Aviation News Item: 02079

6th Nov 2009

Source: verticalmag.com

(All amounts within this news release are stated in U.S. dollars unless otherwise stated) Northstar Aerospace, Inc. (the "Company") today reported revenue from continuing operations for the three months endedSeptember 30, 2009 of$48.1 million compared to$40.0 million in the same period in 2008, an increase of 20.2%.

Defense revenue was$38.8 million for the three months endedSeptember 30, 2009 compared to$29.1 million in 2008, due to increases in activity on the CH-47 Chinook, F-22 and Sikorsky programs. Commercial revenue in the three months endedSeptember 30, 2009 was$9.3 million,$1.6 million lower than in 2008, primarily due to lower activity on the General Electric Aviation Risk and Revenue Sharing program involving the CF-34-3 engine that powers Bombardier regional and business aircraft.

Margin as a percentage of revenue increased to 20.8% in the three months endedSeptember 30, 2009, from 17.7% in 2008. Defense margin as a percentage of revenue was 23.7% in the three months endedSeptember 30, 2009 an increase from 21.9% in the same period of 2008. The growth in defense sector margin is the result of manufacturing performance improvement as well as mix of product deliveries. Commercial margins as a percentage of revenue increased to 9.0% in the three months endedSeptember 30, 2009 compared to 6.7% in 2008 due to improved performance.

Selling, general and administrative ("SG&A") expenses were$4.9 million (10.2% of revenue) for the three months endedSeptember 30, 2009 compared to$4.5 million (11.2% of revenue) in the same period in 2008. The year-on-year increase in total dollars resulted from the addition of depth to the management team to accommodate the increase in revenue.

The loss from continuing operations for the three months endedSeptember 30, 2009 was$0.4 million or$0.01 per share, compared to income of$0.3 million or$0.01 per share in the same period in 2008. As noted in prior periods, the Company does not recognize the income tax benefit for losses generated inCanada. The benefit would have been$0.8 million for the three months endedSeptember 30, 2009.

The Company's backlog was$406 million atSeptember 30, 2009 compared to$479 million atDecember 31, 2008.

Glenn Hess, President and Chief Executive Officer, stated:

"Balance sheet improvements during the quarter underscore management's commitment to strengthen the Company's financial position. Completion of an agreement on a legal proceeding related to an environmental matter at the Company's Canadian subsidiary was another important step toward improving financial stability. During the quarter, margin improvement and strong revenue growth resulting from increased deliveries are encouraging outcomes of earlier investments in our leadership team, employees and manufacturing processes."

A more detailed discussion of the Company's financial results for the three months endedMarch 31, 2009 is contained in Management's Discussion and Analysis, including comments on the comparability of results between the current and prior year and is available on http://www.sedar.com/ and on the Company's website at http://www.nsaero.com/.

Northstar Aerospace, Inc. (http://www.nsaero.com/) is North America's leading independent manufacturer of flight critical gears and transmissions. Northstar Aerospace is a public company (TSX:NAS) with operating subsidiaries in theUnited States andCanada. Its principal products include helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of helicopter engines and transmissions. The Company's executive offices are located inChicago, Illinois. Its plants are located inChicago, Illinois;Phoenix, Arizona; Anderson, Indiana; and Milton and Windsor, Ontario.

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