ExelTech Announces Third Quarter Results and Provides Update Regarding Convertible Debentures and Credit Facilities



    MONTREAL, Feb. 19 /CNW Telbec/ - ExelTech Aerospace Inc. ("ExelTech" or
the "Company") (TSX-V: XLT), a leading aircraft maintenance, repair and
overhaul ("MRO") provider with operations in Montreal and Quebec City, today
announced its financial results for the third fiscal quarter, which ended
December 31, 2008. All amounts are in Canadian dollars unless otherwise
indicated.

    
    - The Company's revenues increased by 21% to $17.6 million in the quarter
      ended December 31, 2008, compared to $14.6 million during the quarter
      ended December 31, 2007, as new capacity was available.

    - The Company's gross margin increased to 20.5% in the quarter ended
      December 31, 2008, compared to 16.8% during the quarter ended
      December 31, 2007;

    - The Company's margin on Earnings before amortization, financial
      expenses and income taxes (EBITDA), a measure of operating performance
      used by management and by certain users of our financial statements,
      improved to 2.0% in the quarter ended December 31, 2008, compared to a
      negative 3.3% in the quarter ended December 31, 2007. EBITDA improved
      month over month in each of the three months of the quarter;

    - The Company recorded a loss of $3.8 million on forward exchange
      contracts during the quarter. The net loss on foreign currency exchange
      has been $2.9 million in the quarter ended December 31, 2008 compare to
      a gain of $0.4 million in the quarter ended December 31, 2007.

    - The Company's Net Loss was $3.0 million in the quarter ended
      December 31, 2008, compared to a Net Loss of $1.3 million during the
      quarter ended December 31, 2007; and

    - The Company completed 50 major maintenance checks in the quarter ended
      December 31, 2008 compared to 33 in the quarter ended December 31,
      2007.
    

    The additional capacity brought on line during July 2008 (30% due to the
new hangar) was effectively used during this quarter. All of the Montreal
hangar slots were filled this quarter as opposed to the slow start in the
second quarter (ended September 30, 2008) when many vacancies existed. Since
July 2008 each month has seen an improvement in EBITDA from the prior month.
    "We still have a long way to go to meet our objective of profitability,"
said Robin Wohnsigl, CEO. "However, these results are encouraging as they
demonstrate our ability to run a profitable company. The combination of
capacity increases and efficiency improvements is beginning to show in the
results".

    Update Regarding Credit Facilities

    The Company's Credit Agreement with its secured lender contains a
requirement (covenant) that the company maintains a maximum ratio of total
liabilities to tangible net worth to be measured at the end of each fiscal
(March 31). Tangible net worth means the total of equity less intangibles,
deferred charges, leasehold improvements, deferred tax credits and unsecured
advances to related parties. The Company was in compliance with the covenant
at the end of the prior fiscal year. As at December 31, 2008, the Company was
not in compliance with this covenant and, if the terms of the bank agreement
remain unchanged, will breach this covenant at the end of the current fiscal
year. The Company is currently in negotiations to renew its credit facilities
with the bank.

    Extension of Debentures

    As announced by the Company on January 29, 2009, it has entered into
discussions with the current holders of convertible debentures which mature
February 26, 2009 (the "Debentures") with a view to extend the maturity date
of the Debentures. The Company has, as at this time, obtained the consent of a
requisite number of holders of the Debentures to extend the maturity date of
the Debentures for a period of three months, to May 29, 2009. The Company
expects to enter into a Supplemental Indenture with Computershare Trust
Company of Canada, as trustee of the Debentures, and obtain the approval of
the TSX Venture Exchange in respect of the extension shortly.

    About ExelTech Aerospace

    The third-largest commercial airframe Maintenance, Repair, and Overhaul
(MRO) vendor in Canada, ExelTech is listed on the TSX Venture Exchange and
trades under the symbol XLT. The Company holds Transport Canada, US Federal
Aviation Administration (FAA), European Aviation Safety Agency (EASA) and
Bermuda Department of Civil Aviation (BDCA) approvals to maintain a range of
aircraft and associated structures, components and systems. Aircraft models
serviced by ExelTech include Embraer ERJ 145 family and EJET 170/190 family,
and Bombardier CRJ regional jets and ATR-42 and 72, Bombardier Dash-8 and Saab
340 regional turboprops and Boeing 737 narrow bodies.
    In the summer of 2008, ExelTech opened a purpose-built 153,000 square
feet state-of-the-art maintenance facility at Montreal's Pierre Elliott
Trudeau International Airport where the EJET family is serviced. It also
converted a former heavy maintenance facility into a dedicated line
maintenance facility servicing domestic and international customers for
Montreal's Trudeau International Airport.
    With 310,000 square feet of hangar, shop and office space in three
facilities at Montreal and Quebec City, and with marketing offices in the US
and Europe, ExelTech provides maintenance repair and overhaul services to
airlines in Canada, the US and 24 other countries around the world.

    To learn more about ExelTech Aerospace Inc. (TSX-V: XLT), please visit
our website at www.exeltech-aerospace.com.

    The TSX Venture Exchange Inc. has not reviewed and does not accept
    responsibility for the adequacy of this release.


    
             SELECTED FINANCIAL INFORMATION OF EXELTECH AEROSPACE

    Consolidated statements       For the three-month    For the nine-months
     of earnings and                periods ended             periods ended
     comprehensive income             December 31              December 31
                                    2008        2007        2008        2007
                                       $           $           $           $
    Revenue                   17,642,749  14,637,242  41,875,417  40,557,426
    Cost of sales             14,017,433  12,179,988  36,501,170  32,440,737
    -------------------------------------------------------------------------
                               3,625,316   2,457,254   5,374,247   8,116,689
    Operating expenses         3,268,274   2,933,820   9,142,365   7,118,484
    -------------------------------------------------------------------------
    (Loss) Earnings before
     the following               357,042    (476,566) (3,768,118)    998,205
    Amortization                 517,294     294,366   1,294,221     900,399
    Goodwill Impairment                -           -  13,241,506           -
    Financial expenses         3,391,390     667,478   4,884,298     903,984
    -------------------------------------------------------------------------
    (Loss) Earnings before
     income taxes             (3,551,642) (1,438,410)(23,188,143)   (806,178)
    -------------------------------------------------------------------------

    Income taxes                (561,234)    (91,753) (2,118,057)    164,989
    -------------------------------------------------------------------------
    (Loss) Earnings and
     comprehensive income     (2,990,408) (1,346,657)(21,070,086)   (971,167)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (Loss) Earnings per
     share - basic and
     diluted                       (0.02)      (0.01)      (0.13)      (0.01)


    Consolidated balance sheets                    As at               As at
                                             December 31            March 31
                                                    2008                2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                       $                   $
    ASSETS

    Current assets                            20,084,258          37,433,052
    Capital assets                            26,912,434          15,439,687
    Intangible assets                            178,586             294,836
    Future income taxes                        5,765,641           3,812,655
    Goodwill                                           -          13,241,506
    -------------------------------------------------------------------------

    TOTAL ASSETS                              52,940,919          70,221,736
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Current liabilities                       22,362,291          18,788,155
    Long-term debt including
     liability portion of debentures          17,850,897          18,339,121
    Other                                        667,160             457,083
    SHAREHOLDERS' EQUITY                      12,060,571          32,637,377
    -------------------------------------------------------------------------

    TOTAL LIABILITIES AND
     SHAREHOLDERS' EQUITY                     52,940,919          70,221,736
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00020968EF




For further information:

For further information: Gérard Moretti, Chief Financial Officer, (514)
631-8999 ext 2406, gmoretti@exeltech-aerospace.com

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EXELTECH AEROSPACE INC.

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