SOURCE: Global Aircraft Solutions, Inc.

November 14, 2007 18:10 ET

Global Aircraft Solutions Announces Third Quarter Financial Results

TUCSON, AZ--(Marketwire - November 14, 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 third quarter ended September 30, 2007.

Net sales for the quarter ended September 30, 2007 decreased 41.8% to $4.6 million compared to $7.9 million for the same period ended September 30, 2006. Net sales for the nine months ended September 30, 2007 decreased $7.6 million, or 25.6%, to $22 million from $29.6 million for the nine months ended September 30, 2006.

The reduction in sales for the quarter took place in the maintenance and part sales divisions. Aircraft maintenance sales decreased $7.7 million and parts sales decreased $2.4 million for the nine months ended September 30, 2007 compared to the same period ended in 2006. The reduction in aircraft maintenance is a direct result of the high unpaid balances of two former clients, BCI and Avolar. In regards to the lower sales seen in the parts division, it was mainly attributable to the time spent on reorganizing, bar-coding, and shelving of the Company's inventory. New management of the parts division believes that this investment in time was necessary to ensure that sales and earnings of this division can perform at the optimum level in 2008 and beyond. The bar-coding of the entire inventory should be completed by the end of 2007.

Although aircraft sales increased 147% or $4.7 million to $7.9 million for the nine-month period ended September 30, 2007 compared to $3.2 million for the same period in 2006, there were no aircraft sales in the third quarter of 2007. Two of the six aircraft from the Joint Venture settlement with BCI are in work at the Company's wholly owned subsidiary, Hamilton Aerospace Technologies, and are expected to be delivered to the contracted buyer before the end of 2007. Of the remaining four aircraft, two are the subject of a signed purchase agreement, and the remaining two are being marketed. All six aircraft have a total book value of $8.65 million, which is currently included in our inventory on the GACF balance sheet.

Gross profit for the third quarter ended September 30, 2007 decreased 14.3% to $1.8 million compared to $2.1 million for the same period in 2006. Gross profit for the nine months ended September 30, 2007 decreased 33.7% to $5.7 million compared to $8.6 million for the same period in 2006.

Net income for the period ended September 30, 2007 totaled $127 thousand compared to $233 thousand for the same period in 2006. Net income for the nine months ended September 30, 2007 totaled $603 thousand compared to $2.4 million for the nine months ended September 30, 2006. Net income for the quarter was impacted by the inability to complete the sale of two aircraft expected to be sold during the quarter. This in turn had a direct impact on the maintenance division and parts division sales due to a delay of work to be provided on these aircraft and the lack of additional liquidity required for new business that would have also been provided by these aircraft sales.

From a balance sheet perspective, total current assets improved at September 30, 2007 to $29.4 million compared to $20.8 million at year end and total assets also improved to $30.8 million compared to $28.5 million respectively. Accounts receivable totaled $10.9 million, of which $3.9 million is outstanding from BCI Aircraft Leasing and $1.6 million is outstanding from GALP. JetGlobal had no account receivable balance at September 30, 2007. Inventory totaled $14.8 million of which $8.65 million represents the value of the six aircraft received from the JetGlobal settlement.

Total liabilities increased slightly to $14 million for the period ended September 30, 2007 compared to $12.7 million at December 31, 2006. The current ratio at the end of the quarter was 2.2 to 1, an improvement from 1.7 to 1 at year end. The book value of the Company was $0.42 per share at September 30, 2007.

"There were several factors that impacted our third quarter financial results," commented Mr. Ian Herman, Chairman and CEO of Global Aircraft Solutions. "The first was our delay in completing the sale of two of the six aircraft we received through our agreement with JetGlobal. While we anticipate closing this sale prior to the end of the year, it certainly had an effect on the financial results of our maintenance and parts divisions. Additionally, we were unable to record several million dollars in sales for the aircraft trading division in the third quarter. Management can assure all of our shareholders that we are working diligently to get back on schedule with the sale of all six aircraft so that we may end 2007 on a positive financial note."

Mr. John Sawyer, President of Global Aircraft Solutions, continued, "The second factor in this quarter's performance was due to the reorganization, bar-coding, and shelving of the inventory sold in our parts division. To ensure the best financial performance in the future, the new management team of our parts division felt that this reorganization was a necessary step for us to take." Mr. Sawyer continued, "I believe strongly that the actions taken, which definitely impacted the results, was an appropriate investment made by our Company to provide a higher return for shareholders in the future."

Conference Call

The conference call will take place at 1 p.m. Eastern, on Thursday, November 15, 2007. Anyone interested in participating should call 1-866-225-8754 if calling within the United States, or 1-480-293-1744 if calling internationally, approximately 5-10 minutes prior to 1 p.m. There will be a playback available until November 22, 2007. 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 3806701 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 December 15, 2007, on either site.

About Global Aircraft Solutions, Inc.

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

Safe Harbor

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 there under 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, 2006. These statements speak only as of above date, and Global disclaims any intent or obligation to update them.


                  Condensed Consolidated Balance Sheets
                 September 30, 2007 and December 31, 2006
                                (unaudited)


                                   ASSETS
                                                      2007         2006
                                                  ------------ ------------
   CURRENT ASSETS
   Cash and cash equivalents                      $    199,479 $    104,440
   Accounts receivable, net                         10,905,761    7,870,799
   Notes receivable                                    353,772      455,859
   Due from equity investee partner                  2,122,000    3,946,414
   Inventory                                        14,825,338    7,852,691
   Restricted funds                                    194,484       65,500
   Deferred income taxes                               299,508      299,508
   Other current assets                                475,244      191,114
                                                  ------------ ------------

     TOTAL CURRENT ASSETS                         $ 29,375,586 $ 20,786,325

   Property, plant and equipment, net                1,148,836    1,521,037
   Equity in net assets of and advances to
    affiliates                                             ---    6,063,067
   Goodwill                                             38,992       38,992
   Other assets                                        277,606       64,855
                                                  ------------ ------------

     TOTAL ASSETS                                 $ 30,841,020 $ 28,474,276
                                                  ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
                                                      2007         2006
                                                  ------------ ------------
   CURRENT LIABILITIES
   Notes payable                                  $  6,673,291 $  5,101,568
   Note payable - related party                      1,060,000          ---
   Accounts payable - trade                          2,649,651    5,001,567
   Customer deposits                                   575,913      541,878
   Billings in excess of costs and estimated
    earnings on contracts in progress, net             785,664      224,046
   Accrued liabilities                                 526,477      493,404
   Income taxes payable                              1,108,416      735,466
   Current maturities - capital lease obligations       60,573       53,247
                                                  ------------ ------------

     TOTAL CURRENT LIABILITIES                    $ 13,439,985 $ 12,151,176

  LONG-TERM LIABILITIES


   Capitalized lease obligations                  $    187,074 $    224,867
   Deferred tax liability                              344,027      344,027
                                                  ------------ ------------

     TOTAL LONG-TERM LIABILITIES                  $    531,101 $    568,894
                                                  ------------ ------------

     TOTAL LIABILITIES                            $ 13,971,086 $ 12,720,070
                                                  ============ ============


   STOCKHOLDERS' EQUITY
   Common stock, $.001 par value, 100,000,000
    shares authorized 40,561,301 and 39,967,807
    shares issued 2007 and 2006 and 40,181,301
    and 39,587,807 shares outstanding 2007
    and 2006                                      $     40,560 $     39,967
   Additional paid-in capital                       13,235,824   12,723,213
   Contributed capital                                 620,289      620,289
   Retained earnings                                 2,973,261    2,370,737
                                                  ------------ ------------

     TOTAL STOCKHOLDERS' EQUITY                   $ 16,869,934 $ 15,754,206
                                                  ============ ============

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 30,841,020 $ 28,474,276
                                                  ============ ============




              Condensed Consolidated Statements of Operations
      For the Three and Nine Months ended September 30, 2007 and 2006
                                (unaudited)

                Three Months   Three Months    Nine Months    Nine Months
                    ended          ended          ended          ended
                September 30,  September 30,  September 30,  September 30,
                     2007           2006           2007           2006
Sales
  Sales,
   maintenance,
   repair,
   overhaul     $   4,041,058  $   6,526,094  $  12,318,048  $  20,048,614
  Sales,
   aircraft
   trading                ---            ---      7,900,000      3,223,000
  Sales, parts        568,017      1,216,186      1,793,485      4,171,126
  Sales, other         11,310        162,075         11,742      2,168,989
                -------------  -------------  -------------  -------------
Total sales     $   4,620,385  $   7,904,355  $  22,023,275  $  29,611,729
Cost of sales
  Cost of
   sales,
   maintenance,
   repair,
   overhaul     $  (2,681,761) $  (4,800,773) $  (8,640,115) $ (14,350,025)
  Cost of
   sales,
   aircraft
   trading                ---            ---     (6,846,234)    (3,255,624)
  Cost of
   sales, parts      (156,224)      (881,127)      (785,058)    (2,837,205)
  Cost of
   sales, other        (1,540)       (74,342)        (1,975)      (616,842)
                -------------  -------------  -------------  -------------
Total cost of
 sales          $  (2,839,525) $  (5,756,242) $ (16,273,382) $ (21,059,696)
                -------------  -------------  -------------  -------------

Gross profit    $   1,780,860  $   2,148,113  $   5,749,893  $   8,552,033

Selling,
 general and
 administrative
 expense           (1,835,945)    (1,992,360)    (4,964,136)    (5,794,094)
Penalties             (48,634)          (560)       (48,634)       (11,731)
                -------------  -------------  -------------  -------------

Income from
 operations     $    (103,719) $     155,193  $     737,123  $   2,746,208

Other income
 (expense):
  Interest
   income       $     198,094  $      12,613  $     382,385  $      67,338
  Interest
   expense           (366,802)      (220,048)      (877,291)      (451,916)
  Miscellaneous
   expense            (10,179)           ---       (110,179)          (116)
  Miscellaneous
   income              16,936         95,970         91,681        114,575
  Gain (loss)
   on asset
   disposal               ---            ---            ---         (8,518)
  Equity in
   income of
   unconsolidated
   affiliate              ---        315,000        214,800      1,238,121
  Gain of sale
   of interest
   in
   unconsolidated
   affiliate          461,231            ---        488,441            ---
                -------------  -------------  -------------  -------------

Net income,
 before taxes   $     195,561  $     358,728  $     926,960  $   3,705,692
  Provision for
   income taxes       (68,432)      (125,555)      (324,436)    (1,293,742)
                -------------  -------------  -------------  -------------


Net income      $     127,129  $     233,173  $     602,524  $   2,411,950
                =============  =============  =============  =============
Net profit per
 share, Basic
 2007 3rd Qtr
 35,160,804
 shares, Year
 to date
 39,842,270
 shares; 2006
 3rd Qtr
 39,277,321
 shares, Year
 to date
 38,980,587
 shares.        $        0.00  $        0.01  $        0.02  $        0.06
Net profit
 (loss) per
 share, Fully
 diluted 2007
 3rd Qtr
 36,586,174
 shares, Year
 to date
 40,997,040
 shares; 2006
 3rd Qtr
 40,689,995
 shares, Year
 to date
 40,399,652
 shares.        $        0.00  $        0.01  $        0.02  $        0.06
                =============  =============  =============  =============

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