First Aviation Announces Second Quarter Results.Business Editors 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.--(BUSINESS WIRE)--Aug. 29, 2002 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 ), a leading provider of products and services to the aerospace industry worldwide, today announced second quarter 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 $26.2 million. Gross profit grew 3.4% on 5.1% lower net sales due to the increasing proportion of logistics services versus lower margin traditional distribution sales. The Company incurred a net loss of $0.02 per share after a charge of $0.02 per share to increase its receivable reserves. For the second quarter ended July July: see month. 31, 2002, net sales were $26.2 million compared to $27.6 million for the prior year. Gross profit increased to $5.9 million from $5.7 million reported in the prior year. The Company incurred a loss from operations of $0.3 million for the quarter, compared to breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations for the same period of the prior year. During the quarter the Company took a charge of $0.2 million to increase its reserves for estimated uncollectible accounts Uncollectible account An account which cannot be collected by a company because the customer is not able to pay or is unwilling to pay. receivable. For the three months ended July 31, 2002, the Company incurred a loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.1 million, or $0.02 per share, compared to income of $0.1 million, or $0.01 per share reported for the same period of the prior year. Without the charge relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc receivable reserves, the Company would have reported breakeven from continuing operations and on a per share basis. During the second quarter of the prior year, the Company recorded a net credit of $0.7 million, or $0.10 per share, for income from disposition of subsidiary. There was no such income or loss reported in the current year. Overall, for the three months ended July 31, 2002, the Company incurred a net loss of $0.1 million compared to net income of $0.8 million for the three months ended July 31, 2001. On a per share basis, the Company incurred a loss of $0.2 per share for the quarter ended July 31, 2002 compared to net income of $0.11 per share in the second quarter of the prior year. 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 that "Logistics services continues to perform well as aerospace companies strive for increased efficiency. As we have previously announced, our strategic vision was to grow this profitable area of our business and we are executing on this strategy. During the quarter, we announced that we had signed a multi-year logistics services contract with Gulfstream Aerospace Gulfstream Aerospace Corporation is a producer of several models of private jet aircraft. Gulfstream Aerospace Corporation has been a unit of General Dynamics since 2001. Gulfstream's main facility is located in Savannah, Georgia, United States. Corporation for its aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. service and support business. We expect to see the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact on earnings of this contract starting in the third quarter. In addition, we continue to look for other opportunities and new logistics services customers. With $32.8 million in cash and low debt levels our balance sheet still is the strongest in the industry. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the quarter again was strong at $0.8 million. We have generated $2.6 million net of cash from operations in this fiscal year." Mr. Culver cul·ver n. A dove or pigeon. [Middle English, from Old English culufre, from Vulgar Latin *columbra, from Latin columbula, diminutive of columba, dove.] further stated that, "We continue to operate in a difficult environment. We have seen several bankruptcies in our industry over the past month, though we did not have any significant exposure relating to these bankruptcies. As a result of this environment, however, we re-assessed our reserves for uncollectible accounts receivable, and took a charge of $0.2 million to increase our reserves." For the six months ended July 31, 2002, the Company reported net sales of $51.2 million, compared to $53.1 million for the same period of the prior year. Gross profit increased to $11.5 million from $10.9 million, an increase of 5.6%. The Company incurred a loss of $0.2 million from operations for the six months ended July 31, 2002 compared to a loss of $0.1 million in the prior year. Without the charge to increase reserves for uncollectible accounts receivable the Company would have had slight income from operations. The loss from continuing operations before cumulative effect of accounting change was $0.1 million, or $0.01 per share, compared to income of $0.2 million, or $ 0.02 per share for the six months ended July 31, 2001. The Company had income from disposition of subsidiary of $0.7 million, or $0.10 per share, for the six months ended July 31, 2001. There was no such income or loss reported in the current year. In the first quarter of the current year, as required, the Company adopted Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). Pronouncement No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " ("FAS 142"). Upon adoption the Company took a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. , non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $2.7 million, or $0.38 per share after applicable income tax benefit, to write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of its goodwill. The adoption of FAS 142 represented a change in accounting principle, and the cumulative effect was reported on a separate line in the Consolidated Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Statements of Operations. After this charge, for the six months ended July 31, 2002 the Company incurred a net loss of $2.8 million, or $0.39 per share, compared to net income of $0.9 million, or $0.12 per share for the six months ended July 31, 2001. 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. is a worldwide leader in providing aerospace products and services to aircraft operators of some of the most widely used commercial and general aviation aircraft. Its operations include Aerospace Products International, Inc. ("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. "), 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. . In addition to the product lines it distributes, API offers overhaul and repair services for brakes and starter/generators, and builds custom hose assemblies. API also is a leading provider of supply chain management and customized third party logistics services, including inventory management services, to the aerospace industry. 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 fastest growing providers of aviation products and inventory management solutions in the industry. The Company will host a conference call to discuss second quarter results on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , August 30, 2002 at 10:00 am EST EST electroshock therapy. EST abbr. electroshock therapy . Interested parties should call 1 (800) 370-0906 before 9:45 am EST. A replay will be available through Tuesday, September 3, 2002. Please call (877) 519-4471; PIN is 3469044. More information about First Aviation can be found on the World Wide Web at http://www.firstaviation.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. Information included in this release may contain 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 by such forward-looking statements. In evaluating such statements, as well as the future prospects of the Company, specific consideration should be given to various factors, including the Company's ability to obtain parts and components from its principal suppliers on a timely basis, domestic and international market and economic conditions, especially those currently facing the aviation industry as a whole, the impact changes in of fuel and other freight related costs, the Company's relationships with its customers, the ability to obtain and service supply chain management contracts, 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 other items that are beyond the Company's control and may cause actual results to differ from management's expectations.
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share amounts)
(unaudited)
Three months ended Six months ended
July 31, July 31,
2002 2001 2002 2001
--------- --------- --------- ---------
Net sales $ 26,165 $ 27,564 $ 51,164 $ 53,136
Cost of sales 20,280 21,875 39,658 42,238
--------- --------- --------- ---------
Gross profit 5,885 5,689 11,506 10,898
Selling, general and
administrative expenses 5,501 4,982 10,461 9,716
--------- --------- --------- ---------
Operating income before
corporate expenses 384 707 1,045 1,182
Corporate expenses 679 731 1,233 1,312
--------- --------- --------- ---------
Income (loss) from operations (295) (24) (188) (130)
Net interest income and other 68 113 99 325
Minority interest in
subsidiary (11) (11) (21) (21)
--------- --------- --------- ---------
Income (loss) from continuing
operations before income
taxes (238) 78 (110) 174
Benefit (provision) for
income taxes 93 (8) 43 (17)
--------- --------- --------- ---------
Income (loss) from continuing
operations before cumulative
effect of accounting change (145) 70 (67) 157
Income from disposition of
subsidiary, net of provision
for income taxes of $ - - 707 - 707
Cumulative effect of
accounting change, net - - (2,735) -
--------- --------- --------- ---------
Net income (loss) $ (145) $ 777 $ (2,802) $ 864
========= ========= ========= =========
Basic net income (loss) per
common share, and net income
(loss) per common share -
assuming dilution:
Income (loss) from
continuing
operations before
cumulative effect of
accounting change $ (0.02) $ 0.01 $ (0.01) $ 0.02
Income from disposition
of subsidiary - 0.10 - 0.10
Cumulative effect of
accounting change, net - - (0.38) -
--------- --------- --------- ---------
Basic net income (loss) per
common share, and net income
(loss) per common share -
assuming dilution $ (0.02) $ 0.11 $ (0.39) $ 0.12
========= ========= ========= =========
Weighted average common
shares outstanding - basic 7,219,300 7,194,419 7,216,747 7,190,502
========= ========= ========= =========
Weighted average common
shares outstanding
- assuming dilution N/A 7,211,742 N/A 7,199,785
========= ========= ========= =========
First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands)
July 31, January 31,
2002 2002
--------- ---------
(unaudited) (a)
Assets
Current assets:
Cash and cash equivalents $ 32,780 $ 31,113
Trade receivables, net of
allowance for doubtful
accounts of $778 and
$707, respectively 14,211 15,396
Inventory, net of allowance
for obsolete and slow
moving inventory of $954
and $885, respectively 21,139 23,016
Prepaid expenses, deferred
income taxes and other 4,702 3,034
--------- ---------
Total current assets 72,832 72,559
Plant and equipment, net 3,960 4,100
Goodwill and other intangibles, net 30 3,885
--------- ---------
$ 76,822 $ 80,544
========= =========
Liabilities and stockholders'
equity Current liabilities:
Accounts payable $ 11,750 $ 11,464
Accrued compensation and
related expenses, and other
accrued liabilities 1,913 2,748
Income taxes payable 1,293 1,293
Obligations under capital
leases 56 180
--------- ---------
Total current liabilities 15,012 15,685
Revolving line of credit 14,500 14,800
Minority interest in
subsidiary 1,041 1,041
--------- ---------
Total liabilities 30,553 31,526
Stockholders' equity:
Common stock, $0.01 par
value, 25,000,000 shares
authorized, 7,224,774 and
7,213,753 shares outstanding,
respectively 91 91
Additional paid-in capital 38,487 38,516
Retained earnings 17,926 20,728
Accumulated other
comprehensive loss (186) (193)
--------- ---------
56,318 59,142
Less: Treasury stock, at
cost (10,049) (10,124)
--------- ---------
Total stockholders' equity 46,269 49,018
--------- ---------
Total liabilities and
stockholders' equity $ 76,822 $ 80,544
========= =========
(a) Balances were derived from the audited balance sheet as of
January 31, 2002.
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