B/E Aerosapce Wins Seating Competition - Awarded All Classes of
Service For US Airways Major Refleeting Program
Company Settles Dispute With Government Reshipment of Passenger
Seats To Iran Air
WELLINGTON, Fla.--(BUSINESS WIRE)--January 14, 1998-- B/E Aerospace, Inc.
(NASDAQ/NMS:BEAV - news) announced today that US Airways (USA) has selected B/E
Aerospace to supply both First Class and Main Cabin Class seating for US Airways' new Airbus
319/320/321 aircraft being purchased by the carrier. The program, while initially valued at $27
million for the first 124 aircraft, would increase to approximately $85 million upon exercise by US
Airways of its options covering an additional 276 new-buy aircraft from Airbus to complete its
narrowbody refleeting program.
Specifically, US Airways has selected B/E's recently introduced Millenium(TM) model seat for
First Class and the company's new Reliance(TM) 985 model for the Main Cabin. Deliveries are
scheduled to begin in July 1998.
Robert J. Khoury, vice chairman and chief executive officer commented, ''This is another
important award for B/E, in which the company is replacing the incumbent First Class seating
provider. This also positions B/E very favorably in the upcoming selection process for USA's new
international fleet expansion, consisting of multi-class service on a number of new-buy widebody
aircraft.''
Khoury continued, ''We are especially pleased that US Airways has chosen B/E to supply both
classes of service for this major refleeting program, one of the largest single new aircraft orders in
aviation history. In awarding this program to B/E, the carrier cited the long relationship that US
Airways has had with the company as well as our industry-leading expertise in 16g seating. The
carrier also praised the Millenium and Reliance models for their comfort and reliability as well as
the potential for commonality and compatibility with US Airway's future fleet plans. We are
honored to be selected to work with US Airways as their partner for the future.''
Separately, the company announced today that a long-running dispute with the U.S. Government
over export sales between 1992 and 1995 to Iran air has been resolved. The dispute centered on
shipments of aircraft seats and related spare parts for five civilian aircraft operated by Iran. Iran
air purchased the seats in 1992 and arranged for them to be installed by a contractor in France. At
the time, Iran was not the subject of a U.S. trade embargo. In fact, B/E Aerospace's sale of slightly
over $3 million in seats and parts in 1992 and 1993 was an insignificant fraction of the over $1.3
billion in sales to Iran by U.S. companies during this period.
In connection with its sale of seats to Iran Air, B/E applied for, and was granted a validated export
license by the U.S. Department of Commerce (DOC). The dispute with the U.S. Government
centered on whether seats were delivered to Iran Air before the formal license was issued by the
DOC, some seven months after B/E first applied for the license.
Today's action resolves all disputes between B/E Aerospace and the Department of Justice as
well as the DOC's Bureau of Export Enforcement. As part of the settlement, B/E has agreed to
plead guilty to a violation of the International Economic Emergency Powers Act, which, in this
case, alleges that the export of seats to Iran Air's refurbishment contractor in France took place
prior to the formal issuance of the validated export license by the DOC. As part of the resolution,
B/E has also entered into a consent order with the DOC under which the DOC has agreed to
suspend the imposition of a three-year export denial order on PTC Aerospace, a member of B/E's
U.S. Seating Products Group, provided no further violations of the export laws occur. The
Company will record a charge of approximately $4 million in its current quarter, which ends Feb.
28, 1998, related to the fines, civil penalties and associated legal fees.
Commenting on the settlement, Khoury stated, ''We are pleased to have reached a global
resolution with the U.S. Government which brings this dispute to a conclusion. While the company
believes that it took steps to comply with the applicable export regulations in the matter at hand,
we have bolstered our procedures and have implemented a focused export compliance program
to further ensure that the complicated laws and regulations relating to export controls are
observed by all our personnel and facilities. We are also most pleased that the resolution reached
today will have no adverse effect on B/E's continuing operations.''
B/E Aerospace, Inc. designs, manufactures, sells and services a broad line of commercial aircraft
cabin interior products, including seating products, passenger entertainment and service systems,
and a complete line of food and beverage preparation and storage equipment. B/E Aerospace is
the world's leading supplier of cabin interior products and services, serving virtually all the world's
airlines.
This press release contains forward-looking statements that involve risks and uncertainties that
may cause the company's actual experience to differ materially from that anticipated. Factors that
might cause such a difference include, but are not limited to, those discussed in the company's
filings with the Securities and Exchange Commission, including its most recent Form 10-Q, proxy
statement and Form 10-K, and in ''Risk Factors'' in the Form S-3 dated Dec. 12, 1996 relating to
the company's recent common stock offering, as well as future events that have the effect of
reducing the company's available cash balances, such as unexpected operating losses or delays in
the integration of the company's available cash balances, such as unexpected operating losses or
delays in the integration of the company's seating business or the delivery of the MDDS
interactive video system or capital expenditures or cash expenditures related to possible future
acquisitions.
Contact:
Jay Jacobson
Financial Relations
914/722-2737 |
