Pemco Aviation Group?

[wnbubbleboy]

November 14, 2005 06:22 PM US Eastern Timezone

Pemco Aviation Group Reports Third Quarter 2005 Results

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Nov. 14, 2005--Pemco Aviation Group, Inc. (NASDAQ: PAGI), a leading provider of aircraft maintenance and modification services, today announced a net loss for the 2005 third quarter of $3.75 million ($0.91 per share), compared with a net income of $0.28 million ($0.07 per share) in the third quarter of 2004. Revenue for the third quarter of 2005 was $31.0 million compared to $54.9 million in third quarter of 2004, a decrease of 43.5%. For the nine months ended September 30, 2005, the Company had a net loss of $2.96 million compared to net income of $0.19 million for the same period in 2004.


According to Ronald Aramini, Pemco's President and CEO, "The third quarter of 2005 was tough for the Company due to several unusual events that caused a net loss. The net loss for the quarter and nine-month period was caused by the Northwest Airlines bankruptcy, the two-month lock out of the union employees at our Dothan facility and the temporary suspension of KC-135 inputs earlier in 2005. None of these events should have a significant continuing impact on the Company's results of operations."

Mr. Aramini added, "In the third quarter, Northwest Airlines reduced the number of aircraft inputs at our commercial facility in Dothan, Alabama due to a strike by their mechanics. Also, during the third quarter, Northwest Airlines filed for Chapter 11 bankruptcy protection causing the Company to reserve for $1.5 million of accounts receivable. Additionally, the Company locked out all union employees at the Dothan, Alabama facility for two months in an effort to finalize negotiations. A new agreement was reached on October 11, 2005. With union employees returning to work and a return to normal aircraft inputs from Northwest, coupled with aircraft inputs under the new Alaska Airlines conversion program and other customers, the Company's commercial segment is expected to be at an historically high business volume by the first quarter of 2006. Also contributing to the decline in revenue in the third quarter was a short term reduction in work on our KC-135 program. KC-135 inductions in the U.S. government fiscal year which ended September 30, 2005 were below original estimates. As a result, revenue from the KC-135 program for the second and third quarters of 2005 was below expectations, but should return to normal levels in the fourth quarter of 2005 and beyond. In addition, we have mutually agreed with the Coast Guard that options for additional C-130 aircraft would not be exercised. This program resulted in significant losses for Pemco in 2003, 2004 and 2005. The last two aircraft under the Coast Guard contract should be delivered in the fourth quarter of 2005. We are very excited about beginning work on two major programs announced previously in the second quarter. With our partner, L-3 Communications, Pemco expects to begin providing sustainment work on the P-3 Orion maritime patrol and antisubmarine warfare aircraft for the U.S. Navy on November 15, 2005. In addition, we have just signed a contract with Southwest Airlines that we expect will add several maintenance and modification lines at our Dothan facility.

 

[wnbubbleboy]

I guess I got my answer:


Southwest Airlines Selects Pemco Aviation

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Nov. 15, 2005--Pemco World Air Services, the Dothan, AL based subsidiary of Pemco Aviation Group (NASDAQ: PAGI) announced today that it has been awarded a contract from Southwest Airlines to provide aircraft maintenance and modification services on its family of 737 aircraft.


Ron Aramini, President and Chief Executive Officer of Pemco Aviation Group said, "The contract award by Southwest confirms the success of our long term strategy for our Dothan facility. We have focused our efforts on quality, price and schedule in support of our customers and that effort has been rewarded. We are very pleased that Southwest Airlines has selected Pemco to join its team."

Ray Bennett, President of Pemco World Air Services, said, "Southwest takes their relationships with their maintenance providers very seriously. By selecting Pemco, they recognize the expertise of our employees, the quality of our work and our strong desire to be a member of the Southwest team. We appreciate their commitment and believe that our partnership with Southwest will grow and provide benefit to both companies."

"We look forward to building a partnership with Pemco Aviation, moving forward to creating a heavy maintenance program that preserves our impeccable safety record and helps us control our costs," said Jim Sokol, Southwest Airlines Vice President of Maintenance and Engineering.

Pemco Aviation Group, Inc., with executive offices in Birmingham, Alabama, and facilities in Alabama and California, performs maintenance and modification of aircraft for the U.S. Government and foreign and domestic commercial customers. The company also provides aircraft parts, support and engineering services and develops and manufactures aircraft cargo systems, rocket vehicles and control systems, and precision components.

This press release contains forward-looking statements made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by their use of words, such as "believe," "expect," "intend" and other words and terms of similar meaning, in connection with any discussion of the Company's prospects, financial statements, business, financial condition, revenues, results of operations or liquidity. Factors that could affect the Company's forward-looking statements include, among other things: changes in global or domestic economic conditions; the loss of one or more of the Company's major customers; the Company's ability to obtain additional contracts and perform under existing contracts; the outcome of pending and future litigation and the costs of defending such litigation; financial difficulties experienced by the Company's customers; potential environmental and other liabilities; the inability of the Company to obtain additional financing; material weaknesses in the Company's internal control over financial reporting; regulatory changes that adversely affect the Company's business; loss of key personnel; and other risks detailed from time to time in the Company's SEC reports, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2004. The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company does not undertake any obligation to update or revise any forward-looking statements and is not responsible for changes made to this release by wire services or Internet services.