Printer Friendly

UNC ANNOUNCES PRODUCT LINE RATIONALIZATION

 ANNAPOLIS, Md., Oct. 6 /PRNewswire/ -- UNC Incorporated (NYSE: UNC) announced today that its subsidiary, Pacific Airmotive, is exiting the JT8 engine overhaul business.
 The JT8, which is one of the 15 engine product lines that Pacific Airmotive and other UNC subsidiaries service, accounted for 7 percent of UNC's consolidated 1993 revenues through Sept. 30th.
 The Company said that this decision had been reached because of the continuing deterioration of the JT8 overhaul market which began in late 1992. The downturn in the JT8 market is due to the large number of useable surplus JT8 engines available on the market which has resulted from the earlier than expected retirement of JT8 powered aircraft. These surplus engines are being purchased by customers in lieu of overhauling their own engines. A detailed market study recently completed by UNC confirmed that the current glut of surplus JT8 engines will continue for several more years. Because of this long term outlook, it was determined that it would be in the Company's best interest to meet this problem head on with a proactive decision rather than wait for improved market conditions sometime in the future. Dan A. Colussy, CEO and Chairman of UNC, said, "The JT8 overhaul business is relatively small, is not an important long term strategic business for UNC and has begun to negatively impact earnings this year. For these reasons, it was decided to exit this product line and redeploy the approximately $25 million in cash freed up by this decision into our existing acquisition growth program. In addition, the elimination of the JT8 business will have a positive impact on 1993 fourth quarter and 1994 earnings."
 The Company said that Pacific Airmotive will absorb a loss projected at $2.5 million in the third quarter on its JT8 business. The Company said it believes that no asset writedowns will be necessary. The JT8 costs plus several other factors including a favorable tax adjustment will impact consolidated third quarter net earnings which the Company projects will be level with 1992's third quarter.
 Pacific Airmotive, in Burbank, Calif., will continue to provide profitable overhaul services for the Pratt & Whitney PT6 and PT6 Twin Pack Engines as a satellite facility under the management of the Company's Airwork overhaul operation. The Company said Pacific Airmotive will begin phasing out of the JT8 immediately and that work will be completed by year end.
 Colussy also said, "UNC will continue to build its presence in the aviation industry by focusing on higher return businesses including small engine overhaul for regional airlines, corporate and helicopter operators; aircraft accessory overhaul; the manufacture and repair of aircraft engine parts and airframe components; and providing aviation contract services. UNC intends to continue its aggressive acquisition and joint venture program and will utilize the capital freed up by this decision to supplement the funds available from its recent $100 million Senior Note offering. The Company remains dedicated to the aviation industry and is very enthusiastic about ongoing opportunities to profitably grow UNC".
 UNC Incorporated, listed on the New York Stock Exchange, is engaged in the manufacturing and remanufacturing of jet engine and aircraft components; the overhaul of aircraft accessories, aircraft engines and industrial gas turbine engines; the refurbishment and overhaul of helicopters; and in providing aircraft maintenance and pilot training contract services.
 -0- 10/6/93
 /CONTACT: Gregory M. Bubb of UNC, 410-266-7333/
 (UNC)


CO: UNC Incorporated; Pacific Airmotive ST: Maryland IN: AIR SU:

D

MJ -- PH016 -- 9333 10/06/93 12:28 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 6, 1993
Words:581
Previous Article:HAGAN ICE CREAM FAMILY GROWS WITH ADDITION OF NEW ALL NATURAL SUPER PREMIUM LINE
Next Article:NIKE: THERE'S STILL PLENTY OF AIR IN AIR JORDAN
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters