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PRECISION AEROTECH REPORTS FIRST QUARTER RESULTS

    LA JOLLA, Calif., Sept. 15 /PRNewswire/ -- Precision Aerotech Inc. (NASDAQ: PAER) today announced sales of $11.4 million from continuing operations for the three months ended July 31, 1993 compared to $9.9 million for the same period one year earlier.  The company reported a net loss from continuing operations of $143,000 or $.06 per share after adjusting for the effect of preferred stock dividends, compared with a net loss of $699,000 or $.22 a share for the same period one year earlier.  After including a small gain from discontinued operations in the prior year, the current quarter net loss of $143,000 or $.06 per share compares with a net loss of $630,000 or $.20 per share for three months ended July 31, 1992.
    The increase in sales for the quarter ended July 31, 1993 is largely associated with one government and one commercial program at Speedring, Inc. ("Speedring"), which were halted, giving rise to claims by Speedring and other suppliers; with subsequent settlements, collection and sales recognition.  Without these impacts, sales for the current period would have been somewhat lower than the comparable period one year earlier due to lower government spare parts sales at L&S Aerotech Inc. ("L&S").
    Selling, general and administrative expenses were down significantly compared with the prior year period in all parts of the company except Speedring Systems Inc. ("Systems"), where planned sales growth and increased product development expenditures required increased spending.
    Operating income performance improved by $552,000 to $1.2 million for the reporting period compared to $649,000 for the comparable three- month period one year earlier.  The operating income and net income improvements resulted from the two Speedring contract settlements and the lower selling, general and administrative expenses discussed above.
    The market outlook for optical components designed and produced by Systems continues to be favorable.  Strong emphasis on commercial and government satellite and other space structures activity is helping to offset some of the decline in traditional strategic weapon navigational components at Speedring.  Weak government spare parts orders coupled with the previously announced reductions in customer commercial air transport production rates are providing a significant challenge for L&S.
    The two most important business issues continue to be debt restructuring and new business development.  Concentrated focus on new product, market, customer and program development continues throughout the company.
    Debt restructuring with the company's principal lenders continues. Until such time as the restructuring is completed, the company will remain in default of its credit agreements, long-term debt will remain classified as a current liability and the lenders, at their discretion, have the option of accelerating their respective debt.  If this were to occur, the company would not be able to meet its obligations and would be forced to file for protection under Chapter 11 of the bankruptcy code.  If the company is successful in its efforts to effect a consensual debt restructuring with its lenders, significant dilution of the common equity will result.  On Aug. 16, 1993, the company's stock began trading with NASDAQ under the symbol "PAER."
                        PRECISION AEROTECH INC.
                          Financial Highlights
      Consolidated Condensed Statements of Operations -(Unaudited)
            (In thousands, except shares and per share data)
                                             Three Months Ended
                                                   July 31,
                                              1993         1992
    Net Sales                                $11,388      $9,872
    Loss from continuing operations
     before income taxes                        (104)       (668)
    Income tax expense                            39          31
    Net loss from continuing operations        ($143)      ($699)
    Discontinued operations:
     Gain from operations of coast               ---          69
    Net Loss                                   ($143)      ($630)
    Earnings (loss) per share:
     Loss from continuing operations           ($.06)      ($.22)
     Earnings from discontinued operations       ---         .02
    Net loss                                   ($.06)      ($.20)
    Number of shares used in calculation   3,448,253   3,452,953
    -0-             09/15/93
    CONTACT:  R.W. Detweiler or S.R. Greene, 619-456-2992
    (PAER) CO:  PRECISION AEROTECH INC. IN:  ARO SU:  ERN ST:  CA


-- LA029 -- X260 09/15/93
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Date:Sep 15, 1993
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