SOURCE: Global Aircraft Solutions, Inc.

May 15, 2008 14:09 ET

Global Aircraft Solutions Announces First Quarter 2008 Financial Results and Conference Call

2008 First Quarter Conference Call on Friday, May 16th at 1:00 p.m. Eastern

TUCSON, AZ--(Marketwire - May 15, 2008) -


Q1 2008 Highlights

--  Revenue totaled $6.9 million compared to $6.2 million in the first
    quarter of 2007
--  Operating Profit was $472,967 and Net income totaled $53,782 as the
    Company returned to profitability
--  The Company's Hamilton Aerospace Technologies subsidiary posted a pre-
    tax operating profit of $583,026 compared to a loss of $2,568,445 in the
    fourth quarter of 2007
--  The Company's World Jet Corporation subsidiary posted a pre-tax
    operating profit of $220,868 compared to loss of $156,470 in the fourth
    quarter 2007
    

Global Aircraft Solutions, Inc. (OTCBB: GACF), an integrated aviation company engaged in aircraft trading, aircraft parts sales, and scheduled maintenance, repair and overhaul (MRO) services for commercial airlines, charter airlines and aviation leasing companies, today announced its financial results for the first quarter ended March 31, 2008.

Net sales for the three months ended March 31, 2008 increased approximately $650,000, or 10.4%, to $6.88 million from $6.23 million for the three months ended March 31, 2007. Cost of sales for the three months ended March 31, 2008 increased approximately $149,000, or 3.6%, to $4.28 million from $4.13 million for the three months ended March 31, 2007. Cost of sales, as a percentage of revenue, decreased in the first quarter of 2008 to 62.1% from 66.2% for the same period in 2007. Gross profit for the three months ended March 31, 2008 totaled $2.6 million or 37.9% compared to $2.1 million or 33.8%, for the first quarter of 2007.

The Company reported an operating profit of $472,967 and a net income of $53,782 for the first quarter of 2008 compared to $503,557 operating profit and $334,865 net income for the first quarter 2007. The lower operating profit during Q1 of 2008 was attributed to a commission paid on an aircraft sale during the quarter of $380,000, while no commissions were paid in Q1 of 2007. The disproportionately lower net income in Q1 2008 compared to Q1 2007 is principally due to the higher interest costs incurred in the first quarter 2008. Interest expense increased to $395,814 for the quarter, from $131,600 a year ago. The interest expense is expected to decrease over the next year as the Company pays down and restructures its debt. Additionally, the Company had a one-time gain from a previous joint venture of $214,800 last year. The two items accounted for a decrease in earnings of $479,014 from Q1 of 2007 to Q1 of 2008. These results for the first quarter of 2008 compare to an operating loss of $5.6 million and a net loss of $3.65 million for the fourth quarter of 2007.

On the balance sheet, the Company reported total current assets of $26.9 million and total assets of $28.1 million. The current ratio improved to 1.91 to 1 from 1.72 to 1 in the same period of 2007. Current liabilities were decreased by $1.7 million as the Company's cash flow improved. Total liabilities for the quarter totaled $14.2 million from $15.8 million at yearend, as the Company paid down their senior debt by $1 million. Diluted share count for the quarter ending March 31, 2008 was 42 million, versus 40.9 million one year ago. Stockholders' equity was $13.9 million or $.33/share fully diluted.

Gordon Hamilton, CEO of Hamilton Aerospace and World Jet, stated, "All the employees of Hamilton and World Jet are to be commended for the way they have pulled together to quickly return both our operating subsidiaries to profitability. In the first quarter of this year, we were able to add Canadian North, SEDENA, Afrijet and Wind Rose to our customer base. Since that time, we have also successfully expanded our FAA-approved capabilities to include the next generation 737-600s through 737-900s. If we continue to focus on what we do best, there is no reason that both World Jet and Hamilton Aerospace should not continue to flourish."

John Sawyer, President of Global Aircraft Solutions, commented, "In the first quarter we were able to sell one of our 737-200s to Canadian North and reinstate with Pamir a sale on a second aircraft out of our 737-200 inventory. We also have a $500,000 non-refundable deposit from Pamir for a third 737-200. Finally, in the first quarter of this year we also sold our MD82 to Wind Rose Aviation. All these sales have converted inventory into cash, allowing us to significantly pay down our senior lender and improve our liquidity. While we cannot disclose other pending transactions until they are finalized, we are making significant progress selling our remaining aircraft assets and resolving some of our larger outstanding receivables. We plan on updating shareholders further in the near future."

Ian Herman, Chairman of Global Aircraft Solutions, added, "I am proud of the efforts made by our entire team to restore our Company to profitability after the events that transpired in 2007. As we continue to resolve and improve our liquidity, we have every reason to expect similar improvements in earnings. While these first quarter results are only a first step back in the right direction, I want to assure all our investors that in spite of the widespread setbacks in the aviation industry at large, our business opportunities remain strong."

Conference Call

The conference call will take place at 1:00 p.m. Eastern, on Friday, May 16, 2008. Anyone interested in participating should call 1-800-762-8779 if calling within the United States, or 1-480-248-5081 if calling internationally, approximately 5 to 10 minutes prior to 1:00 p.m. There will be a playback available until May 23, 2008. To listen to the playback, please call 1-800-406-7325 if calling within the United States or 1-303-590-3030 if calling internationally. Please use pass code 3880517 for the replay.

This call is being webcast by ViaVid Broadcasting and can be accessed at Global's Web site at http://www.globalaircraftsolutions.com. The webcast may also be accessed at ViaVid's Web site at http://www.viavid.net. The webcast can be accessed through June 16, 2008, on either site.

About Global Aircraft Solutions

Global Aircraft Solutions provides parts support and maintenance, repair and overhaul (MRO) services for large passenger jet aircraft to scheduled and charter airlines and aviation leasing companies. Hamilton Aerospace and World Jet, both divisions of Global Aircraft Solutions, operate from adjacent facilities comprising about 35 acres located at Tucson International Airport. These facilities include hangars, workshops, warehouses, offices and other buildings. Notable customers include Pamir Airways, Wind Rose Aviation, Jetran International, the Mexican Presidential Fleet, SEDENA, Canadian North Airlines, CanJet Airlines, Iraqi Airways, Ryan International Airlines and Alant Soyuz.

Global's website is located at www.globalaircraftsolutions.com. The Hamilton Aerospace website is located at www.hamaerotech.com.

Except for the historical information presented, this press release contains "forward-looking statements" made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 or regulations thereunder including, but not limited to expected and estimated revenue and earnings. Forward-looking statements are made based upon management's expectations and belief concerning future developments and their potential effect upon the Company. There can be no assurance that future developments will be in accordance with management's expectations or that the effect of future developments on the Company will be those anticipated by management.

The words "believes," "expects," "intends," "plans," "anticipates," "hopes," "likely," "will," and similar expressions identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company or its subsidiaries or industry results, to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements. These risks include the economic health of the airline industry, demand for Global Aircraft Solutions' services, and competitive pricing pressures.

In addition, other risks are detailed in Global's Form 10-KSB for the year ended December 31, 2007, Global's Form 10-Q for the quarter ended March 31, 2007, Global's 10-Q for the quarter ended June 30, 2007 and Global's Form 10-Q for the quarter ended September 30, 2007. These statements speak only as of above date, and Global disclaims any intent or obligation to update them.

                      GLOBAL AIRCRAFT SOLUTIONS, INC.
                  Condensed Consolidated Balance Sheets
                   March 31, 2008 and December 31, 2007
                                (unaudited)


                                  ASSETS

                                                   March 31,   December 31,
                                                      2008         2007
                                                  ------------ ------------
CURRENT ASSETS
Cash and cash equivalents                         $    269,176 $  1,221,598
Accounts receivable, net                             8,735,347    7,412,120
Due from equity investee partner                       347,000      472,000
Inventory                                           14,977,569   16,429,501
Restricted funds                                       372,005      196,181
Deferred income taxes                                1,682,948    1,682,948
Other current assets                                   561,136      752,784
                                                  ------------ ------------

   TOTAL CURRENT ASSETS                             26,945,181   28,167,132

Property, plant and equipment, net                     922,906    1,024,837
Investments in and advances to affiliates               20,000       20,000
Goodwill                                                38,992       38,992
Deferred taxes                                          76,718       76,718
Other assets                                           123,288      366,469
                                                  ------------ ------------

   TOTAL ASSETS                                   $ 28,127,085 $ 29,694,148
                                                  ============ ============

The accompanying notes, which are not included in this press release, are
an integral part of these condensed consolidated financial statements.





                      GLOBAL AIRCRAFT SOLUTIONS, INC.
                  Condensed Consolidated Balance Sheets
                   March 31, 2008 and December 31, 2007
                                (unaudited)


                   LIABILITIES AND STOCKHOLDERS' EQUITY

                                                  March 31,   December 31,
                                                    2008          2007
                                                ------------  ------------
CURRENT LIABILITIES
Notes payable                                   $  9,085,479  $ 10,268,091
Notes payable, related party                         300,000           ---
Accounts payable - trade                           1,926,603     3,051,776
Customer deposits                                    465,097       419,076
Billings in excess of costs and estimated
 earnings on contracts in progress, net            1,099,113       822,782
Accrued liabilities                                  436,350       484,109
Income taxes payable                                 702,413       673,453
Current maturities - capital lease obligations        63,540        62,038
                                                ------------  ------------

   TOTAL CURRENT LIABILITIES                      14,078,595    15,781,325

LONG-TERM LIABILITIES


Capitalized lease obligations                        154,904       170,990
                                                ------------  ------------

   TOTAL LONG-TERM LIABILITIES                       154,904       170,990
                                                ------------  ------------

TOTAL LIABILITIES                                 14,233,499    15,952,315
                                                ============  ============

Commitments and contingencies

STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value, 5,000,000
 shares authorized no shares issued or
 outstanding 2008 and 2007                               ---           ---
Common stock, $.001 par value, 100,000,000
 shares authorized and 40,181,301 and
 39,587,807 shares issued and outstanding
 2008 and 2007                                        40,181        40,181
Additional paid-in capital                        13,853,944    13,755,973
Contributed capital                                  620,289       620,289
Accumulated deficit                                 (620,828)     (674,610)
                                                ------------  ------------

   TOTAL STOCKHOLDERS' EQUITY                     13,893,586    13,741,833
                                                ============  ============

   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 28,127,085  $ 29,694,148
                                                ============  ============

The accompanying notes, which are not included in this press release, are
an integral part of these condensed consolidated financial statements.





                      GLOBAL AIRCRAFT SOLUTIONS, INC.
              Condensed Consolidated Statements of Operations
       For the Three Months ended March 31, 2008 and March 31, 2007
                                (unaudited)

                                               Three Months   Three Months
                                                   Ended          Ended
                                                 March 31,      March 31,
                                                   2008           2007
Sales
   Sales, maintenance, repair and overhaul    $   3,571,155  $   5,534,331
   Sales, aircraft trading                        1,993,750         50,000
   Sales, parts                                   1,106,462        630,669
   Sales, other                                     207,618         14,000
                                              -------------  -------------
Total sales                                       6,878,985      6,229,000
Cost of sales
   Cost of sales, maintenance, repair and
    overhaul                                     (2,306,565)    (3,751,280)
   Cost of sales, aircraft trading               (1,220,131)          (234)
   Cost of sales, parts                            (569,645)      (374,009)
   Cost of sales, other                            (140,768)          (435)
   Inventory write-down                             (37,938)           ---
                                              -------------  -------------
Total cost of sales                              (4,275,047)    (4,125,958)
                                              -------------  -------------

Gross profit                                      2,603,938      2,103,042

Selling, general and administrative expense      (2,130,971)    (1,599,485)
                                              -------------  -------------

Income from operations                              472,967        503,557

Other income (expense):
      Interest income                                 4,492          6,443
      Interest expense                             (395,814)      (131,600)
      Miscellaneous income                            2,174         21,999
      Miscellaneous expense                             ---       (100,000)
      Equity in income of unconsolidated
       affiliate                                        ---        214,800
                                              -------------  -------------

Net income, before taxes                             83,819        515,199
      Provision for income taxes                    (30,037)      (180,334)
                                              -------------  -------------

Net income                                    $      53,782  $     334,865
                                              =============  =============
Net income per share, Basic 2008 1st Qtr
 40,181,301 shares; 2007 1st Qtr 39,624,241
 shares.                                      $        0.00  $        0.01
Net income per share, Diluted 2008 1st Qtr
 42,015,419 shares; 2007 1st Qtr 40,938,253
 shares.                                      $        0.00  $        0.01
                                              =============  =============

The accompanying notes, which are not included in this press release, are
an integral part of these condensed consolidated financial statements.

Contact Information

  • Contact:
    Global Aircraft Solutions, Inc.
    Ian Herman
    (520) 275-6059
    Email Contact
    Or
    Alliance Advisors, LLC
    Alan Sheinwald
    914-669-0222
    Email Contact