First Aviation Services Inc. (FAvS) (PINKSHEETS: FAVS) announced
that it has entered into definitive agreement with Kelly Aerospace,
Inc. to acquire the business of Kelly Aerospace Turbine Rotables,
Inc. through a newly formed subsidiary named Aerospace Turbine
Rotables, Inc. (AeTR). FAvS has separately entered into definitive
agreement to acquire the propeller overhaul repair business of
Limco-Piedmont Inc. through a newly formed subsidiary Piedmont
Propulsion Systems, LLC (PPS). These transactions will also result
in Limco-Piedmont acquiring approximately 37% of FAvS' common stock
in the form of newly issued non-voting shares, plus preferred stock
and Limco-Piedmont guaranteeing certain debt required to finance
the purchase of AeTR. Limco-Piedmont is a subsidiary of TAT
Technologies Ltd. (NASDAQ: TATTF).
AeTR is a FAA and EASA approved repair station located in
Wichita, KS which provides overhaul, exchange and repair services
for flight critical airframe components on general aviation
turbine-and-piston-powered aircraft. The company overhauls a
variety of aircraft components but specializes in the repair of
landing gear systems, hydrostatic, safety equipment services,
hydraulic and electrical components. The company's product mix and
capabilities focus on turbine aircraft on general aviation
platforms with large in-service fleets.
PPS specializes in MRO services for propellers, primarily for
turboprop aircraft used by regional airlines, military and
corporate operators. PPS is licensed by Hartzell and McCauley to
provide MRO services for their propellers and is recognized as a
leader in its industry.
As described more fully in the shareholder proxy, FAvS believes
these transactions will create a more competitive, profitable and
dynamic firm going forward. The combination of these operations
with FAvS' existing world class supply chain and distribution
services provided by Aerospace Products International, Inc., will
offer a full portfolio of maintenance, repair and overhaul
capabilities to First Aviation customers, able to repair most major
components on turboprops for the military, general aviation, and
regional airline markets. The expanded capabilities will be
immediately accretive to earnings.
Aaron Hollander, Chairman & CEO of First Aviation, said,
"The acquisitions of Kelly Aerospace's Turbine Rotable business and
Limco-Piedmont's propeller overhaul division will significantly
expand our repair and overhaul capabilities. The transactions will
also provide a significant increase in our equity as a result of
the exchange of approximately $5.8 million newly issued common
non-voting shares to Limco-Piedmont for the propeller overhaul
division and credit enhancement to support the AeTR acquisition."
Mr. Hollander went on to say that "the Limco-Piedmont family will
be an excellent investor and partner in First Aviation. We look
forward to welcoming their participation on the board of directors.
They have a deep understanding of the aerospace industry and an
appreciation for First Aviation's capabilities."
Dr. Avraham Ortal, CEO of Limco-Piedmont and a newly appointed
director of FavS, said, "We are very pleased to make this
investment in First Aviation and are enthusiastic about the
prospects of the combined businesses. Aerospace Products
International, Piedmont Propulsion Systems, and Aerospace Turbine
Rotables, Inc. make a powerful combination."
Attached to this press release are Unaudited Pro Forma Condensed
Consolidated Financial Statements for FAvS for the twelve-month
period ended June 30, 2009, based upon financial information for
that period provided by Kelly and Limco-Piedmont. Assuming that
FAvS acquired PPS and AeTR on July 1, 2008, these Statements
reflect pro forma EBITDA of $3,991,000, total assets of
$70,366,000, debt of $28,489,000 and stockholders' equity of
$24,612,000. Stated in terms of FAvS' current fiscal year ending
January 31, 2010, based on discussions with the managements of
Kelly and Piedmont, and assuming that FAvS acquired PPS and AeTR on
February 1, 2009, FAvS anticipates that for the current fiscal year
FAvS will have pro forma EBITDA of between $6 million and $7
million (without giving effect to the costs of the transactions
described above).
The transactions are subject to various contingencies described
in the proxy as well as shareholder approval which is expected at
the company's annual meeting to be held on November 24, 2009.
Please see our forward looking statement at
www.firstaviation.com/forward
First Aviation Services Inc. together with its subsidiaries
("FAvS"), is one of the leading suppliers of aircraft parts and
components to the aviation industry worldwide, and is a provider of
third party logistics and inventory management services to the
aerospace industry.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
The unaudited pro forma condensed consolidated financial data
set forth below are based on historical consolidated financial
statements of FAvS, the historical financial statements of
Aerospace Turbine Rotables, Inc. ("AeTR"), the historical financial
statements of Piedmont Propulsion Systems, LLC ("PPS"), and
adjustments described in the accompanying notes to the unaudited
pro forma financial data. The unaudited pro forma condensed
financial data is presented to give effect to FAvS's acquisitions
of AeTR and PPS (collectively, the "acquisition").
The unaudited pro forma condensed balance sheet combines the
historical consolidated balance sheet of FAvS as of July 31, 2009,
and the historical balance sheets of AeTR and PPS as of June 30,
2009, giving effect to the acquisition as if it occurred on July
31, 2009. The unaudited pro forma condensed consolidated statements
of operations combine the historical consolidated statements of
operations of FAvS for the twelve months ended July 31, 2009 with
the historical financial statements of AeTR and PPS for the twelve
months ended June 30, 2009, giving effect to the acquisition as if
it occurred at the beginning of the twelve month period ended July
31, 2009.
The pro forma condensed consolidated statements of operations
reflect only the pro forma adjustments expected to have a
continuing impact on the combined results beyond 12 months from the
consummation of the acquisition, and do not reflect any changes in
operations that may occur.
The unaudited pro forma condensed consolidated financial data
are for illustrative purposes only, are hypothetical in nature and
do not purport to represent what our results of operations, balance
sheet or other financial information would have been if the
acquisition had occurred as of the dates indicated or what such
results will be for any future periods. The unaudited pro forma
adjustments are based upon available information and certain
assumptions that we believe are reasonable, including an allocation
of the purchase price based on an estimate of fair value, and
exclude certain non-recurring charges as disclosed. These estimates
are preliminary and are based on information currently available
and could change significantly.
The successor will acquire substantially all of the assets and
certain liabilities of PPS and AeTR. The acquisitions will be
accounted for under the purchase method of accounting with the
assets and liabilities acquired recorded at their fair values at
the date of acquisition. The results of operations of the acquired
business will be included in the Condensed Consolidated Statements
of Operations beginning as of the effective date of the
acquisition. The purchase price will be allocated to the assets and
liabilities acquired. The excess value of the purchase price over
the fair value of the assets and liabilities acquired will be
allocated to goodwill and other intangible assets. FAvS will
finalize the purchase accounting after acquisitions and expects to
do so by the end of the first quarter of the next fiscal year. The
pro forma information reflects the fair values as currently
estimated based on preliminary information available.
First Aviation Services Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(amounts in thousands)
July 31, June 30, June 30,
2009 2009 2009
FAvS PPS AeTR Pro Forma
-------- --------- -------- ----------------------
Adjust-
Assets ments Total
Current assets
Cash and cash
equivalents $ 1,827 $ 10 $ (10) f $ 1,827
Trade
receivables-net 13,214 $ 3,454 906 (1,100) i 16,474
Inventories, net 33,360 2,767 2,136 (1,680) i 36,583
Prepaid expenses
and other 1,369 103 482 1,954
-------- --------- -------- -------- --------
Total current assets 49,770 6,324 3,534 (2,790) 56,838
Property and
equipment, net 2,677 131 150 2,958
Goodwill 1,311 1,222 (1,222) e
(1,311) j
4,208 g
6,362 l 10,570
Intangible assets 1,147 (1,147) k
-------- --------- -------- -------- --------
Total assets $ 52,447 $ 8,913 $ 4,906 $ 4,100 $ 70,366
======== ========= ======== ======== ========
Liabilities and
Stockholders' Equity
Current liabilities
Accounts payable $ 14,188 $ 818 $ 516 $ (44) b $ 15,478
Accrued
compensation 160 150 231 (231) b 310
Other accrued
liabilities 1,305 1,071 (1,041) b 1,477
449 k
(307) m
Revolving line of
credit 21,025 (3,028) 3,028 c 28,025
7,000 h
Notes payable -
current
maturities 464 26 (26) c 464
-------- --------- -------- -------- --------
Total current
liabilities 37,142 968 (1,184) 8,828 45,754
Related party
sub-debt 2,000 335 (335) c
(2,000) m
Long-term debt 12 (12) c
Intercompany debt 796 (796) c
Other non-current
liabilities 146 (146) d
-------- --------- -------- -------- --------
Total liabilities 39,142 968 105 5,539 45,754
Stockholders' equity
Common stock 91 91
Preferred stock 1,350 o,m 1,350
Net assets 7,945 (7,945) n
Additional paid in
capital 39,028 55 (55) a 48,985
1,707 m
8,250 o
Retained earnings
(deficit) (17,112) 4,746 (4,746) a (17,112)
Accumulated other
comprehensive
income 348 348
-------- --------- -------- -------- --------
22,355 7,945 4,801 (1,439) 33,662
Less: treasury
stock (9,050) (9,050)
-------- --------- -------- -------- --------
Total stockholders'
equity 13,305 7,945 4,801 (1,439) 24,612
Total liabilities and
stockholders' equity $ 52,447 $ 8,913 $ 4,906 $ 4,100 $ 70,366
======== ========= ======== ======== ========
See Notes to Unaudited Pro Forma Condensed Financial Statements
First Aviation Services Inc. and Subsidiaries
Unaudited Pro Forma Condensed Statement of Operation with EBIT
and EBITDA presented
(amount in thousands)
Twelve months ended
-------------------------------
July 31, June 30, June 30, Pro Forma
2009 2009 2009 ------------------------
FavS PPS AeTR Adjustments Total
--------- ---------- ---------- ----------- ----------
Revenue $ 105,782 $ 10,013 $ 9,486 $ 125,281
COGS 87,236 7,531 6,798 101,565
--------- ---------- ---------- ----------
Gross profit
excluding
freight 18,546 2,482 2,688 23,716
Net freight
expense 1,090 1,090
--------- ---------- ---------- ----------
Gross profit 17,456 2,482 2,688 22,626
Selling,
general and
administrative
expenses 16,667 474 1,311 $ (125) q 18,327
Corporate
expense 1,581 329 600 (765) p 1,745
--------- ---------- ---------- --------- ----------
Income (loss)
from
operations (792) 1,679 777 890 2,554
320 t
Interest
expense, net 1,187 58 (58) s 1,507
Other income
(expense) 10 3 13
--------- ---------- ---------- --------- ----------
Income (loss)
before taxes (1,969) 1,679 722 628 1,060
360 u
Income taxes
(w) 672 290 (962) r 360
--------- ---------- ---------- --------- ----------
Net income
(loss) $ (1,969) $ 1,007 $ 432 $ 1,230 $ 700
========= ========== ========== ========= ==========
EBIT $ (782) $ 1,679 $ 780 $ 2,567
EBITDA 468 1,810 852 3,991
See Notes to Unaudited Pro Forma Condensed Financial Statements
First Aviation Services Inc. and Subsidiaries
Notes to Unaudited Pro Forma Condensed Financial Statements
1. The acquisitions of AeTR and PPS will be accounted for as a
business combination. FAvS will finance the acquisitions with a
$7.0 million borrowing under its existing $32.0 million revolving
credit facility and issuance of its common and preferred stock
currently valued at $9.0 million. The purchase price is subject to
a working capital adjustment. Under the acquisition method of
accounting, the assets and liabilities of AeTR and PPS will be
recorded at their fair values as of the acquisition date.
The purchase price is determined as follows (amounts in
thousands):
Cash consideration paid $ 7,000
Issuance of FAVS stock 9,000
--------
Purchase price $ 16,000
========
For purposes of the pro forma presentation, the purchase price
has been allocated on a preliminary basis to the acquired tangible
and intangible assets and liabilities based on their estimated fair
values as of July 31, 2009 as follows (amounts in thousands);
Current assets $ 7,068
Property and equipment 281
Current liabilities (1,919)
Goodwill 10,570
--------
Net purchase price $ 16,000
========
Subsequent to acquisition, goodwill will be adjusted as other
intangible assets are valued at fair value. Intangible assets with
indefinite lives (once determined), including goodwill, will not be
amortized.
The purchase price allocation above, including amounts allocated
to goodwill, is presented for pro forma information only. The
actual purchase price allocation will be based on the fair values
of the assets acquired and liabilities assumed as of the respective
acquisition dates, which may be materially different than the
estimated fair values at July 31, 2009.
2. The following describes the pro forma adjustments related to
the acquisitions made in the accompanying unaudited pro forma
condensed consolidated balance sheet as of July 31, 2009 and the
unaudited pro forma condensed consolidated statement of operations
for the twelve months ended July 31, 2009.
a To eliminate AeTR historical stockholders' equity
b To eliminate non-acquired current liabilities of AeTR
c To eliminate non-acquired debt of AeTR
d To eliminate deferred tax liability of AeTR
e To eliminate pre-acquisition goodwill on AeTR
f To eliminate non-acquired assets of AeTR
g To record goodwill on AeTR acquisition
h To record debt for AeTR acquisition-interest at prime rate (as defined)
plus 4.5%
i To adjust acquired assets to estimated fair value
j To eliminate pre-acquisition goodwill and intangibles assets on PPS
k To record additional current liabilities for PPS
l To record goodwill on PPS acquisition
m Convert FAVS sub-debt to equity
n To eliminate net assets (equity) on PPS
o To record estimated value of FAvS common and preferred stock to be
issued
p Eliminate corporate allocation
q Eliminate estimated non-ongoing SG&A expenses on AeTR
r Eliminate Income tax on AeTR
s Eliminate historical interest on AeTR
t Estimated additional interest on additional debt
u Estimated income taxes at the statutory rate
v Transaction expenses associated with the acquisitions are not presented
in the accompanying Pro Forma Statement of Operations
w The acquired companies were part of a consolidated group and do not pay
income tax as individual companies. Income taxes presented represent
income tax at an estimated tax rate as if they reported separately
Contact: James Howell Chief Financial Officer Aerospace Products
International, Inc. (203) 291-3300
Grafico Azioni Tat Technologies (NASDAQ:TATTF)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Tat Technologies (NASDAQ:TATTF)
Storico
Da Set 2023 a Set 2024