial public offering and
the application of the net proceeds therefrom as described
in the Company's Prospectus as if it had occurred on January
1, 1997.
For 1996, pro forma as if the following had occurred as of
January 1, 1996: (i) the sale by the Company of 2,700,000
shares of common stock in its initial public offering and
the application of the net proceeds therefrom as described
in the Company's Prospectus; and (ii) the ADS and Minority
Interest acquisitions as described in the Company's
Prospectus.
All periods exclude the effect of a $2,078,000 extraordinary
loss incurred from the Company's debt refinancing with the
net proceeds from the initial public offering.
(4) Pro forma as if the following had occurred as of the
beginning of each period presented: (i) the 3.53 for 1
reverse stock split and the recapitalization described in
the Company's Prospectus; and (ii) the sale by the Company
of 2,700,000 shares of common stock in its initial public
offering as described in the Company's Prospectus.
DECRANE AIRCRAFT HOLDINGS, INC.
Consolidated Balance Sheet Data
(in thousands)
Dec. 31, Dec. 31,
1997 1996
Assets
Current assets
Cash and cash equivalents $ 206 $ 320
Accounts receivable, net 18,152 13,185
Inventories 25,976 19,573
Prepaid expenses
and other
current assets 782 812
------- -------
Total current assets 45,116 33,890
------- -------
Property and
equipment, net 14,054 12,187
Other assets,
principally
intangibles, net 39,967 23,189
======= =======
Total assets $99,137 $69,266
======= =======
Liabilities and
Stockholders' Equity
Current liabilities
Short-term borrowings $ 568 $1,974
Current portion
of long-term
obligations 858 3,004
Convertible
subordinated
notes payable -- 2,922
Accounts payable 8,032 7,420
Accrued expenses 6,911 7,241
Income taxes payable 3,975 843
------- -------
Total current
liabilities 20,344 23,404
------- -------
Long-term liabilities
Long-term obligations 37,412 34,350
Deferred income taxes 1,758 3,312
Minority interest 96 85
------- -------
Total long-term
liabilities 39,266 37,747
------- -------
Mandatorily
redeemable
common stock
warrants -- 6,879
------- -------
Stockholders' equity
Preferred stock -- 13,850
Common stock 53 216
Additional paid-in
capital 51,057 --
Accumulated deficit (11,444) (12,951)
Foreign currency
translation (139) 121
------- -------
Total stockholders'
equity 39,527 1,236
======= =======
Total liabilities
and stockholders'
equity $99,137 $69,266
======= =======
CONTACT: DeCrane Aircraft Holdings Robert A. Rankin, 310/725-9123 or Financial Relations Board Karen Taylor Karen Taylor is an English comedienne from Barrow-in-Furness, Cumbria. She is a former finalist in the prestigious Daily Telegraph Open Mic Award[1] and has fronted her own sketch show on BBC Three, entitled Touch Me, I'm Karen Taylor. , 310/442-0599 (General Information) Moira Conlon, 310/442-0599 (Investor/Analyst) |
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