Fairchild Industries Inc., the Germantown-based aerospace and communications company, yesterday announced "substantial Edward Uhl reported the earnings at the annual stockholders meeting at the firm's commercial aircraft subsidiary here, Swearingen Aviation Corp. Earnings of $5.7 million ($122 a share) on sales of $120 million compared favorably to 1977 first-quarter earnings of $1.2 million (26 cents) on sales of $88 million.
But Fairchild President John Dealy said a major portion of the improved earnings, $1.3 million (29 cents) resulted from the firm's exchange of new nonconvertible debentures due in 1988 for existing convertible debentures due in 1992.
Shareholder and corporate annual meeting gadfly Lewis Gilbert asked about Tuesday's Internal Revenue Service announcement that it was seeking some $39 million from Fairchild in back taxes and civil fraud penalties. Fairchild general counsel Richard Molleur said the firm had been negotiating with the IRS for several years on the matters invoved and had reached tentative agreement on parts of the IRS action.
Molleur and Fairchild's chief financial officer, James Wilson, said that "almost 100 different complex issues" were the source of the IRS action. "It mostly has to do with timing," said Wilson. "Things like paying taxes one year instead of another, or taking depreciation over certain periods of time." However, he said that inventory assessments and certain overseas transactions were also under questions.
Stockholder proposals requiring corporate officers to discuss political contributions, stock options programs to officers, and pre-emptive rights for stockholders were defeated soundly.