Third Quarter EPS of $.33 Per Share Reported by First Aviation

First Aviation Services Inc.

Consolidated Condensed Statements of Operations

(in thousands, except share and per share amounts)

12 Mos Ended

Three Mos Ended Sept 30,

Nine Mos Ended Sept 30,

Dec 31, 

2012

2011

2012

2011

2011*

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Net sales

$        23,100

$        29,807

$        70,575

$        87,556

$      113,056

Cost of sales

(17,285)

(23,502)

(53,304)

(68,807)

(88,635)

Gross profit

5,815

6,305

17,271

18,749

24,421

Selling, general and administrative expenses

4,516

5,048

14,610

15,736

21,248

Corporate expenses

426

341

1,214

1,123

1,500

4,942

5,389

15,824

16,859

22,748

Income from operations

873

916

1,447

1,890

1,673

Non-operating income (expense)

Interest income and other, net

-

(28)

12

(46)

-

Interest expense

(431)

(330)

(1,084)

(1,058)

(1,405)

Other income and expenses

(23)

7

(39)

707

718

Income before income taxes

419

565

336

1,493

986

Income tax provision

(26)

(56)

(98)

(265)

(195)

Net income

393

509

238

1228

791

Dividends on preferred stock

(74)

(64)

(214)

(184)

(251)

Income available to common stockholders

$             319

$             445

$              24

$          1,044

$             540

Basic net income per share, and net income

per share - assuming dilution:

Basic net income per share

$            0.33

$            0.46

$            0.02

$            1.23

$            0.62

Net income per share - assuming dilution

$            0.33

$            0.46

$            0.02

$            1.23

$            0.62

Weighted average shares outstanding - basic

969,072

958,124

965,091

846,144

874,644

Weighted average shares outstanding - assuming dilution

969,072

958,370

965,091

846,871

875,349

* Derived from Audited Consolidated Financial Statements

Please see our forward looking statements at www.firstaviation.com/forward

First Aviation Services Inc.

Consolidated Condensed Balance Sheets

(in thousands, except share amounts)

Sept 30, 2012

Dec 31, 2011*

Sept 30, 2011

(Unaudited)

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$          1,116

$         1,112

$          1,181

Trade receivables, net

14,777

17,679

20,820

Inventories, net

27,503

31,411

31,999

Prepaid expenses and other

2,390

1,843

2,139

Total current assets

45,786

52,045

56,139

Plant and equipment, net

1,671

1,830

1,948

Deferred financing costs and other

358

477

443

Goodwill

7,773

7,773

7,773

Total assets

$        55,588

$       62,125

$        66,303

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$          9,622

$       16,178

$        17,478

Accrued compensation and related expenses

537

424

487

Other accrued liabilities

860

1,276

2,422

Revolving line of credit

14,400

16,985

18,130

Term loan payable

5,200

1,200

600

Notes payable

11

9

-

Total current liabilities

30,630

36,072

39,117

Long-term liabilities:

Other liabilities

1,525

1,431

1,589

Term loan payable

-

4,600

5,200

Subordinated debt

2,596

-

-

Total liabilities

34,751

42,103

45,906

Stockholders' equity

Class A Common stock, $0.20 par value, 1,000,000 shares authorized,

733,648, 733,648 and 733,644 shares issued, respectively, 

681,068, 671,994 and 670,064 shares outstanding, respectively

125

125

125

Class B Common stock, $0.20 par value, 300,000 shares authorized

288,333, 288,333 and 288,333 shares issued

and outstanding, respectively

58

58

58

Preferred stock, $0.01 par value, $100 redemption value, 30,000

shares authorized, 20,494, 18,354 and 17,685 shares issued

and outstanding, respectively

2,049

1,835

1,768

Additional paid-in capital

41,610

41,960

42,167

Deficit

(18,157)

(18,181)

(17,677)

Accumulated other comprehensive income

462

433

391

26,147

26,230

26,832

Less:  treasury stock, at cost, 52,580, 61,654 and 63,580 

shares, respectively

(5,310)

(6,208)

(6,435)

Total stockholders' equity

20,837

20,022

20,397

Total liabilities and stockholders' equity

$        55,588

$       62,125

$        66,303

* Derived from Audited Consolidated Financial Statements

Please see our forward looking statements at www.firstaviation.com/forward

First Aviation Services Inc.

Consolidated Statements of Cash Flows

(in thousands)

12 Mos Ended

Three Months Ended Sept 30,

Nine Months Ended Sept 30,

Dec 31,

2012

2011

2012

2011

2011*

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Cash flows from operating activities

Net income

$             393

$             509

$             238

$          1,228

$             791

Adjustments to reconcile net income to net cash

provided by (used in) operating activities

Depreciation and amortization

279

319

896

939

1,160

Equity based compensation

15

28

53

73

93

Provision for bad debts

236

52

394

188

338

Provision for excess and obsolete inventory

-

-

-

(36)

236

Accreted debt discount

78

-

91

-

-

Change in working capital assets/liabilities:

Trade receivables

(1,112)

(567)

2,508

(957)

2,012

Inventories

491

1,012

3,936

2,707

3,109

Prepaid expenses and other

(177)

516

(556)

278

574

Accounts payable

950

(3,250)

(6,556)

(1,299)

(2,621)

Accrued compensation and related expenses,

   and other accrued liabilities

9

(906)

(303)

(1,033)

(2,242)

Net cash provided by (used in) operating activities

1,162

(2,287)

701

2,088

3,450

Cash flows from investing activities

Purchases of plant and equipment and other assets

(344)

(71)

(556)

(222)

(345)

Net cash used in investing activities

(344)

(71)

(556)

(222)

(345)

Cash flows from financing activities

Net change in revolving iine of credit

(135)

(1,319)

(2,585)

(4,127)

(5,272)

Loan costs

(2)

(10)

(13)

(103)

(118)

Repayments on term loan

(600)

-

(600)

(600)

(600)

Proceeds from subordinate debt issuance

-

-

3,000

-

-

Repayments on notes payable and other additions

1

(174)

96

(156)

(305)

Issuance of Class A Common Stock

-

-

-

3,000

3,001

Net cash (used in) provided by financing activities

(736)

(1,503)

(102)

(1,986)

(3,294)

Effect of exchange rate changes on cash and cash

equivalents

2

(2)

1

(1)

(1)

Net change in cash and cash equivalents

84

(3,863)

44

(121)

(190)

Cash and cash equivalents at the beginning of the period

1,032

5,044

1,112

1,302

1,302

Cash and cash equivalents at the end of the period

$          1,116

$          1,181

$          1,156

$          1,181

$          1,112

Supplemental cash flow disclosures

Cash paid for:

Interest

$             236

$             249

$             748

$             831

$          1,126

Income taxes paid, net

$              15

$              11

$              76

$              71

$              75

* Derived from Audited Consolidated Financial Statements

Please see our forward looking statements at www.firstaviation.com/forward