SOURCE: First Aviation Services Inc.

First Aviation Services Inc.

August 08, 2011 13:25 ET

Profitable Second Quarter Reported by First Aviation

WESTPORT, CT--(Marketwire - Aug 8, 2011) - First Aviation Services Inc. (OTC PINK: FAVS) (PINKSHEETS: FAVS) today released reviewed financial statements for the second quarter ended June 30, 2011. Profit for the quarter was $531 thousand or $.03 per share on sales of $28.5 million while year to date net income of $719 thousand was achieved on sales of $57.7 million or $.04 per share.

Aaron Hollander, Chairman and CEO, said: "We have made substantial progress in the quarter. Strategically we have been very successful in integrating the marketing efforts of First Aviation's three principal subsidiaries to provide unique, value added offerings which increase the company's profitability and competitive position. Our balance sheet also improved significantly during the quarter with $5 million of cash at June end while simultaneously bank debt has been reduced by $3.4 million. We are concentrating on further improvements in working capital as well as operating margins going forward. While many of the segments we serve have been hit hard by the current economic environment, the diversity of our geographic reach and service offerings have helped us be well positioned to take advantage of industry trends."

First Aviation Services Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share and per share amounts)
12 Mos Ended
Three Mos Ended June 30, Six Mos Ended June 30, Dec 31,
2011 2010 2011 2010 2010*
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $ 28,479 $ 32,390 $ 57,749 $ 63,185 $ 128,463
Cost of sales (22,365 ) (25,578 ) (45,305 ) (49,570 ) (103,392 )
Gross profit 6,114 6,812 12,444 13,615 25,071
Selling, general and administrative expenses 5,379 5,365 10,688 10,566 22,419
Corporate expenses 379 377 782 773 1,577
5,758 5,742 11,470 11,339 23,996
Income from operations 356 1,070 974 2,276 1,075
Non-operating income (expense)
Interest income and other, net (17 ) (4 ) (18 ) (2 ) 2
Interest expense (358 ) (532 ) (728 ) (1,060 ) (2,252 )
Other income 700 - 700 - -
Income (loss) before income taxes 681 534 928 1,214 (1,175 )
Income tax provision (150 ) (68 ) (209 ) (141 ) (16 )
Net income (loss) 531 466 719 1,073 (1,191 )
Dividends on preferred stock (61 ) (57 ) (120 ) (121 ) (219 )
Income available (loss attributable) to common stockholders $ 470 $ 409 $ 599 $ 952 $ (1,410 )
Basic net income (loss) per share, and net income
(loss) per share - assuming dilution:
Basic net income (loss) per share $ 0.03 $ 0.03 $ 0.04 $ 0.06 $ (0.09 )
Net income (loss) per share - assuming dilution $ 0.03 $ 0.03 $ 0.04 $ 0.06 $ (0.09 )
Weighted average shares outstanding - basic 15,818,910 15,660,371 15,784,664 15,639,476 15,674,202
Weighted average shares outstanding - assuming dilution 15,833,430 15,676,462 15,802,605 15,653,902 15,674,202
* Derived from Audited Consolidated Financial Statements
Please see our forward looking statements at www.firstaviation.com/forward
First Aviation Services Inc.
Consolidated Condensed Balance Sheets
(in thousands, except share amounts)
Restated
June 30, 2011 Dec 31, 2010* June 30, 2010
(Unaudited) (Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 5,044 $ 1,302 $ 498
Trade receivables, net 20,305 20,051 21,073
Inventories, net 33,024 34,778 37,982
Prepaid expenses and other 2,648 2,417 1,903
Total current assets 61,021 58,548 61,456
Plant and equipment, net 2,126 2,467 2,428
Deferred financing costs and other 503 538 340
Goodwill 7,773 7,773 7,773
Total assets $ 71,423 $ 69,326 $ 71,997
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 20,534 $ 18,777 $ 16,032
Accrued compensation and related expenses 515 555 698
Other accrued liabilities 3,300 3,387 4,928
Revolving line of credit 19,449 22,257 22,857
Term loan and Notes payable - 6,428 6,954
Total current liabilities 43,798 51,404 51,469
Long-term liabilities:
Other liabilities 1,762 1,717 2,214
Term loan payable 5,800 - -
Total liabilities 51,360 53,121 53,683
Stockholders' equity
Class A Common stock, $0.01 par value, 20,000,000 shares authorized,
14,642,887, 11,320,628 and 11,320,628 shares issued, respectively,
13,339,087, 9,956,858 and 9,893,704 shares outstanding, respectively 124 91 91
Class B Common stock, $0.01 par value, 6,000,000 shares authorized,
5,766,667, 5,766,667, and 5,766,667 shares issued, respectively
5,766,667, 5,766,667and 5,766,667shares outstanding, respectively 58 58 58
Preferred stock, $0.01 par value, $100 redemption value, 30,000
shares authorized, 17,041, 15,841 and 14,708 shares issued, respectively,
17,041, 15,841 and 14,708 shares outstanding, respectively 1,704 1,584 1,471
Additional paid-in capital 42,329 39,669 39,967
Deficit (18,122 ) (18,721 ) (16,294 )
Accumulated other comprehensive income 594 500 367
26,687 23,181 25,660
Less: treasury stock, at cost, 1,303,800, 1,363,770 and 1,426,924
shares, respectively (6,624 ) (6,976 ) (7,346 )
Total stockholders' equity 20,063 16,205 18,314
Total liabilities and stockholders' equity $ 71,423 $ 69,326 $ 71,997
* Derived from Audited Consolidated Financial Statements
Please see our forward looking statements at www.firstaviation.com/forward
First Aviation Services Inc.
Consolidated Condensed Statements of Cash Flows
(in thousands)
12 Months Ended
Three Months Ended June 30, Six Months Ended June 30, December 31,
2011 2010 2011 2010 2010*
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from operating activities
Net income (loss) $ 531 $ 466 $ 719 $ 1,073 $ (1,191 )
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities
Depreciation and amortization 533 501 851 898 1,146
Equity based compensation 23 90 45 96 132
Provision for bad debts 74 117 136 117 328
Provision for excess and obsolete inventory - - - - 270
Change in working capital assets/liabilities:
Trade receivables 1,378 (973 ) (390 ) (2,465 ) (1,930 )
Inventories 780 (914 ) 1,754 (865 ) 2,109
Prepaid expenses and other (526 ) (526 ) (469 ) (94 ) (7 )
Accounts payable 1,641 (208 ) 1,951 (210 ) 2,787
Accrued compensation and related expenses,
and other accrued liabilities (156 ) 709 (127 ) (478 ) (2,162 )
Net cash provided by (used in) operating activities 4,278 (738 ) 4,470 (1,928 ) 1,482
Cash flows from investing activities
Purchases of plant and equipment and other assets (50 ) (129 ) (151 ) (197 ) (791 )
Net cash used in investing activities (50 ) (129 ) (151 ) (197 ) (791 )
Cash flows from financing activities
Net change in revolving line of credit (2,830 ) 712 (2,808 ) 1,531 931
Loan costs (93 ) (170 ) (93 ) (170 ) (347 )
Repayments on term loan (300 ) (100 ) (600 ) (100 ) (600 )
Repayments on notes payable and other additions 82 (174 ) 18 338 (397 )
Issuance of Class A Common Stock 3,000 - 3,000 - -
Net cash (used in) provided by financing activities (141 ) 268 (483 ) 1,599 (413 )
Effect of exchange rate changes on cash and cash
equivalents (69 ) 62 (94 ) (9 ) (9 )
Net change in cash and cash equivalents 4,018 (537 ) 3,742 (535 ) 269
Cash and cash equivalents at the beginning of the period 1,026 1,035 1,302 1,033 1,033
Cash and cash equivalents at the end of the period $ 5,044 $ 498 $ 5,044 $ 498 $ 1,302
Supplemental cash flow disclosures
Cash paid for:
Interest $ 290 $ 484 $ 582 $ 979 $ 1,828
Income taxes paid, net $ 50 $ - $ 60 $ - $ 28
* Derived from Audited Consolidated Financial Statements
Please see our forward looking statements at www.firstaviation.com/forward

First Aviation Services Inc., ("FAvS") located in Westport, Connecticut, through its principal operating subsidiaries Aerospace Products International, Inc. ("API"), based in Memphis, TN, Aerospace Turbine Rotables, Inc. ("AeTR") in Wichita, KS, and Piedmont Propulsion Systems, LLC ("PPS") in Winston-Salem, NC 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, FAvS is a leading provider of aviation products, supply chain management services, repair and overhaul and technology solutions to the industry.

More information about FAvS and its subsidiaries may be found on the company's website, www.firstaviation.com. Please see our forward-looking statements at www.firstaviation.com/forward.

Contact Information

  • Contact:
    James G. Howell II
    Chief Financial Officer
    First Aviation Services Inc.
    (901) 259-4502