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Global Aircraft Solutions Announces Second Quarter Financial Results

Posted on: Tuesday, 14 August 2007, 15:15 CDT

Global Aircraft Solutions, Inc. (OTCBB: GACF) an integrated aviation company engaged in aircraft trading, aircraft parts sales, and scheduled maintenance, repair and overhaul (MRO) services for commercial airlines, charter airlines and aviation leasing companies, today announced its financial results for the second quarter ended June 30, 2007.

Net sales for the quarter ended June 30, 2007 increased $975 thousand or 10% to $11.2 million compared to $10.2 million for the same period ended June 30, 2006. Net sales for the six months ended June 30, 2007 decreased $4.3 million, or 19.8%, to $17.4 million from $21.7 million for the six months ended June 30, 2006. The revenue reduction for the six months ended in 2007 took place in the maintenance and parts business due in part to the high unpaid balances of Avolar and BCI, which are now being resolved. Aircraft sales were $7.9 million in the first half of 2007, versus $3.2 million in the same period of 2006. Aircraft sales continue to vary significantly on a period-to-period basis based on the particular aircraft sold as well as the time necessary to complete a transaction.

Gross profit for the second quarter of 2007 decreased 23% to $1.9 million compared to $2.4 million for the same period in 2006. Income from operations decreased 42% to $337 thousand for the second quarter of 2007 compared to $579 thousand for the same period in 2006.

Net income decreased from $1.1 million for the period ended June 30, 2006 to $140 thousand for the period ended June 30, 2007. The decrease in net income was primarily attributable to the $969 thousand gain from Jet Global in the second quarter of 2006 which did not reoccur during the second quarter of 2007 due to our disengagement from the joint venture in this quarter. The quarterly net income was negatively impacted by one-time extraordinary financing charges and interest of in excess of $250,000 to secure interim financing for short-term working capital needs. Additionally, the SG&A was negatively impacted by a $250,000 charge for stock based compensation.

The balance sheet improved as the Company reported total current assets of $27.3 million, up from $20.8 million at yearend, and total assets of $28.7 million versus $28.5 million at yearend. While the cash balance decreased, it is important to note that during the quarter the Company saw significant improvement to current assets due to the six aircraft received from JetGlobal. This improved current ratio from 1.7 to 1 for the yearend 2006 to 2.35 to 1 for the second quarter ended 2007. The Company believes that all of these aircraft will be sold prior to the end of 2007 generating significant liquidity for Global Aircraft. Current Liabilities decreased for the period to $11.6 million from $12.2 million, while total liabilities also decreased to $12.2 million from $12.7 million at yearend of 2006. Book value for our Company increased to $.42 per share at June 30, 2007.

"During the second quarter of 2007, the management team of Global Aircraft was focused on a number of initiatives including the resolution of our liquidity issues which hampered our earnings at year end," stated Mr. Ian Herman, Chairman of Global Aircraft. "I am pleased to announce that five of the six aircraft from our former JetGlobal venture were delivered to us during the second quarter with the sixth to be delivered within the next sixty days. We are confident that we will sell two aircraft, totaling over $4 million in the third quarter of 2007 and the remaining four by the end of 2007. The sale of these aircraft will allow us to retire some debt and will provide us with working capital to grow our business."

Mr. Herman continued, "We have also come to terms with Avolar for a payment schedule of their outstanding debt. To date this balance has been paid down to under $1.5 million from over $2.7 million. Avolar will continue to make weekly payments until early December 2007 when we are expecting the entire outstanding balance will be paid in full."

Mr. John Sawyer, President of Global Aircraft stated, "Although we experienced lower sales in our maintenance division at Hamilton Aerospace Technologies (HAT) for the second quarter of 2007, we have already signed four maintenance contracts through GALP and have experienced increased demand for our services through our marketing efforts." Mr. Sawyer continued, "We believe that our Hamilton subsidiary will increase quarterly revenues in the third quarter to in excess of $4.5 million from $2.75 million in the second quarter of 2007. I am confident that the success we expect to have in the third quarter will continue throughout the rest of 2007."

Conference Call

The conference call will take place at 4:15 p.m. Eastern, on Wednesday, August 15, 2007. Anyone interested in participating should call 1-866-225-8754 if calling within the United States, or 1-480-629-9564 if calling internationally, approximately 5 to 10 minutes prior to 4:15 p.m. There will be a playback available until August 22, 2007. To listen to the playback, please call 1-800-406-7325 if calling within the United States, or 1-303-590-3030 if calling internationally. Please use pass code 3770547 for the replay.

This call is being webcast by ViaVid Broadcasting and can be accessed at Global's Web site at http://www.globalaircraftsolutions.com. The webcast may also be accessed at ViaVid's Web site at http://www.viavid.net. The webcast can be accessed through October 15, 2007, on either site.

About Global Aircraft Solutions, Inc.

Global Aircraft Solutions provides parts support and maintenance, repair and overhaul (MRO) services for large passenger jet aircraft to scheduled and charter airlines and aviation leasing companies. Hamilton Aerospace and World Jet, both divisions of Global Aircraft Solutions, operate from adjacent facilities comprising about 35 acres located at Tucson International Airport. These facilities include hangars, workshops, warehouses, offices and other buildings. Notable customers include Avolar Airlines, BCI Aircraft Leasing, Jetran International, Goodrich Corporation, AAR, the Mexican Presidential Fleet, Pegasus Aviation, Shaheen Airlines, Iraqi Airways, Royal Khmer Airlines and Alant Soyuz.

Global's website is located at www.globalaircraftsolutions.com. The Hamilton Aerospace website is located at www.hamaerotech.com.

Safe Harbor

Except for the historical information presented, this press release contains "forward-looking statements" made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 or regulations there under including, but not limited to expected and estimated revenue and earnings. Forward-looking statements are made based upon management's expectations and belief concerning future developments and their potential effect upon the Company. There can be no assurance that future developments will be in accordance with management's expectations or that the effect of future developments on the Company will be those anticipated by management.

The words "believes,""expects,""intends,""plans,""anticipates,""hopes,""likely,""will," and similar expressions identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company or its subsidiaries or industry results, to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements. These risks include the economic health of the airline industry, demand for Global Aircraft Solutions' services, and competitive pricing pressures.

In addition, other risks are detailed in Global's Form 10-KSB for the year ended December 31, 2006. These statements speak only as of above date, and Global disclaims any intent or obligation to update them.

Source: Business Wire

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