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NORTHSTAR AEROSPACE INC. RESTORES PROFITABILITY,
INCREASES REVENUE AND MARGIN
CHICAGO, ILLINOIS, March 31, 2010 - (All amounts within this news release are
stated in U.S. dollars unless otherwise stated.) Northstar Aerospace, Inc. (the
"Company") today reported revenue from continuing operations for the
three months ended December 31, 2009 of $53.7 million compared to $51.6 million
in the same period in 2008. Revenue from continuing operations for the twelve
months ended December 31, 2009 was $193.9 million compared to $171.7 million in
2008.
Defense revenue was $39.5 million and $144.7 million for the three and twelve
months ended December 31, 2009, respectively. For the three months period,
revenue from the defense sector is consistent with the $39.9 million reported
for 2008. For the twelve month period, an increase in activity on the CH-47
Chinook and F-22 Raptor programs in 2009 contributed to the $18.8 million
increase in revenue over the $125.9 million reported for 2008.
Commercial revenue in the three and twelve months ended December 31, 2009 was
$14.2 million and $49.2 million, respectively, compared to $11.7 million and
$45.8 million in the comparable periods of 2008. The $2.5 million increase in
the three month period is due to increased activity on the Rolls-Royce programs.
The $3.4 million increase in the twelve month period compared to 2008 is
primarily due to increased activity on the General Electric Aviation Risk and
Revenue Sharing program involving the CF34-3 engine that powers Bombardier
regional and business aircrafts and an increase in Rolls-Royce activity
partially offset by decreases in other small programs.
Margin increased to 23.3% in the three months ended December 31, 2009, from 1.4%
in 2008. For the twelve months ended December 31, 2009, margin increased to
21.3% from 14.0% for the same period in 2008. The margin was impacted in 2008 by
$6.5 million of inventory provisions, without which the margin would have been
17.8%. The remaining increase in margin is a result of realizing cost
efficiencies from increased volume and productivity improvements.
Defense margin was 24.4% and 22.9% in the three and twelve months ended December
31, 2009, respectively, compared to 9.1% and 18.5% in the same period of 2008.
Commercial margin increased to 20.3% and 16.6% in the three months and twelve
months ended December 31, 2009, respectively, compared to a loss of 24.6% and a
gain of 1.6% in the comparable periods of 2008.
Selling, general and administrative ("SG&A") expenses were $4.1
million (7.6% of revenue) and $19.0 million (9.8% of revenue) for the three and
twelve months ended December 31, 2009, respectively. For the same periods in
2008, SG&A expenses were $4.9 million (9.5% of revenue) and $17.4 million
(10.2% of revenue), respectively. The year-on-year decrease in total dollars for
the three month period was due to certain restructuring costs in 2008 that did
not occur in 2009. The year-on-year increase for the twelve month period
resulted from the addition of depth to the management team to accommodate the
increase in revenue.
Income from continuing operations for the three months ended December 31, 2009
was $3.9 million or $0.13 per share, compared to a loss of $10.6 million or
$0.35 per share in the same period in 2008. The income from continuing
operations for the twelve months ended December 31, 2009 was $4.6 million or
$0.15 per share, compared to a loss of $10.1 million or $0.34 per share in the
same period in 2008.
Net income including the impact of discontinued operations for the three months
ended December 31, 2009 was $3.7 million or $0.12 per share, compared to a loss
of $10.4 million or $0.35 per share in the same period in 2008. The net income
for the twelve months ended December 31, 2009 was $3.5 million or $0.12 per
share, compared to a loss of $9.4 million or $0.32 per share in the same period
in 2008.
As noted in prior periods, the Company does not recognize the income tax benefit
for losses generated in Canada. Additionally, the Company's income tax expense
from Canadian operations is offset by the realization of the benefits from its
net operating loss carryforward. The expense related to Canada would have been
$0.3 million for the three months ended December 31, 2009. The benefit would
have been $0.3 million for the twelve months ended December 31, 2009.
The Company's backlog was $426 million at December 31, 2009 compared to $479
million at December 31, 2008.
Glenn Hess, President and Chief Executive Officer, stated:
"Turnaround strategies to reduce long-term debt, focus on our core business
and invest in people and technology have contributed to restoring the company to
profitability. Significant increases in revenue, margin and income from
continuing operations are strong indicators that our continuous improvement
efforts are yielding positive results. We will continue to pursue further growth
and operational improvement in 2010."
A more detailed discussion of the Company's financial results for the three
months ended March 31, 2009 is contained in Management's Discussion and
Analysis, including comments on the comparability of results between the current
and prior year and is available on www.sedar.com and on the Company's website at
www.nsaero.com.
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; Anderson, Indiana; and Milton and Windsor, Ontario.
Forward Looking Statements
This press release contains forward-looking statements that are subject to risks
and uncertainty. All statements, other than statements of historical facts
included in this press release, including, without limitation, those regarding
the Company's financial position, business strategy, projected costs, including
estimated environmental remediation costs, and plans, projected revenues,
objectives of management for future operations, and certain other items may be
or include forward-looking statements. Forwardlooking 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, U.S. military activity, domestic and international economic
conditions, and other political and economic risks, including currency 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 Consolidated
Financial Statements for the Years Ended December 31, 2009 and 2008 -
Management's Discussion and Analysis - Risks and Uncertainties, and in the
Company's Annual Information Form filed on March 31, 2010, 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 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.
***
Contact: Greg Schindler, Chief Financial Officer, Vice President Finance -
708-728-2099
or gschindler@nsaero.com
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