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O.C. BUSINESS PLUS | ORANGE COUNTY BRIEFLY

Compass Aerospace Will Miss $4.7-Million Interest Payment

April 13, 2001

Compass Aerospace Corp., a Santa Ana-based maker of plane parts and manufacturing kits, has disclosed that it won't be able to make a $4.7-million interest payment due Sunday.

The company's difficulties in meeting its debt obligations prompted its outside accountants, Ernst & Young LLP, to question whether Compass can continue as a going concern, according to its annual report, filed earlier this month with the Securities and Exchange Commission.

Compass, which logged operating losses of $17.1 million last year on sales of $154.9 million, also said it continues to be out of compliance with terms of its bank credit agreement and is not able to borrow under that arrangement.

The 4-year-old company said that Boeing Co., which accounted for about half of its revenue last year, has cut back on orders, apparently in an effort to reduce inventories.

Last month, Compass sold its Trim Engineering group of companies in the United Kingdom to a joint venture, using $44 million in proceeds from the sale to reduce its senior secured debt.

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