PAGI Pemco Aviation Grp. (MM)

Pemco Aviation Group, Inc. (NASDAQ: PAGI) announced today that it has entered into a tentative agreement with its lenders, Wachovia Bank and Compass Bank, to extend its revolving credit agreement until August 31, 2007. The credit line was due to expire on October 15 of this year. The extended credit line modifies the existing borrowing base calculation to provide increased availability. The total amount of the revolving credit agreement increases if and when Pemco is awarded the new KC-135 PDM contract. Randy Shealy, Senior Vice President and Chief Financial Officer of Pemco Aviation states, �We are very pleased to announce the extension of our relationship with Wachovia and Compass Banks. They have been very supportive of Pemco and we look forward to continuing our long-term relationship with Wachovia and Compass.� Pemco has also entered into a tentative agreement to sell its California subsidiary, Pemco Engineers, Inc. Pemco Engineers designs and manufactures cargo handling systems and components for freight carriers worldwide. The agreement ensures a smooth transition and a continuum of the innovative solutions and customer support for which Pemco Engineers is known by its customers. The company also announced that it has submitted its bid for the re-competition of the United States Air Force KC-135 PDM contract. The bid was submitted on September 18, 2006. An award of the contract is anticipated to take place later this year. Ron Aramini, President and Chief Executive Officer, stated, �Pemco has utilized all resources available to it to provide the highest value bid to the United States Air Force. Our expertise with the KC-135 is unmatched by our competitors.� Pemco Aviation Group, with executive offices in Birmingham, Alabama, and facilities in Alabama and California, performs maintenance and modification of aircraft for the U.S. Government and for foreign and domestic commercial customers. The Company also provides aircraft parts and support and engineering services, in addition to developing and manufacturing aircraft cargo systems, rocket vehicles and control systems, and precision components. For more information go to www.pemcoaviationgroup.com. This press release contains forward-looking statements made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by their use of words, such as "believe," "expect," "intend" and other words and terms of similar meaning, in connection with any discussion of the Company's prospects, financial statements, business, financial condition, revenues, results of operations or liquidity. Factors that could affect the Company's forward-looking statements include, among other things: changes in global or domestic economic conditions; the loss of one or more of the Company's major customers; the Company's ability to obtain additional contracts and perform under existing contracts; the outcome of pending and future litigation and the costs of defending such litigation; financial difficulties experienced by the Company's customers; potential environmental and other liabilities; the inability of the Company to obtain additional financing; material weaknesses in the Company�s internal control over financial reporting; regulatory changes that adversely affect the Company's business; loss of key personnel; and other risks detailed from time to time in the Company's SEC reports, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2005. The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company does not undertake any obligation to update or revise any forward-looking statements and is not responsible for changes made to this release by wire services or Internet services. Pemco Aviation Group, Inc. (NASDAQ: PAGI) announced today that it has entered into a tentative agreement with its lenders, Wachovia Bank and Compass Bank, to extend its revolving credit agreement until August 31, 2007. The credit line was due to expire on October 15 of this year. The extended credit line modifies the existing borrowing base calculation to provide increased availability. The total amount of the revolving credit agreement increases if and when Pemco is awarded the new KC-135 PDM contract. Randy Shealy, Senior Vice President and Chief Financial Officer of Pemco Aviation states, "We are very pleased to announce the extension of our relationship with Wachovia and Compass Banks. They have been very supportive of Pemco and we look forward to continuing our long-term relationship with Wachovia and Compass." Pemco has also entered into a tentative agreement to sell its California subsidiary, Pemco Engineers, Inc. Pemco Engineers designs and manufactures cargo handling systems and components for freight carriers worldwide. The agreement ensures a smooth transition and a continuum of the innovative solutions and customer support for which Pemco Engineers is known by its customers. The company also announced that it has submitted its bid for the re-competition of the United States Air Force KC-135 PDM contract. The bid was submitted on September 18, 2006. An award of the contract is anticipated to take place later this year. Ron Aramini, President and Chief Executive Officer, stated, "Pemco has utilized all resources available to it to provide the highest value bid to the United States Air Force. Our expertise with the KC-135 is unmatched by our competitors." Pemco Aviation Group, with executive offices in Birmingham, Alabama, and facilities in Alabama and California, performs maintenance and modification of aircraft for the U.S. Government and for foreign and domestic commercial customers. The Company also provides aircraft parts and support and engineering services, in addition to developing and manufacturing aircraft cargo systems, rocket vehicles and control systems, and precision components. For more information go to www.pemcoaviationgroup.com. This press release contains forward-looking statements made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by their use of words, such as "believe," "expect," "intend" and other words and terms of similar meaning, in connection with any discussion of the Company's prospects, financial statements, business, financial condition, revenues, results of operations or liquidity. Factors that could affect the Company's forward-looking statements include, among other things: changes in global or domestic economic conditions; the loss of one or more of the Company's major customers; the Company's ability to obtain additional contracts and perform under existing contracts; the outcome of pending and future litigation and the costs of defending such litigation; financial difficulties experienced by the Company's customers; potential environmental and other liabilities; the inability of the Company to obtain additional financing; material weaknesses in the Company's internal control over financial reporting; regulatory changes that adversely affect the Company's business; loss of key personnel; and other risks detailed from time to time in the Company's SEC reports, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2005. The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company does not undertake any obligation to update or revise any forward-looking statements and is not responsible for changes made to this release by wire services or Internet services.