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Alabama Aircraft Industries, Inc. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2009

Dépèche transmise le 4 août 2009 par Business Wire

Alabama Aircraft Industries, Inc. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2009

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Alabama Aircraft Industries, Inc. (Pink Sheets: AAII), a leading provider of aircraft maintenance and modification services to military customers, today announced its operating results for the second quarter and six months ended June 30, 2009. Net income for the second quarter of 2009 was $0.8 million, or $0.19 per share, compared to a net loss for the second quarter of 2008 of $2.4 million, or $0.59 per share. Revenue from continuing operations for the second quarter of 2009 was $17.3 million versus revenue of $12.5 million in the first quarter of 2008, an increase of 38.0%. Income from continuing operations for the second quarter of 2009 was $0.8 million compared to a loss from continuing operations of $1.1 million for the second quarter of 2008.

Net income for the first six months of 2009 was $1.4 million, or $0.35 per share, compared to a net loss for the first six months of 2008 of $1.6 million, or $0.39 per share. Revenue from continuing operations for the six months ended June 30, 2009 was $32.9 million, compared to revenue from continuing operations of $32.1 million for the six months ended June 30, 2008, an increase of 2.5%. Income from continuing operations for the first six months of 2009 was $1.6 million compared with income from continuing operations of $0.3 million for the first six months of 2008.

Ronald Aramini, Alabama Aircraft’s President and Chief Executive Officer, stated, “We are very pleased to report net income for the second quarter and first six months of 2009. We continue to see advancement in our efforts to improve productivity and control costs. Revenue for the second quarter of 2009 versus the second quarter of 2008 increased significantly due to the higher volume of aircraft inducted into our Birmingham facility during the last twelve months. Our emphasis for future growth continues to be on P-3 and C-130 aircraft. Several new C-130 programs are currently being competed and we expect additional C-130 programs to be competed in the near future. Our P-3 business has grown significantly and is profitable for us.”

Mr. Aramini further stated, “We just completed negotiations with Boeing on an extension of the Bridge contract to cover KC-135 inductions through September 30, 2010. We look forward to continuing to provide the United States Air Force (“USAF”) with high quality and competitive prices on its fleet of KC-135 tankers. There have been no recent developments in the KC-135 re-competition. We anticipate that the appeal by the USAF and Boeing of the Court of Federal Claims ruling will be resolved in late 2009 or early 2010. We firmly believe the Court’s ruling, which set aside the award of the KC-135 contract to Boeing, was correct and that the ruling will not be overturned. As previously reported, we are extremely pleased with the jury’s verdict in our case against General Electric Capital Aviation Services which awarded AAII compensatory damages and punitive damages in an aggregate amount of approximately $8.5 million before interest. As a result of the jury verdict, we reversed an allowance for doubtful accounts of $1.4 million in the first quarter of 2009.”

Second quarter 2009 revenue from continuing operations increased $4.8 million from the second quarter of 2008. Revenue from the KC-135 Program Depot Maintenance (“PDM”) program increased by $4.2 million during the second quarter of 2009 versus the second quarter of 2008. The KC-135 program, which accounted for 86% of revenue in the second quarter of 2009 and 84% of revenue in the second quarter of 2008, allows for the Company to provide services on PDM aircraft, drop-in aircraft, and other aircraft related areas. During the second quarter of 2009, the Company delivered four PDM aircraft compared to three PDM aircraft during second quarter of 2008. Revenue increased on the KC-135 program in the second quarter of 2009 versus the second quarter of 2008 due to an increase in the number of KC-135 aircraft in work and one more delivery during the second quarter of 2009. The Company delivered one P-3 aircraft in the second quarter of 2009 versus no P-3 aircraft deliveries in the second quarter of 2008, resulting in an increase in P-3 revenue of $1.3 million. The Company has been successful in pursuing additional contracts to perform maintenance services on P-3 aircraft and has seen a growth in P-3 inductions with three P-3s in work at the end of the second quarter of 2009 and an additional induction in July 2009. Revenue decreased $1.5 million in the second quarter of 2009 versus the second quarter of 2008 under contracts to perform non-routine maintenance work on other aircraft, primarily USAF C-130 aircraft, due to a reduction of aircraft inducted. During the first quarter 2009, the Company was awarded a contract for de-paint services on USAF C-130 aircraft which resulted in an increase in revenue of $0.8 million in the second quarter of 2009 as compared to the second quarter of 2008.

Gross profit increased from $1.2 million to $3.0 million during the second quarter of 2009 compared to the second quarter of 2008. Gross profit on KC-135 revenue increased $0.7 million due to more aircraft in work during the second quarter of 2009 and due to one more delivery during the second quarter of 2009. Gross profit on the P-3 program increased $0.4 million in the second quarter of 2009 as compared to the second quarter of 2008 due to efficiency gains in the production line and due to no deliveries of P-3 aircraft in the second quarter of 2008. Gross profit increased $0.4 million during the second quarter of 2009 versus the second quarter of 2008 on non-routine maintenance work performed on C-130 due to an increase in the contract price. Work performed on the newly acquired contract for de-paint services on C-130 aircraft resulted in additional gross profit of $0.2 million.

Selling, general and administrative (“SG&A”) expenses decreased $0.2 million during the second quarter of 2009 compared to the second quarter of 2008 due to a reduction in legal fees related to the KC-135 legal actions. SG&A expenses were 11.6% of revenue in the second quarter of 2009 as compared to 17.2% in the second quarter of 2008.

Total interest expense increased $31,000 in the second quarter of 2009 as compared to the second quarter of 2008. The increase in interest expense was due to the amortization of a $400,000 debt extension fee paid by AAII in the first quarter of 2009 which was partially refunded to AAII in the second quarter of 2009.

The Company’s revenue from continuing operations for the first six months of 2009 increased $0.8 million from revenue for the first six months of 2008. Revenue from the KC-135 PDM program increased $2.2 million during the first six months of 2009 versus the first six months of 2008. The KC-135 program accounted for 88% of revenue in the first six months of 2009 and 84% of revenue in the first six months of 2008. During the first six months of 2009, the Company delivered seven PDM aircraft which was consistent with the seven PDM aircraft delivered during first six months of 2008. Revenue increased on the KC-135 program in the first six months of 2009 versus the first six months of 2008 due to more KC-135 aircraft in work throughout the period. The Company delivered one P-3 aircraft in each of the first six months of 2009 and 2008. P-3 revenue increased $0.2 million due to an increase in the contractual price and an increase in P-3 aircraft in work during the first six months of 2009. Revenue decreased $2.9 million under contracts to perform non-routine maintenance work on other aircraft, primarily USAF C-130 aircraft, due to fewer aircraft in work during the first six months of 2009. The Company’s award of a contract for de-paint services on USAF C-130 aircraft resulted in an increase in revenue of $1.3 million in the first six months of 2009 as compared to the first six months of 2008.

Gross profit decreased from $5.8 million to $4.8 million during the first six months of 2009 compared to the first six months of 2008. Gross profit on KC-135 revenue decreased $1.6 million due to a decrease in price per KC-135 aircraft. Gross profit on the P-3 program increased $0.2 million in the first six months of 2009 as compared to the first six months of 2008 due to efficiency gains in the production line. Gross profit increased $0.4 million during the first six months of 2009 versus the first six months of 2008 on non-routine maintenance work performed on C-130 due to an increase in the contract price. Work performed on the newly acquired contract for de-paint services on C-130 aircraft resulted in additional gross profit of $0.2 million.

Selling, general and administrative (“SG&A”) expenses decreased $1.0 million during the first six months of 2009 compared to the first six months of 2008 due to a reduction in legal fees related to the KC-135 legal actions. SG&A expenses were 12.4% of revenue in the first six months of 2009 as compared to 15.7% in the first six months of 2008. During the first six months of 2008, the Company forgave a related party receivable (including accrued interest) of $0.5 million. During the first six months of 2009, the Company reversed an allowance for doubtful accounts of $1.4 million due to positive developments in the GECAS case to collect the outstanding receivables.

Total interest expense increased $88,000 in the first six months of 2009 as compared to the first six months of 2008. The increase in interest expense is due to the amortization of a $400,000 debt extension fee paid by AAII in the first six months of 2009 which was partially refunded to AAII in the first six months of 2009.

*Use of Non-GAAP Financial Measures

EBITDA from continuing operations is defined as earnings from continuing operations before interest, taxes, depreciation and amortization. The Company presents EBITDA because its management uses the measure to evaluate the Company's performance and to allocate resources. In addition, EBITDA has been used as one of the components to calculate the Company’s debt covenants. The Company believes EBITDA is also a measure of performance used by some commercial banks, investment banks, investors, analysts and others to make informed investment decisions. EBITDA is an indicator of cash generated to service debt and fund capital expenditures. EBITDA is not a measure of financial performance under generally accepted accounting principles and should not be considered as a substitute for or superior to other measures of financial performance reported in accordance with GAAP. EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies. See the reconciliation of income (loss) from continuing operations to EBITDA from continuing operations at the end of this release.

About Alabama Aircraft Industries

Alabama Aircraft Industries, Inc., located in Birmingham, Alabama, performs maintenance and modification of aircraft for the U.S. Government and military customers. The Company also provides aircraft parts and support and engineering services.

Caution Concerning Forward-Looking Statements

This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition generally, as well as specific matters such as the award or loss of contracts, the outcome of pending or future litigation and estimates of backlog. Forward-looking statements are often identified by words such as “expect,” “anticipate,” “intend,” “plan,” believe,” “seek,” “see,” “may,” “should,” “could” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, among other things: the severity and duration of the current economic recession and current financial conditions; the impact of U.S. and foreign government programs to restore liquidity and stimulate national and global economies; the impact of conditions in the financial and credit markets on the availability and cost of capital to us; operational challenges in achieving our strategic objectives and executing our plans, competition in the aircraft maintenance and modification industry; the award or loss of contracts; changes in estimates of backlog; our ability to obtain additional contracts and perform under existing contracts; the final outcome of our legal action with regard to the KC-135 contract; the outcome of pending and future litigation and the costs of defending such litigation; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including regulatory changes that could adversely affect our business; potential environmental and other liabilities; our inability to obtain additional financing; the loss of key personnel; and other factors and risks detailed from time to time in our publicly available statements and reports, which are available at www.pinksheets.com. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. We do not undertake any obligation to update or revise any forward-looking statements and are not responsible for changes made to this release by wire services or Internet services.