TIMCO Aviation Services, Inc. Announces Third Quarter 2004 Results
November 15 2004 - 4:30PM
PR Newswire (US)
TIMCO Aviation Services, Inc. Announces Third Quarter 2004 Results
GREENSBORO, N.C., Nov. 15 /PRNewswire-FirstCall/ -- TIMCO Aviation
Services, Inc. (OTC:TMAS) (BULLETIN BOARD: TMAS) today announced
its results of operations for the 2004 third quarter. Revenue for
the three months ended September 30, 2004 was $74.2 million,
compared to $64.3 million for the third quarter of 2003. Net income
from continuing operations for the 2004 third quarter was $168,000
compared to $128,000 for the comparable 2003 period. Net income
from continuing operations for the third quarter of 2003 benefited
from the elimination and reduction in accruals of $0.9 million
based on settlements and revised estimates and from the collection
of a $0.9 million account receivable that had previously been
written off as uncollectible. Without these benefits, the net loss
from continuing operations for the 2003 third quarter would have
been $1.7 million. After accounting for income from discontinued
operations, net income for the third quarter of 2004 was $261,000
($0.01 per basic and $0.00 per diluted share), compared to net
income of $345,000 ($0.01 per basic share and $0.00 per diluted
share) for the 2003 third quarter. Revenue for the nine months
ended September 30, 2004 was $235.7 million, compared to $167.7
million for the same period in 2003, a 41% increase. The net loss
from continuing operations was $1.1 million for the first nine
months of 2004, compared to a net loss of $2.8 million for the
comparable 2003 period. Net loss from continuing operations for the
first nine months of 2004 benefited from a gain on the settlement
of a warrant obligation of $0.2 million. Net loss from continuing
operations for the first nine months of 2003 benefited from the
elimination and reduction of accruals aggregating $2.1 million,
collection of a $0.9 million account receivable that had previously
been written off as uncollectible and from a tax benefit of $0.9
million. Without these benefits, the net loss from continuing
operations for the first nine months of 2004 and 2003 would have
been $1.3 million and $6.7 million, respectively. After accounting
for income from discontinued operations, net income for the first
nine months of 2004 was $130,000 ($0.00 per basic share and diluted
share), compared to a net income of $638,000 ($0.02 per basic and
diluted share) for the comparable 2003 period. Roy T. Rimmer, Jr.,
the Company's Chairman and Chief Executive Officer, stated: "We
have experienced significant incremental growth during 2004, which
we believe is the result of our customers looking to us for a
larger portion of their MR&O needs. We intend to focus our
efforts during the rest of 2004 and into 2005 on increasing our
revenues in each of our businesses, controlling our costs, and
improving our profitability." Gil West, the Company's President and
Chief Operating Officer, stated: "We are encouraged by the trend
among airlines to increase the amount of their outsourced airframe
maintenance and we expect this trend will continue in the future.
We are also experiencing strong growth in our engineering and
interior related businesses, and we are taking steps to expand our
engine business. Our ability to handle significant growth in each
of our businesses while maintaining our margins is a testimony to
our first class operations and our attention to the basics." TIMCO
Aviation Services, Inc. is among the world's largest providers of
fully integrated aviation maintenance, repair and overhaul
(MR&O) services for major commercial airlines, regional air
carriers, aircraft leasing companies, government and military units
and air cargo carriers. The Company currently operates four
MR&O businesses: TIMCO, which, with its four active locations
(Greensboro, NC, Macon, GA, Lake City, FL and Goodyear, AZ), is one
of the largest independent providers of heavy aircraft maintenance
services in the world; Aircraft Interior Design and Brice
Manufacturing, which specialize in the refurbishment of aircraft
interior components and the manufacture and sale of aftermarket
parts and new aircraft seats; TIMCO Engineered Systems, which
provides engineering services both to our other MR&O operations
and to our customers; and TIMCO Engine Center, which refurbishes
JT8D engines and performs on-wing repairs for both JT8D and CFM-56
series engine. Visit TIMCO online at http://www.timco.aero/ . This
press release contains certain forward-looking statements. Forward-
looking statements involve known and unknown risks and
uncertainties, which may cause the Company's actual results in
future periods to differ materially from forecasted results. A
number of factors, including those identified in the Company's
Annual Report on Form 10-K for the year ended December 31, 2003,
its Quarterly Report on Form 10-Q for the quarter ended September
30, 2004, and those identified below, could adversely affect the
Company's ability to obtain these results: the Company's ability to
continue to generate sufficient working capital from operations to
meet its operating requirements and service its indebtedness, the
Company maintaining good working relationships with its vendors and
customers, competitive pricing for the Company's products and
services, the Company's ability to achieve gross margins at which
it can be profitable, including margins on services the Company
performs on a fixed price basis, competition in the aircraft
maintenance, repair and overhaul market, the Company's ability to
attract and retain qualified personnel in its business, utilization
rates for the Company's MR&O facilities, the Company's ability
to integrate future acquisitions, the Company's ability to
effectively manage its business, economic factors which affect the
airline industry generally and thereby affect our business (since
our customer base consists primarily of airlines and freight
carriers), including the amount of aircraft maintenance being
outsourced, the price of jet fuel and the ongoing war on terrorism,
and changes in government regulations. Copies of the Company's
filings with the U.S. Securities and Exchange Commission are
available from the SEC or may be obtained upon request from the
Company. The Company does not undertake any obligation to update
the information contained herein, which speaks only as of this
date. TIMCO Aviation Services, Inc. ($ thousands, except per share
data) Three months ended Nine months ended Sept. 30, Sept. 30, 2004
2003 2004 2003 Operating revenue $74,152 $64,309 $235,654 $167,706
Gross Profit (a) 7,122 5,426 20,221 10,520 Gross Profit Percentage
(a) 9.6 % 8.4 % 8.6 % 6.3 % Operating expenses (b) 5,206 3,125
16,113 9,797 Operating expenses as a % of revenue (b) 7.0 % 4.9 %
6.8 % 5.8 % Income from operations (c) 1,916 2,301 4,108 723 Income
(loss) from continuing operations (d) 168 128 (1,077) (2,755)
Income, net, from discontinued operations (e) 93 217 1,207 3,393
Net income $261 $345 $130 $638 Basic income $0.01 $0.01 $0.00 $0.02
per share Diluted income per share $0.00 $0.00 $0.00 $0.02 The
Company is providing the following information to allow what the
Company believes to be a meaningful comparison of its period to
period results. (a) 2003 third quarter and nine month gross profit
benefited from the elimination of accruals aggregating $463.
Without this impact, gross profit for the 2003 third quarter and
first nine months would have been $4,963 (7.7% of revenues) and
$10,057 (6.0% of revenues), respectively. (b) 2003 third quarter
and nine month operating expenses benefited from the elimination of
accruals and recovery of an account receivable that had previously
been written off as uncollectible aggregating $1,325 and $2,589,
respectively. Without the impact of these items, operating expenses
for the 2003 third quarter and first nine months would have been
$4,450 (6.9% of revenues) and $12,386 (7.4% of revenues),
respectively. (c) The income (loss) from operations for the third
quarter and first nine months of 2003 without the impact of the
items noted in (a) and (b) above would have been $513 and ($2,329),
respectively. (d) Income from continuing operations for the nine
months ended September 30, 2004 included a gain on the settlement
of a warrant obligation of $209. Income from continuing operations
in the first nine months of 2003 included an income tax benefit of
$884. Without the benefit of these items and of the items described
in (a) and (b) above, the net income (loss) from continuing
operations for the third quarter of 2004 and 2003 would have been
$168 and ($1,660), respectively, and the net loss from continuing
operations for the first nine months of 2004 and 2003 would have
been ($1,286) and ($6,691), respectively. (e) Income, net, from
discontinued operations reflects the gain on the collection of
receivables and the sale of inventory from discontinued operations.
The Company's manufacturing, redistribution and new parts
operations were sold in fiscal 2000 and the process of collection
on the assets from these discontinued operations is winding down.
As a result, income from discontinued operations is not expected to
be significant in future periods. Income, net from discontinued
operations included a benefit of $825 in the nine months ended
September 30, 2004 from the sale of our Miramar facility and a
benefit of $2,700 in the nine-month period ended September 30, 2003
from the elimination and settlement of contingency exposures and
reserves relating to discontinued operations. DATASOURCE: TIMCO
Aviation Services, Inc. CONTACT: Roy T. Rimmer, Jr., Chairman &
Chief Executive Officer, or Fritz Baumgartner, Vice President,
Controller and Chief Accounting Officer, of TIMCO Aviation
Services, Inc., +1-336-668-4410 Web site: http://www.timco.aero/
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