First Aviation Announces Record Sales for the First Quarter Ended April 30, 2004.WESTPORT Westport, residential town (1990 pop. 24,407), Fairfield co., SW Conn., on Long Island Sound at the mouth of the Saugatuck River; settled 1645–50, inc. 1835. It serves as a popular residence for New York City commuters. Westport has a summer theater. , Conn. -- First Aviation Services 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 : FAVS FAVS Fabbrica Armi Valle Susa FAVS Fighter Attack Visual System ), one of the leading providers of supply chain services to the aerospace industry worldwide, today announced record net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $30.2 million in the first quarter ended April 30, 2004. A net loss of $(410,000) or $(0.06) per share was incurred in the first quarter of the fiscal year versus net income of $120,000 or $0.02 per share in the first quarter ended April 30, 2003. For the three months ended April 30, 2004, net sales of $30.2 million increased by $4.6 million, or 18.0% over that reported in the prior year. Gross profit increased to $5.6 million, adding $738,000 or 15.0% over the prior year quarter. In the first quarter of the current fiscal year, net sales of parts and components increased in a majority of the customer sectors the company serves, notably in the general aviation, corporate flight departments, large corporate maintenance, repair and overhaul Maintenance, Repair and Overhaul or MRO is a multi-billion dollar industry which works on international authorization rules to deliver a safe airline operation and to assure reliability and availability of customer fleets. facilities, and retail and airline sectors. Mr. Michael Culver Michael Culver (born June 16, 1938 in Hampstead, London) is an English actor, best known to television viewers for his role as Major Erwin Brandt in the 1970s BBC drama Secret Army. He also played the strict Prior Robert ("Brother Prior") in the television series Cadfael. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of First Aviation, said: "Operating results at API (Application Programming Interface) A language and message format used by an application program to communicate with the operating system or some other control program such as a database management system (DBMS) or communications protocol. exceeded plan for the first quarter. We are pleased by the progress made in the prior three months which resulted in near across the board increases in sales at API." Selling, general and administrative expense increased 17.0% to 5.0 million in the current quarter from $4.3 million in the prior year quarter. The increases were due to a variety of factors, primarily increases in personnel costs related to the increased level of sales and management restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , and legal costs for ongoing litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Corporate expenses increased by $440,000 to $930,000 in the quarter ended April 30, 2004, due in part to expenses associated with a proxy contest Proxy contest A battle for the control of a firm in which a dissident group seeks, from the firm's other shareholders, the right to vote those shareholders' shares in favor of the dissident group's slate of directors. Also called proxy fights. by a dissident shareholder. "Profitability was negatively impacted by the increase in expenses" said Mr. Aaron Aaron (âr`ən), in the Bible, the brother of Moses and his spokesman in Egypt, and the first high priest of the Hebrews. He is presented as the instrument of God in performing many signs, such as the turning of his rod into a serpent and Hollander, Chairman of First Aviation. "We are disappointed to have incurred the costs associated with the proxy contest and shareholder proposals by a dissident shareholder, especially since we had stellar revenue growth in the first quarter." First Aviation, located in Westport, Connecticut Westport is a coastal town in Fairfield County, Connecticut, in the United States. The 2004 population estimate was 26,644. The town is as affluent as other expensive Fairfield County towns, boasting a per capita income of more than $70,000. and its principal operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , Aerospace Products International Inc. ("API"), based in Memphis, Tennessee For the ancient Egyptian capital, see . Memphis is a city in the southwest corner of Tennessee, and the county seat of Shelby County. Memphis rises above the Mississippi River on the 4th Chickasaw Bluff just below the mouth of the Wolf River. , is one of the leading providers of services to the aviation industry worldwide. The services the Company provides the aviation industry include the sale of aircraft parts and components, the provision of supply chain management services, overhaul and repair services for brakes and starter/generators, and the assembly of custom hoses. With locations in the U.S., Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and Asia Pacific, plus partners throughout the world, API continues to be one of the leading providers of aviation products, supply chain management services and technology solutions in the industry. More information about First Aviation can be found on the World Wide Web at http://www.favs.com and, http://www.apiparts.com. 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. Certain statements discussed in this release constitute forward-looking statements 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. Forward-looking statements are not statements of historical facts, but rather reflect the Company's current expectations concerning future events and results. Such forward-looking statements, including those concerning the Company's expectations, involve known and unknown risks, uncertainties and other factors, some of which are beyond the Company's control, that may cause the Company's actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Such risks, uncertainties and other important factors include, at a minimum, the Company's ability to obtain parts and components from its principal suppliers on a timely basis, depressed domestic and international market and economic conditions, especially those currently facing the aviation industry as a whole, the impact of changes in fuel and other freight related costs, relationships with its customers, the ability of the Company's customers to meet their financial obligations to the Company, the ability to obtain and service supply chain management contracts, changes in regulations or accounting standards, the ability to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. suitable acquisitions and expand, and other items that are beyond the Company's control may cause actual results to differ from management's expectations. In addition, specific consideration should be given to the various factors described in Item 7, "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended January January: see month. 31, 2004, and the various factors described in this release. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions, or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which the forward-looking statement is based.
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share and per share amounts)
Three months ended
April 30,
2004 2003
------------ ------------
(unaudited)
Net sales $30,215 $25,605
Cost of sales 24,603 20,731
------------ ------------
Gross profit 5,612 4,874
Selling, general and administrative expenses 4,990 4,266
Corporate expenses 930 490
------------ ------------
Income (loss) from operations (308) 118
Net interest income and other (82) 89
Minority interest in subsidiary (10) (10)
------------ ------------
Income (loss) before income taxes (400) 197
Benefit (provision) for income taxes (10) (77)
------------ ------------
Net income (loss) $(410) $120
============ ============
Basic net income (loss) per share, and net
income (loss) per share - assuming dilution:
Basic net income (loss) per share, and net
income (loss) per share - assuming
dilution $(0.06) $0.02
============ ============
Weighted average shares outstanding - basic 7,290,048 7,251,355
============ ============
Weighted average shares outstanding
- assuming dilution N/A 7,258,903
First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands, except share amounts)
April 30, January 31,
2004 2004
------------ ------------
(unaudited) *
Assets
Current assets:
Cash and cash equivalents $23,745 $25,144
Trade receivables, net of allowance
for doubtful accounts of $1,411 and
$1,418, respectively 15,164 13,499
Inventory, net of allowance for
obsolete and slow moving inventory of
$938 and $1,013, respectively 21,492 22,344
Prepaid expenses and other 1,001 1,032
------------ ------------
Total current assets 61,402 62,019
Plant and equipment, net 3,019 2,963
------------ ------------
$64,421 $64,982
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $11,331 $9,561
Accrued compensation and related
expenses, and other accrued
liabilities 2,270 2,376
Income taxes payable 942 939
------------ ------------
Total current liabilities 14,543 12,876
Revolving line of credit 12,650 14,500
Minority interest in subsidiary 1,041 1,041
------------ ------------
Total liabilities 28,234 28,417
Stockholders' equity:
Common stock, $0.01 par value,
25,000,000 shares authorized,
7,296,960 and 7,284,093 shares
outstanding 91 91
Additional paid-in capital 38,358 38,375
Retained earnings 7,144 7,554
Accumulated other comprehensive
income (loss) 211 238
------------ ------------
45,804 46,258
Less: Treasury stock, at cost (9,617) (9,693)
------------ ------------
Total stockholders' equity 36,187 36,565
------------ ------------
Total liabilities and stockholders' equity $64,421 $64,982
============ ============
* Balances were derived from the audited balance sheet as of
January 31, 2004.
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