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Defense revenue was $35.9 million for the three months ended June 30, 2009 compared to $31.4 million in 2008, due to increases in activity on the CH-47 and Apache programs. Commercial revenue in the three months ended June 30, 2009 was $11.0 million or $0.8 million lower than the $11.8 million in 2008. Certain commercial customers have delayed the deliveries on some orders.

Margins as a percentage of revenue were 19.6% in the three months ended June 30, 2009, consistent with the same period of 2008. Defense margins as a percentage of revenue decreased to 21.7% in the three months ended June 30, 2009 from 22.2% in the same period of 2008 attributed to the mix of product deliveries. Commercial margins as a percentage of revenue increased to 12.8% in the three months ended June 30, 2009 compared to 12.4% in 2008.

Selling, general and administrative ("SG&A") expenses were $4.9 million (10.4% of revenue) for the three months ended June 30, 2009 compared to $4.3 million (9.9% 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.

During the three months ended June 30, 2009, the Company entered into a previously announced settlement agreement of an environmental class action claim relating to a former operating location at the Company's Canadian subsidiary. With this agreement in place, the Company has recorded a provision of $4.1 million (CDN $5.1 million) as an unusual item in the interim consolidated statement of operations.

The loss from continuing operations for the three months ended June 30, 2009 was $4.0 million or $0.13 per share, compared to income of $0.3 million or $0.01 per share in the same period in 2008. Included in the net loss per share for the three months ended June 30, 2009 is a $4.1 million provision for the settlement agreement noted above.

In May 2009, the Company completed an agreement to sell the net assets of Northstar Aerospace Turbine Engine Service Group, its engine repair and overhaul business, for gross proceeds of $9.4 million including $1.4 million in an estimated working capital adjustment. Based on these proceeds, the Company has reported a loss of sale of $1.3 million, net of an income tax benefit of $0.7 million. The proceeds from this sale were sufficient to satisfy the Company's remaining $7.5 million bank repayment requirement due by July 31, 2009. The Company has no additional repayment requirements prior to the maturity of the credit facility in October 2010.

The net loss for the three months ended June 30, 2009 was $5.2 million or $0.17 per share, including the settlement agreement noted above and $0.04 loss per share from the discontinued operations, compared to income of $0.6 million or $0.02 per share in the same period in 2008, including $0.01 per share from the discontinued operations.

The Company's backlog was $434 million at June 30, 2009 compared to $479 million at December 31, 2008.

Glenn Hess, President and Chief Executive Officer, stated: "This past quarter, we realized growth in year-on-year revenue and operational earnings as we continued to ramp-up production on our defense business. We also strengthened our business by divesting our engine repair and overhaul business to further our strategy of focusing on our core gear and transmission business. While there is still much work remaining to achieve our potential, we are encouraged by these developments."

A more detailed discussion of the Company's financial results for the three months ended March 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 www.sedar.com and on the Company's website at www.nsaero.com.

Northstar Aerospace, Inc. (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 the United States and Canada. 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 in Chicago, Illinois. Its plants are located in Chicago, Illinois; Phoenix, Arizona; Anderson, Indiana; and Milton and Windsor, Ontario.

Forward Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainty. All statements, other than statements of historical facts included in this press release, including, without limitation, those regarding the Company's financial position, business strategy, projected costs and plans, projected revenues, objectives of management for future operations, and certain other items may be or include forward-looking statements. Forward-looking information contained herein is based upon a number of assumptions regarding the Canadian, U.S. and global economic environment, and local and foreign government policies and actions. Actual future results of the Company may differ materially depending on a variety of factors, including production rates, timing of product deliveries, Canadian, U.S. and foreign government activities, volatility of the market for the Company's products and services, worldwide political stability, factors that result in significant and prolonged disruption to commercial air travel worldwide, U.S. military activity, domestic and international economic conditions, and other political and economic risks, including currency risks, and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations ("Cautionary Statements"), are included in the Company's Consolidated Financial Statements for the Years Ended December 31, 2008 and 2007 - Management's Discussion and Analysis - Risks and Uncertainties, and in the Company's Annual Information Form filed on March 31, 2009, under the heading of Risks and Uncertainties. All information contained in this press release and subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by the Cautionary Statements. The Company disclaims any intentions or obligation to update or revise any forward looking statements or comments as a result of any new information, future event or otherwise, unless such disclosure is required by law.

Non-GAAP Measures

The Company defines adjusted net income, comparable basis as income from operations before income taxes and unusual items. The Company defines EBITDA as earnings from continuing operations before interest, income taxes, foreign exchange, depreciation and amortization, unusual items, impairments of long-lived assets and goodwill, loss on interest rate swap contracts and other non-recurring items. EBITDA and adjusted net income are used by management to evaluate the Company's performance as compared to other companies in the industry that have different financing and capital structures and/or tax rates.

Furthermore, the Company has included information concerning EBITDA and adjusted net income (loss) before taxes because it believes these measures are used by certain investors as measures of continuing financial performance. These measures are not measures of financial performance under Canadian generally accepted accounting principles (GAAP). As well, these measures have no standardized meaning prescribed under GAAP and are unlikely to be comparable to similarly titled measures used by other companies. These measures should not be construed as an alternative to cash flow from operations or earnings from operations as determined in accordance with GAAP as measures of liquidity or earnings.

The Company's provision for legal settlements, environmental liabilities and restructuring and severance costs are included as an adjusting item to arrive at EBITDA and adjusted net income (loss) before taxes as these matters are not recurring by nature. The environmental provision is related to a specific concern at the Company's Canadian facilities. Estimates related to the provision are based on a number of assumptions which are inherently difficult to determine and no assurances can be given that environmental test results, changes in laws or enforcement policies or other factors could not result in costs that differ from the estimates contained therein. As a result of the complexity of this matter, there have been changes in various estimates that resulted in multiple year impacts. The provision for restructuring and severance costs is related to certain plans that require implementation over a period of time. The need for these plans is in response to the increasing costs at the Company's Canadian operations, principally driven by the strengthening of the Canadian dollar. Management does not consider these matters to be recurring in nature or part of the on-going business of the Company. For a detailed reconciliation of EBITDA to income from continuing operations, please see Management's Discussion and Analysis available on the Company's website and on SEDAR.