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Mr. Aaron Hollander, Chairman and CEO of First Aviation, said: "The team continues to make progress in improving efficiencies and customer service while reducing costs. The markets we compete in have suffered significant erosion due to the economic downturn. Corporate flight hours are down 30% to 40% and charter operators have reported even worse results. OEM's are slashing production and airlines face further reductions in capacity. Notwithstanding the difficult economy, we have controlled costs and improved customer service levels. We are increasing our competitiveness and are focusing on strategic partnerships that will increase market share and improve profitability."
The company reported that the delay in reporting the first quarter financials was the result of a restatement in the prior periods' financial statements as more fully described in the annual report for the year ended January 31, 2009. Financial statements for the period ended January 31, 2009 are available on the company's website.
First Aviation and its principal operating subsidiary Aerospace Products International, Inc. ("API"), headquartered in Memphis, Tennessee, is a leading provider of services to the aviation industry worldwide. With locations in the U.S., Canada, Asia Pacific, and China plus partners throughout the world, services to the aviation industry include the sale of aircraft parts and components, the provision of supply chain management services, and overhaul and repair services.
More information about First Aviation can be found on the Company's and API's websites, which are located at http://www.favs.com and http://www.apiworldwide.com.
Forward-Looking Statements
Certain statements discussed in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. Such forward-looking statements, including those concerning our expectations, involve known and unknown risks, uncertainties and other factors, some of which are beyond the Company's control, that may cause our 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. Such risks, uncertainties and other important factors include, among others: our ability to obtain parts and components from principal suppliers on a timely basis; depressed domestic and international market and economic conditions; especially those currently facing the aviation industry as a whole, including terrorism and terrorism related impacts, the impact of changes in fuel and other freight related costs, major adverse weather related effects such as hurricanes impacting our customer base, relationships with customers, the ability of our customers to meet their financial obligations to us, our ability to obtain and service supply chain management contracts, changes in regulations or accounting standards, the ability to consummate suitable acquisitions and expand, the loss of the use of facilities and distribution hub in Southaven, Mississippi, significant failure of our computer systems, telephone systems or networks, and other items that are beyond our control and may cause actual results to differ from management's expectations. The Company undertakes no obligation to update any forward-looking statements or cautionary factors except as required by law.
First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share and per share amounts)
Three months ended
April 30,
2009 2008
----------- -----------
(unaudited) (unaudited)
Net sales $ 26,431 $ 29,499
Cost of sales 22,317 24,593
----------- -----------
Gross profit 4,114 4,906
Selling, general and administrative expenses 3,784 4,519
Corporate expenses 320 367
----------- -----------
Income from operations 10 20
Net interest income (expense) (192) (307)
Foreign currency transaction gain (loss) - (1)
----------- -----------
Loss before income taxes (182) (288)
Provision for income taxes - (4)
----------- -----------
Net loss $ (182) $ (292)
=========== ===========
(EBIDTA) Earnings before interest, taxes,
depreciation and amortization $ 297 $ 445
=========== ===========
Basic net loss per share, and net loss per share
- assuming dilution:
Basic net loss per share $ (0.02) $ (0.04)
=========== ===========
Net loss per share - assuming dilution $ (0.02) $ (0.04)
=========== ===========
Weighted average shares outstanding - basic 7,534,569 7,423,220
=========== ===========
Weighted average shares outstanding - assuming
dilution 7,534,569 7,423,220
=========== ===========
First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands, except share and per share amounts)
April 30, January 31,
2009 2009
----------- -----------
(unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 1,349 $ 1,304
Trade receivables, net of allowance for
doubtful accounts of $926 and $1,013,
respectively 12,976 14,492
Inventory, net of allowance for obsolete
and slow moving inventory of $4,354 and
$4,425, respectively 28,480 29,471
Prepaid expenses and other 1,246 1,362
----------- -----------
Total current assets 44,051 46,629
Plant and equipment, net 2,958 3,253
----------- -----------
Total Assets $ 47,009 $ 49,882
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 11,195 $ 11,651
Accrued compensation and related expenses 251 290
Other accrued liabilities 1,400 1,280
Revolving line of credit 18,419 20,630
Notes payable 537 537
----------- -----------
Total current liabilities 31,802 34,388
Related Party - JEM III LLC 2,000 2,000
----------- -----------
Total liabilities 33,802 36,388
Stockholders' equity:
Common stock, $0.01 par value, 10,000,000
shares authorized, 9,135,699 shares issued 91 91
Additional paid-in capital 38,318 38,288
Accumulated deficit (16,972) (16,761)
Accumulated other comprehensive income 153 229
----------- -----------
21,590 21,847
Less: Treasury stock, at cost, 1,601,130
and 1,601,130 shares, respectively (8,383) (8,353)
----------- -----------
Total stockholders' equity 13,207 13,494
----------- -----------
Total liabilities and stockholders' equity $ 47,009 $ 49,882
=========== ===========
First Aviation Services Inc.
Consolidated Condensed Statements of Cash Flows (Unaudited)
(in thousands)
Three months ended
April 30,
2009 2008
------------ ------------
(unaudited) (as restated)
Cash flows from operating activities
Net loss $ (182) $ (292)
Adjustments to reconcile net loss to net
cash used in operating activities - non-cash
expense (income):
Depreciation and amortization 287 425
Equity based compensation - 6
(Increase) decrease in working capital assets:
Trade receivables 1,516 1,217
Inventory 991 191
Prepaid expenses and other 116 (452)
(Increase) decrease in working capital
liabilities:
Accounts payable (470) (1,475)
Accrued compensation and related
expenses, and other accrued liabilities 81 525
------------ ------------
Net cash used in operating activities 2,339 145
Cash flows from investing activities
Purchases of plant and equipment (8) (188)
------------ ------------
Net cash used in investing activities (8) (188)
Cash flows from financing activities
Borrowings (repayments), net on revolving line
of credit (2,211) 1,097
Repayments on notes payable - (86)
------------ ------------
Net cash provided by (used in) financing
activities (2,211) 1,011
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents (75) (44)
Net decrease in cash and cash equivalents 45 924
Cash and cash equivalents at beginning of
period 1,304 750
------------ ------------
Cash and cash equivalents at end of period $ 1,349 $ 1,674
============ ============
Contact: James Howell Chief Financial Officer Aerospace Products International, Inc. (203) 291-3300
SOURCE: First Aviation Services Inc.
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