SOURCE: First Aviation Services Inc.

First Aviation Services Inc.

May 17, 2010 11:48 ET

Strong First Quarter Announced by First Aviation

WESTPORT, CT--(Marketwire - May 17, 2010) - First Aviation Services Inc. (PINKSHEETS: FAVS) today announced that net income of $607 thousand, or $.04 per share, compared favorably in the first quarter versus a net loss of $421 thousand, or $.06 cents per share, in the prior year first quarter.

Sales for the first quarter were $30.8 million, an improvement over the prior year of 19.3%. Contributing to the sales growth were the two previously announced acquisitions of Aerospace Turbine Rotables, Inc. and Piedmont Propulsion Systems, LLC that closed in December, 2009. Without recognizing the effect of these acquisitions, sales increased 2.0% on a year over year basis.

The EBITDA before acquisition expense for the quarter was $1,485 thousand versus $47 thousand in the comparable period last year.

"We reported strong first quarter results notwithstanding the challenging economic environment," said Aaron P. Hollander, Chairman and CEO of First Aviation. "We are pursuing opportunities that capitalize on the combined strength of First Aviation's operating subsidiaries and focusing on international and military markets that we believe will continue to outperform. While we see signs of recovery in general aviation, particularly in the corporate and charter segments, we expect it will be some time for the market to fully recover."

Note: In December of 2009 the Company began reporting on a calendar year basis. The above numbers reflect management's estimates of the prior year's first quarter on a comparable basis.

                       FIRST AVIATION SERVICES INC.
            Consolidated Condensed Statements of Operations(1)
                 (In Thousands, except per share amounts)

                                                        Three Months Ended
                                                             March 31,
                                                        ------------------
                                                          2010      2009
                                                        --------  --------
                                                        (Actual)  (Actual)

Net Sales                                               $ 30,795  $ 25,807
Cost of Sales                                            (23,992)  (21,448)
                                                        --------  --------
  Gross Profit                                             6,803     4,359

Selling, general & administrative expenses                (5,201)   (4,052)
Corporate expenses                                          (385)     (433)
Acquisition expense                                          (11)        -
                                                        --------  --------
  Income (loss) from operations                            1,206      (126)

Net interest income (expense) and other                     (541)     (295)
Foreign Exchange gain (loss)                                  15         -
                                                        --------  --------

Income (loss) before income taxes                            680      (421)
Income tax benefit (provision)                               (73)        -
                                                        --------  --------

Net Income (loss)                                       $    607  $   (421)
                                                        ========  ========



EBITDA - Before Acquisition Expense                     $  1,485  $     47

Basic EPS Before Acquisition Expense                    $   0.04  $  (0.06)

Basic EPS After Acquisition Expense                     $   0.04  $  (0.06)

Basic average shares outstanding                          15,618     7,422


(1) Figures disclosed in this Press Release have not been audited; please
    see our forward looking statements at www.firstaviation.com/forward





                       FIRST AVIATION SERVICES INC.
                 Consolidated Condensed Balance Sheets(1)
                 (In Thousands, except per share amounts)

                                                   March 31,   December 31,
                                                      2010         2009
                                                  -----------  -----------
                                                    (Actual)     (Actual)

Assets
Current assets:
  Cash and cash equivalents                       $     1,035  $     1,033
  Trade receivables, net                               20,217       18,725
  Inventories, net                                     37,555       37,604
  Prepaid expenses and other                            1,889        2,445
                                                  -----------  -----------
        Total current assets                           60,696       59,807

Property, plant and equipment, net                      2,458        2,663
Goodwill                                               11,488       11,488

                                                  -----------  -----------
Total Assets                                      $    74,642  $    73,958
                                                  ===========  ===========


Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                                $    17,392  $    17,091
  Accrued Compensation                                    530          407
  Other accrued liabilities                             2,004        3,378
  Revolving line of credit                             22,145       21,326
  Other short-term debt                                 7,000        7,000
  Notes payable                                           418          432
                                                  -----------  -----------
        Total current liabilities                      49,489       49,634

Long-term liabilities                                     872          649
                                                  -----------  -----------
Total Liabilities                                      50,361       50,283

Common Stock                                               91           91
        Class A $0.01 par value, 20,000,000
         shares authorized, 11,320,628 shares
         issued

        Class B $0.01 par value, 6,000,000                 58           58
         shares authorized, 5,766,667 shares
         issued
Preferred Stock                                         1,414        1,350
        $0.01 par value, 30,000 shares
         authorized, 13,500 shares issued
        Additional Paid In Capital                     46,639       46,754
        Accumulated other comprehensive income            319          390
        Retained Earnings                             (16,721)     (17,296)
        Treasury Stock                                 (7,519)      (7,672)
                                                  -----------  -----------
        Total Stockholders' Equity                     24,281       23,675
                                                  -----------  -----------

                                                  -----------  -----------
Total Liabilities & stockholders' equity          $    74,642  $    73,958
                                                  ===========  ===========

(1) Figures disclosed in this Press Release have not been audited; please
    see our forward looking statements at www.firstaviation.com/forward




                       FIRST AVIATION SERVICES INC.
            Consolidated Condensed Statements of Cash Flows(1)
                              (In Thousands)

                                                        Three Months Ended
                                                            March 31,
                                                        ------------------
                                                          2010      2009
                                                        --------  --------
                                                        (Actual)  (Actual)

Cash flows from operating activities:
        Net income (loss)                               $    607  $   (421)

        Adjustments to reconcile net (loss) to net cash
         provided by (used in) operating activities:
                   Depreciation and amortization             273       274
                   Deferred income tax provision
                   Stock based compensation                    6       139

        (Increase) decrease in working capital assets:
                   Trade receivables                      (1,492)   (1,195)
                   Inventory                                  49       152
                   Prepaid expenses and other assets         556        90

        Increase (decrease) in working capital
         liabilities:
                   Accounts payable                          301     2,332
                   Accrued compensation and related
                    expenses, and other accrued
                    liabilities                           (1,187)     (474)

                                                        --------  --------
Net cash (used in) provided by operating activities         (887)      897

        Cash flows from investing activities:
        Payment for net assets acquired                        -         -
        Payment for goodwill                                   -         -
        Purchases of plant and equipment                     (68)      (67)
        Disposals of PPE                                       -         -

                                                        --------  --------
Net cash used in investing activities                        (68)      (67)

        Cash flows from financing activities:
        Borrowings (repayments), net on revolving line
         of credit                                           819      (837)
        Borrowings (repayments), net on notes payable &
         other                                               209       (76)
        Borrowings (repayments), net on time loan              -         -

                                                        --------  --------
Net cash provided by (used in)  financing activities       1,028      (913)

        Effect of exchange rates on cash                     (71)      (42)

                                                        --------  --------
Net change in cash and cash equivalents                        2      (125)

        Cash and cash equivalents at beginning of
         period                                            1,033     2,136
                                                        --------  --------

Cash and cash equivalents at end of period              $  1,035  $  2,011
                                                        ========  ========


(1) Figures disclosed in this Press Release have not been audited; 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 in 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

    First Aviation Services Inc.
    15 Riverside Ave
    Westport, CT 06880
    www.firstaviation.com