BENSALEM, Pa., May 15, 2013 /PRNewswire/ -- Precision Aerospace Components Inc. (PAOS:OTCQB) is a one-stop source for standard, self-locking, semi-special and special nuts, bolts and washers manufactured to several military, aerospace and industrial specifications. The Company maintains an inventory of approximately 44,000 SKUs comprised of approximately 65 million parts of premium quality, brand name fastener products.
Precision Aerospace Components announces results from operations for the three months ending March 31, 2013. The Company's revenues increased approximately 242% or $5.1 million for the quarter to $7.2 million from $2.1 million in the comparable period last year. This is largely a result of the Fastener Distribution and Marketing Company, Inc., (FDMC) acquisition completed on May 25, 2012.
The Company's gross profit increased approximately 211% or $1.3 million for the quarter to $1.9 million from $0.6 million in the comparable period last year. The Company believes that its gross profit will remain at the current levels during 2013, based on discussions with its primary customers. The Company's total operating expenses increased 188% or $1.0 million for the quarter to $1.6 million from $0.6 million in the comparable period last year. This is largely a result of the acquisition and costs associated with the acquisition. Net income was $51,373 which was essentially flat compared to the fourth quarter of 2012.
The Company's accounts receivable have increased by approximately $0.5 million to $3.4 million at March 31, 2013 from $3.0 million at December 31, 2012; this difference is due to mainly to sales and normal deviations in customer payments. The Company's inventory levels have remained relatively consistent as of March 31, 2013 compared to December 31, 2012. Net income was $51,373 which was essentially flat compared to the fourth quarter of 2012.
During the first quarter of 2013, the Company completed the last phase of its relocation and consolidation of the activities of its headquarters operations, as well as the operations of its Freundlich Supply Company Inc. and Tiger-Tight Inc. subsidiaries from Staten Island New York to Bensalem, Pennsylvania, at the present location of its Aero-Missile Components Inc. subsidiary. This relocation allows the Company to better serve its customers through the co-location of its broadened inventory and is enabling the Company to realize additional efficiencies from its recent acquisition. As a result of this relocation, the Company is achieving significant and continuing savings from the elimination of the facilities costs associated with its Staten Island location. Additionally, the lower overall tax environment outside of New York City and State is beneficial to the Company.
During the third quarter of 2013, the Company anticipates starting shipment of a unique sealing product that it has developed in conjunction with one of the major manufacturers and its customer to fulfill specific customer needs. The product should fulfill similar needs with other customers. The product addresses current product offering technical shortfalls by increasing resistance to torque out and providing an optional self-sealing feature.
The Company's subsidiary, Aero-Missile Components, has been named the Master Distributor by SPS Technologies located in Jenkintown, Pennsylvania for its FLEXLOC® Locknut product line toward the end of last year. The FLEXLOC® Locknut is a premium locknut line with Military, Aerospace and Industrial applications. FLEXLOC® locknuts have been designed into challenging joint applications by engineers for over 50 years. The FLEXLOC® line enjoys an unequalled history of success in applications where resistance to severe vibration is required. As a Master Distributor, Aero-Missile Components will service a network of SPS Authorized FLEXLOC® Distributors. The FLEXLOC® Locknut product line is manufactured by SPS Technologies domestically in the United States. FLEXLOC® is a registered trademark of SPS Technologies, a PCC Company. The Company anticipates significant additional revenues from sales of the FLEXLOC® line as the year progresses.
"First quarter revenues were in line with our expectations and we expect overall product sales to continue to show improvement throughout the coming year. Some of these anticipated sales increases are already being realized, stated Mr. Andrew Prince, President and Chief Executive Officer of Precision Aerospace Components. "During the first quarter Precision was awarded the Silver Distributor award by the Boeing Company which was a significant accomplishment for us. And we began the widespread distribution of our Tiger-Tight lock washers under an exclusive North American distribution agreement. Precision also retained an experienced engineering sales manager to spearhead the sales of this product line.
The Company has realized some significant savings from the elimination of the facilities and costs associated with its Staten Island location which was closed down late last year and recently opened a new warehouse in Denton, Texas to better serve our customers in the Dallas-Ft. Worth area.
Expanding our sales organizations and presence in these new markets will make a meaningful impact on the rate of growth the Company sees in the coming months and provide logistical support for our current products and the launch of new product lines. We believe all of these new initiatives will improve our overall cost structure, cash flows and provide better service to our network partners and the end customers that we serve."
About Precision Aerospace Components Inc. (PAOS:OTCQB): The Company's operations are carried out through its wholly-owned distribution subsidiaries Aero-Missile Components, Inc. ("Aero-Missile") and Freundlich Supply Company, Inc. ("Freundlich"), both of whom have Stocking Distributor relationships with a number of United States fastener manufacturers and who sell high technology, specially engineered fasteners - nuts and bolts - predominantly total levels of the aviation industries (original equipment manufacturers, maintenance and repair organizations, and other distributors as well as to the United States Department of Defense ("Department of Defense"). Creative Assembly Systems, Inc. ("Creative Assembly") is a value added distributor of proprietary and specialty fasteners for production, primarily serving the heavy truck, automotive, appliance, and material handling industries and Tiger-Tight Corp. ("Tiger-Tight") the exclusive North American master distributor of the Tiger-Tight locking washer. Tiger-Tight washers are used in demanding vibration applications and the Company believes they have significant advantages in comparison to competitive products. Tiger-Tight products are now available and under evaluation by several major US corporations; they are being used aboard the SpaceX Dragon – the first civilian space craft to dock and return from the International Space Station. For more information visit http://precisionaerospacecomponents.com
This Form 10-Q contains "forward-looking statements" relating to Precision Aerospace Components, Inc. (the "Company") which represent the Company's current expectations or beliefs including, but not limited to, statements concerning the Company's operations, performance, financial condition and growth. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as "may", "anticipate", "intend", "could", "estimate" or "continue" or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel, variability of quarterly results, and the ability of the Company to continue its growth strategy and the Company's competition, certain of which are beyond the Company's control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, or any of the other risks set out under the caption "Risk Factors" in the Company's 10-K report for the year ended 2012 occur, actual outcomes and results could differ materially from those indicated in the forward-looking statements.
Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Hanover Financial Services
SOURCE Precision Aerospace Components Inc.