Northstar Aerospace, Inc. provides Third Quarter Update

    SYMBOL: NAS     Common Shares

    CHICAGO, Oct. 23 /CNW/ - (all amounts stated in U.S. dollars) - Northstar
Aerospace, Inc., a leading independent manufacturer of flight-critical
aerospace gears and transmissions, today advised that earnings for the third
quarter ended September 30, 2008 are expected to be less than current analyst
estimates, primarily due to delays in deliveries. The Company anticipates net
income for the quarter of approximately $300 thousand or $0.01 per share,
including a one-time tax benefit of approximately $1.4 million.
    The Company will be in violation of a financial covenant of its credit
agreement as a result of lower than expected earnings. The covenant requires
that the Company generate earnings in excess of a ratio to its fixed charges.
The Company is currently in discussions with its bank group to obtain a waiver
of this covenant violation and amend the covenants in future periods to best
fit the Company's financing needs.

    Northstar President and Chief Executive Officer Glenn Hess said:

        "While this announcement is not one the Company would want to be
        making, progress continues to be made to position Northstar's
        manufacturing operations to meet our customers' demands. During the
        third quarter, the Company paid down its working capital facility by
        approximately $8 million through improvements in accounts receivable
        and a net reduction in inventory."

        "Management's objective is to turn a growing backlog into profitable
        growth and positive cash generation. We are upgrading our team,
        processes and systems to create a structure that will enable
        Northstar to accelerate manufacturing improvements to meet this
        objective. While increasing costs in the short-term, we are confident
        these changes will lead to long-term benefits for Northstar's
        shareholders, customers, and employees."

    Northstar plans to provide additional information regarding its third
quarter results and business outlook during its regular quarterly conference
call on Thursday, November 6, at 9:00 a.m. EST, following the release of its
earnings announcement.

    Northstar Aerospace, Inc. ( 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, the statements
made with respect to the Company's ability to obtain a waiver of its credit
agreement covenant violation and an amendment to its credit agreement
covenants, 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. Forward-looking information
contained herein is based upon a number of assumptions regarding the Canadian,
U.S. and global economic environment, local and foreign government policies
and actions and assumptions made based upon discussions to date with the
Company's lenders. Actual events and future results of the Company may differ
materially depending on a variety of factors, including the results of
on-going discussions and negotiations with the Company's lenders, 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. Other 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 press
release 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 factors noted above and 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.

    %SEDAR: 00002555E

For further information:

For further information: Craig Yuen, (708) 728-2121 or

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