SYMBOL: NAS Common Shares
CHICAGO, Aug. 8 /CNW/ - (All amounts within this news release are stated
in U.S. dollars) Northstar Aerospace, Inc. (the "Company") today reported
revenue for the three months ended June 30, 2008 of $46.5 million compared to
$40.9 million in 2007, an increase of 14%. Revenue year-to-date is
$87.8 million compared to $79.8 million in 2007.
Revenue in the three and six months ended June 30, 2008 was driven by a
$5.5 million and $7.7 million increase, respectively, in the defense sector
business. Commercial revenue for 2008 has remained consistent with the prior
Margins as a percentage of revenue were 20.4% in the three months ended
June 30, 2008 compared to 21.6% in the same period of 2007. Defense sector
margins decreased from 25.1% to 22.2% mainly from the mix of revenue on the
CH-47 program. Commercial sector margins increased from 15.4% to 16.7%, mainly
due to mix of program revenue.
Selling, general and administrative ("SG&A") expenses of $4.7 million for
the three months ended June 30, 2008 and $4.1 million in 2007 remained
consistent as a percentage of sales at 10.1%. SG&A expenses year-to-date were
$9.1 million (10.3% of sales) compared to $8.6 million (10.7% of sales) in
Earnings before interest, income taxes, depreciation, amortization, gains
(losses) on foreign exchange and forward contracts, non-recurring and unusual
items ("EBITDA") were $5.8 million for the three months ended June 30, 2008
compared to $5.4 million in 2007. EBITDA year-to-date is $11.0 million
compared to $10.5 million in 2007.
The net income for the three months ended June 30, 2008 was $0.6 million
or $0.02 per share compared to a loss of $0.1 million or $0.00 per share for
the same period in 2007. Net income year-to-date was $0.7 million or $0.02 per
share compared to $0.1 million or $0.00 per share in 2007.
The Company's backlog increased to $468 million at June 30, 2008 from
$426 million at March 31, 2008 and $372 million at December 31, 2007.
Glenn Hess, President and Chief Executive Officer, stated:
"For the quarter, we reached record levels of revenue and backlog.
The Company's commitment to meeting customer requirements by adding
needed equipment and resources resulted in a 14% increase in year-
over-year volume during the second quarter.
Our focus continues to be on increasing production and continuous
improvement in the manufacturing operations to meet our customers'
delivery and quality requirements. The operational and financial
results during the quarter are encouraging and add to a strong
foundation for growth during the balance of the year and beyond."
A more detailed discussion of the Company's financial results for the
three months ended June 30, 2008 is contained in Management's Discussion and
Analysis, including comments on the comparability of results between the
current and prior year.
Northstar Aerospace, Inc. (www.nsaero.com) is North America's leading
independent manufacturer of flight critical gears and transmissions. Northstar
Aerospace is a public company (TSX:NAS) with operating subsidiaries in the
United States and Canada. Its principal products include helicopter gears and
transmissions, accessory gearbox assemblies, rotorcraft drive systems and
other machined and fabricated parts. It also provides maintenance, repair and
overhaul of helicopter engines and transmissions. The Company's executive
offices are located in Chicago, Illinois. Its plants are located in Chicago,
Illinois; Phoenix, Arizona; Stroud, Oklahoma; Anderson, Indiana; and Milton
and Windsor, Ontario.
Forward Looking Statements
This press release includes "forward-looking statements" that are subject
to risk and uncertainty. All statements other than statements of historical
facts included in this report, including, without limitation, those regarding
the Company's financial position, business strategy, projected costs and
plans, projected revenues, objectives of management for future operations, and
certain other items discussed above may be or include forward-looking
statements. There is uncertainty over the impact of terrorist activity on the
North American economy and the Company's revenues and earnings for 2008 and
beyond. There is also uncertainty as a result of the downturn in the
commercial aerospace market, the impact of lower world wide commercial
passenger air travel, air freight traffic, fluctuation in foreign currency
markets and the impact of the level of future U.S. military expenditures.
Forward-looking information contained herein is based upon a number of
assumptions regarding the Canadian, U.S. and global economic environment and
local and foreign government policies and actions. Actual future results of
the Company may differ materially depending on a variety of factors, including
production rates, timing of product deliveries, Canadian, U.S. and foreign
government activities, volatility of the market for the Company's products and
services, worldwide political stability, factors that result in significant
and prolonged disruption to commercial air travel worldwide, worldwide
political stability, domestic and international economic conditions, and other
political and economic risks and uncertainties. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, there can be no assurance that such expectations will prove to
have been correct. Important factors that could cause actual results to differ
materially from the Company's expectations ("Cautionary Statements"), are
included in the Company's Annual Report for the Years Ended December 31, 2007
and 2006 - Management's Discussion and Analysis - Risks and Uncertainties, and
in the Company's Annual Information Form filed on March 31, 2008, under the
heading of Risks and Uncertainties. All information contained in this report
and subsequent written and oral forward-looking statements attributable to the
Company or persons acting on behalf of the Company are expressly qualified in
their entirety by the Cautionary Statements.
The Company disclaims any intentions or obligation to update or revise
any forward looking statements or comments as a result of any new information,
future event or otherwise, unless such disclosure is required by law.
The Company defines adjusted net income, comparable basis as income from
operations before income taxes and unusual items. The Company defines EBITDA
as earnings from continuing operations before interest, income taxes, foreign
exchange, depreciation and amortization, unusual items, and other
non-recurring items. EBITDA and adjusted net income are used by management to
evaluate the Company's performance as compared to other companies in the
industry that have different financing and capital structures and/or tax
Furthermore, the Company has included information concerning EBITDA and
adjusted net income (loss) before taxes because it believes these measures are
used by certain investors as measures of continuing financial performance.
These measures are not measures of financial performance under Canadian
generally accepted accounting principles (GAAP). As well, these measures have
no standardized meaning prescribed under GAAP and are unlikely to be
comparable to similarly titled measures used by other companies. These
measures should not be construed as an alternative to cash flow from
operations or earnings from operations as determined in accordance with GAAP
as measures of liquidity or earnings.
The Company's provision for environmental liabilities and restructuring
and severance costs are included as an adjusting item to arrive at EBITDA and
adjusted net income (loss) before taxes as these matters are not recurring by
nature. The environmental provision is related to a specific concern at the
Company's Canadian facilities. Estimates related to the provision are based on
a number of assumptions which are inherently difficult to determine and no
assurances can be given that environmental test results, changes in laws or
enforcement policies or other factors could not result in costs that differ
from the estimates contained therein. As a result of the complexity of this
matter, there have been changes in various estimates that resulted in multiple
year impacts. The provision for restructuring and severance costs is related
to certain plans that require implementation over a period of time. The need
for these plans is in response to the increasing costs at the Company's
Canadian operations, principally driven by the strengthening of the Canadian
dollar. Management does not consider these matters to be recurring in nature
or part of the on-going business of the Company.
For a detailed reconciliation of EBITDA to income from continuing
operations, please see Management's Discussion and Analysis available on the
Company's website and on SEDAR.
NORTHSTAR AEROSPACE INC.
For the three months and six months ended June 30, 2008
prepared in accordance with Canadian GAAP
(thousands of U.S. dollars except per share amounts)
Summary of Quarterly Information
Q2 2008 Q1 2008 Q4 2007 Q3 2007
Revenues $46,483 $41,315 $42,247 $41,667
Unusual items(*) - - 6,386 -
Net income (loss) 629 80 (7,774) 284
Income (loss) per share:
basic & diluted 0.02 0.00 (0.26) 0.01
Q2 2007 Q1 2007 Q4 2006 Q3 2006
Revenues $40,876 $38,913 $34,121 $36,898
Unusual items(*) - - 8,077 -
Net income (loss) (85) 171 (12,842) 701
Income (loss) per share:
basic & diluted (0.00) 0.01 (0.43) 0.02
(*) includes environmental remediation provisions and restructuring
charges for severance and termination.
Summary Balance Sheet Information
June 30, March 31, December 31,
2008 2008 2007
Working capital $53,824 $52,934 $56,159
Total assets $187,938 $183,124 $184,968
Total debt $76,211 $72,255 $75,493
Shareholders' equity $47,589 $42,868 $43,237
The unaudited Consolidated Financial Statements for the Three and Six
Months ended June 30, 2008 and related MD&A are available on our website at:
www.nsaero.com and on SEDAR.
For further information:
For further information: Craig Yuen, Chief Financial Officer, (708)