The cyclical downturn in the aerospace industry failed to improve during the second quarter, which resulted in very difficult market conditions.
The Fairchild Corporation showed a loss of $.28
per share on continuing operations, compared with a loss of $.40 per share in the same quarter last year. Sales were up 20% over the same quarter last year, but on a pro forma basis they were
down by 19%, despite the continuing growth in our global market share, which we estimate is now close to 40%. We are not expecting market conditions to improve before calendar 2001.
There were some encouraging signs at the recent Goldman Sachs Airlines Conference. The industry is facing a shortage of capacity. Evidently, the limit has been reached in modifications to the
configuration of the existing fleet, with the result that orders for new aircraft may be forthcoming.
In difficult conditions, our performance compares favorably with that of our competitors. We have
consolidated our leadership position, continued to increase our market presence and put even greater emphasis on operating efficiencies.
We have built substantial enterprise value at The
Fairchild Corporation. We have made over $110 million in capital expenditures in recent years and have invested $450 million on acquisitions.
As a result of the aerospace downturn, our
shareholders have yet to see the benefits from these strategic moves. I believe a base has been created that will produce strong results when the industry enters its next growth cycle. At that time,
the patience of our shareholders, which has been severely tested in these difficult times, should prove to be fully justified.
JEFFREY J. STEINER Chairman & Chief Executive Officer
This report to shareholders contains forward-looking statements within the meaning of Section 27-A of the Securities Act of
1933, as amended and Section 21-E of the Securities Exchange Act of 1934, as amended. The Company's actual results could differ materially from those set forth in the forward-looking
statements as a result of the risks associated with the Company's business, changes in general economic conditions, and changes in the assumptions used in making such forward-looking statements..