Decrane Holdings Co · 424B3 · On 2/11/0

Filed On 2/11/0   ·   SEC File 333-70363   ·   Accession Number 912057-0-5480

Prospectus   ·   Rule 424(b)(3)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus                                           202  1,173K 

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PROSPECTUS                                                                      

DeCrane Holdings Co.

COMMON STOCK, PAR VALUE $0.01 PER SHARE 
WARRANTS TO PURCHASE COMMON STOCK 

  This prospectus relates to the resale of 100,000 warrants each to purchase
1.55 shares of common stock, par value $0.01 per share of DeCrane Holdings Co., 
and the shares issued upon the exercise of warrants, held by certain holders    
named herein or in an accompanying supplement to this prospectus. All of the    
offered securities are being sold by such persons or entities and we will not   
receive any proceeds received therefrom, other than upon exercise of warrants.  
The warrants were issued, and shares issued upon the exercise of warrants by    
persons other than exercising warrantholders have been or will be issued,       
pursuant to an exemption from the registration requirements of the Securities   
Act of 1933. The offered securities are being registered by us pursuant to      
registration rights granted in connection with the issuance in October, 1998 of 
the warrants, which were paired in units with the 12% Series A Senior           
Subordinated Notes of DeCrane Aircraft Holdings, Inc. when originally issued.   
The warrants may trade separately from the notes on and after the effective date
of the registration statement of which this prospectus is a part.               

 The offered securities may be offered by the holders from time to time in
transactions in the over-the-counter market, in privately negotiated            
transactions, in underwritten offerings or by a combination of such methods of  
sale, at fixed prices that may be changed, at market prices prevailing at the   
time of sale, at prices related to such prevailing market prices or at          
negotiated prices. The warrantholders may effect such transactions by selling   
the warrants to or through broker-dealers and such broker-dealers may receive   
compensation in the form of discounts, concessions or commissions from the      
holders or the purchasers of the offered securities for whom such broker-dealers
may act as agent or to whom they sell as principal or both. The foregoing       
compensation to a particular broker-dealer might be in excess of customary      
commissions. If required, the names of any such broker-dealers and the          
applicable compensation, if any, will be set forth in an accompanying supplement
to this prospectus.                                                             

   Selling holders, and any broker-dealers or agents that participate with the
holders in the distribution of the offered securities, may be deemed to be      
"underwriters" within the meaning of Section 2(11) of the Securities Act, and   
any commissions received by them and any profit on the resale of the offered    
securities purchased by them may be deemed to be underwriting commissions or    
discounts under the Securities Act.                                             

  The information in this prospectus is not yet complete and may be amended.
We have filed a registration statement regarding these securities with the      
Securities and Exchange Commission. You may not sell or accept offers to buy    
before the registration statement becomes effective. This prospectus is not an  
offer to sell, or the solicitation of an offer to buy. We will not participate  
in any sale of these securities in any state in which offer, solicitation or    
sale would be unlawful before registering or qualifying under the securities    
laws of that state.                                                             

SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF RISK FACTORS
THAT YOU SHOULD CONSIDER BEFORE INVESTING IN THE OFFERED SECURITIES.            

------------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES 
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE     
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

The date of this prospectus is February 10, 2000. 

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EXPLANATORY NOTE

  This prospectus relates to the resale of 100,000 warrants each to purchase
1.55 shares of common stock, par value $0.01 per share of DeCrane Holdings Co.  
by holders who are named in an accompanying supplement to this prospectus, and  
any stockholders of the shares received upon exercise of those warrants who may 
wish to sell their shares. This prospectus refers to the warrants and warrant   
shares, collectively, as offered securities. All of the warrants are being sold 
by such persons or entities and we will not receive any of the proceeds received
therefrom, other than upon exercise of warrants. The warrants were issued, and  
shares issued upon the exercise of warrants by persons other than exercising    
warrantholders, have been or will be issued, pursuant to an exemption from the  
registration requirements of the Securities Act of 1933. The offered securities 
are being registered by us pursuant to registration rights granted in connection
with the initial private placement of the warrants as part of the DLJ           
acquisition described herein.                                                   

The offered securities may be offered by the warrantholders from time to
time in transactions in the over-the-counter market, in privately negotiated    
transactions, in underwritten offerings or by a combination of such methods of  
sale, and may be offered at fixed prices that may be changed, at market prices  
prevailing at the time of sale, at prices related to such prevailing market     
prices or at negotiated prices. The warrantholders may effect such transactions 
by selling the warrants to or through broker-dealers and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from  
the warrantholders or the purchasers of the offered securities for whom such    
broker-dealers may act as agent or to whom they sell as principal or both. That 
compensation to a particular broker-dealer might be in excess of customary      
commissions. If required, the names of any such broker-dealers and the          
applicable compensation, if any, will be set forth in an accompanying supplement
to this prospectus. See "Plan of Distribution."                                 

    Any selling warrantholders and stockholders and any broker-dealers or agents
that participate with those warrantholders and stockholders in the distribution 
of the offered securities may be deemed to be "underwriters" within the meaning 
of Section 2(11) of the Securities Act, and any commissions received by them and
any profit on the resale of the offered securities purchased by them may be     
deemed to be underwriting commissions or discounts under the Securities Act.    

  We have filed a registration statement regarding these securities with the
Securities and Exchange Commission. You may not sell or accept offers to buy    
before the registration statement becomes effective. This prospectus is not an  
offer to sell, or the solicitation of an offer to buy. We will not participate  
in any sale of these securities in any state in which offer, solicitation or    
sale would be unlawful before registering or qualifying under the securities    
laws of that state.                                                             

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SUMMARY 

THE FOLLOWING SUMMARY CONTAINS BASIC INFORMATION ABOUT THIS OFFERING. IT
LIKELY DOES NOT CONTAIN ALL THE INFORMATION THAT IS IMPORTANT TO YOU. TO FULLY  
UNDERSTAND THIS OFFERING, YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY,      
INCLUDING THE FINANCIAL STATEMENTS AND THEIR RELATED NOTES.                     

  THE SECURITIES REGISTERED BY THIS PROSPECTUS ARE EQUITY OBLIGATIONS ISSUED
BY DECRANE HOLDINGS CO. DECRANE HOLDINGS CO. IS A HOLDING COMPANY AND DOES NOT  
HAVE ANY MATERIAL OPERATIONS OR ASSETS OTHER THAN ITS OWNERSHIP OF THE CAPITAL  
STOCK OF DECRANE AIRCRAFT HOLDINGS, INC. AS USED IN THIS PROSPECTUS, UNLESS THE 
CONTEXT INDICATES OTHERWISE, AND EXCEPT WHEN USED IN THE SECTIONS "DESCRIPTION  
OF WARRANT" AND "DESCRIPTION OF CAPITAL STOCK," "DECRANE HOLDINGS" AND "WE,"    
"US," "OUR" AND SIMILAR TERMS REFER TO THE COMBINED BUSINESS OF DECRANE HOLDINGS
CO. (AND DECRANE AIRCRAFT, ITS PREDECESSOR) AND ALL OF ITS SUBSIDIARIES,        
COLLECTIVELY. EXCEPT WHERE WE INDICATE OTHERWISE, THIS PROSPECTUS PRESENTS ALL  
INFORMATION ON A "PRO FORMA" BASIS, GIVING EFFECT TO ALL OF THE TRANSACTIONS    
REFERRED TO IN "UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA," INCLUDING THE 
ACQUISITION OF DECRANE AIRCRAFT BY DLJ MERCHANT BANKING PARTNERS II, L.P. AND   
ITS AFFILIATES AND DECRANE AIRCRAFT'S ACQUISITIONS OF AVTECH CORPORATION,       
DETTMERS INDUSTRIES, INC., PATS, INC., PPI HOLDINGS, INC., CUSTOM WOODWORK &    
PLASTICS, INC., PCI NEWCO, INC., INTERNATIONAL CUSTOM INTERIORS, INC., AND THE  
INFINITY PARTNERS, LTD.                                                         

OUR COMPANY 

OVERVIEW                                                                        

Since our founding in 1989, through acquisitions and internal growth, we
have become one of the premier suppliers to the general aviation market. We     
offer a complete line of interior cabin furniture, galleys, seating, and        
entertainment systems for corporate aircraft. In addition, we manufacture       
aviation electronic components, referred to as avionics, and provide systems    
integration services. We sell our products in the corporate, commercial         
(including regional), retrofit, aftermarket and military aircraft markets.      
Within these markets, our customers include original manufacturers of aircraft  
and related avionics equipment, commonly referred to as OEM's, major components 
suppliers, aircraft repair and modification centers and commercial airlines. For
the twelve months ended September 30, 1999, we generated pro forma revenues and 
EBITDA (as defined) of $294.9 million and $67.1 million, respectively.          

During 1998 and 1999, we completed and integrated eight acquisitions,   
increasing our diversification within the aircraft industry and reducing our    
reliance on the commercial aircraft market. We have built a leading position in 
a number of niche markets in the aircraft industry. The substantial majority of 
our revenue is generated by businesses in which we have a leading market share. 
In order to take advantage of the complementary nature of our various product   
offerings, to rationalize and consolidate the operations of each of our separate
companies and to provide even higher levels of customer service, in 1999 we     
reorganized our related businesses into three separate operating groups: Cabin  
Management, Specialty Avionics and Systems Integration.                         

THE CABIN MANAGEMENT GROUP.  We are the leading independent provider of 
cabin management products for the corporate aircraft market, serving major      
manufacturers such as Boeing Business Jet, Bombardier, Cessna, Dassault,        
Gulfstream and Raytheon. We provide a full line of interior cabin components,   
including seats, furniture, cabinetry, galleys, in-flight entertainment systems,
sidewalls and headliners, which are either sold separately or as a              
pre-engineered, pre-fabricated set. Our "cabinet-in-a-box" product offers       
customized, pre-engineered, pre-fit interior cabinetry and galley kits to       
corporate jet OEM's and independent completion centers. We also have developed  
and are currently marketing our "cabin-in-a-box" product, which is comprised of 
a customized, pre-engineered, pre-fit cabin interior system, including          
furniture, galleys, seats, audio-visual entertainment systems, lighting,        
sidewalls, headliners and electrical control units. Our cabin-in-a-box product  
will enable our customers to rely on us as the single source for cabin-related  
products. We estimate that this product could decrease cycle times by 15% to    
20%, offering significant cost reduction opportunities to our customers, and    
could increase the dollar content per plane for us. The Cabin Management Group  
contributed approximately 40% of our pro forma revenue for the twelve months    
ended September 30, 1999.                                                       

THE SPECIALTY AVIONICS GROUP.  This group designs, engineers and        
manufactures electronic components, electronic display devices and interconnect 
components and assemblies. Among the products offered by this group are flight  
deck communications and audio power control equipment, harness assemblies and   
connectors, power and signal contact products and liquid crystal display        
devices, commonly referred to as                                                

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LCD's. Customers of this group include Airbus, Boeing, Honeywell, Matsushita,   
and Rockwell Collins. The Specialty Avionics Group contributed approximately 39%
of our pro forma revenue for the twelve months ended September 30, 1999.        

 THE SYSTEMS INTEGRATION GROUP.  This group provides auxiliary fuel tanks,
auxiliary power units and system integration services, including engineering,   
kit manufacturing, installation and certification. Customers of this group      
include Boeing Business Jet, Bombardier, Cessna, Gulfstream, Raytheon and       
Rockwell Collins. The Systems Integration Group contributed approximately 21% of
our pro forma revenue for the twelve months ended September 30, 1999.           

INDUSTRY OVERVIEW AND TRENDS                                                    

   We believe the following characteristics of our markets have contributed to
our growth and profitability and should provide further opportunities for our   
success:                                                                        

- INCREASED DEMAND FOR NEW AIRCRAFT.                                    

  - CORPORATE AIRCRAFT.  The growing popularity of fractional aircraft
         ownership in the United States, the expansion of this program to Europe
     and the Far East and the increased demand for more expedient travel
     have significantly expanded demand for corporate aircraft. The Teal
     Group Corporation, an industry-recognized aerospace research group,
      projects delivery of 5,067 corporate aircraft between 1999 and 2008,
        representing an increase of approximately 52% over the 3,326 corporate
aircraft that were delivered between 1989 and 1998.           

      - COMMERCIAL AIRCRAFT.  The 1999 CURRENT MARKET OUTLOOK, released by The
       Boeing Company in June 1999, projects that between 1999 and 2008, the
commercial aircraft industry will require 8,900 new commercial
    aircraft, and between 2009 and 2018, it will require an additional
11,250 aircraft.                                              

   - REGIONAL AIRCRAFT.  As part of the total projected increase for the
       commercial aircraft fleet, Boeing projects a compounded annual growth
       rate of 9.4% for the regional aircraft fleet from 1999 to 2008 due to
new longer-range, state-of-the-art regional aircraft and the  
         integration of regional carrier services with major carriers to support
the "point-to-point" routing concept.                         

- INCREASED DEMAND FOR CABIN MANAGEMENT SYSTEMS. As businesses become   
   increasingly dependent on new technology, passengers are demanding more
   advanced in-flight services. These services include in-flight passenger
telecommunications systems and entertainment systems, such as video,
    video-on-demand and other interactive systems. In corporate aircraft for
example, Honeywell's AIS-1000 OneView-TM-Airborne Information System
      delivers more than 40 channels of live television programming and Internet
    and e-mail access to the aircraft via direct broadcast satellite service
providers.                                                          

  - SIGNIFICANT BARRIERS TO ENTRY. We believe that manufacturers' reluctance
to include new companies as additional approved vendors on their    
engineering drawings, increasingly stringent Federal Aviation       
    Administration requirements for aircraft manufacturing and modification,
     including extensive and lengthy qualification and certification programs,
     and the initial capital investment and tooling requirements necessary for
     the manufacture of aircraft components and systems all create significant
barriers to entry in a number of our markets.                       

    - REDUCTION IN NUMBER OF APPROVED SUPPLIERS AND VENDORS. Commercial airlines
     have come under increasing pressure to reduce operating and capital costs
      associated with providing services. As a result, many OEM's are initiating
   proactive programs to reduce cycle times, decrease inventory and reduce
   costs. Boeing, for example, has announced that it intends to reduce its
     number of suppliers by 19%, from 31,000 to 25,000, by the end of 2000 and
by 42% over the long term. Manufacturers can realize efficiencies by
purchasing a higher number of assemblies from a smaller number of   
suppliers, each of whom has multiple related product capability.    

    - NEW SAFETY MANDATES. Historically, the FAA has taken a very proactive role
      in promulgating new safety standards, such as collision avoidance systems,
     wind shear detection systems, group proximity detection systems and smoke
detection and fire suppression systems. These safety mandates should
      provide significant retrofit opportunities for the commercial fleet, which
today exceeds 12,000 aircraft.                                      

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COMPETITIVE STRENGTHS                                                           

We have used our strong market positions to compete more effectively, to
capitalize on industry consolidation trends and to cross-sell products to our   
existing customer base. We believe that we are well-positioned to take advantage
of the foregoing trends and expected growth in the aircraft industry as a result
of the following competitive strengths:                                         

- LEADING POSITIONS IN NICHE MARKETS. We are a leading provider of      
      components within a number of the niche markets we serve. Our strategy has
  been to combine complementary businesses in markets in which we have a
   leading position. We believe our combination of component manufacturing
      and integration and installation capabilities provides us with competitive
advantages. The combination of product lines we offer provides      
    opportunities for our customers to deal with a reduced number of vendors
and suppliers, to reduce the number of component parts through the  
   purchase of sub-assemblies and to reduce cycle times, all of which help
reduce costs and simplify the production process.                   

    - STRONG CUSTOMER RELATIONSHIPS. Through our acquisitions and as a result of
    our performance, we have enjoyed long-term relationships with leaders in
      our primary markets, including Boeing and Boeing Business Jet, Bombardier,
      Cessna, Gulfstream, Honeywell, Matsushita, Raytheon, and Rockwell Collins.
    We believe we have been able to develop and solidify these relationships
by combining production and engineering capabilities, providing     
engineering support services and enhancing our customers' in-house  
production processes.                                               

- DIVERSIFIED REVENUE BASE. We sell our products in the corporate,      
   commercial, retrofit, aftermarket and military aircraft markets. Within
   these markets, our customers include original manufacturers of aircraft
     and related avionics equipment, aircraft repair and modification centers,
and airlines. Each of these markets has different demand drivers and
    operates on different production cycles. Accordingly, our involvement in
     these multiple markets reduces our exposure to cyclical product demand in
    any one segment of the aircraft industry. Demand for new products in the
    commercial aircraft market, for example, is driven largely by the age of
    the existing commercial fleet, the growth in revenue passenger miles and
     industry load factors, whereas demand in the corporate aircraft market is
  driven largely by the growth in fractional ownership, competition from
     commercial airlines and the growth in the global economy. Our aftermarket
  sales are dependent in part upon the growing number of aircraft in the
  existing fleet while technology advances and safety updates help drive
demand in the retrofit market.                                      

   - COMPLEMENTARY AND STRATEGICALLY INTEGRATED BUSINESS LINES. Since 1989, we
      have completed seventeen acquisitions of businesses and assets. We believe
that our acquisitions complement each other and create a core of    
 interrelated products and services, which increases our cross-selling
    opportunities to existing and new customers. The complementary nature of
 our business lines should allow us to help our customers reduce their
production costs.                                                   

    - LOW-COST, HIGH-QUALITY OPERATIONS. We have established low-cost operations
 through cost reduction programs, technological development and, where
     appropriate, the use of vertical integration. Four of our facilities have
received a quality award from Boeing, and nine of our facilities are
     currently certified according to the International Standards Organization
specifications ISO-9001 or ISO-9002.                                

- REGULATORY CERTIFICATIONS. We believe our FAA-certified airframe and  
  power-plant mechanics who are authorized to perform specified aircraft
modification functions provide us with a significant competitive    
     advantage. As of December 31, 1999, our operations include one of only 31
      currently active FAA Designated Alteration Stations worldwide, and we hold
   nine FAA domestic repair station certificates as well as numerous Parts
   Manufacturer Approval authorizations from the FAA. These certifications
  make us one of a few companies with the in-house capability to design,
     engineer, produce, install and certify a part, which together help reduce
cycle times.                                                        

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GROWTH STRATEGY                                                                 

Our principal strategy is to establish and expand leading positions in  
high-margin, niche markets. We also seek to maintain a balance of revenues among
the equipment manufacturer market, the retrofit market and the aftermarket. We  
believe that this strategy positions us for future success by:                  

- BROADENING SALES TO EXISTING CUSTOMER BASE. We have relationships with
     virtually every major OEM and with fractional ownership programs, such as
      Executive Jet. We plan to continue cross-selling our portfolio of products
     to our existing customer base in order to increase our dollar content per
      plane. For example, we originally entered the corporate aircraft market by
offering cabin management systems and entertainment systems. We then
      expanded our product offering to include seating and in 1999, through four
   separate acquisitions, we added cabinetry and galley products, which we
sell to OEM's. Finally, we developed pre-fabricated interior kits,  
cabinet-in-a-box and cabin-in-a-box, to facilitate cross-selling and
     further encourage OEM's to outsource their cabin engineering requirements
    to us. We believe these products should reduce cycle times and costs for
 manufacturers and increase our dollar content per plane. We currently
provide cabinet-in-a-box kits to several of our customers and are in
  discussions with a number of corporate jet manufacturers regarding our
cabin-in-a-box product.                                             

    - STRENGTHENING POSITION IN NICHE MARKETS. We plan to continue to strengthen
our position in niche markets by providing engineering and customer 
    service support to our existing customer base through the integration of
     our engineering services with the OEM's engineering capabilities. We also
plan to continue to examine new market niches and consolidate the   
  fragmented sectors in our markets to further service our customers. We
target for acquisition aircraft component manufacturers and systems 
    integration and installation providers that meet the following criteria:

- are complementary to our existing businesses;                   

- have a leading market share in their own niches;                

- leverage our existing strengths;                                

- add new expertise; and/or                                       

- increase cross-selling opportunities.                           

In analyzing a potential acquisition's value, we focus on economies of
scale, product line extensions, new customer relationships, increased 
 manufacturing capacity and opportunities for increased cost reductions.

    - CONTINUING OPERATIONAL EFFICIENCY IMPROVEMENTS. We are taking advantage of
      areas of synergies across and within our three business segments by making
operational efficiency improvements in human resources, support,    
      procurement and cross-selling. For example, we recently formed the Systems
Integration Group to leverage the engineering capabilities of our   
     Hollingsead subsidiary with the manufacturing and systems integration and
     installation capabilities of our PATS subsidiary. In addition, as part of
      the Systems Integration Group's strategy, we are consolidating facilities,
  reducing headcount and replacing relatively expensive manufacturing at
 Hollingsead with more economical outsourced products. This will allow
Hollingsead to focus on its core engineering and systems integration
competencies. We are also standardizing processes and centralizing  
    procurement at our four recently acquired cabin furniture companies, and
we continue to evaluate our operations to streamline or increase    
efficiencies.                                                       

- EXPANDING PRODUCT DEVELOPMENT. Development of advanced cabin features 
increases demand for many of our products and provides attractive   
cross-selling opportunities. For example, our newly introduced      
e-CABIN, an "office in the sky," provides leading-edge business and   
      entertainment services for the corporate jet cabin and its passengers. Our
e-CABIN provides each passenger with on-demand audio and video      
   entertainment, including live television and Internet and e-mail access
  via Honeywell's OneView system. We will continue considering strategic
partnerships with leading technology companies to keep our product  
 offerings on the cutting edge, as we have done with Honeywell and its
OneView system.                                                     

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RECENT DEVELOPMENTS 

Continuing our acquisition strategy, subsequent to September 30, 1999 we
acquired:                                                                       

- PCI NewCo, Inc., a Kansas-based manufacturer of composite material and
      components for middle-and high-end corporate aircraft, on October 6, 1999;

- International Custom Interiors, Inc., a Florida-based provider of     
      upholstery services and manufacturer of furniture for middle- and high-end
corporate aircraft, on October 8, 1999; and                         

 - The Infinity Partners, Ltd., a Texas-based designer and manufacturer of
      interior furniture components for middle- and high-end corporate aircraft,
on December 17, 1999.                                               

   The historical consolidated financial data included in this prospectus does
not reflect these acquisitions because they were acquired subsequent to         
September 30, 1999. However, all information in this prospectus presented on a  
pro forma basis gives effect to these acquisitions as described in "Unaudited   
Pro Forma Consolidated Financial Data." See "Recent Developments--Acquisitions  
Subsequent to September 30, 1999."                                              

In addition, in December 1999, we announced a plan to reorganize and    
restructure the operations of two of our subsidiaries. In conjunction with this 
restructuring, we expect to record a nonrecurring pre-tax charge of             
approximately $9.5 million in the fourth quarter of 1999, resulting in a net    
loss for the quarter and year ending December 31, 1999. The historical and pro  
forma consolidated financial data included in this prospectus does not reflect  
this restructuring charge. See "Recent Developments--Reorganization and         
Restructuring Charge."                                                          

------------------------

   Our principal executive offices are located at 2361 Rosecrans Avenue, Suite
180, El Segundo, California 90245. Our telephone number is (310) 725-9123.      
Further information is also available as noted under "Where You Can Get More    
Information" at the end of the "Business" section.                              

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COMMON STOCK

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Common Stock......................... The holders of DeCrane Holdings common stock are entitled to
                                      one vote per share on all matters submitted for action by   
                                      the shareholders. There is no provision for cumulative      
                                      voting with respect to the election of directors. Holders of
                                      DeCrane Holdings common stock are entitled to share equally,
                                      share for share, if dividends are declared on common stock, 
                                      whether payable in cash, property or securities of DeCrane  
                                      Holdings. In the event of any voluntary or involuntary      
                                      liquidation, dissolution or winding up of DeCrane Holdings, 
                                      after payment has been made from the funds available        
                                      therefore to the holders of preferred stock, if any, for the
                                      full amount to which they are entitled, the holders of      
                                      common stock are entitled to share equally, share for share,
                                      in the assets available for distribution. See "Description  
                                      of Capital Stock of DeCrane Holdings."                      

                                          THE WARRANTS                                            

Warrants............................. 100,000 warrants each of which will entitle the holder      
                                      thereof to purchase 1.55 shares of DeCrane Holdings common  
                                      stock. The total number of warrants represent 155,000       
                                      shares, which constitutes approximately 5% of the common    
                                      stock of DeCrane Holdings on a fully diluted basis (assuming
                                      exercise of all outstanding warrants, including those held  
                                      by affiliates of DLJ).                                      

Exercise............................. Each warrant will entitle the holder thereof, to purchase   
                                      1.55 shares of common stock at an exercise price of $23.00  
                                      per share. The warrants are exercisable at any time prior to
                                      the expiration of the warrants, as set forth below. The     
                                      exercise price and number of shares of common stock issuable
                                      upon exercise of the warrants will be subject to adjustment 
                                      from time to time upon the occurrence of changes with       
                                      respect to the common stock of DeCrane Holdings, including  
                                      some types of distributions of shares of common stock,      
                                      issuances of options or convertible securities, dividends   
                                      and distributions and some changes in options and           
                                      convertible securities of DeCrane Holdings. A warrant does  
                                      not entitle the holder thereof to receive any dividends paid
                                      on shares of common stock.                                  

Expiration........................... September 30, 2008.                                         

Transfer Agent....................... The transfer agent and registrar for the offered securities 
                                      is the Secretary of DeCrane Holdings. The transfer agent can
                                      be reached c/o DeCrane Aircraft Holdings, Inc., at          
                                      (310) 725-9123.                                             

Use of Proceeds...................... We will not receive any cash proceeds from sales of warrants
                                      or warrant shares. See "Use of Proceeds."                   

United States Tax Consequences....... You should review the information under "United States Tax  
                                      Consequences" before you make an investment in the offered  
                                      securities.                                                 

The Units............................ The warrants were originally sold as "units," paired with   
                                      the 12% Series A Senior Subordinated Notes of DeCrane       
                                      Aircraft. The warrants may trade separately from the notes  
                                      on and after the effective date of the registration         
                                      statement of which this prospectus is a part. This          
                                      prospectus does not cover the DeCrane Aircraft notes.       

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SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA 

The summary unaudited pro forma financial data were derived from our    
historical financial data and give pro forma effect to the transactions         
described in our pro forma financial data and related notes included elsewhere  
in this prospectus as if they occurred on January 1, 1998. The pro forma        
adjustments are based upon available information and assumptions management     
believes are reasonable under the circumstances. The pro forma financial data do
not purport to represent what our actual results of operations or actual        
financial position would have been if such transactions had actually occurred on
such date or to project our future results of operations or financial position. 
The information in this table should be read in conjunction with "Recent        
Developments," "Selected Consolidated Financial Data," "Management's Discussion 
and Analysis of Financial Condition and Results of Operations," "Unaudited Pro  
Forma Consolidated Financial Data" and our consolidated financial statements and
related notes included elsewhere in this prospectus.                            

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                                                                                              TWELVE    
                                                        YEAR         NINE MONTHS ENDED        MONTHS    
                                                       ENDED           SEPTEMBER 30,           ENDED    
                                                    DECEMBER 31,  -----------------------  SEPTEMBER 30,
                                                      1998(1)      1998(1)      1999(1)       1999(1)   
                                                    ------------  ----------   ----------  -------------
                                                                  (DOLLARS IN THOUSANDS)                
                                                                                                        
PRO FORMA STATEMENT OF OPERATIONS DATA:                                                                 
Revenues...........................................   $ 268,470   $ 196,903    $ 223,326     $ 294,893  
Gross profit(2)....................................      83,595      58,337       75,431       100,689  
Operating income(3)................................      30,706      18,542       32,980        45,144  
Provision (benefit) for income taxes...............         387      (1,513)       5,304         7,204  
Income (loss) before extraordinary item............      (5,379)     (6,943)       3,138         4,702  
OTHER PRO FORMA FINANCIAL DATA:                                                                         
Cash flows from operating activities...............   $   2,667   $  (3,624)   $  18,508     $  24,799  
Cash flows from investing activities...............    (237,409)   (235,275)      (9,100)      (11,234) 
Cash flows from financing activities...............     237,118     237,944      (14,440)      (15,266) 
EBITDA(4)..........................................      57,491      39,905       49,465        67,051  
EBITDA margin(5)...................................        21.4%       20.3%        22.1%         22.7% 
Adjusted EBITDA(6).................................   $  60,684   $  42,490    $  49,465     $  67,659  
Adjusted EBITDA margin(7)..........................        22.6%       21.6%        22.1%         22.9% 
Depreciation and amortization(8)...................   $  20,284   $  15,066    $  15,655     $  20,873  
Capital expenditures:                                                                                   
  Paid in cash.....................................       7,212       5,028        5,511         7,695  
  Financed with capital lease obligations..........         224         176        1,467         1,515  
Cash interest expense..............................      33,239      25,175       23,452        31,516  
Adjusted EBITDA to cash interest expense(9)........        1.8x        1.7x         2.1x          2.1x  
Ratio of earnings to fixed charges(10).............          --          --         1.3x          1.3x  
OTHER OPERATING DATA:                                                                                   
Bookings(11).......................................   $ 266,952   $ 195,385    $ 230,299     $ 301,866  
Backlog at end of period(12).......................     143,851     149,586      150,824       150,824  

                                                                · Download Table

                                                                  AS OF     
                                                              SEPTEMBER 30, 
                                                                 1999(13)   
                                                              --------------
                                                               (DOLLARS IN  
                                                                THOUSANDS)  
                                                                            
PRO FORMA BALANCE SHEET DATA:                                               
Cash and cash equivalents...................................     $  4,530   
Working capital.............................................       63,950   
Total assets................................................      492,484   
Total debt(14)..............................................      316,804   
Mandatorily redeemable preferred stock......................       39,785   
Stockholders' equity........................................       70,078   

See accompanying Notes to Summary Unaudited Pro Forma Consolidated Financial
Data. 

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NOTES TO SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA                

(1)  Reflects our acquisition of DeCrane Aircraft in connection with the DLJ    
  acquisition and our acquisition of the following companies (on the dates
indicated) as if each had occurred as of January 1, 1998:             

                                                        · Enlarge/Download Table
                                                                                                   
- Avtech (June 26, 1998);    - PPI (April 23, 1999);               - International Custom Interiors
                                                                     (October 8, 1999); and        
- Dettmers (June 30, 1998);  - Custom Woodwork (August 15, 1999);  - Infinity (December 17, 1999). 

- PATS (January 22, 1999);   - PCI NewCo (October 6, 1999);                                        

(2) Net of $6.2 million of non-cash acquisition related charges to reflect cost 
 of sales based on the fair value of inventory acquired in connection with
   the DLJ acquisition and our PPI, Custom Woodwork and PCI NewCo acquisitions
for the year ended December 31, 1998 and the nine months ended          
September 30, 1998.                                                     

(3) Excludes an approximate $9.5 million pre-tax charge we will incur in the    
fourth quarter of 1999 in connection with the Hollingsead and Elsinore  
Engineering restructuring.                                              

(4) EBITDA equals operating income plus depreciation, amortization, parent      
  company management fees, non-cash acquisition related charges described in
    Note 2 above and other acquisition related costs. EBITDA is not a measure of
performance or financial condition under generally accepted accounting  
 principles. EBITDA is not intended to represent cash flow from operations
   and should not be considered as an alternative to income from operations or
net income computed in accordance with generally accepted accounting    
   principles, as an indicator of our operating performance, as an alternative
to cash flow from operating activities or as a measure of liquidity. The
   funds depicted by EBITDA are not available for our discretionary use due to
funding requirements for working capital, capital expenditures, debt    
 service, income taxes and other commitments and contingencies. We believe
   that EBITDA is a standard measure of liquidity commonly reported and widely
 used by analysts, investors and other interested parties in the financial
   markets. However, not all companies calculate EBITDA using the same method,
and the EBITDA numbers set forth above may not be comparable to EBITDA  
reported by other companies.                                            

(5) EBITDA margin is computed by dividing EBITDA by revenues.                   

(6) Adjusted EBITDA equals EBITDA plus the following nonrecurring charges:      

                                                        · Enlarge/Download Table

                                                                                               TWELVE    
                                                       YEAR          NINE MONTHS ENDED         MONTHS    
                                                      ENDED            SEPTEMBER 30,           ENDED     
                                                   DECEMBER 31,   -----------------------  SEPTEMBER 30, 
                                                       1998           1998         1999         1999     
                                                  --------------  ------------   --------  --------------
                                                                  (DOLLARS IN THOUSANDS)                 
                                                                                                         
EBITDA as described in Note 4 above..............    $57,491        $39,905      $49,465      $67,051    
                                                     -------        -------      -------      -------    
Adjustments for nonrecurring charges                                                                     
  Workforce reductions...........................      2,430          1,822           --          608    
  Engineering costs                                      350            350           --           --    
  Reduction of corporate expenses................        310            310           --           --    
  Non-cash stock option compensation expense.....         73             73           --           --    
  Expiration of employment contract of a former                                                          
    stockholder of a previously acquired company          30             30           --           --    
                                                     -------        -------      -------      -------    
      Total adjustments..........................      3,193          2,585           --          608    
                                                     -------        -------      -------      -------    
Adjusted EBITDA..................................    $60,684        $42,490      $49,465      $67,659    
                                                     =======        =======      =======      =======    

(7) Adjusted EBITDA margin is computed by dividing Adjusted EBITDA by revenues. 

(8) Reflects depreciation and amortization of plant and equipment and goodwill  
and other intangible assets. Excludes amortization of deferred financing
costs and debt discounts that are classified as a component of interest 
expense.                                                                

(9) Adjusted EBITDA to cash interest expense is computed by dividing Adjusted   
EBITDA by cash interest expense.                                        

(10) For purposes of calculating the ratio of earnings to fixed charges,        
    earnings represent net income before income taxes, minority interests in the
 income of majority-owned subsidiaries, cumulative effect of an accounting
change, extraordinary items and fixed charges. Fixed charges consist of:

- interest, whether expensed or capitalized;                      

    - amortization of debt expense and discount or premium relating to any
indebtedness, whether expensed or capitalized; and            

       - one-third of rental expenses under operating leases which is considered
  to be a reasonable approximation of the interest portion of such
expense.                                                      

    There were deficiencies of earnings to fixed charges of $4.9 million for the
year ended December 31, 1998 and $8.4 million for the nine months ended 
September 30, 1998.                                                     

(11) Bookings represent the total invoice value of purchase orders received     
during the period.                                                      

(12) Orders are generally subject to cancellation by the customer prior to      
shipment. The level of unfilled orders at any given date during the year
  will be materially affected by the timing of our receipt of orders and the
speed with which those orders are filled.                               

(13) Reflects our PCI NewCo, International Custom Interiors and Infinity        
   acquisitions as if each had occurred as of September 30, 1999. Excludes the
 effect of an approximate $9.5 million pre-tax charge we will incur in the
fourth quarter of 1999 in connection with the Hollingsead and Elsinore  
Engineering restructuring.                                              

(14) Total debt is defined as long-term debt, including current portion, and    
short-term borrowings.                                                  

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA

  The following tables present our summary historical consolidated financial
data and comparable data for DeCrane Aircraft, our predecessor. The data as of  
and for the four months ended December 31, 1998 were derived from our audited   
financial statements. The data for each of the two years in the period ended    
December 31, 1997 and the eight months ended August 31, 1998 were derived from  
the DeCrane Aircraft audited financial statements. The data as of September 30, 
1998 and 1999 and for the one month ended September 30, 1998 and the nine months
ended September 30, 1999 were derived from our unaudited historical financial   
statements for such periods, which, in the opinion of management, reflect normal
and recurring adjustments necessary to present fairly the financial position and
results of operations for the periods presented. The results of operations for  
interim periods are not necessarily indicative of results of operations for the 
full year. The information in this table should be read in conjunction with     
"Selected Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our consolidated financial   
statements and related notes included elsewhere in this prospectus. All dollar  
amounts are in thousands.                                                       

                                                        · Enlarge/Download Table


                                                                                                                                 
                                                                                        NINE MONTHS ENDED SEPTEMBER 30,(1)       
                                         YEAR ENDED DECEMBER 31,(1)                --------------------------------------------- 
                            -----------------------------------------------------                                                
                                                                1998                             1998                            
                                                   ------------------------------  ---------------------------------             
                                                   EIGHT MONTHS     FOUR MONTHS    EIGHT MONTHS        ONE MONTH                 
                                                     ENDED             ENDED          ENDED              ENDED                   
                                                   AUGUST 31,       DECEMBER 31,   AUGUST 31,         SEPTEMBER 30,              
                              1996        1997        1998             1998           1998               1998            1999    
                            --------    --------   -------------    -------------  ---------------    --------------   --------- 
                                      (PREDECESSOR)(2)                             (PREDECESSOR)(2)                              
STATEMENT OF OPERATIONS                                                                                                          
  DATA:                                                                                                                          
Revenues..................  $ 65,099    $108,903     $ 90,077         $  60,356       $ 90,077          $  16,012      $ 177,836 
Gross profit(3)...........    15,707      28,656       29,976            17,617         29,976              4,932         59,755 
Operating income(4).......     4,251      11,995        9,278             4,195          9,278                960         22,742 
Interest expense..........     4,248       3,154        2,350             6,867          2,350              1,765         19,884 
Provision for income taxes                                                                                                       
  (benefit)(5)............       712       3,344        2,892            (2,668)         2,892               (506)         2,669 
Income (loss) before                                                                                                             
  extraordinary item......      (817)      5,254        3,189              (339)         3,189               (480)           500 
Extraordinary loss from                                                                                                          
  debt refinancing(6).....        --      (2,078)          --            (2,229)            --               (296)            -- 
Net income (loss).........      (817)      3,176        3,189            (2,568)         3,189               (776)           500 

OTHER FINANCIAL DATA:                                                                                                            
Cash flows from:                                                                                                                 
  Operating activities      $  2,958    $  4,641     $  3,014         $   1,008       $  3,014          $  (1,506)     $  10,222 
  Investing activities....   (24,016)    (27,809)     (87,378)         (192,678)       (87,378)          (185,433)      (121,431)
  Financing activities        21,051      22,957       89,871           189,268         89,871            191,223        110,929 
EBITDA(7).................     7,602      16,915       13,743            13,476         13,743              3,310         38,821 
EBITDA margin(8)..........      11.7%       15.5%        15.3%             22.3%          15.3%              20.7%          21.8%
Depreciation and                                                                                                                 
  amortization(9).........  $  3,351    $  4,920     $  4,358         $   4,604       $  4,358          $   1,166      $   4,219 
Capital expenditures:                                                                                                            
  Paid in cash(10)........     5,821       3,842        1,745             1,813          1,745                307          4,752 
  Financed with capital                                                                                                          
    lease obligations.....       414         182          116                48            116                 --          1,323 
Ratio of earnings to fixed                                                                                                       
  charges(11).............       1.0x        3.3x         3.0x               --            3.0x                --            1.2x

OTHER OPERATING DATA:                                                                                                            
Bookings(12)..............  $ 81,914    $112,082     $ 94,439         $  54,021       $ 94,439          $  16,890      $ 226,468 
Backlog at end of                                                                                                                
  period(13)..............    44,433      49,005       84,184            75,388         84,184             84,607        139,758 
                                                        · Enlarge/Download Table
                                                                                                                     
BALANCE SHEET DATA:                                                                                                  

Cash and cash equivalents............................................................................................
Working capital......................................................................................................
Total assets.........................................................................................................
Total debt(15).......................................................................................................
Mandatorily redeemable preferred stock...............................................................................
Stockholders' equity.................................................................................................

                                                                                                                     
                               AS OF                                                                                 
                         SEPTEMBER 30,                                                                               
BALANCE SHEET DATA:         1999(14)                                                                                 
                         -----------                                                                                 
Cash and cash equivalen    $   3,139                                                                                 
Working capital........       59,250                                                                                 
Total assets...........      458,399                                                                                 
Total debt(15).........      285,177                                                                                 
Mandatorily redeemable        39,785                                                                                 
Stockholders' equity...       70,078                                                                                 

See accompanying Notes to Summary Historical Consolidated Financial Data. 

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NOTES TO SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA                         

(1) Reflects the results of operations and financial position of companies    
    acquired for all periods subsequent to their respective acquisition dates as
follows:                                                                

   - the remaining 25% minority interest in Cory Components beginning on
February 20, 1996;                                            

- Aerospace Display Systems beginning on September 18, 1996;      

- Elsinore Engineering beginning on December 5, 1996;             

- Audio International beginning on November 14, 1997;             

- Avtech beginning on June 26, 1998;                              

- Dettmers beginning on June 30, 1998;                            

- PATS beginning on January 22, 1999;                             

- PPI beginning on April 23, 1999; and                            

- Custom Woodwork beginning on August 5, 1999.                    

Excludes the results of operations and financial position of PCI NewCo, 
International Custom Interiors and Infinity because they were acquired  
subsequent to September 30, 1999.                                       

(2) Reflects DeCrane Aircraft's results of operations and financial position  
prior to (predecessor) the DLJ acquisition.                           

 (3) Net of non-cash charges to reflect cost of sales based on the fair value of
inventory acquired as follows:                                        

- $4.4 million for the four months ended December 31, 1998 and    
       $1.2 million for the one month ended September 30, 1998 in connection
with the DLJ acquisition; and                                 

       - $1.6 million for the nine months ended September 30, 1999 in connection
with our PPI and Custom Woodworks acquisitions.               

(4) Net of $3.6 million of non-capitalizable transaction costs associated with
  the DLJ acquisition in August 1998. Excludes an approximate $9.5 million
  pre-tax charge we will incur in the fourth quarter of 1999 in connection
with the Hollingsead and Elsinore Engineering restructuring.          

(5) For the four months ended December 31, 1998, includes a $2.6 million      
benefit from the reduction of the deferred tax valuation allowance.   

(6) Represents:                                                               

   - the write-offs, net of an income tax benefit, of deferred financing
       costs, unamortized original issue discounts, a prepayment penalty and
         other related expenses incurred as a result of the repayment of debt by
         DeCrane Aircraft with the net proceeds from its initial public offering
in April 1997; and                                            

   - the write-offs, net of an income tax benefit, of deferred financing
   costs as a result of the repayment of DeCrane Aircraft's existing
         indebtedness in connection with the DLJ acquisition and the refinancing
     of the bridge notes during the four months ended December 31, 1998.

(7) EBITDA equals operating income plus depreciation, amortization, parent    
    company management fees, non-cash acquisition related charges described in
   Note 3 above and other acquisition related costs. EBITDA is not a measure
   of performance or financial condition under generally accepted accounting
   principles. EBITDA is not intended to represent cash flow from operations
     and should not be considered as an alternative to income from operations or
net income computed in accordance with generally accepted accounting  
     principles, as an indicator of our operating performance, as an alternative
  to cash flow from operating activities or as a measure of liquidity. The
     funds depicted by EBITDA are not available for our discretionary use due to
funding requirements for working capital, capital expenditures, debt  
   service, income taxes and other commitments and contingencies. We believe
     that EBITDA is a standard measure of liquidity commonly reported and widely
   used by analysts, investors and other interested parties in the financial
     markets. However, not all companies calculate EBITDA using the same method,
and the EBITDA numbers set forth above may not be comparable to EBITDA
reported by other companies.                                          

(8) EBITDA margin is computed by dividing EBITDA by revenues.                 

(9) Reflects depreciation and amortization of plant and equipment and goodwill
  and other intangible assets. Excludes amortization of deferred financing
 costs and debt discounts that are classified as a component of interest
expense.                                                              

(10) Includes $4.4 million for the year ended December 31, 1996 related to our  
acquisition of a manufacturing facility.                              

(11) For purposes of calculating the ratio of earnings to fixed charges,        
  earnings represent net income before income taxes, minority interests in
the income of majority-owned subsidiaries, cumulative effect of an    
 accounting change, extraordinary items and fixed charges. Fixed charges
consist of:                                                           

- interest, whether expensed or capitalized;                      

    - amortization of debt expense and discount or premium relating to any
indebtedness, whether expensed or capitalized; and            

       - one-third of rental expenses under operating leases which is considered
  to be a reasonable approximation of the interest portion of such
expense.                                                      

  There were a deficiencies of earnings to cover fixed charges for the years
 ended December 31, 1994 and 1995, the four months ended December 31, 1998
 and the one month ended September 30, 1998 of $1.8 million, $2.3 million,
$2.9 million and $1.0 million, respectively.                            

(12) Bookings represent the total invoice value of purchase orders received     
during the period.                                                    

(13) Orders are generally subject to cancellation by the customer prior to      
  shipment. The level of unfilled orders at any given date during the year
    will be materially affected by the timing of DeCrane Aircraft's receipt of
orders and the speed with which those orders are filled.              

(14) Excludes the effect of an approximate $9.5 million pre-tax charge we will  
    incur in the fourth quarter of 1999 in connection with the Hollingsead and
Elsinore Engineering restructuring.                                   

(15) Total debt is defined as long-term debt, including current portion, and    
short-term borrowings.                                                

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RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING INFORMATION AS PART OF YOUR 
EVALUATION OF OUR COMPANY AND ITS BUSINESS BEFORE MAKING AN INVESTMENT IN THE   
OFFERED SECURITIES.                                                             

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 

Some of the statements in this prospectus discuss future expectations,  
beliefs or strategies, projections or other "forward-looking" information. These
statements are subject to known and unknown risks. Many factors could cause     
actual company results, performance or achievements, or industry results, to be 
materially different from the projections expressed or implied by this          
prospectus. Some of those risks are specifically described below, but we are    
also vulnerable to a variety of elements that affect many businesses, such as:  

- fuel prices and general economic conditions that affect demand for    
     aircraft and air travel, which in turn affect demand for our products and
services;                                                           

   - changes in prevailing interest rates and the availability of financing to
fund our plans for continued growth;                                

- inflation, and other general changes in costs of goods and services;  

- liability and other claims asserted against us;                       

- the ability to attract and retain qualified personnel;                

- labor disturbances; and                                               

   - changes in operating strategy, or our acquisition and capital expenditure
plans.                                                              

We cannot predict any of the foregoing with certainty, so our           
forward-looking statements are not necessarily accurate predictions. Also, we   
are not obligated to update any of these statements, to reflect actual results  
or report later developments. You should not rely on our forward-looking        
statements as if they were certainties.                                         

SUBSTANTIAL LEVERAGE--OUR SUBSTANTIAL LEVELS OF DEBT COULD ADVERSELY AFFECT OUR 
FINANCIAL HEALTH AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES.

   We incurred significant debt as part of our acquisition of DeCrane Aircraft
in connection with the DLJ transaction in August 1998 and in connection with    
companies we have acquired. As of September 30, 1999, on a pro forma basis, we  
would have had total consolidated indebtedness of approximately $316.8 million, 
and we would have had available $50.0 million of additional revolving borrowings
under the DeCrane Aircraft bank credit facility. In order to borrow those funds,
we will have to satisfy funding conditions of the kind usually imposed in       
similar agreements. The bank credit facility and the indenture under which      
DeCrane Aircraft's senior subordinated notes are issued each also permit us to  
incur significant amounts of additional debt and to secure that debt with some  
of our assets.                                                                  

The amount of debt we carry could have important consequences:          

 - It may limit the cash flow available for general corporate purposes and
   acquisitions. Interest payments on our debt for the twelve months ended
     September 30, 1999 would have been $31.5 million on a pro forma basis. We
   had deficiencies of earnings to cover fixed charges for the years ended
   December 31, 1994 and 1995, the four months ended December 31, 1998 and
 the one month ended September 30, 1998 of $1.8 million, $2.3 million,
$2.9 million and $1.0 million, respectively.                        

    - It may limit our ability to obtain additional debt financing in the future
for working capital, capital expenditures or acquisitions.          

   - It may limit our flexibility in reacting to competitive and other changes
in the industry and economic conditions generally.                  

- It may expose us to increased interest expenses, when interest rates  
     fluctuate, because some of our borrowing may be, and in recent years most
of it has been, at variable "floating" rates.                       

  - It may limit our ability to respond to changes in our markets or exploit
business opportunities.                                             

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RESTRICTIVE COVENANTS--OUR OPERATIONS AND THOSE OF OUR SUBSIDIARIES ARE         
RESTRICTED BY THE TERMS OF OUR BANK CREDIT FACILITY AND SENIOR SUBORDINATED     
NOTES.                                                                          

Our bank credit facility and the indenture under which our senior       
subordinated notes are issued limit our flexibility in operating our businesses,
including our ability and the ability of our subsidiaries to:                   

- incur debt;                                                           

- issue preferred stock;                                                

- repurchase capital stock or subordinated debt;                        

- enter into transactions with affiliates;                              

- enter into sale and leaseback transactions;                           

- create liens or allow them to exist;                                  

- pay dividends or other distributions;                                 

- make investments;                                                     

- sell assets; and                                                      

- enter into mergers and consolidations.                                

    In addition, our bank credit facility requires that we satisfy several tests
of financial condition. Our ability to do so can be affected by events beyond   
our control, and we cannot assure you that we will meet those tests. Our failure
to do so could result in a default under our bank credit facility or the notes. 

ADDITIONAL BORROWINGS--DESPITE CURRENT INDEBTEDNESS LEVELS, WE MAY STILL BE ABLE
TO INCUR SUBSTANTIALLY MORE DEBT. THIS COULD INTENSIFY THE RISKS DESCRIBED      
ABOVE.                                                                          

DeCrane Aircraft and its subsidiaries may be able to incur substantial  
additional indebtedness in the future under the terms of its debt agreements. If
new debt is added to our current debt levels, the related risks that we now face
could intensify.                                                                

POTENTIAL INABILITY TO SERVICE DEBT--WE WILL REQUIRE A SIGNIFICANT AMOUNT OF    
CASH TO SERVICE OUR DEBT. OUR ABILITY TO GENERATE CASH DEPENDS ON CASH FLOWS    
FROM OUR SUBSIDIARIES AND MANY FACTORS BEYOND OUR CONTROL.                      

  Our ability to satisfy our debt obligations, including these notes, and to
fund planned capital expenditures will depend on our ability to generate cash in
the future. This, to an extent, is subject to general economic, financial,      
competitive, legislative, regulatory and other factors that are beyond our      
control.                                                                        

    We cannot assure you that our operating cash flow will be sufficient to meet
our anticipated future operating and capital expenditures and debt payments as  
they become due or that future borrowings will be available to us for such      
purposes. If our cash flow is lower than we expect, we might be forced to reduce
or delay acquisitions or capital expenditures, sell assets and/or reduce        
operating expenses in order to make all required debt service payments.         
Alternatively, we may have to refinance all or a portion of our debt on or      
before maturity. A reduction in our operating expenses might reduce important   
efforts, such as selling and marketing programs, management information system  
upgrades and new product development. In addition, we may not be able to        
refinance our debt on commerciably reasonable terms or at all.                  

   On a pro forma basis, we would have had income before extraordinary item of
$4.7 million for the twelve months ended September 30, 1999. However, we expect 
to record a pre-tax charge of approximately $9.5 million in the fourth quarter  
of 1999, resulting in a net loss for the year ending December 31, 1999. See     
"Recent Developments--Reorganization and Restructuring Change." In the past, our
acquisitions resulted in increased interest and amortization expenses. As a     
result DeCrane Aircraft incurred historical net losses in each year from our    
inception through 1996, despite positive operating income. The first historical 
net profit reported by DeCrane Aircraft occurred in 1997, in part because of the
repayment of a significant part of its outstanding debt with the net proceeds of
its initial public offering.                                                    

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AIRCRAFT INDUSTRY RISKS--THE AIRCRAFT INDUSTRY IS CYCLICAL AND AFFECTED BY MANY 
FACTORS BEYOND OUR CONTROL, INCLUDING MILITARY SPENDING TRENDS AND REGIONAL     
ECONOMIC INSTABILITY IN ASIA.                                                   

A downturn in the aircraft market could adversely affect our business.  

- The principal markets for corporate aircraft manufacturers are        
    corporations, fractional ownership programs and wealthy individuals. The
      corporate aircraft market is cyclical and has been adversely affected by a
number of factors, including the general state of the U.S. economy, 
      corporate profits, interest rates and commercial airline fares. A downturn
    in any of these factors could depress the demand for corporate aircraft.

- The principal markets for manufacturers of commercial aircraft are the
   commercial and regional airline industries, which are cyclical and have
    been adversely affected by a number of factors, including increased fuel
and labor costs and intense price competition. Commercial aircraft  
   production may increase and decrease in response to changes in customer
     demand caused by general economic conditions. For example, new commercial
     aircraft deliveries declined from a peak of approximately 767 aircraft in
  1991 to approximately 367 aircraft in 1995, according to AEROSPACE AND
   AIRTRANSPORT CURRENT ANALYSIS published by Standard and Poor's Industry
     Surveys, and the Boeing Company also has announced reductions in 2000 and
2001 from its 1999 delivery levels.                                 

  - The Asian markets are important for manufacturers of commercial aircraft
     and components for those aircraft. Boeing has reported a large backlog of
aircraft sales to customers in Asia, and some deliveries have been  
    deferred or canceled. Boeing has characterized the economic situation in
Asia as a risk to its deliveries over the next few years. It has    
   previously announced scheduled production slowdowns in its 747, 767 and
  777 aircraft lines, among others, during 2000 and 2001. That situation
could, if it continues or worsens, result in additional significant 
cancellations or deferrals of deliveries for new aircraft.          

 - The military aircraft industry is dependent upon the level of equipment
   expenditures by the armed forces of countries throughout the world, and
     especially those of the United States. In recent years, this industry has
      been adversely affected by a number of factors, including the reduction in
 military spending since the end of the Cold War. Further decreases in
 military spending could further depress demand for military aircraft.

   Any decrease in demand for new aircraft will likely result in a decrease in
demand for our products and services, and, correspondingly, our revenues,       
thereby adversely affecting our financial condition.                            

CONCENTRATION OF KEY CUSTOMERS--WE RECEIVE A SIGNIFICANT SHARE OF OUR REVENUES  
FROM A SMALL GROUP OF KEY CUSTOMERS, AND WE ARE VULNERABLE TO CHANGES IN THEIR  
ECONOMIC CONDITION AND PURCHASING PLANS.                                        

 A significant decline in business from any one of our key customers could
have a material adverse effect on our business. Our three largest customers for 
the twelve months ended September 30, 1999 were Boeing, Textron (which includes 
Cessna), and Bombardier. On a pro forma basis, Boeing accounted for             
approximately 18.3% of our consolidated revenues for that twelve month period,  
Textron for approximately 14.6% and Bombardier for approximately 11.4%. Some of 
our customers have the in-house capabilities to perform the services and provide
many of the products we offer and, accordingly, could discontinue outsourcing   
their business to us.                                                           

In addition to the percentage of revenues directly earned from Boeing, a
significant part of our revenues are earned indirectly from Boeing through sales
of components to Boeing's suppliers. Most of our contracts with Boeing allow    
Boeing to stop purchasing or terminate the contract at any time. In addition,   
under some circumstances, those contracts may allow Boeing to enforce           
alternative economic terms, which would make the contracts less commercially    
favorable to us. During October 1997, Boeing announced that parts shortages     
adversely affected its production and delivery rates. Boeing shut down its 737  
and 747 production lines for approximately one month and did not resume normal  
production rates until late November 1997. In late 1998, among other things,    
Boeing announced reductions in its previously scheduled production for the 747, 
767 and 777 programs in 2000 and 2001, as described in "--Aircraft Industry     
Risks" above. Boeing might suffer further production schedule reductions.       

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COMPETITION--WE COMPETE WITH LARGER COMPANIES IN A FRAGMENTED INDUSTRY.         

    We operate in a highly competitive industry. Some of our competitors include
corporate aircraft manufacturers and independent completion and modification    
companies, major airlines and other independent services organizations,         
including some of our customers, many of whom may have significantly greater    
financial, technological, manufacturing and marketing resources than we do. The 
niche markets within the aircraft industry that we serve are relatively         
fragmented, with several competitors offering the same products and services we 
provide. Due to the global nature of the aircraft industry, competition comes   
from both U.S. and foreign companies. See "Business--Competition" for a list of 
some of our competitors.                                                        

GROWTH STRATEGY--OUR ACQUISITION OF OTHER COMPANIES MAY POSE CERTAIN RISKS.     

We consider and take advantage of selected opportunities to grow by     
acquiring other businesses whose operations or product lines complement our     
existing businesses. Our ability to implement this growth strategy will depend  
on finding suitable acquisition candidates at acceptable valuations and         
obtaining the required financing. Any acquisition we may make in the future     
could be subject to a number of risks, including:                               

- our ability to integrate the operations and personnel of the acquired 
company;                                                            

  - our failure to identify liabilities of the acquired company for which we
may be responsible as a successor owner or operator;                

- the loss of key personnel in the acquired company; and                

    - the impact on our financial position, results of operations and cash flows
resulting from additional acquisition indebtedness.                 

Our inability to adequately manage these or other risks could have an   
adverse effect on our business.                                                 

REGULATION--THE FAA CLOSELY REGULATES MANY OF OUR OPERATIONS. IF WE FAIL TO     
COMPLY WITH ITS MANY STANDARDS, OR IF THOSE STANDARDS CHANGE, WE COULD LOSE     
INSTALLATION OR CERTIFICATION CAPABILITIES, WHICH ARE IMPORTANT TO OUR BUSINESS.

The Federal Aviation Administration prescribes standards and licensing  
requirements for aircraft components, licenses private repair stations and      
issues Designated Alteration Station approvals, which give the holder the right 
to certify some aircraft design modifications on behalf of the FAA. Our ability 
to arrange for rapid government certification of the systems integration        
services we perform is important to our business. It depends on our continuing  
access to, or use of, these FAA certifications and approvals, and our employment
of, or access to, FAA-certified individual engineering professionals. We cannot 
assure you that we will continue to have adequate access to those               
certifications, approvals and certified professionals. The FAA curtailed our    
subsidiary's use of a Designated Alteration Station certification for new       
projects for several months during 1997, until the facility was brought into    
compliance with the FAA's regulations governing FAA-certified repair stations as
further described in "Business--Industry Regulation." The loss of a required    
license or certificate, or its unavailability, could adversely affect our       
operations. The FAA could also change its policies regarding the delegation of  
inspection and certification responsibilities to private companies, which could 
adversely affect our business.                                                  

EXCESS LOSS RISKS--WE COULD SUSTAIN LOSSES IN EXCESS OF OUR INSURANCE FOR       
LIABILITY CLAIMS.                                                               

 Our business exposes us to possible claims for damages resulting from the
manufacture, installation and use of our products. Many factors beyond our      
control could lead to such claims, such as the failure of an aircraft on which  
our products have been installed, the reliability and skill of the operators of 
such aircraft and the maintenance performed on such aircraft. We carry aircraft 
products and grounding liability insurance for this purpose, but we cannot      
assure you that our insurance coverage will be adequate to cover claims that may
arise or that we will be able to renew our coverage in the future at            
commercially reasonable rates. See "Business--Legal Proceedings."               

GOLD AND COPPER PRICES--A SIGNIFICANT INCREASE IN THE PRICE OF GOLD OR COPPER   
COULD REDUCE OUR GROSS PROFIT.                                                  

  A significant portion of the cost of the materials used in our contacts is
comprised of the cost of gold, and to a lesser extent, the cost of copper. We   
cannot always recover raw material price increases by                           

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increasing our product selling prices. Accordingly, a significant increase in   
the price of gold or copper could adversely affect our results of operations. We
have not purchased commodities contracts for gold or copper and do not          
anticipate doing so.                                                            

ENVIRONMENTAL RISKS AND REGULATION--SOME OF OUR OPERATIONS AND FACILITIES       
GENERATE WASTE OR HAVE DONE SO IN THE PAST, WHICH MAY RESULT IN UNKNOWN FUTURE  
LIABILITIES FOR ENVIRONMENTAL REMEDIATION.                                      

    Federal and state laws, particularly the federal Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), impose strict, retroactive   
and joint and several liability upon persons responsible for releases or        
potential releases of hazardous substances and other parties who have some      
relationship to a site or a source of waste. We have sent waste to treatment,   
storage or disposal facilities that have been designated as National Priority   
List sites under CERCLA or equivalent listings under state laws. We have        
received requests for information or allegations of potential responsibility    
from the U.S. Environmental Protection Agency regarding our use of several of   
these sites. Given the potentially retroactive nature of environmental          
liability, it is possible that we will receive additional notices of potential  
liability relating to current or former activities. We may incur costs in the   
future for prior waste disposal by us or former owners of our subsidiaries or   
our facilities. Some of our operations are located on properties which are      
contaminated to varying degrees. In addition, some of our manufacturing         
processes create wastewater which requires chemical treatment, and one of our   
facilities has been cited for excessive quantity and strength of its wastewater.
We may incur costs in the future to address existing or future contamination. If
we incur significant costs in connection with these or other environmental      
issues, our business and financial condition could be adversely affected.       

CONTROL BY PRINCIPAL SHAREHOLDERS--WE ARE CONTROLLED BY PRINCIPAL SHAREHOLDERS  
WHO ARE AFFILIATED WITH OUR LENDERS AND MAY HAVE ECONOMIC INTERESTS WHICH DIFFER
OR CONFLICT WITH YOURS.                                                         

 A significant amount of the outstanding shares of common stock of DeCrane
Holdings are held by DLJ Merchant Banking Partners II, L.P. and affiliated funds
and entities. Those DLJ affiliates own approximately 83.7% of the common stock  
of DeCrane Holdings, on a fully diluted basis assuming exercise of all          
outstanding warrants and options. As a result of their stock ownership, the     
DLJ affiliates control DeCrane Holdings and DeCrane Aircraft and have the power 
to approve all matters requiring approval of the common stockholders, including 
electing all of their directors, appointing new management, and approving sales 
of all or substantially all of the assets of the companies. The directors       
elected by the DLJ affiliates will have the ability to control decisions        
affecting our capital structure, including issuing additional capital stock,    
establishing stock purchase programs and declaring dividends.                   

DLJ Capital Funding, Inc., which is an agent and lender under our bank  
credit facility, DLJ Bridge Finance, Inc., which purchased the original bridge  
notes refinanced by the old notes, and Donaldson, Lufkin & Jenrette Securities  
Corporation, which was the initial purchaser of the old notes, are also DLJ     
affiliates, but they do not own any equity securities of DeCrane Aircraft or    
DeCrane Holdings.                                                               

The interests of the principal shareholders could conflict with your    
interests as a holder of common stock or warrants. For example, those           
shareholders may have an interest in pursuing transactions that they believe    
enhance the value of their equity investment in DeCrane Aircraft or DeCrane     
Holdings, even though the transactions involve risks to your investment.        

INDUSTRY AND MARKET DATA--WE CANNOT GUARANTEE THE ACCURACY AND COMPLETENESS OF  
THE INDUSTRY AND MARKET DATA INCLUDED IN THIS PROSPECTUS.                       

Industry and market data used throughout this prospectus is based on the
good faith estimates of our management, which estimates are based primarily upon
internal management information and, to the extent available, independent       
industry publications and other publicly available information. However, the    
nature of the aircraft industry and competition in our markets results in       
limited availability of reliable, independent data. Although we believe that the
sources we have used are reliable, we do not guarantee, and have not            
independently verified, the accuracy and completeness of the information.       

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DEPENDENCE ON KEY PERSONNEL--WE NEED TO RETAIN THE SERVICES OF OUR KEY          
EMPLOYEES.                                                                      

 Our success and growth depends in large part on the skills and efforts of
our management team and on our ability to attract and retain qualified personnel
experienced in the various operations of our business. The loss of key          
personnel, including our founder, R. Jack DeCrane, combined with the failure to 
attract additional qualified personnel for whatever reason, could delay         
implementation of our business plan or otherwise adversely affect our           
operations. We do not carry key man life insurance on any members of our        
management team.                                                                

NO PRIOR PUBLIC MARKET--YOU CANNOT BE SURE THAT AN ACTIVE TRADING MARKET WILL   
DEVELOP FOR THE OFFERED SECURITIES.                                             

 There is no existing trading market for the offered securities. We cannot
assure you that any market for the warrants or the warrant shares will develop, 
or about your ability to sell the offered securities or the price at which you  
may be able to sell them. If such a market were to develop, the offered         
securities could trade at prices that may be higher or lower than their initial 
offering price. That trading price could depend on many factors, including our  
operating results and the market for similar securities.                        

DIVIDENDS--YOU CANNOT BE SURE THAT WE WILL PAY DIVIDENDS ON THE COMMON STOCK.   

    DeCrane Holdings has not paid dividends to date on its common stock and does
not anticipate paying any cash dividends on its common stock in the foreseeable 
future. DeCrane Holdings is a holding company that is dependent on distributions
from its subsidiaries to meet its cash requirements. The terms of the bank      
credit facility and senior subordinated note indenture restrict the ability of  
DeCrane Aircraft to make distributions to DeCrane Holdings and, consequently,   
will restrict the ability of DeCrane Holdings to pay dividends on the common    
stock. Also, holders of the warrants will not have the right to receive any     
dividends so long as their warrants are unexercised.                            

YEAR 2000--SOME OF THE ADMINISTRATIVE AND MANUFACTURING SYSTEMS ON WHICH WE RELY
MAY NOT OPERATE CORRECTLY DUE TO THE DATE CHANGES THAT OCCURRED ON OR AROUND    
JANUARY 1, 2000.                                                                

 Many existing computer programs use only two digits to identify a year in
the date field. These programs, if not corrected, could fail or create erroneous
results when dealing with dates later than December 31, 1999. This "Year 2000"  
issue is believed to affect virtually all companies and organizations, including
DeCrane Aircraft. We are dependent in part on computer- and date-controlled     
systems for some internal functions, particularly inventory control, purchasing,
customer billing and payroll. Similarly, suppliers of components and services on
which we rely, and our customers, may have Year 2000 compliance risks which     
would affect their operations and their transactions with us. Other parties with
whom we have commercial relationships rely heavily on computer-based technology.
Any problems related to these or other Year 2000 issues could adversely affect  
our business.                                                                   

  As of the date of this prospectus, the January 1, 2000 date has passed and
we are not aware of any significant internal-, customer- or vendor-related Year 
2000 issues or computer-related failures. However, as of this date we have not  
performed all of the month-, quarter- and year-end update and closing procedures
for our computer and date-controlled systems. We cannot assure you that our     
efforts to address Year 2000 issues were fully effective, or that Year 2000     
issues will not have a material adverse effect on our business, financial       
condition or results of operations.                                             

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RECENT DEVELOPMENTS 

ACQUISITIONS SUBSEQUENT TO SEPTEMBER 30, 1999                                   

Continuing our acquisition strategy, subsequent to September 30, 1999 we
acquired:                                                                       

- substantially all of the assets of PCI NewCo, Inc., a Kansas-based    
      manufacturer of composite material and components for middle- and high-end
corporate aircraft, on October 6, 1999;                             

- all of the common stock of International Custom Interiors, Inc., a    
Florida-based provider of upholstery services and manufacturer of   
      furniture for middle- and high-end corporate aircraft, on October 8, 1999;
and                                                                 

- substantially all of the assets of The Infinity Partners, LLC, a      
      Texas-based designer and manufacturer of interior furniture components for
middle- and high-end corporate aircraft, on December 17, 1999.      

 The total purchase price was $29.6 million, plus contingent consideration
totaling a maximum of $29.7 million payable over five years based on future     
attainment of defined performance criteria. Our historical consolidated         
financial statements for periods after September 30, 1999 will reflect the      
financial position and results of operations of the companies acquired for      
periods subsequent to their respective acquisition dates. The acquisitions were 
funded with borrowings under our senior credit facility. For additional         
information on these acquisitions, see our unaudited financial statements       
included elsewhere in this prospectus.                                          

REORGANIZATION AND RESTRUCTURING CHARGE                                         

In December 1999, we announced a plan to reorganize and restructure the 
operations of two of our subsidiaries, Hollingsead and Elsinore Engineering. In 
conjunction with this restructuring, we expect to record a nonrecurring pre-tax 
charge of approximately $9.5 million in the fourth quarter of 1999, resulting in
a net loss for the quarter and year ending December 31, 1999. The historical and
pro forma consolidated financial data included in this prospectus does not      
reflect this restructuring charge. For additional information, see our unaudited
financial statements included elsewhere in this prospectus.                     

USE OF PROCEEDS 

We are registering the offered securities in order to satisfy our       
obligations under the registration rights agreement entered into at the time of 
the initial offering of the units which included the warrants and the DeCrane   
Aircraft old notes. All of the securities offered hereby are being sold by the  
holders of the relevant warrants or warrant shares. DeCrane Holdings has not    
received and will not receive any of the proceeds from the sale of the offered  
securities, other than upon the exercise of warrants by exercising              
warrantholders.                                                                 

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CAPITALIZATION

 The following table sets forth our consolidated cash and cash equivalents
and total capitalization as of September 30, 1999 on a historical and pro forma 
basis. This table should be read in conjunction with "Management's Discussion   
and Analysis of Financial Condition and Results of Operations," our "Unaudited  
Pro Forma Consolidated Financial Statements" and related notes, and our         
consolidated financial statements and related notes included elsewhere in the   
prospectus.                                                                     

                                                                · Download Table

                                                                      AS OF         
                                                               SEPTEMBER 30, 1999   
                                                             -----------------------
                                                              ACTUAL    PRO FORMA(1)
                                                             --------   ------------
                                                             (DOLLARS IN THOUSANDS) 
                                                                                    
Cash and cash equivalents................................... $  3,139     $  4,530  
                                                             ========     ========  
Total debt:                                                                         
  Bank credit facility:                                                             
    Term facility........................................... $169,050     $214,050  
    Revolving credit facility...............................   13,500           --  
  Senior Subordinated Notes due 2008........................  100,000      100,000  
  Other debt................................................    2,627        2,754  
                                                             --------     --------  
Total debt..................................................  285,177      316,804  
Mandatorily redeemable preferred stock......................   39,785       39,785  
Stockholders' equity........................................   70,078       70,078  
                                                             --------     --------  
Total capitalization........................................ $395,040     $426,667  
                                                             ========     ========  

------------------------                                                        

(1) Pro forma reflects the additional borrowings required to fund the PCI NewCo,
International Custom Interiors and Infinity acquisitions.               

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DIVIDEND POLICY 

  DeCrane Holdings has not paid dividends to date on our common stock and we
do not anticipate paying any cash dividends on our common stock in the          
foreseeable future. DeCrane Holdings is a holding company that is dependent on  
distributions from its subsidiary to meet its cash requirements. The terms of   
DeCrane Aircraft's bank credit facility and the indenture for its senior        
subordinated notes restrict the ability of DeCrane Aircraft to make             
distributions to DeCrane Holdings and, consequently, will restrict our ability  
to pay dividends on our stock. Further, holders of our warrants will not have   
the right to receive any dividends in any case, so long as their warrants are   
unexercised.                                                                    

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SELECTED CONSOLIDATED FINANCIAL DATA

 The following tables present our selected consolidated financial data and
comparable data for DeCrane Aircraft, our predecessor. The data as of and for   
the four months ended December 31, 1998 were derived from our audited financial 
statements. The data for each of the four years in the period ended             
December 31, 1997 and the eight months ended August 31, 1998 were derived from  
the DeCrane Aircraft audited financial statements. The data as of September 30, 
1998 and 1999 and for the one month ended September 30, 1998 and the nine months
ended September 30, 1999 were derived from our unaudited historical financial   
statements for such periods, which, in the opinion of management, reflect normal
and recurring adjustments necessary to present fairly the financial position and
results of operations for the periods presented. The results of operations for  
interim periods are not necessarily indicative of results of operations for the 
full year. The information in this table should be read in conjunction with     
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations" and our consolidated financial statements and related notes included
elsewhere in this prospectus. All dollar amounts are in thousands.              

                                                        · Enlarge/Download Table


                                                      YEAR ENDED DECEMBER 31,(1)       1998             
                               -------------------------------------------------------------------------
                                                                           -----------------------------
                                                                           EIGHT MONTHS     FOUR MONTHS 
                                                                               ENDED           ENDED    
                                                                            AUGUST 31,     DECEMBER 31, 
                                 1994       1995       1996       1997         1998            1998     
                               --------   --------   --------   --------   -------------   -------------
                                                   (PREDECESSOR)(2)                                     
                                                                                                        
STATEMENT OF OPERATIONS DATA:                                                                           
Revenues.....................  $47,092    $55,839    $ 65,099   $108,903     $ 90,077        $  60,356  
Cost of sales(3).............   36,407     43,463      49,392     80,247       60,101           42,739  
                               -------    -------    --------   --------     --------        ---------  
Gross profit.................   10,685     12,376      15,707     28,656       29,976           17,617  
Selling, general and                                                                                    
  administrative expenses....    7,716      9,426      10,747     15,756       15,719           10,274  
Nonrecurring charges(4)......       --         --          --         --        3,632               --  
Amortization of intangible                                                                              
  assets.....................    1,209      1,115         709        905        1,347            3,148  
                               -------    -------    --------   --------     --------        ---------  
Operating income.............    1,760      1,835       4,251     11,995        9,278            4,195  
Interest expense.............    3,244      3,821       4,248      3,154        2,350            6,867  
Terminated debt offering                                                                                
  expenses...................       --         --          --         --          600               --  
Other expenses, net..........      332        382         108        243          247              335  
                               -------    -------    --------   --------     --------        ---------  
Income (loss) before                                                                                    
  provision for income taxes                                                                            
  and                                                                                                   
  extraordinary item.........   (1,816)    (2,368)       (105)     8,598        6,081           (3,007) 
Provision for income taxes                                                                              
  (benefit)(5)...............      613      1,078         712      3,344        2,892           (2,668) 
                               -------    -------    --------   --------     --------        ---------  
Income (loss) before                                                                                    
  extraordinary item.........   (2,429)    (3,446)       (817)     5,254        3,189             (339) 
Extraordinary loss from debt                                                                            
  refinancing(6).............     (264)        --          --     (2,078)          --           (2,229) 
                               -------    -------    --------   --------     --------        ---------  
Net income (loss)............  $(2,693)   $(3,446)   $   (817)  $  3,176     $  3,189        $  (2,568) 
                               =======    =======    ========   ========     ========        =========  

OTHER FINANCIAL DATA:                                                                                   
Cash flows from operating                                                                               
  activities.................  $(2,322)   $ 1,457    $  2,958   $  4,641     $  3,014        $   1,008  
Cash flows from investing                                                                               
  activities.................     (993)    (1,462)    (24,016)   (27,809)     (87,378)        (192,678) 
Cash flows from financing                                                                               
  activities.................    3,028         41      21,051     22,957       89,871          189,268  
EBITDA(7)....................    5,196      5,471       7,602     16,915       13,743           13,476  
EBITDA margin(8).............     11.0%       9.8%       11.7%      15.5%        15.3%            22.3% 
Depreciation and                                                                                        
  amortization(9)............  $ 3,436    $ 3,636    $  3,351   $  4,920     $  4,358        $   4,604  
Capital expenditures:                                                                                   
  Paid in cash(10)...........    1,016      1,203       5,821      3,842        1,745            1,813  
  Financed with capital lease                                                                           
    obligations..............      276         33         414        182          116               48  
Ratio of earnings to fixed                                                                              
  charges(11)................       --         --         1.0x       3.3x         3.0x              --  

OTHER OPERATING DATA:                                                                                   
Bookings(12).................  $47,896    $50,785    $ 81,914   $112,082     $ 94,439        $  54,021  
Backlog at end of                                                                                       
  period(13).................   24,493     19,761      44,433     49,005       84,184           75,388  


                                      NINE MONTHS ENDED SEPTEMBER 30,(1)                                
                               ------------------------------------------------                         
                                             1998                                                       
                               --------------------------------                                         
                                 EIGHT MONTHS       ONE MONTH                                           
                                    ENDED             ENDED                                             
                                  AUGUST 31,      SEPTEMBER 30,                                         
                                     1998             1998            1999                              
                               ----------------   -------------   -------------                         
                               (PREDECESSOR)(2)                                                         
                                                                                                        
STATEMENT OF OPERATIONS DATA:                                                                           
Revenues.....................      $ 90,077         $  16,012       $ 177,836                           
Cost of sales(3).............        60,101            11,080         118,081                           
                                   --------         ---------       ---------                           
Gross profit.................        29,976             4,932          59,755                           
Selling, general and                                                                                    
  administrative expenses....        15,719             3,170          27,507                           
Nonrecurring charges(4)......         3,632                --              --                           
Amortization of intangible                                                                              
  assets.....................         1,347               802           9,506                           
                                   --------         ---------       ---------                           
Operating income.............         9,278               960          22,742                           
Interest expense.............         2,350             1,765          19,884                           
Terminated debt offering                                                                                
  expenses...................           600                --              --                           
Other expenses, net..........           247               181            (311)                          
                                   --------         ---------       ---------                           
Income (loss) before                                                                                    
  provision for income taxes                                                                            
  and                                                                                                   
  extraordinary item.........         6,081              (986)          3,169                           
Provision for income taxes                                                                              
  (benefit)(5)...............         2,892              (506)          2,669                           
                                   --------         ---------       ---------                           
Income (loss) before                                                                                    
  extraordinary item.........         3,189              (480)            500                           
Extraordinary loss from debt                                                                            
  refinancing(6).............            --              (296)             --                           
                                   --------         ---------       ---------                           
Net income (loss)............      $  3,189         $    (776)      $     500                           
                                   ========         =========       =========                           
OTHER FINANCIAL DATA:                                                                                   
Cash flows from operating                                                                               
  activities.................      $  3,014         $  (1,506)      $  10,222                           
Cash flows from investing                                                                               
  activities.................       (87,378)         (185,433)       (121,431)                          
Cash flows from financing                                                                               
  activities.................        89,871           191,223         110,929                           
EBITDA(7)....................        13,743             3,310          38,821                           
EBITDA margin(8).............          15.3%             20.7%           21.8%                          
Depreciation and                                                                                        
  amortization(9)............      $  4,358         $   1,166       $   4,219                           
Capital expenditures:                                                                                   
  Paid in cash(10)...........         1,745               307           4,752                           
  Financed with capital lease                                                                           
    obligations..............           116                --           1,323                           
Ratio of earnings to fixed                                                                              
  charges(11)................           3.0x               --             1.2x                          
OTHER OPERATING DATA:                                                                                   
Bookings(12).................      $ 94,439         $  16,890       $ 226,468                           
Backlog at end of                                                                                       
  period(13).................        84,184            84,607         139,758                           

                                                        · Enlarge/Download Table

                                                      AS OF DECEMBER 31,(1)                          AS OF SEPTEMBER 30,(1)    
                                   ------------------------------------------------------------  ------------------------------
                                     1994       1995       1996         1997           1998           1998           1999(14)  
                                   --------   --------   --------   ------------   ------------  ---------------   ------------
                                                 (PREDECESSOR)(2)                                                              
                                                                                                                               

BALANCE SHEET DATA:                                                                                                            
Cash and cash equivalents.         $    236   $    305   $    320   $        206   $      3,518  $         4,267   $      3,139
                                                                                                                               
Working capital...................  11,459      12,583     10,486       24,772         46,227         46,173           59,250  
Total assets......................  37,685      36,329     69,266       99,137        330,575        333,808          458,399  
Total debt(15)....................  23,874      24,672     42,250       38,838        186,765        184,893          285,177  
Mandatorily redeemable preferred                                                                                               
  stock and common stock                                                                                                       
  warrants........................   2,329       1,633      6,879           --         35,884         34,436           39,785  
Stockholders' equity (deficit)....     766      (1,697)     1,236       39,527         61,879         63,924           70,078  

See accompanying Notes to Selected Consolidated Financial Data. 

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NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA                                   

(1) Reflects the results of operations and financial position of companies    
   acquired for all periods subsequent to their respective acquisition dates
as follows:                                                           

   - the remaining 25% minority interest in Cory Components beginning on
February 20, 1996;                                            

- Aerospace Display Systems beginning on September 18, 1996;      

- Elsinore Engineering beginning on December 5, 1996;             

- Audio International beginning on November 14, 1997;             

- Avtech beginning on June 26, 1998;                              

- Dettmers beginning on June 30, 1998;                            

- PATS beginning on January 22, 1999;                             

- PPI beginning on April 23, 1999; and                            

- Custom Woodwork beginning on August 5, 1999.                    

Excludes the results of operations and financial position of PCI NewCo, 
International Custom Interiors and Infinity because they were acquired  
subsequent to September 30, 1999.                                       

(2) Reflects DeCrane Aircraft's results of operations and financial position  
prior to (predecessor) the DLJ acquisition.                           

(3) Includes non-cash charges to reflect cost of sales based on the fair value
of inventory acquired as follows:                                     

 - $4.4 million for the four months ended December 31, 1998 and $1.2
       million for the one month ended September 30, 1998 in connection with
the DLJ acquisition; and                                      

       - $1.6 million for the nine months ended September 30, 1999 in connection
with our PPI and Custom Woodworks acquisitions.               

(4) Reflects $3.6 million of non-capitalizable transaction costs associated   
with the DLJ acquisition in August 1998. Excludes an approximate $9.5 
million pre-tax charge we will incur in the fourth quarter of 1999 in 
 connection with the Hollingsead and Elsinore Engineering restructuring.

(5) Prior to the acquisition of the remaining 25% minority interest in Cory   
  Components in 1996, DeCrane Aircraft did not consolidate the earnings of
   Cory Components for tax purposes. As such, despite a consolidated pre-tax
     loss in each of the years, DeCrane Aircraft recorded a provision for income
   taxes from 1993 up to the date of the acquisition in 1996 which primarily
  relates to Cory Components. For the four months ended December 31, 1998,
includes a $2.6 million benefit from the reduction of the deferred tax
valuation allowance.                                                  

(6) Represents:                                                               

   - the write-offs of unamortized deferred financing costs, unamortized
        original issue discounts and a prepayment penalty incurred as a result
        of the refinancing by DeCrane Aircraft of a substantial portion of our
debt in November 1994;                                        

   - the write-offs, net of an income tax benefit, of deferred financing
       costs, unamortized original issue discounts, a prepayment penalty and
         other related expenses incurred as a result of the repayment of debt by
         DeCrane Aircraft with the net proceeds from its initial public offering
in April 1997; and                                            

   - the write-offs, net of an income tax benefit, of deferred financing
   costs as a result of the repayment of DeCrane Aircraft's existing
         indebtedness in connection with the DLJ acquisition and the refinancing
     of the bridge notes during the four months ended December 31, 1998.

(7) EBITDA equals operating income plus depreciation, amortization, parent    
    company management fees, non-cash acquisition related charges described in
   Note 3 above and other acquisition related costs. EBITDA is not a measure
   of performance or financial condition under generally accepted accounting
   principles. EBITDA is not intended to represent cash flow from operations
     and should not be considered as an alternative to income from operations or
net income computed in accordance with generally accepted accounting  
     principles, as an indicator of our operating performance, as an alternative
  to cash flow from operating activities or as a measure of liquidity. The
     funds depicted by EBITDA are not available for our discretionary use due to
funding requirements for working capital, capital expenditures, debt  
   service, income taxes and other commitments and contingencies. We believe
     that EBITDA is a standard measure of liquidity commonly reported and widely
   used by analysts, investors and other interested parties in the financial
     markets. However, not all companies calculate EBITDA using the same method,
and the EBITDA numbers set forth above may not be comparable to EBITDA
reported by other companies.                                          

(8) EBITDA margin is computed by dividing EBITDA by revenues.                 

(9) Reflects depreciation and amortization of plant and equipment and goodwill
  and other intangible assets. Excludes amortization of deferred financing
 costs and debt discounts that are classified as a component of interest
expense.                                                              

(10) Includes $4.4 million for the year ended December 31, 1996 related to our
acquisition of a manufacturing facility.                            

(11) For purposes of calculating the ratio of earnings to fixed charges,      
    earnings represent net income before income taxes, minority interests in
the income of majority-owned subsidiaries, cumulative effect of an  
   accounting change, extraordinary items and fixed charges. Fixed charges
consist of:                                                         

- interest, whether expensed or capitalized;                      

    - amortization of debt expense and discount or premium relating to any
indebtedness, whether expensed or capitalized; and            

       - one-third of rental expenses under operating leases which is considered
  to be a reasonable approximation of the interest portion of such
expense.                                                      

There were deficiencies of earnings to cover fixed charges for the years
 ended December 31, 1994 and 1995, the four months ended December 31, 1998
 and the one month ended September 30, 1998 of $1.8 million, $2.3 million,
$2.9 million and $1.0 million, respectively.                            

(12) Bookings represent the total invoice value of purchase orders received   
during the period.                                                  

(13) Orders are generally subject to cancellation by the customer prior to    
    shipment. The level of unfilled orders at any given date during the year
      will be materially affected by the timing of DeCrane Aircraft's receipt of
orders and the speed with which those orders are filled.            

(14) Excludes the effect of an approximate $9.5 million pre-tax charge we will
      incur in the fourth quarter of 1999 in connection with the Hollingsead and
Elsinore Engineering restructuring.                                 

(15) Total debt is defined as long-term debt, including current portion, and  
short-term borrowings.                                              

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS 

THE FOLLOWING DISCUSSIONS SHOULD BE READ IN CONJUNCTION WITH OUR        
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS  
PROSPECTUS.                                                                     

DeCrane Holdings is a holding company and does not have any material    
operations other than its ownership of all of the capital stock of DeCrane      
Aircraft. As described in the notes to the consolidated financial statements    
included elsewhere in this prospectus, DeCrane Aircraft is the predecessor of   
DeCrane Holdings, and the financial information presented for periods prior to  
the DLJ acquisition is for DeCrane Aircraft.                                    

OVERVIEW                                                                        

  Our financial position and results of operations have been affected by our
history of acquisitions. Since DeCrane Aircraft's formation in 1989, we have    
completed seventeen acquisitions of businesses or assets. As a result, our      
historical financial statements do not reflect the financial position and       
results of operations of our current businesses. Our most recent acquisitions,  
which affect the comparability of the historical financial statements included  
herein, consist of:                                                             

- the remaining 25% minority interest in Cory Components, acquired on   
February 20, 1996;                                                  

- Aerospace Display Systems, acquired on September 18, 1996;            

- Elsinore Engineering, acquired on December 5, 1996;                   

- Audio International, acquired on November 14, 1997;                   

- Avtech, acquired on June 26, 1998;                                    

- Dettmers, acquired on June 30, 1998;                                  

- PATS, acquired on January 22, 1999;                                   

- PPI, acquired on April 23, 1999; and                                  

- Custom Woodwork on August 5, 1999.                                    

   Our historical financial statements included in this prospectus reflect the
financial position and results of operations of the acquired businesses         
subsequent to their respective acquisition dates. Additionally, DeCrane         
Aircraft's capital structure was significantly altered in August 1998 by the    
financing obtained to fund the tender offer for its stock in conjunction with   
the DLJ acquisition.                                                            

 In October 1999, we acquired PCI NewCo and International Custom Interiors
and in December 1999 we acquired Infinity. Our historical financial statements  
do not reflect these acquisitions because they were acquired subsequent to      
September 30, 1999.                                                             

THE DLJ ACQUISITION AND FINANCING                                               

 In August 1998, DeCrane Holdings and its two subsidiaries, an acquisition
subsidiary and a financing subsidiary, completed a successful $186.3 million    
cash tender offer for all of the shares of DeCrane Aircraft. DeCrane Holdings   
was organized by DLJ Merchant Banking II, L.P. and several of its affiliates.   
The funds for the tender offer and the refinancing of DeCrane Aircraft's        
existing debt were obtained from the sale of equity by DeCrane Holdings and the 
issuance of debt by its finance subsidiary. DeCrane Holdings received an initial
capital contribution of approximately $99.0 million from the sale of its        
preferred and common stock and warrants to DLJ Merchant Banking. DeCrane        
Holdings used these funds to capitalize its finance subsidiary. The finance     
subsidiary then entered into a $130.0 million syndicated bank credit facility   
with a group of lenders led by DLJ Capital Funding, Inc. and issued             
$100.0 million of senior subordinated increasing rate bridge notes to DLJ Bridge
Finance Inc. The finance subsidiary capitalized the acquisition subsidiary with 
the funds necessary to complete the tender offer.                               

Upon completion of the tender offer, the acquisition and finance        
subsidiaries were merged into DeCrane Aircraft, and DeCrane Aircraft's existing 
debt was repaid. As a result of the mergers, DeCrane Aircraft became a          
wholly-owned subsidiary of DeCrane Holdings, and the bank credit facility and   
bridge notes became obligations of DeCrane Aircraft. In October 1998, DeCrane   
Aircraft refinanced the bridge                                                  

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notes with the proceeds from the sale of the old notes issued under the         
indenture described in this prospectus.                                         

The gross purchase price for DeCrane Aircraft's shares and options was  
$186.3 million. Assets acquired and liabilities assumed have been recorded at   
their estimated fair values based on an independent appraisal. The purchase     
price was allocated to the assets acquired based on the estimated fair values of
$4.4 million for inventory, $2.6 million for fixed assets, and $50.0 million for
identifiable intangible assets. The excess of the purchase price over the fair  
value of the net assets acquired totalling $70.0 million was allocated to       
goodwill. The increase in inventory value was expensed as the inventory was sold
during the four months ended December 31, 1998. The intangible assets, other    
than goodwill, are being amortized on a straight-line basis over periods between
five and fifteen years. Goodwill is being amortized on a straight-line basis    
over a period of thirty years.                                                  

In connection with the DLJ acquisition, DeCrane Holdings raised         
approximately $99.0 million through its sale of common stock, preferred stock   
and warrants. The proceeds of those sales were contributed to the paid-in       
capital of DeCrane Aircraft. The DeCrane Holdings preferred stock provides for  
cumulative dividends that do not require payment in cash through 2003, but will 
be payable in cash thereafter and will be mandatorily redeemable in 2009. The   
DeCrane Holdings preferred stock is exchangeable into debentures that will      
contain customary covenants and events of default, including covenants that     
limit the ability of DeCrane Holdings and its subsidiaries to incur debt, pay   
dividends and acquire or make equity investments in other companies.            

INDUSTRY OUTLOOK AND TRENDS                                                     

    We sell our products to the corporate, commercial, retrofit, aftermarket and
military aircraft markets. Within these markets, our customers include original 
manufacturers of aircraft and related electronic equipment, aircraft repair and 
modification centers and commercial airlines.                                   

    The Teal Group Corporation, an industry-recognized aerospace research group,
projects delivery of 5,067 corporate aircraft between 1999 and 2008,            
representing an increase of approximately 52% over the 3,326 corporate aircraft 
that were delivered between 1989 and 1998. Similarly, the 1999 CURRENT MARKET   
OUTLOOK, released by The Boeing Company in June 1999, projects that the world   
jetliner fleet will grow from 12,600 aircraft at the end of 1998 to 19,100      
aircraft by 2008, and to 28,400 aircraft by 2018. The Boeing report also        
projects that, between 1999 and 2008, the commercial aircraft industry will     
require 8,900 new commercial aircraft, and between 2009 and 2018, it will       
require an additional 11,250 new aircraft, both to support the projected world  
fleet expansion and to replace capacity lost as aircraft are removed from       
commercial airline service.                                                     

  Boeing has, however, announced production cutbacks in several of its lines
for 2000 and 2001. Our sales to Boeing, our largest customer, have decreased due
to a number of factors at the manufacturer and the overall commercial aircraft  
industry. For example, Boeing deliveries of its 747, 767 and 777 airplanes have 
declined due to the recent financial difficulties of many Asian carriers. We    
believe that over the next two years, Boeing's commercial aircraft deliveries   
will stabilize at about 490 aircraft, a decline from the record level of 620    
aircraft in 1999. As a result, we expect short-term demand for our commercial   
aircraft products to be lower than in previous years, with recovery in the      
longer term.                                                                    

NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998                                                                            

THE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998  
REFLECTS THE COMBINED HISTORICAL RESULTS FOR THE EIGHT MONTHS ENDED AUGUST 31,  
1998 (PREDECESSOR) AND THE ONE MONTH ENDED SEPTEMBER 31, 1998.                  

    REVENUES.  Revenues increased $71.7 million, or 67.6%, to $177.8 million for
the nine months ended September 30, 1999 from $106.1 million for the nine months
ended September 30, 1998. Revenues increased due to:                            

- the inclusion of $76.9 million of revenues resulting from the Avtech, 
Dettmers, PATS, PPI and Custom Woodwork acquisitions; and           

- a $6.7 million increase in entertainment and cabin management product 
revenues.                                                           

The increases were offset by:                                           

   - a $8.7 million decrease in revenues due to weak demand for our commercial
aircraft products; and                                              

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- a $3.2 million net decrease in revenues from our other products and   
services.                                                           

GROSS PROFIT.  Gross profit increased $24.9 million, or 71.3%, to $59.8 
million for the nine months ended September 30, 1999. Gross profit as a percent 
of revenues increased to 33.6% for the nine months ended September 30, 1999 from
32.9% for the same period last year. Factors contributing to the gross profit   
increase were:                                                                  

- a contribution of $29.1 million from the acquired companies;          

  - a $3.5 million increase due to higher entertainment and cabin management
products revenues; and                                              

   - a $1.2 million increase resulting from the portion of the DLJ acquisition
  purchase price allocated to inventory and charged to operations as the
inventory was sold during the one month ended September 30, 1998.   

Offsetting the above favorable factors were:                            

    - a $2.8 million decrease due to lower commercial aircraft product revenues;

    - a $2.5 million decrease due to lower margins resulting from fixed overhead
costs absorbed over a lower revenue base;                           

- a $1.6 million charge for the portions of PPI and Custom Woodwork     
acquisition purchase prices allocated to inventory and charged to   
operations as the inventory was sold during the nine months ended   
September 30, 1999; and                                             

- a $2.0 million decrease related to other products and services.       

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and     
administrative expenses increased $8.6 million, or 45.5%, to $27.5 million for  
the nine months ended September 30, 1999, from $18.9 million for the same period
last year. SG&A expenses as a percent of revenues decreased to 15.5% for the    
nine months ended September 30, 1999 compared to 17.8% for the same period last 
year. SG&A expenses increased as a result of:                                   

- a $8.0 million increase from the inclusion of expenses from acquired  
companies; and                                                      

- a $0.6 million increase in expenses at our other companies.           

OPERATING INCOME.  Operating income increased $12.5 million to          
$22.7 million for the nine months ended September 30, 1999, from $10.2 million  
for the same period last year. Operating income as a percent of revenues        
increased to 12.8% for the nine months ended September 30, 1999, from 9.6% for  
the same period last year. Operating income increased due to:                   

- the inclusion of $21.0 million from the acquired companies;           

- a $3.6 million charge recorded in 1998 for nonrecurring tender offer  
expenses;                                                           

- a $2.6 million increase related to entertainment and cabin management 
products; and                                                       

 - a $1.2 million charge resulting from the portion of the DLJ acquisition
  purchase price allocated to inventory and charged to operations as the
inventory was sold during the one month ended September 30, 1998.   

The increases were offset by:                                           

- higher amortization expenses of $7.4 million associated with the DLJ  
acquisition and the PATS, PPI and Custom Woodwork acquisitions; and 

    - a $5.5 million reduction resulting from weakened demand for our commercial
aircraft products;                                                  

- a $1.6 million charge for the portions of the PPI and Custom Woodwork 
acquisition purchase prices allocated to inventory and charged to   
operations as the inventory was sold during the nine months ended   
September 30, 1999; and                                             

- a $1.4 million decrease related to other products and services.       

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INTEREST EXPENSE.  Interest expense increased $15.8 million to          
$19.9 million for the nine months ended September 30, 1999, from $4.1 million   
for the same period last year. Higher debt levels resulting from the tender     
offer and the Avtech, Dettmers, PATS, PPI, and Custom Woodwork acquisitions     
caused the increase.                                                            

    PROVISION FOR INCOME TAXES.  The provision for income taxes differs from the
amount determined by applying the applicable U.S. statutory federal rate to the 
income (loss) before income taxes primarily due to the effects of state and     
foreign income taxes and non-deductible expenses, principally goodwill          
amortization. The difference in the effective tax rates between periods is      
mostly a result of higher goodwill amortization.                                

    NET INCOME.  Net income decreased $1.9 million, to $0.5 million for the nine
months ended September 30, 1999 compared to $2.4 million for the same period in 
1998.                                                                           

BOOKINGS AND BACKLOG.  Bookings increased $115.1 million, or 103.4%, to 
$226.4 million for the nine months ended September 30, 1999 compared to $111.3  
million for the same period in 1998. An increase in bookings of $132.5 million  
attributable to companies acquired was offset by decreases of $15.3 million for 
commercial aircraft products and $2.1 million for our other products and        
services. Backlog increased $64.4 million, or 85.4%, to $139.8 million as of    
September 30, 1999 compared to $75.4 million was of December 31, 1998. A $71.0  
million increase in backlog attributable to companies acquired as offset by     
decreases of $5.7 million for commercial aircraft products and $0.9 million for 
our other products and services.                                                

EVENTS SUBSEQUENT TO SEPTEMBER 30, 1999                                 

  COMPANIES ACQUIRED.  We acquired PCI NewCo, International Custom Interiors
and Infinity for a total purchase price of $29.6 million, plus contingent       
consideration totaling a maximum of $29.7 million payable over five years based 
on future attainment of defined performance criteria. The acquisitions were     
funded with borrowings under our senior credit facility.                        

  REORGANIZATION AND RESTRUCTURING CHARGE.  In December 1999, we announced a
plan to reorganize and restructure the operations of two of our subsidiaries,   
Hollingsead and Elsinore Engineering. In conjunction with this restructuring, we
expect to record a nonrecurring pre-tax charge of approximately $9.5 million in 
the fourth quarter of 1999, resulting in a net loss for the quarter and year    
ending December 31, 1999.                                                       

MANAGEMENT STOCK PURCHASE.  In December 1999, our management purchased  
171,295 shares of common stock for $23.00 per share. The total purchase price   
was $3.9 million, of which one-half was paid in cash at closing and we loaned   
the remaining one-half to management with interest at applicable federal rates. 

STOCK OPTION PLAN.  Our qualified management incentive stock option plan
provides for the granting of options, to employees of DeCrane Aircraft and its  
subsidiaries, to purchase 356,257 common shares and expires in 2009. The options
generally vest based upon future attainment of defined performance criteria,    
although alternate vesting schedules may be authorized. In December 1999,       
options to purchase 279,662 shares at $23.00 per share were granted, of which   
options to purchase approximately 28,000 shares immediately vested. We believe  
the per share exercise price of the options granted approximated the fair market
value of the underlying common stock on the grant date.                         

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997           

THE RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998 
REFLECTS THE COMBINED HISTORICAL RESULTS FOR THE EIGHT MONTHS ENDED AUGUST 31,  
1998 (PREDECESSOR) AND THE FOUR MONTHS ENDED DECEMBER 31, 1998.                 

    REVENUES.  Revenues increased $41.6 million, or 38.2%, to $150.5 million for
the year ended December 31, 1998 from $108.9 million for the year ended         
December 31, 1997. Revenues increased primarily due to the inclusion of:        

   - $20.2 million of revenues from Audio International, which was acquired on
November 14, 1997;                                                  

- $25.2 million of revenues from Avtech, which was acquired on June 26, 
1998; and                                                           

- $3.3 million of revenues from Dettmers, which was acquired on June 30,
1998.                                                               

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 These revenue increases were somewhat offset by continued softness in the
electrical contact markets, where we experienced a sales decline of             
approximately $8.6 million for the year ended December 31, 1998 compared with   
the same period last year.                                                      

GROSS PROFIT.  Gross profit increased $18.9 million, or 65.9%, to       
$47.6 million for the year ended December 31, 1998 from $28.7 million for the   
year ended December 31, 1997. Gross profit as a percent of revenues increased to
31.6% for the year ended December 31, 1998 from 26.3% for the year ended        
December 31, 1997. Factors contributing to the gross profit increase were:      

    - $12.4 million from an overall increase in sales volume, primarily a result
      of the November 1997 Audio International and June 1998 Avtech and Dettmers
acquisitions;                                                       

- $10.3 million due to the higher overall gross margins of the acquired 
companies; and                                                      

- $1.8 million due to overall margin improvements at existing companies.

The increase was offset by:                                             

  - a $1.2 million decrease due to a decline in electrical contact revenues;
and                                                                 

- a $4.4 million charge for the portion of the DLJ acquisition purchase 
      price allocated to inventory and expensed as the inventory was sold during
the four months ended December 31, 1998.                            

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and     
administrative expenses increased $13.8 million, or 87.3%, to $29.6 million for 
the year ended December 31, 1998 from $15.8 million for the year ended          
December 31, 1997. SG&A expenses as a percent of revenues increased to 19.7% for
the year ended December 31, 1998 from 14.5% for the year ended December 31,     
1997. SG&A expenses increased primarily as a result of:                         

- the inclusion of $9.2 million of expenses pertaining to Audio         
  International, Avtech and Dettmers which were acquired during 1997 and
1998;                                                               

  - $3.6 of non-capitalizable costs associated with the DLJ acquisition; and

  - a $1.9 million increase in research and development costs related to new
product introductions at Audio International and Dettmers.          

   OPERATING INCOME.  Operating income increased $1.5 million to $13.5 million
for the year ended December 31, 1998 from $12.0 million for the year ended      
December 31, 1997. Operating income as a percent of revenues decreased to 8.9%  
for the year ended December 31, 1998 from 11.0% for the year ended December 31, 
1997. An overall $13.1 million increase in operating income, including          
$12.0 million from the acquisitions of Audio International, Avtech and Dettmers,
was offset by:                                                                  

- the $4.4 million charge for the portion of the DLJ purchase price     
allocated to inventory;                                             

   - $3.6 million of higher amortization expense associated with acquisitions,
including the DLJ acquisition; and                                  

 - the $3.6 million charge for non-capitalizable costs associated with the
DLJ acquisition.                                                    

 INTEREST EXPENSE.  Interest expense increased $6.0 million, or 187.5%, to
$9.2 million for the year ended December 31, 1998 from $3.2 million for the year
ended December 31, 1997. This increase resulted primarily from the higher debt  
levels associated with the DLJ acquisition.                                     

PROVISION FOR INCOME TAXES.  During the year ended December 31, 1998, we
decreased our provision for income taxes by $3.2 million to $0.2 million from   
$3.4 million for the year ended December 31, 1997, as a result of lower income  
before taxes and the reduction of our deferred tax asset valuation allowance by 
$2.6 million. This decrease was significantly offset by an increase in          
non-deductible expenses, particularly the amortization of intangible assets,    
during the same period. We have approximately $17.4 million and $0.6 million in 
loss carry forwards available at December 31, 1998 for federal and state income 
tax purposes.                                                                   

EXTRAORDINARY LOSS FROM DEBT REFINANCING.  During the year ended        
December 31, 1998, we incurred a $2.2 million extraordinary charge, net of an   
estimated $1.5 million income tax benefit, as a result of the refinancing of the
bridge notes with a units offering consisting of notes and warrants. During the 
year ended                                                                      

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December 31, 1997, we incurred a $2.1 million extraordinary charge, net of an   
estimated $1.4 million income tax benefit, as a result of a debt refinancing    
with the proceeds from our initial public offering.                             

   NET INCOME.  Net income decreased $2.6 million to $0.6 million for the year
ended December 31, 1998 compared to $3.2 million for the same period in 1997    
primarily due to the higher amortization, interest and other expenses associated
with the DLJ acquisition.                                                       

BOOKINGS AND BACKLOG.  Bookings increased $36.4 million, or 32.5%, to   
$148.5 million for the year ended December 31, 1998 compared to $112.1 million  
for the same period in 1997. The increase in bookings for 1998 includes:        

- $21.0 million attributable to Audio International;                    

- $15.4 million attributable to Avtech; and                             

- $2.9 million attributable to Dettmers.                                

As of December 31, 1998, we had a sales order backlog of $75.4 million  
compared to $49.0 million as of December 31, 1997.                              

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996           

    REVENUES.  Revenues increased $43.8 million, or 67.3%, to $108.9 million for
1997 from $65.1 million for 1996. Revenues increased primarily due to:          

    - the inclusion of $10.7 million of revenues from Aerospace Display Systems;

- growth in our private labeling programs of $6.4 million;              

   - growth in contact sales of $6.3 million driven by new aircraft production
rate increases;                                                     

- an increase in sales of harness assemblies for in-flight entertainment
systems of $5.1 million;                                            

- an increase in sales of specialty connectors for cabin management and 
   in-flight entertainment systems principally on Boeing's 777 aircraft of
$4.9 million;                                                       

- an increase of sales to Interactive Flight Technologies, Inc. of      
      $3.3 million relating to a major systems integration program for Swiss Air
Transport Co. Ltd.;                                                 

- the inclusion of $3.0 million of revenue from Elsinore;               

- new systems integration programs for navigational systems of          
$1.5 million;                                                       

- the inclusion of $1.3 million of revenue from Audio International;    

- a new systems integration program for United Parcel Service, Inc. of  
$0.9 million; and                                                   

- the overall growth in the commercial aircraft market.                 

  Partially offsetting this increase was a decline in sales to AT&T Wireless
Services, Inc. of $3.8 million, reflecting the completion in late 1995 and early
1996 of a major systems integration program.                                    

GROSS PROFIT.  Gross profit increased $12.9 million, or 82.4%, to       
$28.7 million for 1997 from $15.7 million for 1996. Gross profit as a percentage
of revenues increased to 26.3% for 1997 from 24.1% for 1996. This increase in   
gross profit was attributable to:                                               

- a $10.6 million increase as a result of increased sales volume,       
    $3.8 million of which was attributable to the Aerospace Display Systems,
Elsinore and Audio International acquisitions; and                  

  - a $2.3 million increase attributable to a favorable shift in revenues to
  higher margin products, cost reductions and sustained price increases.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  SG&A expenses increased  
$5.0 million, or 46.6%, to $15.8 million for 1997 from $10.7 million for 1996.  
SG&A expenses as a percentage of revenues decreased to 14.5% for 1997 from 16.5%
for 1996. SG&A expenses increased primarily due to:                             

- $2.3 million of incremental expenses resulting from the acquisition of
  Aerospace Display Systems, the AMP facility and Elsinore, all of which
occurred in late 1996;                                              

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- $0.8 million for additional staff to pursue higher sales to aircraft  
  manufacturers and to develop capabilities for in-flight entertainment,
 navigation and satellite communication and safety systems integration
services; and                                                       

- $0.6 million of incremental expenses resulting from the acquisition of
Audio International, which occurred in 1997.                        

 OPERATING INCOME.  Operating income increased $7.7 million, or 182.2%, to
$12.0 million for 1997 from $4.3 million for 1996. Operating income as a        
percentage of revenues increased to 11.0% for 1997 from 6.5% for 1996. The      
increase in operating income resulted from the factors described above.         

INTEREST EXPENSE.  Interest expense decreased $1.1 million, or 25.8%, to
$3.2 million for 1997 from $4.2 million for 1996. The decrease resulted from the
completion of the initial public offering on April 16, 1997 and the repayment of
a substantial portion of debt with the net proceeds.                            

   PROVISION FOR INCOME TAXES.  During 1997, we reduced our deferred tax asset
valuation allowance by $0.5 million to reflect the book benefit of federal and  
state net operating loss carry forwards not previously recognized. We have      
approximately $2.5 million of net operating loss carry forwards available at    
December 31, 1997 for federal income tax purposes.                              

EXTRAORDINARY LOSS FROM DEBT REFINANCING.  During 1997, we incurred a   
$2.1 million extraordinary charge, net of an estimated $1.4 million income tax  
benefit, as a result of refinancing debt with the net proceeds from the initial 
public offering.                                                                

 NET INCOME (LOSS).  Net income increased $4.0 million to $3.2 million for
1997 from a net loss of $0.8 million for 1996. The increase is a result of the  
factors described above.                                                        

LIQUIDITY AND CAPITAL RESOURCES                                                 

We have required cash primarily to fund acquisitions and, to a lesser   
extent, to fund capital expenditures and for working capital. Our principal     
sources of liquidity have been cash flow from operations and third party        
borrowings.                                                                     

   For the nine months ended September 30, 1999, we generated $10.2 million of
cash from operating activities, which is the net of $15.5 million of cash       
generated from operations after adding back depreciation, amortization and other
non-cash items, and $5.9 million used for working capital and $0.1 million      
resulting from an increase in other liabilities. The following factors          
contributed to the $5.9 million working capital increase:                       

- a net $5.7 million decrease in accounts payable and accrued expenses  
   resulting from lower inventory levels, the 1999 payment of $3.0 million
accrued contingent consideration pertaining to the 1997 Audio       
International acquisition and payment timing patterns;              

- a $2.6 million accounts receivable increase due to higher sales; and  

- a $1.3 million increase in prepaid expenses and other assets.         

The working capital increases were offset by:                           

- a $1.4 million inventory decrease as a result of achieving a higher   
inventory turnover rate; and                                        

- a $2.3 million increase in income taxes payable due to higher current 
taxable income.                                                     

For the year ended December 31, 1998, we generated cash from operating  
activities of $4.0 million. Our accounts receivable consist of trade receivables
and unbilled receivables, which are recognized pursuant to the percentage of    
completion method of accounting for long-term contracts. Accounts receivable    
increased $6.6 million for the year ended December 31, 1998 from higher overall 
sales. Unbilled receivables comprised $3.5 million of this increase. Inventories
decreased $2.2 million for the year ended December 31, 1998, due to improved    
inventory management at several subsidiaries as well as the sale of some contact
product lines and the disposal of obsolete inventory items. Accounts payable    
decreased $2.9 million for the year ended December 31, 1998 as a result of      
payment of various assumed transaction expenses in the acquisitions of 1998 and 
an agreement with a new gold supplier for significantly lower prices in exchange
for shorter payment terms. Accrued expenses, however, increased $5.9 million for
the year ended December 31, 1998, primarily as a result of a $2.8 million       
increase in accrued interest.                                                   

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Cash used for investing activities during the nine months ended         
September 30, 1999 consisted of $113.8 million for the PATS, PPI and Custom     
Woodwork acquisitions, $3.0 million of contingent consideration paid during 1999
related to the 1997 Audio International acquisition, and $4.8 million for       
capital expenditures. We anticipate spending $6.6 million for capital           
expenditures in 1999.                                                           

  Cash used in investing activities was $280.1 million during the year ended
December 31, 1998. Of this amount, $190.9 million was used for the DeCrane      
Aircraft acquisition, $83.6 million was used for the Avtech acquisition and     
$2.2 million for the Dettmers acquisition. The total purchase price for the     
Dettmers acquisition also included additional contingent consideration with a   
maximum of $2.0 million payable between 1999 and 2002. We spent $3.6 million on 
capital expenditures during the year ended December 31, 1998, which was lower   
than the $4.5 million originally anticipated because the actual cash outlays for
our information systems upgrade program were delayed until 1999. The bank credit
facility contains restrictions on our ability to make capital expenditures;     
however, we believe the permitted capital expenditures will be sufficient to    
complete our investment program and maintain our facilities.                    

    Cash provided by financing activities was $110.9 million for the nine months
ended September 30, 1999. The cash provided was primarily used to fund our      
acquisitions as follows:                                                        

  - January 1999 -- the senior term loan facility was amended to provide for
      an additional $20.0 million of term loan borrowings and we used the funds,
  along with $14.9 million of borrowings under our acquisition revolving
     credit facility and a $5.0 million customer advance to acquire all of the
common stock of PATS;                                               

  - April 1999 -- the term loan facility was further amended and we borrowed
 an additional $70.0 million and used $50.0 million of the proceeds to
    partially fund the PPI acquisition and $20.0 million to repay borrowings
     under our acquisition and working capital revolving credit facilities; we
   also sold 543,478 shares of common stock and used the $12.5 million net
proceeds to fund the remaining portion of the PPI acquisition; and  

- August 1999 -- we borrowed an additional $13.8 million under our      
   acquisition and working capital revolving credit facilities to fund the
Custom Woodwork acquisition.                                        

Subsequent to September 30, 1999, we:                                   

   - borrowed $11.5 million under our acquisition revolving credit facility in
conjunction with the October 1999 PCI NewCo and International Custom
Interiors acquisitions;                                             

   - further amended our term loan facility in December 1999 to provide for an
additional $45.0 million of term loan borrowings; the interest rate 
    margins applicable to the incremental term loan borrowings are 2.50% for
prime rate borrowings or 3.75% for Euro-Dollar borrowings;          

- used the term loan proceeds to fund the Infinity acquisition and repay
      $28.0 million of acquisition and working capital revolving credit facility
borrowings; and                                                     

- sold 171,304 shares of common stock to management for $3.9 million of 
      which one-half was paid in cash at closing and used to repay senior credit
facility borrowings.                                                

At September 30, 1999, senior credit facility borrowings totaling       
$182.6 million are at variable interest rates based on defined margins over the 
current prime or Euro-Dollar rates. As of September 30, 1999 we had             
$59.3 million of working capital, $25.0 million of borrowings available under   
our working capital senior credit facility and $11.5 million available under our
acquisition senior credit facility. Although we cannot be certain, we believe   
that the current levels of working capital and amounts available under our      
senior credit facilities will enable us to meet our liquidity requirements for  
the foreseeable future.                                                         

   Cash provided by financing activities was $279.2 million for the year ended
December 31, 1998. In connection with the DLJ acquisition, we entered into a new
bank credit facility that initially provided for term loan borrowings in the    
aggregate principal amount of $80.0 million, now increased to $99.9 million, and
revolving loan borrowings up to an aggregate principal amount of $50.0 million, 
including $25.0 million for working capital purposes which expires in 2004. In  
1998, prior to the DLJ acquisition, we also completed a common stock offering   
and used the $34.8 million net proceeds to reduce the amount outstanding under  
our credit facility, and borrowed $85.8 million under our then-existing senior  
credit facility to finance the Avtech and Dettmers acquisitions.                

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The DLJ acquisition created substantial debt for us, resulting in       
significant debt service obligations. Although we cannot be certain, we         
anticipate that operating cash flow, together with borrowings under the bank    
credit facility, will be sufficient to meet our future short- and long-term     
operating expenses, working capital, capital expenditures and debt service      
obligations for the foreseeable future. However, our ability to pay principal or
interest, to refinance our debt and to satisfy our other debt obligations will  
depend on our future operating performance. We will be affected by economic,    
financial, competitive, legislative, regulatory, business and other factors     
beyond our control. In addition, we are continually considering acquisitions    
that complement or expand our existing businesses or that may enable us to      
expand into new markets. Future acquisitions may require additional debt, equity
financing or both. We may not be able to obtain any additional financing on     
acceptable terms.                                                               

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT                                        

   In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133    
requires companies to record derivatives on the balance sheet as assets or      
liabilities, measured at fair value. It also requires that gains or losses      
resulting from changes in the values of those derivatives be accounted for      
depending on the use of the derivative and whether it qualifies for hedge       
accounting. Adoption of SFAS No. 133, as amended by SFAS No. 137 in June 1999,  
is required for the fiscal year beginning January 1, 2001. Management believes  
the adoption of SFAS No. 133 will not have a material impact on our consolidated
financial position or results of operations.                                    

SWISS FRANC FORWARD EXCHANGE CONTRACTS                                          

Some of the contact blanks we use in the production of our contacts are 
manufactured at our Swiss facility and shipped to our El Segundo, California    
facility for plating and assembly. In 1996, 1997 and 1998, solely in an effort  
to mitigate the effects of currency fluctuations between the U.S. Dollar and the
Swiss Franc, we entered into forward exchange contracts at fixed rates. However,
we have not entered into any such contracts during the nine months ended        
September 30, 1999 and no such contracts are open as of that date. We plan to   
continue efforts to mitigate this risk in the future. We do not engage in any   
currency exchange transactions for trading or speculative purposes. Realized and
unrealized gains and losses on foreign exchange contracts are recognized        
currently in the consolidated statements of operations.                         

COMPLIANCE OF KEY SYSTEMS WITH YEAR 2000 PERFORMANCE STANDARDS                  

  We are dependent in part on computer- and date-controlled systems for some
internal functions, particularly inventory control, purchasing, customer billing
and payroll. Similarly, suppliers of components and services on which we rely,  
and our customers, may have Year 2000 compliance risks, which would affect their
operations and their transactions with us. Other parties with whom we have      
commercial relationships, including raw materials suppliers and service         
providers, such as banking and financial services, data processing services,    
telecommunications services and utilities, are highly reliant on computer-based 
technology.                                                                     

 We have incurred less than $1.0 million in the aggregate to remediate and
test our systems, and evaluate and address the risks of our key customers and   
vendors. All of our Year 2000 compliance costs have been funded from our        
operating cash flow. We believe the number of products manufactured by us whose 
functioning is dependent upon computer-controlled or other date-controlled      
systems is not significant. Our manufacturing operations and our products       
generally are not based upon date-controlled machinery; our business operations 
and systems are not so time-sensitive that brief interruptions, or a shift to   
backup paper records, should cause significant losses.                          

  As of the date of this prospectus, the January 1, 2000 date has passed and
we are not aware of any significant internal-, customer- or vendor-related Year 
2000 issues or computer-related failures. However, as of this date we have not  
performed all of the month-, quarter and year-end update and closing procedures 
for our computer and date-controlled systems. We cannot assure you that our     
efforts to address Year 2000 issues were fully effective, or that Year 2000     
issues will not have a material adverse effect on our business, financial       
condition or results of operations. We intend to continue to monitor our systems
and our vendors, suppliers and customers for Year 2000 related issues and take  
necessary actions to correct the problems, if any, as they occur.               

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COMMON EUROPEAN CURRENCY                                                        

The Treaty on European Economic and Monetary Union provides for the     
introduction of a single European currency, the Euro, in substitution for the   
national currencies of the member states of the European Union that adopt the   
Euro. In May 1998, the European Council determined the 11 member states that met
the requirement for the Monetary Union and the currency exchange rates among the
currencies for the member states joining the Monetary Union. The transitory     
period for the Monetary Union started on January 1, 1999. According to the      
European Council Resolution of July 7, 1997, the transition will be made in     
three steps, beginning with a transition period from January 1, 1999 to         
December 31, 2001, in which currency accounts may be opened and financial       
statements may be drawn in Euros, and local currencies and Euros will coexist.  
From January 1, 2002 to June 30, 2002, local currencies will be exchanged for   
Euros. On July 1, 2002, local currencies are scheduled to disappear. We could   
incur transitional costs as we redesign our software systems to reflect the     
adoption of the new currency, but we do not expect such costs to be material.   

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                      

    We are exposed to various market risks, including interest rates and changes
in foreign currency exchange rates. Market risk is the potential loss arising   
from adverse changes in market rates and prices, such as interest rates and     
foreign currency exchange rates. From time to time we use derivative financial  
instruments to manage and reduce risks associated with these factors. We do not 
enter into derivatives or other financial instruments for trading or speculative
purposes.                                                                       

INTEREST RATE RISK.  A significant portion of our capital structure is  
comprised of long-term variable- and fixed-rate debt.                           

   Market risk related to our variable-rate debt is estimated as the potential
decrease in pre-tax earnings resulting from an increase in interest rates. The  
interest rates applicable to variable-rate debt are, at our option, based on    
defined margins over the current prime or Euro-Dollar rates. At September 30,   
1999, the current prime rate was 8.25% and the current Euro-Dollar rate was     
5.52%. Based on $182.6 million of variable-rate debt outstanding as of September
30, 1999, a hypothetical one percent rise in interest rates, to 9.25% for prime 
rate borrowings and 6.52% for Euro-Dollar borrowings, would reduce our pre-tax  
earnings by $1.8 million annually. Subsequent to September 30, 1999, we         
increased our variable-rate debt by $28.5 million. Prior to December 31, 1997,  
we purchased interest rate cap contracts to limit our exposure related to rising
interest rates on our variable-rate debt. While we have not entered into similar
contracts since that date, we may do so in the future depending on our          
assessment of future interest rate trends.                                      

  At September 30, 1999, the carrying value of our fixed-rate long-term debt
approximated its fair value. Market risk related to our fixed-rate debt is      
deemed to be the potential increase in fair value resulting from a decrease in  
interest rates. For example, a hypothetical ten percent decrease in the interest
rates, from 12.0% to 10.8%, would increase the fair value of our fixed-rate debt
by approximately $7.0 million.                                                  

  FOREIGN CURRENCY EXCHANGE RATE RISK.  Our foreign customers are located in
various parts of the world, primarily Western Europe, the Far East and Canada,  
and two of our subsidiaries operate in Western Europe. To limit our foreign     
currency exchange rate risk related to sales to our customers, orders are       
primarily valued and sold in U.S. dollars. From time to time we have entered    
into forward foreign exchange contracts to limit our exposure related to foreign
inventory procurement and operating costs. However, we have not entered into any
such contracts during the nine months ended September 30, 1999 and no such      
contracts are open as of that date.                                             

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BUSINESS

OVERVIEW                                                                        

Since our founding in 1989, through acquisitions and internal growth, we
have become one of the premier suppliers to the general aviation market. We     
offer a complete line of interior cabin furniture, galleys, seating, and        
entertainment systems for corporate aircraft. In addition, we manufacture       
aviation electronic components, referred to as avionics, and provide systems    
integration services. We sell our products in the corporate, commercial         
(including regional), retrofit, aftermarket and military aircraft markets.      
Within these markets, our customers include original manufacturers of aircraft  
and related avionics equipment, commonly referred to as OEM's, major components 
suppliers, aircraft repair and modification centers and commercial airlines. For
the twelve months ended September 30, 1999, we generated pro forma revenues and 
EBITDA (as defined) of $294.9 million and $67.1 million, respectively.          

During 1998 and 1999, we completed and integrated eight acquisitions,   
increasing our diversification within the aircraft industry and reducing our    
reliance on the commercial aircraft market. We have built a leading position in 
a number of niche markets in the aircraft industry. The substantial majority of 
our revenue is generated by businesses in which we have a leading market share. 
In order to take advantage of the complementary nature of our various product   
offerings, to rationalize and consolidate the operations of each of our separate
companies and to provide even higher levels of customer service, in 1999 we     
reorganized our related businesses into three separate operating groups: Cabin  
Management, Specialty Avionics and Systems Integration.                         

THE CABIN MANAGEMENT GROUP.  We are the leading independent provider of 
cabin management products for the corporate aircraft market, serving major      
manufacturers such as Boeing Business Jet, Bombardier, Cessna, Dassault,        
Gulfstream and Raytheon. We provide a full line of interior cabin components,   
including seats, furniture, cabinetry, galleys, in-flight entertainment systems,
sidewalls and headliners, which are either sold separately or as a              
pre-engineered, pre-fabricated set. Our "cabinet-in-a-box" product offers       
customized, pre-engineered, pre-fit interior cabinetry and galley kits to       
corporate jet OEM's and independent completion centers. We also have developed  
and are currently marketing our "cabin-in-a-box" product, which is comprised of 
a customized, pre-engineered, pre-fit cabin interior system, including          
furniture, galleys, seats, audio-visual entertainment systems, lighting,        
sidewalls, headliners and electrical control units. Our cabin-in-a-box product  
will enable our customers to rely on us as the single source for cabin-related  
products. We estimate that this product could decrease cycle times by 15% to    
20%, offering significant cost reduction opportunities to our customers, and    
could increase the dollar content per plane for us. The Cabin Management Group  
contributed approximately 40% of our pro forma revenue for the twelve months    
ended September 30, 1999.                                                       

THE SPECIALTY AVIONICS GROUP.  This group designs, engineers and        
manufactures electronic components, electronic display devices and interconnect 
components and assemblies. Among the products offered by this group are flight  
deck communications and audio power control equipment, harness assemblies and   
connectors, power and signal contact products and liquid crystal display        
devices, commonly referred to as LCD's. Customers of this group include Airbus, 
Boeing, Honeywell, Matsushita, and Rockwell Collins. The Specialty Avionics     
Group contributed approximately 39% of our pro forma revenue for the twelve     
months ended September 30, 1999.                                                

 THE SYSTEMS INTEGRATION GROUP.  This group provides auxiliary fuel tanks,
auxiliary power units and system integration services, including engineering,   
kit manufacturing, installation and certification. Customers of this group      
include Boeing Business Jet, Bombardier, Cessna, Gulfstream, Raytheon and       
Rockwell Collins. The Systems Integration Group contributed approximately 21% of
our pro forma revenue for the twelve months ended September 30, 1999.           

INDUSTRY OVERVIEW AND TRENDS                                                    

    We sell our products in the corporate, commercial, retrofit, aftermarket and
military aircraft markets. Within these markets, our customers include original 
manufacturers of aircraft and related avionics equipment, major component       
suppliers, aircraft repair and modification centers and commercial airlines.    

The leading manufacturers of corporate aircraft include Airbus, Boeing  
Business Jet, Cessna, Dassault, Gulfstream and Raytheon, while the leading      
manufacturers of regional aircraft include Bombardier, Embraer and Fairchild    
Dornier. Airbus and Boeing are the primary manufacturers of commercial aircraft 
designed to                                                                     

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carry 100 or more passengers. The major systems installed on new aircraft, such 
as flight deck avionics systems, are produced by a limited number of            
manufacturers, including Honeywell, Rockwell Collins and Sextant Avionique. The 
integration of new systems into existing aircraft, referred to as the retrofit  
market, and the manufacture and sale of replacement products for existing       
aircraft, referred to as the aftermarket, are served by a highly fragmented     
group of companies, including many of the foregoing manufacturers and a number  
of smaller, specialized companies. We market our commercial aircraft products   
directly to the aircraft manufacturers as well as to the manufacturers of major 
aircraft sub-systems. In some cases, we sell our products to competing          
manufacturers.                                                                  

   We believe the following characteristics of our markets have contributed to
our growth and profitability and should provide further opportunities for our   
success:                                                                        

  - INCREASED DEMAND FOR NEW CORPORATE AIRCRAFT. The Teal Group Corporation,
 an industry-recognized aerospace research group, projects delivery of
    5,067 corporate aircraft between 1999 and 2008, representing an increase
      of approximately a 52% over the 3,326 aircraft that were delivered between
      1989 and 1998. We believe that the following factors have driven increased
demand for new corporate aircraft:                                  

     - the growing popularity of fractional aircraft ownership in the United
      States and the expansion of this form of ownership to Europe and the
Far East;                                                     

       - the introduction of new, larger and more efficient aircraft, including:

          - several new mid to high end corporate aircraft, such as the Airbus
     CJ, Boeing Business Jet, and Bombardier Global Express; and

          - additional new model aircraft, such as the Bombardier Continental,
          Cessna Sovereign, and Raytheon Horizon, which are expected to be
introduced in the next few years;                     

   - the need for long range flights to expanding international markets;

- the increased demand for more expedient travel;                 

- the worldwide threat of terrorism; and                          

 - the perceived decline in the level of service afforded commercial
airline passengers.                                           

  - INCREASED LONG-TERM DEMAND FOR NEW COMMERCIAL AIRCRAFT. The 1999 CURRENT
      MARKET OUTLOOK, released by The Boeing Company in June 1999, projects that
      the world jetliner fleet will grow from 12,600 aircraft at the end of 1998
  to 19,100 aircraft by 2008, and to 28,400 aircraft by 2018. The report
also projects that, between 1999 and 2008, the commercial aircraft  
     industry will require 8,900 new commercial aircraft, and between 2009 and
    2018, it will require an additional 11,250 aircraft, both to support the
    projected world fleet expansion and to replace capacity lost as aircraft
are removed from commercial airline service. Despite the increases  
projected for the commercial aircraft industry generally, Boeing has
    announced production cutbacks in several of its lines for 2000 and 2001,
     and our sales to Boeing have decreased. For example, Boeing deliveries of
    its 747, 767 and 777 airplanes have declined due to the recent financial
     difficulties of many Asian carriers. See "Risk Factors--Aircraft Industry
Risks and--Concentration of Key Customers."                         

    - INCREASED DEMAND FOR NEW REGIONAL AIRCRAFT. As part of the total projected
    increase for the commercial aircraft fleet, Boeing's 1999 CURRENT MARKET
     OUTLOOK projects a compounded annual growth rate of 9.4% for the regional
    aircraft fleet from 1999 to 2008. We believe that the projected increase
in the regional aircraft fleet is driven by the following factors:  

       - the introduction of new regional aircraft with state-of-the-art
     cockpits and the same safety equipment as larger commercial
aircraft;                                             

       - continued integration of the services of regional carriers with
major carriers;                                       

         - newer longer-range turboprop and jet aircraft that allow regional
       carriers to consider new "point-to-point" routes, which would
permit passengers to bypass hubs; and                 

- upgraded airport facilities for regional passengers.    

- INCREASED DEMAND FOR CABIN MANAGEMENT SYSTEMS.  As businesses become  
   increasingly dependent on new technology, passengers are demanding more
advanced in-flight services, particularly in the corporate aircraft 
 market. These services include in-flight passenger telecommunications
systems and                                                         

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     in-flight entertainment systems, such as video, video-on-demand and other
    interactive systems. We believe that demand for systems in the passenger
     cabin, as well as avionics systems on the flight deck, is increasing as a
result of:                                                          

       - a desire by airlines for additional revenue-producing services;

    - longer flights combined with a demand by passengers for more
          sophisticated forms of in-flight services and entertainment; and

          - the advent of new technologies and Federal Aviation Administration
mandates related to aircraft safety and navigation.   

In corporate aircraft for example, Honeywell's AIS-1000 OneView-TM- 
Airborne Information System delivers more than 40 channels of live  
television programming and Internet and e-mail access to corporate  
aircraft via direct broadcast satellite service providers.          

   - SIGNIFICANT BARRIERS TO ENTRY. We believe that there are many barriers to
entry that limit access to the aircraft industry, including:        

         - the reluctance of aircraft manufacturers to include new companies
         as additional approved vendors on their engineering drawings, a
favored status often called "print position";         

       - the general FAA certification requirements necessary to perform
aircraft modifications or maintenance;                

   - the required compliance with FAA aircraft manufacturing and
  aircraft modification design and installation standards;

          - the required compliance with specifications for some products sold
to commercial and military markets;                   

         - the required compliance with qualification and approval standards
       imposed by aircraft and electronic systems manufacturers; and

         - the initial capital investment and tooling requirements necessary
      for the manufacture of some aircraft components and systems.

    - REDUCTION IN NUMBER OF APPROVED SUPPLIERS AND VENDORS. Commercial airlines
   have come under increasing pressure to reduce the operating and capital
 costs associated with providing services. As a result, many OEM's are
   initiating proactive programs to reduce cycle times, decrease inventory
   and reduce costs. Boeing, for example, has announced that it intends to
    reduce its number of suppliers by 19%, from 31,000 to 25,000, by the end
of 2000 and by 42% over the long term. Manufacturers can realize    
   efficiencies by purchasing a higher number of assemblies from a smaller
      number of suppliers, each of whom has multiple related product capability.

- NEW SAFETY MANDATES. New technologies and FAA mandates are driving a  
   proliferation of new safety systems for airplanes. The world's airlines
  and aircraft and electronic systems manufacturers have cooperated with
     regulatory agencies in the development of industry standards, regulations
     and system requirements for future air navigation systems. We expect that
    this initiative will drive a complete modernization of both airborne and
 ground-based air traffic management systems. As navigation technology
    becomes more accurate, new navigation systems such as global positioning
     systems may become federally required. Other new technologies, which have
     already been mandated, include traffic collision avoidance systems, cargo
hold fire detection and suppression systems, and windshear detection
  systems. In anticipation of new FAA recommendations and mandates, many
    airlines have already begun to install enhanced ground proximity warning
systems, predictive windshear detection systems and enhanced digital
   flight data recorders. These safety mandates should provide significant
retrofit opportunities for the commercial fleet, which today exceeds
12,000 aircraft.                                                    

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ACQUISITION HISTORY                                                             

   DeCrane Aircraft was formed in 1989 to capitalize on emerging trends in the
aircraft market through acquisitions. Since our formation, we have completed    
seventeen acquisitions, summarized as follows:                                  

                                                        · Enlarge/Download Table

                                                         PRINCIPAL PRODUCTS AND SERVICES        
           ACQUIRED ENTITY OR ASSET                      AT THE TIME OF THE TRANSACTION         
-----------------------------------------------  -----------------------------------------------
                                                                                                
    1990                                                                                        
1   Hollingsead International                    Avionics support structures                    

    1991                                                                                        
2   Tri-Star Electronics International           Contacts and connectors                        
3   Tri-Star Europe                              Contact blanks                                 
4   Tri-Star Technologies                        Wire marking equipment                         
5   Cory Components                              Connectors & harness assemblies                

    1996                                                                                        
6   Aerospace Display Systems                    Dichroic liquid crystal displays               
7   Elsinore Engineering                         Engineering services                           
8   AMP manufacturing facility                   Contact blanks                                 

    1997                                                                                        
9   Audio International                          Cabin management & entertainment products      

    1998                                                                                        
10  Avtech                                       Cockpit audio, lighting, power & control       
11  Dettmers Industries                          Corporate aircraft seats                       

    1999                                                                                        
12  PATS                                         Auxiliary fuel & power systems                 
13  PPI                                          Aircraft furniture components                  
14  Custom Woodwork and Plastics                 Aircraft furniture components                  
15  International Custom Interiors               Aircraft furniture components                  
16  PCI NewCo                                    Composite material components                  
17  Infinity Partners                            Aircraft furniture components                  

COMPETITIVE STRENGTHS                                                           

We have used our strong market positions to compete more effectively, to
capitalize on industry consolidation trends and to cross-sell products to our   
existing customer base. We believe that we are well-positioned to take advantage
of the foregoing trends and expected growth in the aircraft industry as a result
of the following competitive strengths:                                         

- LEADING POSITIONS IN NICHE MARKETS. We are a leading provider of      
      components within a number of the niche markets we serve. Our strategy has
  been to combine complementary businesses in markets in which we have a
    leading position, thereby increasing sales volume with our customers and
   strengthening our competitive position. The substantial majority of our
revenue is generated by businesses in which we have a leading market
share. We believe our combination of component manufacturing and    
  integration and installation capabilities provides us with competitive
advantages. The combination of product lines we offer provides      
    opportunities for our customers to deal with a reduced number of vendors
and suppliers, to reduce the number of component parts through the  
      purchase of sub-assemblies and to reduce cycle times, all of which help to
reduce costs and simplify the production process.                   

    - STRONG CUSTOMER RELATIONSHIPS. Through our acquisitions and as a result of
    our performance, we have enjoyed long-term relationships with leaders in
      our primary markets, including Boeing and Boeing Business Jet, Bombardier,
      Cessna, Gulfstream, Honeywell, Matsushita, Raytheon, and Rockwell Collins.
    We believe we have been able to develop and solidify these relationships
by combining production and engineering capabilities, providing     
engineering support services and enhancing our customers' in-house  
production processes.                                               

- DIVERSIFIED REVENUE BASE. We sell our products in the corporate,      
   commercial, retrofit, aftermarket and military aircraft markets. Within
   these markets, our customers include original manufacturers of aircraft
     and related avionics equipment, aircraft repair and modification centers,
and airlines. Each of these markets has different demand drivers and
    operates on different production cycles. Accordingly, our involvement in
     these multiple markets reduces our exposure to cyclical product demand in
any                                                                 

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one segment of the aircraft industry. Demand for new products in the
    commercial aircraft market, for example, is driven largely by the age of
    the existing commercial fleet, the growth in revenue passenger miles and
     industry load factors, whereas demand in the corporate aircraft market is
  driven largely by the growth in fractional ownership, competition from
     commercial airlines and the growth in the global economy. Our aftermarket
  sales are dependent in part upon the growing number of aircraft in the
  existing fleet while technology advances and safety updates help drive
demand in the retrofit market.                                      

   - COMPLEMENTARY AND STRATEGICALLY INTEGRATED BUSINESS LINES. Since 1989, we
      have completed seventeen acquisitions of businesses and assets. We believe
that our acquisitions complement each other and create a core of    
 interrelated products and services, which increases our cross-selling
    opportunities to existing and new customers. The complementary nature of
 our business lines should allow us to help our customers reduce their
    production costs. For example, our acquisitions of PPI, Custom Woodwork,
International Custom Interiors and Infinity, corporate aircraft     
furnishings manufacturers; Dettmers, a corporate aircraft seat      
     manufacturer; and Audio International, a corporate aircraft entertainment
  and cabin management product manufacturer; should enable us to offer a
   more integrated set of products and services to the middle and high-end
corporate aircraft market.                                          

    - LOW-COST, HIGH-QUALITY OPERATIONS. We have established low-cost operations
 through cost reduction programs, technological development and, where
   appropriate, the use of vertical integration. For example, our low-cost
      production capabilities, coupled with our focus on delivering high-quality
  products, has enabled us to grow the number of programs under which we
supply electrical contacts to many of our competitors.              

     We use sophisticated processes to ensure that our products meet or exceed
    industry and customer quality requirements. Many customers formally have
   recognized the effectiveness of our quality programs by issuing quality
      approval letters, awarding quality compliance certificates and authorizing
     our inspection personnel to act as their authorized quality certification
representatives. For example, four of our facilities have received a
quality award from Boeing, and nine of our facilities are currently 
certified according to the International Standards Organization     
specifications ISO-9001 or ISO-9002.                                

- REGULATORY CERTIFICATIONS. We believe our FAA-certified airframe and  
  power-plant mechanics who are authorized to perform specified aircraft
modification functions provide us with a significant competitive    
    advantage. As of December 31, 1999, our subsidiaries include one of only
  31 currently active FAA Designated Alteration Stations worldwide, hold
 nine FAA domestic repair station certificates and hold numerous Parts
   Manufacturer Approval authorizations from the FAA. These certifications
  make us one of a few companies with the in-house capability to design,
     engineer, produce, install and certify a part, which together help reduce
cycle times.                                                        

GROWTH STRATEGY                                                                 

Our principal strategy is to establish and expand leading positions in  
high-margin, niche markets within the corporate, commercial, retrofit,          
aftermarket and military aircraft markets. We focus on the manufacture of       
corporate aircraft interiors and avionics equipment and the integration of      
avionics systems. We also seek to maintain a balance of revenues among the      
equipment manufacturer market, the retrofit market and the aftermarket. We      
believe that this strategy positions us for future success by:                  

- BROADENING SALES TO EXISTING CUSTOMER BASE. We have relationships with
     virtually every major OEM and with fractional ownership programs, such as
      Executive Jet. We plan to continue cross-selling our portfolio of products
     to our existing customer base in order to increase our dollar content per
      plane. For example, we originally entered the corporate aircraft market by
offering cabin management systems and entertainment systems. We then
      expanded our product offering to include seating and in 1999, through four
   separate acquisitions, we added cabinetry and galley products, which we
sell to OEM's. Finally, we developed pre-fabricated interior kits,  
cabinet-in-a-box and cabin-in-a-box, to facilitate cross-selling and
     further encourage OEM's to outsource their cabin engineering requirements
    to us. We believe these products should reduce cycle times and costs for
 manufacturers and increase our dollar content per plane. We currently
provide cabinet-in-a-box kits to several of our customers and are in
  discussions with a number of corporate jet manufacturers regarding our
cabin-in-a-box product.                                             

    - STRENGTHENING POSITION IN NICHE MARKETS. We plan to continue to strengthen
our position in niche markets by providing engineering and customer 
service support to our existing customer base through               

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  the integration of our engineering services with the OEM's engineering
   capabilities. We also plan to continue to examine new market niches and
    consolidate the fragmented sectors in our markets to further service our
     customers. We target for acquisition aircraft component manufacturers and
  systems integration and installation providers that meet the following
criteria:                                                           

- are complementary to our existing businesses;           

- have a leading market share in their own niches;        

- leverage our existing strengths;                        

- add new expertise; and/or                               

- increase cross-selling opportunities.                   

  In analyzing a potential acquisition's value, we focus on economies of
 scale, product line extensions, new customer relationships, increased
   manufacturing capacity and opportunities for increased cost reductions.

    - CONTINUING OPERATIONAL EFFICIENCY IMPROVEMENTS. We are taking advantage of
      areas of synergies across and within our three business segments by making
operational efficiency improvements in human resources, support,    
      procurement and cross-selling. For example, we recently formed the Systems
Integration Group to leverage the engineering capabilities of our   
     Hollingsead subsidiary with the manufacturing and systems integration and
     installation capabilities of our PATS subsidiary. In addition, as part of
      the Systems Integration Group's strategy, we are consolidating facilities,
  reducing headcount and replacing relatively expensive manufacturing at
 Hollingsead with more economical outsourced products. This will allow
Hollingsead to focus on its core engineering and systems integration
competencies. We are also standardizing processes and centralizing  
    procurement at our four recently acquired cabin furniture companies, and
we continue to evaluate our operations to streamline or increase    
efficiencies.                                                       

- EXPANDING PRODUCT DEVELOPMENT. Development of advanced cabin features 
increases demand for many of our products and provides attractive   
      cross-selling opportunities. For example, our newly introduced e-CABIN, an
 "office in the sky," provides leading-edge business and entertainment
services for the corporate jet cabin and its passengers. Our e-CABIN
 provides each passenger with on-demand audio and video entertainment,
    including live television and Internet and e-mail access via Honeywell's
    OneView system. We will continue considering strategic partnerships with
     leading technology companies to keep our product offerings on the cutting
edge, as we have done with Honeywell and its OneView system.        

PRODUCTS AND SERVICES                                                           

Our principal products and services, on a pro forma basis, are:         

                                                                · Download Table

                                                              TWELVE MONTHS ENDED
                                                              SEPTEMBER 30, 1999 
                                                                   PRO FORMA     
              PRINCIPAL PRODUCTS AND SERVICES                      REVENUES      
------------------------------------------------------------  -------------------
                                                                                 
CABIN MANAGEMENT GROUP                                                           
Interior furnishings, seating, composite components, and                         
  entertainment and cabin control systems...................          39.9%      

SPECIALTY AVIONICS GROUP                                                         
Cockpit audio, communication, lighting and power and control                     
  devices, electrical contacts, connectors and harness                           
  assemblies, liquid crystal display devices, and wire                           
  marking and crimping equipment............................          39.4       

SYSTEMS INTEGRATION GROUP                                                        
Auxiliary fuel systems and power units, and integration of                       
  cabin and fight deck systems..............................          20.7       
                                                                     -----       
    Consolidated pro forma revenues.........................         100.0%      
                                                                     =====       

    We believe historical data about our products and services is not meaningful
because it is not reflective of the companies we have recently acquired and the 
products and services they provide.                                             

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  CABIN MANAGEMENT GROUP.  This group provides a full line of interior cabin
components and services for the middle- to high-end corporate aircraft market.  

- INTERIOR FURNISHINGS, SEATING AND COMPOSITE COMPONENTS. We design,    
      engineer and manufacture customized, pre-fit products and provide services
including:                                                          

INTERIOR FURNISHINGS                                                

- entertainment and refreshment centers;                            

- conference tables;                                                

- hi-low dining/coffee tables;                                      

- end tables;                                                       

- cabinets;                                                         

- arm and side ledges;                                              

- galleys;                                                          

- lavatories;                                                       

- vanities;                                                         

- room enclosures;                                                  

- cabinetry refurbishment services;                                 

SEATING                                                                 

- executive track and swivel seats;                                     

- jump-seats;                                                           

- divans, including models that convert                                 
to beds or contain storable tables;                                 

- upholstery services;                                                  

COMPOSITE COMPONENTS                                                    

- sound-damping side walls and headliners;                              

- passenger service units;                                              

- environmental (HVAC) ducting; and                                     

- closets.                                                              

Many of our products are made with what we believe to be high quality 
     veneers, leathers and fabrics and lightweight structural aluminum honeycomb
  or foam- or balsa-core composites reinforced with Kevlar-TM-, Nomex-TM-,
graphite or fiberglass.                                               

- ENTERTAINMENT AND CABIN CONTROL SYSTEMS. We design to customer        
specifications, engineer and manufacture fully-integrated in-flight 
entertainment and cabin management systems, including audio-video   
  entertainment systems, cabin lighting, passenger switching and control
modules, chimes and paging systems and headphone systems. Our       
 entertainment systems include video on demand, and our cabin lighting
   products include both halogen and flat-candle fluorescent illumination.
      The fully-integrated systems are operated with our passenger switching and
     control modules, which includes membrane-type and touch-screen models. We
  recently introduced a new fiber-optic based technology for our systems
 that replaces traditional wire harnesses with lightweight fiber-optic
cable.                                                              

 SPECIALTY AVIONICS GROUP.  This group designs, engineers and manufactures
electronic components and display devices, interconnect components and          
assemblies.                                                                     

  - COCKPIT AUDIO, COMMUNICATION, LIGHTING AND POWER AND CONTROL DEVICES. We
are a leading manufacturer of cockpit audio, lighting and power and 
   control devices used in commercial, regional and corporate aircraft. We
 also manufacture a variety of other commercial aircraft safety system
   components, including warning tone generators, temperature and de-icing
      monitoring systems, steep approach monitors and low voltage power supplies
for traffic collision avoidance systems.                            

 - ELECTRICAL CONTACTS. Contacts conduct electronic signals or electricity
      and are installed at the terminus of a wire or an electronic or electrical
     device. We supply precision-machined contacts for use in connectors found
in virtually every electronic and electrical system on a commercial 
   aircraft. We sell contacts directly to aircraft and related electronics
      manufacturers and, through our private labeling programs, to several major
 connector manufacturers who sell connectors to the same markets under
their brand name.                                                   

 - CONNECTORS AND HARNESS ASSEMBLIES. Electronic and electrical connectors
  link wires and devices in avionics systems, and permit their assembly,
installation, repair and removal. Our connectors are specially      
  manufactured to meet the critical performance requirements demanded by
manufacturers and required in the harsh environment of an operating 
     aircraft. We produce connectors that are used in aircraft galleys, flight
 decks and control panels in the passenger cabin. We also produce wire
harness assemblies for use in cabin avionics systems, from wire,    
connectors, contacts and hardware. We typically sell our harness    
    assemblies to manufacturers of aircraft electronic systems. In addition,
 we incorporate and sell our harness assemblies as part of our systems
integration services.                                               

 - LIQUID CRYSTAL DISPLAY DEVICES. We manufacturer dichroic liquid crystal
      displays, also known as LCD's, and modules used in commercial and military
aircraft. Modules are liquid crystal displays packaged              

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      with a backlight source and additional on-board electronic components. Our
      products are used in a variety of flight deck applications, such as flight
  control systems, fuel quantity indicators, airborne communications and
    safety systems. Dichroic liquid crystal display products are widely used
      in the aircraft industry because they are easily adapted to custom design,
 and they possess high performance characteristics, which include high
  readability in sunlight and darkness, readability from extreme viewing
  angles, and the ability to withstand wide temperature fluctuations. We
also manufacture electronic clocks, capable of serving all types of 
aircraft, that use our liquid crystal display devices.              

   - WIRE MARKING AND CRIMPING EQUIPMENT. Wires running between the individual
     contacts that comprise a connector are marked according to their function
 and, in some applications, the contacts are crimped onto the wire. We
design and manufacture high-speed wire marking systems and portable 
 crimping machines used by harness manufacturers, wire mills, aircraft
manufacturers and the U.S. military.                                

SYSTEMS INTEGRATION GROUP.  This group provides auxiliary fuel tank,    
auxiliary power units and systems integration products and services, including  
engineering, kit manufacturing, installation and certification.                 

- AUXILIARY FUEL SYSTEMS AND AUXILIARY POWER UNITS. We manufacture and  
   install auxiliary fuel tanks for commercial and corporate aircraft. Our
     unique design and tank construction has made us a leader in the auxiliary
     fuel tank market. We also manufacture auxiliary power units which provide
  ground power to corporate jets made by Cessna, Gulfstream, Learjet and
Raytheon.                                                           

- INTEGRATION OF CABIN AND FLIGHT DECK SYSTEMS. We have designed and    
      patented a wide range of avionics support structures. These structures are
  used to support and environmentally cool avionics equipment, including
navigation, communication and flight control equipment. We sell our 
   avionics support structures under the Box-Mount-TM- name. We sell these
 support structures to aircraft and related electronics manufacturers,
    airlines and major modification centers. In addition, these products are
essential components of the installation kits used in our systems   
   integration operations. We also perform all of the functions, including
design, engineering, certification, manufacturing and installation, 
     necessary to retrofit an aircraft with a new or upgraded avionics system.

INDUSTRY REGULATION                                                             

The aviation industry is highly regulated in the United States by the   
Federal Aviation Administration and in other countries by similar agencies to   
ensure that aviation products and services meet stringent safety and performance
standards. We and our customers are subject to these regulations. In addition,  
many customers impose their own compliance and quality requirements on their    
suppliers. The FAA prescribes standards and licensing requirements for aircraft 
components, issues Designated Alteration Station authorizations, and licenses   
private repair stations. Our subsidiaries hold various FAA approvals, which may 
only be used by the subsidiary obtaining such approval.                         

The FAA can authorize or deny authorization of many of the services and 
products we provide. Any such denial would preclude our ability to provide the  
pertinent service or product. If we failed to comply with applicable FAA        
standards or regulations, the FAA could exercise a wide range of remedies,      
including a warning letter, a letter of correction, a civil penalty action, and 
emergency or non-emergency suspension or revocation of a certificate or         
approval.                                                                       

 In July of 1997, the FAA notified us that our FAA-approved repair station
which holds Designated Alteration Station authorization did not fully comply    
with some of the requirements for some of the FAA ratings that it held. The FAA 
granted us until September 10, 1997 to bring the facility into full compliance, 
and curtailed several operations of the repair station, including prohibiting   
initiation of new projects under that authorization, until it achieved full     
compliance. On August 28, 1997 the FAA inspected the repair station and         
determined that it was in full compliance with all FAA requirements applicable  
to Class III and Class IV Airframe ratings. The FAA issued a revised Air Agency 
Certificate including those ratings, and removed the operating restrictions, as 
of September 5, 1997.                                                           

 The FAA also has the power to issue cease and desist orders and orders of
compliance and to initiate court action for injunctive relief. If the FAA were  
to suspend or revoke our certificates or approvals on a nonemergency basis, we  
would be permitted to continue making the products and delivering the goods     
pending any available appeals, but would be required to stop if the FAA         
eventually prevailed on appeal. If the FAA did so on an emergency basis, we     
would be obliged to stop immediately the manufacturing of products and          
delivering of services that require such certificate or approval. If the FAA    
were to determine that noncompliance with its standards creates a safety hazard,
it also could order that the pertinent component or aircraft immediately cease  
to be operated until the condition is corrected. This could require             

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that customers ground aircraft or remove affected components from aircraft      
currently in service, both of which are expensive actions.                      

    Each type of aircraft operated by airlines in the United States must possess
an FAA type certificate, generally held by the aircraft manufacturer, indicating
that the type design meets applicable airworthiness standards. When someone else
develops a major modification to an aircraft already type-certificated, that    
person must obtain an FAA-issued Supplemental Type Certificate for the          
modification. Historically, we have obtained several hundred of these           
Supplemental Type Certificates, most of which we obtained on behalf of our      
customers as part of our systems integration services. Some of these            
certificates we obtain are or will eventually be transferred to our customers.  
As of January 1, 2000, we own and/or manage 235 Supplemental Type Certificates. 
Many are multi-aircraft certificates which apply to all of the aircraft of a    
single type. We foresee the need to obtain additional Supplemental Type         
Certificates so that we can expand the services we provide and the customers we 
serve.                                                                          

Supplemental Type Certificates can be issued for proposed aircraft      
modifications directly by the FAA, or on behalf of the FAA by one of the 31     
holders of currently active Designated Alteration Station authorizations as of  
January 1, 2000. The FAA designates what types of Supplemental Type Certificates
can be issued by each Designated Alteration Station. Our subsidiary Hollingsead,
as one of the 31, can directly issue many of the Supplemental Type Certificates 
we and our customers require for our systems integration operations. In many    
cases, this has increased the speed with which we can obtain such certificates  
and help bring our customers' systems to market.                                

  After obtaining a Supplemental Type Certificate, a manufacturer must apply
for a Parts Manufacturer Approval from the FAA, or a supplement to an existing  
Parts Manufacturer Approval, which permits the holder to manufacture and sell   
installation kits according to the approved design and data package. We have    
nine Parts Manufacturer Approvals and over 200 supplements to those approvals.  
In general, each initial Parts Manufacturer Approval is an approval of a        
manufacturing or modification facility's production quality control system. Each
Parts Manufacturer Approval supplement authorizes the manufacture of a          
particular part in accordance with the requirements of the corresponding        
Supplemental Type Certificate. We routinely apply for and receive such Parts    
Manufacturer Approval supplements. In order to perform the actual installations 
of a modification, we are also required to have FAA approval. This authority is 
contained either in our Parts Manufacturer Approvals and related supplements, or
in our repair station certificates. In order for a company to perform most kinds
of repair, engineering, installation or other services on aircraft, its facility
must be designated as an FAA-authorized repair station. As of January 1, 2000,  
we had nine authorized repair stations.                                         

    In addition to its approval of design, production, and installation, the FAA
certifies personnel. Several of our engineering personnel have been certified by
the FAA to perform specific tasks related to the design, production, and        
performance of aircraft modifications. Such certified personnel include         
mechanics and repairmen. The FAA also delegates some of its oversight           
responsibilities, such as testing and inspection responsibilities, to           
FAA-certified Designated Engineering Representatives. We employ or contract for 
several of such designated representatives who evaluate engineering design data 
packages, ensure compliance with applicable FAA regulations, oversee product    
testing to ensure airworthiness, and work with the FAA to obtain approvals of   
those data packages.                                                            

   U. S. military specification standards are frequently used by both military
and commercial customers in the aircraft industry to define and control         
characteristics of a product. Through the use of a government Qualified Parts   
List and Qualified Vendor's List, a customer may be assured that a product or   
service has met all of the requirements set forth in the military specification.
Parts listed with a Qualified Parts List allow others to reliably design parts  
to interface with such parts as a result of the military specification standards
used. We believe that we hold more Qualified Parts Lists for our contact product
line than any other manufacturer.                                               

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SALES AND MARKETING                                                             

 Product line managers and our product engineering staff provide technical
sales support for our direct sales personnel and agents. We may also assign     
responsibility for marketing, sales and/or services for key customers to one of 
our senior executives. We have nine authorized distributors who purchase, stock 
and resell several of our product lines.                                        

    Our systems integration services are sold by sales managers on our staff who
are assigned to geographic territories. Because of the significant amount of    
technical engineering work required in the sales process, our sales managers are
generally assisted by a support team of program management, installation and    
engineering personnel. Each support team specializes in safety systems,         
in-flight entertainment, or navigation systems. These support teams continue to 
manage the project throughout the entire integration process.                   

CUSTOMERS                                                                       

  We estimate that in 1999, we sold our products and services to about 1,300
customers on a pro forma basis. Our primary customers include manufacturers of  
aircraft and related avionics equipment, airlines, aircraft component           
manufacturers and distributors, and aircraft repair and modification companies. 
The following customers accounted for 10.0% or more of our consolidated pro     
forma revenues:                                                                 

                                                                · Download Table

                                                              TWELVE MONTHS ENDED
                                                              SEPTEMBER 30, 1999 
                                                                   PRO FORMA     
                    SIGNIFICANT CUSTOMER                          REVENUES(A)    
------------------------------------------------------------  -------------------
                                                                                 
Boeing(b)...................................................         18.3%       
Textron(c)..................................................         14.6        
Bombardier..................................................         11.4        
                                                                     ----        
  Total pro forma revenues..................................         44.3%       
                                                                     ====        

------------------------                                                        

  (a) Historical data is not deemed to be meaningful because it is not
reflective of the companies we have recently acquired.    

       (b) Reflects only our direct revenues from Boeing. Excludes revenues from
           components we provide indirectly to Boeing through our sales to other
Boeing suppliers.                                         

(c) Includes Cessna.                                              

Most of our sales to Boeing are pursuant to contracts which may be      
terminated by Boeing at any time and include various terms favorable to the     
buyer. For example, one provides that we must extend to Boeing any reductions in
prices or lead times that we provide to other customers and that we must match  
other suppliers' price reductions of more than five percent, or delete the      
affected products from the contract. Another contract relieves Boeing from any  
obligation to order products covered by the contract if Boeing's customers      
request an alternate supplier, or our product is not technologically competitive
in Boeing's judgment, or Boeing changes the design of an aircraft so that our   
products are no longer needed, or Boeing reasonably determines that we cannot   
meet its requirements in the amounts and within the schedules it requires. Our  
contracts with Boeing also generally grant Boeing an irrevocable non-exclusive  
worldwide license to use our designs, tooling and other intellectual property   
rights related to products sold to Boeing, if we default, or suffer a bankruptcy
filing, or transfer our manufacturing rights to a third party.                  

MANUFACTURING AND QUALITY CONTROL                                               

    Many of our product lines use process-specific equipment and procedures that
have been custom-designed or fabricated to provide high-quality products at     
relatively low cost. Some of our key product lines are vertically integrated,   
which we believe improves our product performance, customer service and         
competitive pricing.                                                            

  We have conducted programs to reduce costs including overhead expenses. In
some cases, these programs have involved the use of proprietary equipment or    
processes which have enabled us to reduce costs without reducing quality levels.

Several of our key customers have developed their own design, product   
performance, manufacturing process and quality system standards and require     
their suppliers to comply with such standards. As a result, we have developed   
and conducted comprehensive quality policies and procedures which meet or exceed
our                                                                             

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customers' requirements. Many of our customers have recognized formally the     
effectiveness of our quality programs by issuing quality approval letters and   
awarding quality compliance certificates. In addition, some of our customers    
have authorized our inspection personnel also to act as their authorized quality
representatives. That authorization enables us to ship directly into the        
inventory stockrooms of these customers, eliminating the need for inspection at 
the receiving end.                                                              

  We use sophisticated equipment and procedures to ensure the quality of our
products and to comply with United States military specifications and FAA       
certification requirements. We perform a variety of testing procedures,         
including environmental testing under different temperature, humidity and       
altitude levels, shock and vibration testing and X-ray fluorescent measurement. 
These procedures, together with other customer approved techniques for document,
process and quality control, are used throughout our manufacturing facilities.  

RAW MATERIALS AND COMPONENT PARTS                                               

The components we manufacture require the use of various raw materials  
including gold, aluminum, copper, rhodium, plating chemicals, hardwoods and     
plastics. The availability and prices of these materials may fluctuate. Their   
price is a significant component in, and part of, the sales price of many of our
products. Although some of our contracts have prices tied to raw materials      
prices, we cannot always recover increases in raw materials prices in our       
product sale prices. We also purchase a variety of manufactured component parts 
from various suppliers. Raw materials and component parts are generally         
available from multiple suppliers at competitive prices. However, any delay in  
our ability to obtain necessary raw materials and component parts may affect our
ability to meet customer production needs. See "Risk Factors--Gold and Copper   
Prices."                                                                        

INTELLECTUAL PROPERTY AND PROPRIETARY INFORMATION                               

 We have various trade secrets, proprietary information, trademarks, trade
names, patents, copyrights and other intellectual property rights which we      
believe are important to our business in the aggregate, but not individually.   

COMPETITION                                                                     

We operate in a highly competitive industry and compete with a number of
companies, many of whom have significantly greater financial, technological,    
manufacturing and marketing resources than we do. We believe that our ability to
compete depends on high product performance, short lead-time and timely         
delivery, competitive price and superior customer service and support.          

   The niche markets within the aircraft industry that we serve are relatively
fragmented, with several competitors offering the same products and services we 
provide. Due to the global nature of the aircraft industry, competition comes   
from both U.S. and foreign companies.                                           

Our principal competitors in contacts and connectors are large and      
diversified corporations which produce a broad range of products. In other areas
we generally face a group of smaller companies and enterprises, except for the  
corporate aircraft manufacturers, which are generally part of large and         
diversified companies.                                                          

                                                                · Download Table

GROUP--PRINCIPAL PRODUCTS AND SERVICES--PRINCIPAL COMPETITORS    
-------------------------------------------------------------    
                                                                 
CABIN MANAGEMENT GROUP                                           
  INTERIOR FURNISHINGS                                           
    - Aviart                                                     
    - Custom Aircraft Cabinets                                   
    - Hiller                                                     
    - Corporate aircraft manufacturers and independent           
      completion and modification companies                      
  SEATING                                                        
    - Aircraft Modular Products, a division of BE Aerospace      
    - ERDA                                                       
  COMPOSITE COMPONENTS                                           
    - AAR                                                        
    - Burnham                                                    
    - Fibre Art                                                  

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GROUP--PRINCIPAL PRODUCTS AND SERVICES--PRINCIPAL COMPETITORS    
-------------------------------------------------------------    
                                                                 
    - Plastic Fab                                                
    - Sealed Composites Works                                    
    - The Nordam Group                                           
  ENTERTAINMENT AND CABIN CONTROL SYSTEMS                        
    - Aerospace Lighting                                         
    - Baker Electronics                                          
    - DPI Labs                                                   
    - Grimes Aerospace                                           
    - Nellcor Puritan Bennett                                    
    - Air Show / Pacific Systems                                 
SPECIALTY AVIONICS GROUP                                         
  COCKPIT AUDIO, COMMUNICATION, LIGHTING AND POWER AND           
    CONTROL DEVICES                                              
    - Becker Avionics                                            
    - Crane ELDEC                                                
    - Diehl GmbH                                                 
    - Gables Engineering                                         
    - Page Aerospace                                             
  ELECTRICAL CONTACTS                                            
    - Amphenol                                                   
    - Deutsch Engineered Connecting Devices, a division of       
      Deutsch                                                    
  CONNECTORS AND HARNESS ASSEMBLIES                              
    - AMP (connectors)                                           
    - Electronic Cable Specialists (harness assemblies)          
    - ITT Cannon (connectors)                                    
    - Radiall S.A. (connectors)                                  
  LIQUID CRYSTAL DISPLAY DEVICES                                 
    - Cristalloid                                                
SYSTEMS INTEGRATION GROUP                                        
  AUXILIARY FUEL SYSTEMS AND AUXILIARY POWER UNITS               
    - Allied Signal (power units)                                
    - Marshall Engineering (fuel systems)                        
  INTEGRATION OF CABIN AND FIGHT DECK SYSTEMS                    
    - Electronic Cable Specialists (avionics support             
      structures)                                                
    - Engineering departments of airlines                        
    - Numerous independent airframe maintenance and              
      modification companies                                     

BACKLOG                                                                         

As of September 30, 1999, we had an aggregate sales order backlog of    
$150.8 million compared to $143.9 million as of December 31, 1998, all on a pro 
forma basis. Orders are generally filled within twelve months; however, our     
orders are generally subject to cancellation by the customer prior to shipment. 
The level of unfilled orders at any given date will be materially affected by   
when we receive orders and how fast we fill them. Period-to-period comparisons  
of backlog figures may not be meaningful. For that reason, our backlogs do not  
necessarily accurately predict actual shipments or sales for any future period. 

EMPLOYEES                                                                       

As of December 31, 1999, we had 2,536 employees, of whom 1,997 were in  
manufacturing operations, 261 were in engineering, 183 were in finance and      
administration and 95 were in sales. The foregoing numbers include 83 temporary 
employees but do not reflect the anticipated employee reductions resulting from 
the Hollingsead and Elsinore Engineering restructuring. None of our employees is
subject to a collective bargaining agreement, and we have not experienced any   
material business interruption as a result of labor disputes since DeCrane      
Aircraft was formed. We believe that we generally have a good relationship with 
our employees.                                                                  

FACILITIES                                                                      

 Our principal facilities are described in the following table. We believe
that our facilities are in good condition and are adequate to support our       
operations for the foreseeable future.                                          

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                                                        · Enlarge/Download Table

                                                                                                APPROXIMATE     LEASE   
                   LOCATION                                  FACILITY DESCRIPTION                 SQ. FT.     EXPIRATION
----------------------------------------------  ----------------------------------------------  ------------  ----------
                                                                                                                        
LEASED FACILITIES                                                                                                       
Wichita, KS (two buildings)...................  Manufacturing, engineering and administration     156,500        2007   
Georgetown, DE (a)............................     Manufacturing and aircraft modifications       110,000        2041   
El Segundo, CA................................  Manufacturing, engineering and administration      81,300        2010   
Columbia, MD..................................  Manufacturing, engineering and administration      65,923        2007   
Garden Grove, CA (b)..........................  Manufacturing, engineering and administration      58,303        2007   
Denton, TX (three buildings)..................  Manufacturing, engineering and administration      47,905        2015   
Goleta, CA....................................                   Engineering                       33,200        2010   
Wichita, KS...................................         Manufacturing and administration            33,000        2009   
Stuart, FL....................................  Manufacturing, engineering and administration      29,700        2008   
Orlando, FL...................................         Manufacturing and administration            28,500        2010   
Hatfield, PA..................................  Manufacturing, engineering and administration      27,500        2002   
Bioggio, Switzerland..........................                  Manufacturing                      21,915        2004   
Denton, TX (d)................................         Manufacturing and administration            20,000        2015   
Orlando, FL (c)...............................                  Manufacturing                      20,000        2000   
Mezzovico, Switzerland........................                  Manufacturing                      18,046        2001   
Lewisville, TX (d)............................                  Manufacturing                      13,000        2004   
Garden Grove, CA (b)..........................                    Warehouse                        10,000        2003   
Seattle, WA...................................                    Warehouse                        10,000        2001   
North Little Rock, AR (three buildings) (e)...                   Engineering                        8,828        2000   
Santa Ana, CA.................................         Engineering and aircraft hanger              8,816        2000   
El Segundo, CA................................             Corporate administration                 7,853        2007   
Anaheim, CA...................................                  Manufacturing                       6,036        2004   
Goleta, CA (b)................................                   Engineering                        5,816        2000   
Hutchinson, KS................................                  Manufacturing                       5,300        2000   
Bioggio, Switzerland (two buildings)..........                  Administration                      4,660        2000   
Tucson, AZ....................................               Field service office                     580        2000   
Quebec, Canada................................               Field service office                     380        2000   
Wichita, KS...................................               Field service office                     350        2000   
Cedex, France.................................               Field service office                     210        2000   

OWNED FACILITIES                                                                                                        
Seattle, WA (six buildings)...................  Manufacturing, engineering and administration      87,382               
Pooler, GA....................................         Manufacturing and administration            24,000               
North Little Rock, AR (e).....................          Manufacturing and engineering              20,000               
North Little Rock, AR.........................  Manufacturing, engineering and administration      18,000               

OWNED AND LEASED FACILITIES--SUBLEASED TO                                                                               
OTHERS                                                                                                                  
Seattle, WA (owned)...........................                   Office space                      34,229               
Santa Fe Springs, CA (leased).................          Manufacturing and office space             24,000        2000   
Santa Fe Springs, CA (leased).................          Manufacturing and office space             17,600        2000   
Wiltshire, United Kingdom (leased)............          Manufacturing and office space              4,823        2013   

------------------------------                                                  

(a) Includes a 25,000 square foot expansion under construction and expected to  
be ready for occupancy in 2000.                                         

(b) Will be vacated in 2000 and subleased in conjunction with the Hollingsead   
and Elsinore Engineering restructuring.                                 

(c) Will be replaced with a 33,000 square foot building under construction and  
expected to be ready for occupancy in 2000; the new lease will expire in
2010.                                                                   

(d) During 2000, the Lewisville, TX facility will be vacated and subleased for  
the remaining lease term upon occupancy of the Denton, TX facility.     

(e) A new, owned 20,000 square foot facility is under construction and expected 
to be ready for occupancy in 2000; upon occupancy, the three leased     
buildings will be vacated and subleased for the remainder of their lease
terms, if any.                                                          

ENVIRONMENTAL MATTERS                                                           

   Our facilities and operations are subject to various federal, state, local,
and foreign environmental laws and regulations, including those relating to     
discharges to air, water, and land, the handling and disposal of solid and      
hazardous waste, and the cleanup of properties affected by hazardous substances.
In addition, some environmental laws, such as the federal Comprehensive         
Environmental Response, Compensation and Liability Act, as amended (CERCLA) and 
similar state laws, impose strict liability upon persons responsible for        
releases or potential releases of hazardous substances. That liability generally
is retroactive, and may create "joint and several" liability among multiple     
parties who have some relationship to a site or a source of waste. We have sent 
waste to treatment, storage, or disposal facilities that have been designated as
National Priority List sites under CERCLA or equivalent listings under state    
laws. We have received CERCLA requests for information or allegations of        
potential responsibility from the Environmental Protection Agency regarding our 
use of several of those sites. In addition, some of our operations are located  
on properties which are contaminated to varying degrees.                        

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We have not incurred, nor do we expect to incur, liabilities in any     
significant amount as a result of the foregoing matters, because in these cases 
other entities have been held primarily responsible, the levels of contamination
are sufficiently low so as not to require remediation, or we are indemnified    
against such costs. In most cases, we do not believe that we have any material  
liability for past waste disposal. However, in a few cases, we do not have      
sufficient information to assess our potential liability, if any. It is         
possible, given the potentially retroactive nature of environmental liability,  
that we will receive additional notices of potential liability relating to      
current or former activities.                                                   

Some of our manufacturing processes create wastewater which requires    
chemical treatment, and one of our facilities was cited for excessive quantity  
and strength of its wastewater. The costs associated with remedying that failure
have not been material. In addition, volatile organic compounds were discovered 
at a different facility of ours during groundwater sampling in 1998. We have    
completed a voluntary cleanup program there and have received a "no further     
action" letter.                                                                 

We believe that we have been and are in substantial compliance with     
environmental laws and regulations and that we have no liabilities under        
environmental laws and regulations, except for liabilities which we do not      
expect would likely have a material adverse effect on our business, financial   
position, results of operations or cash flows. However, some risk of            
environmental liability is inherent in the nature of our business, and we might 
in the future incur material costs to meet current or more stringent compliance,
cleanup, or other obligations pursuant to environmental laws and regulations.   
See "Risk Factors--Environmental Risks and Regulations."                        

LEGAL PROCEEDINGS                                                               

As part of its investigation of the crash off the Canadian coast on     
September 2, 1998 of Swissair Flight 111, the Canadian Transportation Safety    
Board (TSB) notified us that they recovered burned wire which was attached to   
the in-flight entertainment system installed on some of Swissair's aircraft by  
one of our subsidiaries. We are fully cooperating with the on-going TSB         
investigation. Although the TSB has not issued a final report, it has advised us
that it has no evidence to date that the system we installed malfunctioned or   
failed during the flight. Families of the 229 persons who died aboard the flight
have filed actions in federal and state courts against us, and many other       
parties unaffiliated with us, including Swissair and Boeing. The actions claim  
negligence, strict liability and breach of warranty relating to the installation
and testing of the in-flight entertainment system. The actions seek compensatory
and punitive damages and costs in an unstated amount. We intend to defend the   
claims vigorously.                                                              

   We are a party to a license agreement with McDonnell Douglas (now a part of
Boeing) pursuant to which we may request specified data in order to design and  
market modifications to aircraft manufactured by McDonnell Douglas. Under the   
agreement, we are to pay McDonnell Douglas a royalty of five percent of the net 
sales price of all modifications sold by us for which we have requested data    
from McDonnell Douglas. We requested data for a single modification, which we   
believe is exempt from the agreement's provision requiring royalties. In 1996,  
McDonnell Douglas made a demand for $650,000 for royalties. We do not believe   
that we are obligated to McDonnell Douglas in any amount. However, if the claim 
is asserted, and if we are unsuccessful in defending it, we may be required to  
pay royalties to McDonnell Douglas.                                             

   We are party to other litigation incident to the normal course of business.
We do not believe that the outcome of any of such other matters in which we are 
currently involved will have a material adverse effect on our financial         
condition or results of operations.                                             

WHERE YOU CAN GET MORE INFORMATION                                              

 Any registered purchaser may request from us any information it wishes in
order to verify the information in this prospectus. Apart from this prospectus  
and any responses we make to those requests, no-one is authorized to give       
information about this exchange offer or the notes on our behalf.               

We have filed with the Securities and Exchange Commission a registration
statement on the SEC's Form S-1, to register the new notes. This prospectus is  
an update of that registration statement. However, the registration statement   
has additional information which is not included here, in accordance with SEC   
rules. Our descriptions and statements about any contract or other document in  
this prospectus are summaries only, and, in each instance, reference is made to 
a copy of such contract or other document filed as an exhibit to the            
registration statement, each such description or statement being qualified in   
all respects                                                                    

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by such reference. We are required to attach copies of our material contracts   
and documents as exhibits to the registration statement we filed with the SEC.  

   We became a reporting company as a result of the registration of the notes,
and file annual, quarterly and current reports, proxy statements and other      
information with the SEC. Our fiscal year ends on December 31. You may read and 
copy any reports, statements or other information we file with the SEC at the   
SEC's reference room in Washington D.C. Please call the SEC at (202) 942-8090   
for further information on the operation of the reference rooms. You can also   
request copies of these documents, upon payment of a duplicating fee, by writing
to the SEC, or review our SEC filings on the SEC's EDGAR web site, which can be 
found at http\\www.sec.gov. You may also write or call us at our corporate      
headquarters located at 2361 Rosecrans Avenue, Suite 180, El Segundo, California
90245. Our telephone number is (310) 725-9123.                                  

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MANAGEMENT

 The following table sets forth certain information concerning each person
who is currently a director or executive officer of DeCrane Holdings. Each      
director also serves as a director of DeCrane Aircraft.                         

                                                        · Enlarge/Download Table

NAME                                               AGE                                     POSITION                         
----                                       --------------------                            --------                         
                                                                                                                            
Thompson Dean.............................                   41  Chairman of the Board of Directors and President of DeCrane
                                                                 Holdings                                                   
R. Jack DeCrane...........................                   53  Director of DeCrane Holdings and Chief Executive Officer of
                                                                 DeCrane Aircraft                                           
Charles H. Becker.........................                   54  Senior Vice President and Group President of DeCrane       
                                                                 Aircraft                                                   
Richard J. Kaplan.........................                   56  Assistant Secretary and Assistant Treasurer (chief         
                                                                 accounting officer) of DeCrane Holdings and Senior Vice    
                                                                 President, Chief Financial Officer, Secretary and Treasurer
                                                                 of DeCrane Aircraft                                        
Robert G. Martin..........................                   62  Senior Vice President and Group President of DeCrane       
                                                                 Aircraft                                                   
Jeffrey A. Nerland........................                   42  Vice President, Business Development of DeCrane Aircraft   
Jeffrey F. Smith..........................                   39  Senior Vice President and Group President of DeCrane       
                                                                 Aircraft                                                   
John F. Fort, III.........................                   58  Director                                                   
Dr. Robert J. Hermann.....................                   66  Director                                                   
Dr. Paul G. Kaminski......................                   57  Director                                                   
Susan C. Schnabel.........................                   38  Director                                                   
Timothy J. White..........................                   38  Director and Secretary of DeCrane Holdings                 

 THOMPSON DEAN has been the Managing Partner of DLJ Merchant Banking, Inc.
since November 1996. Previously, Mr. Dean was a Managing Director of DLJ        
Merchant Banking, Inc. and its predecessor. Mr. Dean serves as a director of    
Commvault Inc., Von Hoffman Press, Inc., Manufacturer's Services Limited, Phase 
Metrics, Inc., AKI Holding Corp. and Insilco Holding Corporation. He became a   
director in 1998.                                                               

 R. JACK DECRANE is the founder of DeCrane Aircraft. Mr. DeCrane served as
President of DeCrane Aircraft since it was founded in December 1989 until       
April 1993 when he was elected to the newly-created office of Chief Executive   
Officer. Prior to founding our company, Mr. DeCrane held various positions at   
the aerospace division of B.F. Goodrich. Mr. DeCrane was a Group Vice President 
at the aerospace division of B.F. Goodrich with management responsibility for   
three business units from 1986 to 1989. He has served on our board of directors 
since its inception.                                                            

CHARLES H. BECKER has been DeCrane Aircraft's Senior Vice President and 
President of the Cabin Management Group since October 1999. Mr. Becker          
previously served as President and Chief Operating Officer of DeCrane Aircraft  
from April 1998 to October 1999, Group Vice President of Components of DeCrane  
Aircraft from December 1996 to April 1998, and President of Tri-Star from       
December 1994 to April 1998. Prior to joining us, Mr. Becker was President of   
the Interconnect Systems Division of Microdot, Inc., a manufacturer of contacts 
and connectors for aerospace applications, from 1984 to 1994.                   

RICHARD J. KAPLAN has been the Senior Vice President, Chief Financial   
Officer, Secretary and Treasurer of DeCrane Aircraft since March 1999. From     
April 1998 to March 1999, he served as Executive Vice President and Chief       
Operating Officer of Developers Diversified Realty Corporation. From 1977 to    
1998, he was a partner with Price Waterhouse LLP, having joined the firm in     
1964.                                                                           

ROBERT G. MARTIN has been DeCrane Aircraft's Senior Vice President and  
President of the Systems Integration Group since October 1999 and President of  
PATS since we acquired it in January 1999. Mr. Martin also served as President  
of Aerospace Display Systems from September 1996 until October 1999. Prior to   
our acquisition of Aerospace Display Systems in 1996, Mr. Martin had served as  
its President since 1992.                                                       

JEFFREY A. NERLAND has been DeCrane Aircraft's Vice President, Business 
Development, since January 1999. From July 1994 through December 1998, he was   
President of The Nerland Group and a partner with Budetti, Harrison, Nerland and
Associates, a consulting and interim management firm. Previously, Mr. Nerland   
was a director with Kibel, Green Inc., a consulting firm.                       

JEFFREY F. SMITH has been DeCrane Aircraft's Senior Vice President and  
President of the Specialty Avionics Group since October 1999 and President of   
Avtech since we acquired it in June 1998. Previously, he has served in various  
capacities with Avtech since 1989.                                              

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JOHN F. FORT, III served as Chairman of the Board of Directors of Tyco  
International, Inc. from 1982 to December 1992, and as Chief Executive Officer  
from 1982 to June 1992. Mr. Fort serves as a director of Tyco International,    
Inc., Dover Corporation and Roper Industries. He became a director in 1998.     

DR. ROBERT J. HERMANN is a Senior Partner of Global Technology Partners.
Dr. Hermann most recently served as Senior Vice President for Science and       
Technology at United Technologies Corporation and served in various other       
capacities at United Technologies Corporation since 1982. Prior to joining      
United Technologies Corporation, Dr. Hermann spent 20 years with the National   
Security Agency. In 1977 he was appointed Principal Deputy Assistant Secretary  
of Defense for Communications, Command, Control and Intelligence, and in 1979   
was named Assistant Secretary of the Air Force for Research, Development and    
Logistics and Director of the National Reconnaissance Office. He became a       
director in 1998.                                                               

DR. PAUL G. KAMINSKI is a Senior Partner of Global Technology Partners. 
Dr. Kaminski currently serves as Chief Executive Officer of Technovation, Inc., 
a consulting firm focusing on business strategy and advanced technology.        
Dr. Kaminski served as U.S. Undersecretary of Defense for Acquisition and       
Technology from October 1994 to 1997. Prior to that time, he served as Chairman 
and Chief Executive Officer of Technology Strategies and Alliances.             
Dr. Kaminski is a former Chairman of the Defense Science Board and is currently 
a member of the Senate Select Committee on Intelligence-Technical Advisory      
Group, the NRO Advisory Council and the National Academy of Engineering.        
Dr. Kaminski is a director of General Dynamics Corporation, Dyncorp,            
Eagle-Picher Technologies and several privately held information technology     
companies. He became a director in 1998.                                        

SUSAN C. SCHNABEL has been a Managing Director of DLJ Merchant          
Banking, Inc. since January 1998. In 1997, she served as Chief Financial Officer
of PETsMART, a specialty retailer of pet products and supplies. From 1990 to    
1996, Ms. Schnabel was with Donaldson, Lufkin & Jenrette Securities Corporation,
where she became a Managing Director in 1996. Ms. Schnabel serves as a director 
of Dick's Clothing and Sporting Goods, Environmental Systems Products and       
Wavetek Corporation. She became a director in 1998.                             

TIMOTHY J. WHITE has been a Vice President of DLJ Merchant Banking, Inc.
since June 1998. From October 1994 to May 1998, Mr. White was an Associate and  
Vice President at Donaldson, Lufkin & Jenrette Securities Corporation. From     
May 1994 to October 1994, Mr. White was an Associate Counsel in the Office of   
the Independent Counsel, United States Department of Justice. Prior to that     
time, Mr. White was an attorney with Davis Polk & Wardwell. He became a director
in 1998.                                                                        

   An agreement entered into in connection with the DLJ acquisition entitled a
holding company controlled by DLJ Merchant Banking Partners II, L.P. to         
designate a number of directors proportionally commensurate with its stock      
ownership of DeCrane Aircraft. DeCrane Holdings selected all of the current     
members of the Board of Directors of DeCrane Aircraft. DLJ Merchant Banking or  
its designate selected all of the members of the Board of Directors of DeCrane  
Holdings.                                                                       

SUMMARY COMPENSATION TABLE                                                      

   The following table describes all annual compensation awarded to, earned by
or paid to our Chief Executive Officer and the four most highly compensated     
executive officers other than the Chief Executive Officer for the years ended   
December 31, 1999, 1998 and 1997.                                               

                                                        · Enlarge/Download Table

                                                                                                          ALL OTHER             
                                                         ANNUAL COMPENSATION                            COMPENSATION            
                                            ----------------------------------------------   -----------------------------------
                                                                                                                                
                                                                                 OTHER                                          
                                                                                ANNUAL              SECURITIES                  
                                                                               COMPENSATION         UNDERLYING           OTHER  
                                             YEAR       SALARY      BONUS         (1)               OPTIONS(2)            (3)   
                                              ----     --------   ----------     -------     ------------------------   ------- 
R. Jack DeCrane............................   1999     $334,791   $  700,000     $30,873                     106,877    $ 9,025 
Chief Executive Officer                       1998      281,761    1,044,000      30,151                      50,000     34,064 
and Director(4)                               1997      244,744      220,000      --                          50,000     29,411 
Charles H. Becker..........................   1999     $235,000   $  210,000     $19,158                      26,719      --    
Senior Vice President(5)                      1998      206,948      160,000      14,678               --                 --    
                                              1997      174,492      102,000       6,168                      15,000    $18,000 
Richard J. Kaplan..........................   1999     $158,333   $  258,000     $13,572                      28,669      --    
Senior Vice President(6)                      1998        --          --          --                   --                 --    
                                              1997        --          --          --                   --                 --    
Robert G. Martin...........................   1999     $187,500   $  209,000     $ 1,300             17,813               --    
Senior Vice President(7)                      1998      172,000       66,000       1,300               --                 --    
                                              1997      130,000       66,000       1,300                      10,000      --    
Jeffrey A. Nerland.........................   1999     $160,000   $  181,000     $ 6,366                      10,688      --    
Vice President(8)                             1998        --          --          --                   --                 --    
                                              1997        --          --          --                   --                 --    

------------------------                                                        

(1) Amounts paid by us for premiums on health, life and long-term disability    
   insurance and automobile leases provided by us for the benefit of the named
executive officer.                                                      

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(2) Number of shares of common stock of DeCrane Holdings issuable upon exercise 
    of options granted pursuant to our management incentive plan during the last
fiscal year.                                                            

(3) Relocation costs.                                                           

(4) Mr. DeCrane also served as Chairman of the Board of Directors through       
August 1998.                                                            

(5) Mr. Becker served as Group Vice President of Components, and President of   
Tri-Star, through April 1998. Mr. Becker became President and Chief     
Operating Officer in April 1998 and Senior Vice President and Group     
President of Cabin Management in October, 1999.                         

(6) Mr. Kaplan joined DeCrane Aircraft as Senior Vice President on March 15,    
1999.                                                                   

(7) Mr. Martin served as President Aerospace Display Systems from September 1996
   until October 1999. Mr. Martin has been President of PATS since we acquired
    it in January 1999, and became our Senior Vice President and Group President
of Systems Integration in October 1999.                                 

(8) Prior to Mr. Nerland joining DeCrane Aircraft on January 1, 1999, he        
   provided consulting services to us during 1998 for which either Mr. Nerland
    or The Nerland Group, of which Mr. Nerland was a principal, was paid a total
   of $127,800 in 1998 and early 1999, which amount has been excluded from the
table above.                                                            

STOCK OPTION GRANTS IN LAST FISCAL YEAR                                         

The following table sets forth individual grants of options to purchase 
shares of DeCrane Holdings common stock granted to the executive officers named 
below during the fiscal year ended December 31, 1999, pursuant to the management
incentive plan. See "Employment Agreements and Compensation                     
Arrangements--INCENTIVE PLANS."                                                 

                                                        · Enlarge/Download Table

                                                                                            POTENTIAL REALIZABLE  
                                            NUMBER OF                                         VALUE AT ASSUMED    
                                            SECURITIES                                      ANNUAL RATES OF STOCK 
                                            UNDERLYING    % OF    EXERCISE OR              PRICE APPRECIATION (1) 
                                             OPTIONS    OPTIONS   BASE PRICE   EXPIRATION  -----------------------
NAME                                         GRANTED    GRANTED    PER SHARE      DATE         5%          10%    
----                                        ----------  --------  -----------  ----------  ----------   ----------
                                                                                                                  
R. Jack DeCrane............................  106,877      38.2%     $23.00        2009     $1,545,931   $3,917,691

Charles H. Becker..........................   26,719       9.6       23.00        2009        386,479      979,414

Richard J. Kaplan..........................   28,669      10.3       23.00        2009        414,685    1,050,893

Robert G. Martin...........................   17,813       6.4       23.00        2009        257,657      652,955

Jeffrey A. Nerland.........................   10,688       3.8       23.00        2009        154,597      391,780

------------------------                                                        

(1) The potential realizable value assumes stock price appreciation rates of 5% 
   and 10%, compounded annually, from the date the option was granted over the
 full option term. These assumed annual compound rates are mandated by the
rules of the Securities and Exchange Commission and do not represent our
estimate or projection of future prices of the stock.                   

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION      
VALUES                                                                          

 No stock options were exercised by our executive officers during the year
ended December 31, 1999. The following tables sets forth information about the  
stock options held by the executive officers named below as of December 31,     
1999.                                                                           

                                                        · Enlarge/Download Table

                                                           NUMBER OF SECURITIES       VALUE OF UNEXERCISED   
                                                          UNDERLYING UNEXERCISED      IN-THE-MONEY OPTIONS   
NAME                                                              OPTIONS             AT FISCAL YEAR-END(1)  
----                                                     -------------------------  -------------------------
                                                         EXERCISABLE/UNEXERCISABLE  EXERCISABLE/UNEXERCISABLE
                                                                                                             
R. Jack DeCrane.........................................        22,712/84,165                        --/--   

Charles H. Becker.......................................         5,678/21,041                        --/--   

Richard J. Kaplan.......................................         6,092/22,577                        --/--   

Robert G. Martin........................................         3,785/14,028                        --/--   

Jeffrey A. Nerland......................................          2,271/8,417                        --/--   

------------------------                                                        

(1) No options were in-the-money based on the common stock share price of $23.00
per share as of December 31, 1999, the measuring date.                  

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

  Our Board of Directors makes decisions regarding officer compensation as a
committee of the whole. R. Jack DeCrane, chief executive officer of DeCrane     
Aircraft, participates in those discussions as a member of the Board of         
Directors.                                                                      

EMPLOYMENT AGREEMENTS AND COMPENSATION ARRANGEMENTS                             

R. JACK DECRANE                                                         

On July 17, 1998, the Compensation Committee of our Board of Directors  
approved a three-year employment agreement between DeCrane Aircraft and R. Jack 
DeCrane, replacing his prior employment agreement that was to expire on         
September 1, 1998. Mr. DeCrane's employment agreement provides for various      
benefits, including:                                                            

- an initial salary of $310,000, which is subject to annual review and  
increase, but not decrease;                                         

 - an annual bonus, currently determined pursuant to the performance-based
cash incentive bonus plan;                                          

  - a $500,000 bonus in recognition of our then-recent acquisition of Avtech
Corporation;                                                        

- a $250,000 signing bonus;                                             

    - options to purchase 50,000 shares of common stock of DeCrane Aircraft at a
   price equal to the fair market value of the shares as of July 16, 1998,
one-half of which were immediately exercisable; the rest became     
exercisable upon the completion of the DLJ acquisition; and         

    - a $150,000 cash continuation bonus payable on January 2, 1999, if employed
by us on January 1, 1999.                                           

  Mr. DeCrane's options were cancelled in August 1998 and he received a cash
payout in lieu of the options.                                                  

  The employment agreement also provides that if specified change-of-control
events occur, and Mr. DeCrane's employment is terminated by us for any reason   
other than for cause or as a result of his death or disability, or by           
Mr. DeCrane for "good reason," as defined in the agreement, then we will pay    
Mr. DeCrane a lump sum in cash within fifteen days. The amount of that payment  
will be $1.00 less than three times the sum of Mr. DeCrane's average base salary
plus bonus for the five calendar years preceding his termination date and       
accrued but unpaid salary and bonus through the termination date. Mr. DeCrane   
will also receive other specified benefits, including continued coverage under  
our welfare plans for up to two years; a lump sum payment in cash equal to any  
unvested portions of our contributions to him under specified savings plans,    
plus two times the amount of our annual contributions on his behalf to those    
plans; a lump sum payment in cash equal to our matching contributions under     
those savings plans that Mr. DeCrane would have received had he continued       
maximum participation in the plans until the earlier of two years following his 
termination and December 31 of the year he turns 65, plus the vested and        
unvested amounts credited to him under any of our deferred compensation plans   
and the amount required to be credited during the year of his termination; and  
outplacement consulting services to aid Mr. DeCrane with re-employment. We will 
reduce these payments to the extent necessary to ensure deductibility for tax   
purposes.                                                                       

ROBERT G. MARTIN                                                        

  We entered into an employment agreement with Robert G. Martin, Senior Vice
President of DeCrane Aircraft and President of the Systems Integration Group on 
September 10, 1999, amending his prior employment agreement dated September 19, 
1996. Mr. Martin's employment agreement provides for an annual salary of        
$210,000 and an annual bonus determined pursuant to the performance-based cash  
incentive bonus plan. Mr. Martin's employment agreement expires on December 31, 
2001, and DeCrane Aircraft may terminate the agreement at any time for cause or 
if Mr. Martin otherwise breaches the agreement or in the event of Mr. Martin's  
death or disability.                                                            

JEFFREY F. SMITH                                                        

We entered into an employment agreement with Jeffrey F. Smith, Vice     
President and General Manager of our Avtech subsidiary, on June 26, 1998.       
Mr. Smith's employment agreement provides for an annual salary, initially in the
amount of $145,000 and an annual bonus currently determined pursuant to the     
performance-based cash incentive bonus plan. Mr. Smith's employment agreement   
expires on June 30, 2000,                                                       

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and Avtech may terminate the agreement at any time for cause or in the event of 
Mr. Smith's death or disability. If Mr. Smith's employment is terminated without
cause, Mr. Smith is entitled to receive severance compensation in an amount     
equal to his base salary plus his anticipated bonus for the year in which he    
resigns.                                                                        

401(K) RETIREMENT PLAN                                                  

   Substantially all of our full-time employees are eligible to participate in
one of six 401(k) retirement plans we sponsor. The 401(k) plans allow employees 
as participants to defer, on a pre-tax basis, a portion of their salary and     
accumulate tax deferred earnings, as a retirement fund. Effective October 1,    
1997, we matched 25% of the employee contribution up to 6% of the employee's    
salary for the fourth quarter of 1997 and each quarter of 1998. Currently, the  
plans generally provide for us to match 50% of the employee contribution for up 
to 6% of the employee's salary. The full amount vested in a participant's       
account will be distributed to a participant following termination of           
employment, normal retirement or in the event of disability or death.           

INCENTIVE PLANS                                                         

Our management incentive plan provides for the issuance of options to   
purchase the common stock of DeCrane Holdings as incentive compensation to      
designated executive personnel and other key employees of DeCrane Aircraft and  
its subsidiaries, in amounts determined by the plan's committee from time to    
time. The management incentive plan is administered by a committee appointed by 
the Board of Directors of DeCrane Holdings. The plan provides for the granting  
of options to purchase 356,257 common shares and expires in 2009. Generally, ten
percent of the options awarded to each plan participant vest immediately, and   
the remaining ninety percent of each participant's options will vest at a later 
date. The options generally vest based upon future attainment of defined        
performance criteria, although alternate vesting schedules may be authorized by 
the committee appointed by the Board of Directors of DeCrane Holdings to        
administer the plan. As of the date of this prospectus, options to purchase     
279,662 shares at $23.00 per shares have been granted, of which options to      
purchase approximately 28,000 shares vested immediately. We believe the per     
share exercise price of the options granted approximated the fair market value  
of the underlying common stock on the grant date.                               

   Our stock purchase plan provides for the purchase of shares of common stock
of DeCrane Holdings by designated executive personnel and other key employees of
DeCrane Aircraft and its subsidiaries, with a portion of the purchase price to  
be loaned to the participants by DeCrane Aircraft. This arrangement was made    
available to persons and in amounts determined by the committee appointed by the
Board of Directors of DeCrane Holdings to administer the plan. In December 1999,
management purchased 171,295 shares of DeCrane Holdings common stock for $23.00 
per share. The total purchase price was $3.9 million, of which one-half was paid
in cash at closing and one-half was loaned to management by DeCrane Aircraft    
with interest at applicable federal rates.                                      

 Our cash incentive bonus plan provides for the allocation of a bonus pool
each year for incentive compensation to designated executive personnel and other
key employees of DeCrane Aircraft and its subsidiaries. The bonus pool for      
participants will be adjusted upwards or downwards each year based on EBITDA and
cash flow, as defined, generated by the relevant participant's operating unit.  
Bonus payments will be made in the quarter following the end of the year or     
period to which they relate and have been approved.                             

DIRECTORS' COMPENSATION                                                         

 The directors of DeCrane Aircraft generally do not receive annual fees or
fees for attending meetings of the Board of Directors of DeCrane Aircraft or    
committees thereof. However, John F. Fort, III, an independent director not     
affiliated with any investor in DeCrane Holdings, receives a director's fee of  
$5,000 for each meeting attended. In addition, the Board of Directors of DeCrane
Holdings extended the management incentive plan to independent non-management   
directors, and issued options to purchase 3,260 shares of DeCrane Holdings      
common stock to Mr. Fort under the terms of the management incentive plan. See  
"Related Party Transactions." Also, all directors are reimbursed for            
out-of-pocket expenses. We expect to continue those policies. DeCrane Holdings  
does not compensate or intend to compensate its directors.                      

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SECURITY OWNERSHIP OF SIGNIFICANT BENEFICIAL OWNERS AND MANAGEMENT

 All of the 100 outstanding shares of common stock of DeCrane Aircraft are
owned by DeCrane Holdings. DeCrane Aircraft has no other class of stock         
outstanding. DeCrane Holdings has 3,571,827 shares of common stock issued and   
outstanding, which are owned by 33 shareholders, and 342,417 shares of 14%      
Senior Redeemable Exchangeable Preferred Stock due 2008 issued and outstanding  
as of December 31, 1999. The following table sets forth the beneficial ownership
of DeCrane Holdings' voting securities as of December 31, 1999 by its principal 
owners and our executive officers and directors.                                

                                                        · Enlarge/Download Table

                                                          COMMON STOCK(2)         14% SENIOR REDEEMABLE  
                                                     -------------------------   EXCHANGEABLE PREFERRED  
                                                     NUMBER OF                       STOCK DUE 2008      
                                                      SHARES,                   -------------------------
                                                     PARTIALLY                  NUMBER OF                
NAME OF BENEFICIAL OWNER (1)                          DILUTED       PERCENTAGE   SHARES        PERCENTAGE
----------------------------                         ---------      ----------  ---------      ----------
                                                                                                         
DLJ Merchant Banking Partners II, L.P., and                                                              
  affiliates(3)..................................... 3,519,565         94.6%     340,000          99.3%  
Thompson Dean(4)....................................    --            --                         --      
  DLJ Merchant Banking, Inc.                                                                             
  277 Park Avenue                                                                                        
  New York, New York 10172                                                                               
Susan C. Schnabel(4)................................    --            --           --            --      
  DLJ Merchant Banking, Inc.                                                                             
  277 Park Avenue New York, New York 10172                                                               
Timothy J. White(4).................................    --            --           --            --      
  DLJ Merchant Banking, Inc.                                                                             
  277 Park Avenue                                                                                        
  New York, New York 10172                                                                               
Global Technology Partners, LLC(5)..................    --            --           --            --      
  1300 I Street N.W.                                                                                     
  Washington, D.C.                                                                                       
Dr. Robert J. Hermann(5)............................     9,561         *             714          *      
c/o Global Technology Partners, LLC                                                                      
  1300 I Street, N.W.                                                                                    
  Washington, D.C.                                                                                       
Dr. Paul G. Kaminski(5).............................     9,561         *             714          *      
c/o Global Technology Partners, LLC                                                                      
  1300 I Street, N.W.                                                                                    
  Washington, D.C.                                                                                       
John F. Fort, III(6)................................     1,087         *           --            --      
R. Jack DeCrane(7)..................................    79,233          2.2%       --            --      
Charles H. Becker(8)................................    23,069         *           --            --      
Richard J. Kaplan(9)................................    27,831         *           --            --      
Robert G. Martin(10)................................     8,132         *           --            --      
Jeffrey A. Nerland(11)..............................     8,792         *           --            --      
Jeffrey A. Smith(12)................................    12,480         *           --            --      
All directors and named executive officers as a                                                          
  group                                                                                                  
  (12 persons)......................................   179,746          5.0%       1,428          *      

------------------------                                                        

*  Less than 1.0%                                                           

(1) Each person who has the power to vote and direct the disposition of shares
is deemed to be a beneficial owner of those shares.                   

(2) The common stock columns reflect the number of shares owned and the total 
percentage ownership in the manner required by Securities and Exchange
    Commission rules. The entries for each holder assumes, if applicable, that
  the particular holder, and no one else, fully exercises all rights under
  warrants to purchase common stock and common stock which may be acquired
upon the exercise of stock options which are exercisable or will be   
exercisable prior to 60 days from December 31, 1999.                  

(3) Reflects 3,369,565 shares and warrants for the issuance of an additional  
     150,000 shares, held directly by DLJ Merchant Banking Partners II, L.P. and
the following related investors: DLJ Merchant Banking                 

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Partners II-A, L.P.; DLJ Offshore Partners II, C.V.; DLJ Diversified  
    Partners, L.P.; DLJ Diversified Partners-A, L.P.; DLJ Millennium Partners,
L.P.; DLJ Millennium Partners-A, L.P.; DLJMB Funding II, Inc.; UK     
    Investment Plan 1997 Partners, Inc.; DLJ EAB Partners, L.P.; DLJ First ESC
L.P. and DLJ ESC II L.P. See "Related Party Transactions" and "Plan of
 Distribution." The address of DLJ Offshore Partners II, C.V. is John B.
     Gorsiraweg 14, Willemstad, Curacao, Netherlands Antilles. The address of UK
     Investment Plan 1997 Partners, Inc. is 2121 Avenue of the Stars, Fox Plaza,
     Suite 3000, Los Angeles, California 90067. The address of each of the other
persons is 277 Park Avenue, New York, New York 10172.                 

(4) Messrs. Dean and White and Ms. Schnabel are officers of DLJ Merchant      
   Banking, Inc., an affiliate of Merchant Banking Partners II, L.P. as well
as Donaldson, Lufkin & Jennette Securities Corporation. The share data
shown for these individuals excludes shares shown as held by the DLJ  
affiliates separately listed in this table; Messrs. Dean and White and
Ms. Schnabel disclaim beneficial ownership of those shares.           

(5) Messrs. Hermann and Kaminski are members of Global Technology Partners,   
   LLC. Six members of Global Technology Partners, including Messrs. Hermann
   and Kaminski, acquired 30,967 shares of DeCrane Holdings common stock and
2,417 shares of DeCrane Holdings 14% Senior Redeemable Exchangeable   
     Preferred Stock due 2008, in transactions negotiated with DeCrane Holdings.
     The share data shown for Global Technology Partners and Messrs. Hermann and
   Kaminski excludes shares shown as held by the individual members; Messrs.
 Hermann and Kaminski disclaim beneficial ownership in any of the shares
held by the other members.                                            

(6) Includes 1,087 shares that may be acquired upon the exercise of stock     
   options which are exercisable or will become exercisable prior to 60 days
from December 31, 1999.                                               

(7) Includes 22,712 shares that may be acquired upon the exercise of stock    
   options which are exercisable or will become exercisable prior to 60 days
from December 31, 1999.                                               

(8) Includes 5,678 shares that may be acquired upon the exercise of stock     
   options which are exercisable or will become exercisable prior to 60 days
from December 31, 1999.                                               

(9) Includes 6,092 shares that may be acquired upon the exercise of stock     
   options which are exercisable or will become exercisable prior to 60 days
from December 31, 1999.                                               

(10) Includes 3,785 shares that may be acquired upon the exercise of stock    
     options which are exercisable or will become exercisable prior to 60 days
from December 31, 1999.                                             

(11) Includes 2,271 shares that may be acquired upon the exercise of stock    
     options which are exercisable or will become exercisable prior to 60 days
from December 31, 1999.                                             

(12) Includes 3,785 shares that may be acquired upon the exercise of stock    
     options which are exercisable or will become exercisable prior to 60 days
from December 31, 1999.                                             

   DeCrane Holdings is authorized to issue an aggregate of 4,500,000 shares of
DeCrane Holdings common stock, par value $.01 per share, of which 3,571,827 are 
outstanding, excluding 305,000 reserved for issuance upon exercise of           
outstanding warrants and 400,869 reserved for issuance upon exercise of stock   
options outstanding. DeCrane Holdings is authorized to issue up to 2,500,000    
shares of DeCrane Holdings preferred stock, par value $.01 per share, in one or 
more series, of which 342,417 are outstanding. For a full description of DeCrane
Holdings' capital stock, please review DeCrane Holdings' Certificate of         
Incorporation and Certificate of Designation for its 14% Senior Redeemable      
Exchangeable Preferred Stock due 2008. You can obtain a copy from us or from the
exhibits to the registration statement of which this prospectus is a part. See  
"Where You Can Obtain More Information" at the end of "Business."               

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RELATED PARTY TRANSACTIONS

In August 1998, DeCrane Holdings, a holding company organized by DLJ    
Merchant Banking Partners, II, L.P. and several affiliates acquired all our     
then-outstanding common stock. An agreement entered into in connection with the 
DLJ acquisition entitled a holding company controlled by DLJ Merchant Banking   
Partners II, L.P. to designate a number of directors proportionally commensurate
with its stock ownership of DeCrane Aircraft. DeCrane Holdings selected all of  
the current members of the Board of Directors of DeCrane Aircraft. DLJ Merchant 
Banking or its designate selected all of the members of the Board of Directors  
of DeCrane Holdings.                                                            

  We also entered into certain financing arrangements in connection with the
DLJ Acquisition. DLJ Capital Funding, Inc., another DLJ affiliate of DLJ        
Merchant Banking, received customary fees and reimbursement of expenses in      
connection with the arrangement and syndication of our previous bank credit     
facility and as a lender thereunder. Donaldson, Lufkin & Jenrette Securities    
Corporation, which is also an affiliate of DLJ Merchant Banking, acted as the   
initial purchaser of the old notes and is the sole market-maker for the notes.  
In addition, DeCrane Aircraft is obligated to pay DLJ Securities Corporation an 
annual advisory fee of $300,000 until 2003. We may from time to time enter into 
other investment banking relationships with DLJ Securities Corporation or one of
its affiliates pursuant to which DLJ Securities Corporation or its affiliate    
will receive customary fees and will be entitled to reimbursement for all       
reasonable disbursements and out-of-pocket expenses incurred in connection      
therewith. We expect that any such arrangement will include provisions for the  
indemnification of DLJ Securities Corporation against liabilities, including    
liabilities under the federal securities laws.                                  

   In connection with the DLJ acquisition, an Investors' Agreement dated as of
August 28, 1998, and amended as of October 2, 1998, was entered into among      
DeCrane Holdings, DLJ Merchant Banking and its affiliates which hold DeCrane    
Holdings stock. It provides that:                                               

   - Any person acquiring shares of common stock or preferred stock of DeCrane
    Holdings who is required by the terms of the Investors' Agreement or any
 employment agreement or stock purchase, option, stock option or other
 compensation plan of DeCrane Holdings to become a party thereto shall
execute an agreement to become bound by the Investors' Agreement and
thereafter shall be bound by it.                                    

- Transfers of the shares of DeCrane Holdings common stock and preferred
stock by the parties to the agreement are restricted.               

  - Parties to the agreement may participate in some specific kinds of sales
of shares of DeCrane Holdings' common stock by the DLJ affiliates.  

   - The DLJ affiliates may require the other parties to the agreement to sell
 shares of DeCrane Holdings' common stock in some cases should the DLJ
affiliates choose to sell any such shares owned by them.            

 - The DLJ affiliates may request six demand registrations with respect to
the warrants for DeCrane Holdings common stock held by DLJ Merchant 
      Banking and the common stock and preferred stock held by those affiliates,
which are immediately exercisable subject to customary deferral and 
cutback provisions.                                                 

- The parties to the agreement are entitled to unlimited piggyback      
registration rights, subject to customary cutback provisions, and   
      excluding registrations of shares issuable in connection with any employee
stock options, employee benefit plan or an acquisition.             

   - DeCrane Holdings will indemnify the shareholders against some liabilities
and expenses, including liabilities under the Securities Act.       

- The DLJ affiliates have the right to appoint all of the members of the
      Boards of Directors of DeCrane Holdings and DeCrane Aircraft, and at least
one of such directors on each board will be an independent director.
Messrs. Hermann, Kaminski and Fort are independent directors.       

 Each warrant for DeCrane Holdings common stock held by the DLJ affiliates
entitles the holder thereof to purchase one share of common stock at an exercise
price of not less than $0.01 per share subject to customary antidilution        
provisions and other customary terms. Those DLJ warrants are exercisable at any 
time prior to 5:00 p.m. New York City time on August 28, 2009, subject to       
applicable federal and state securities laws.                                   

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  In connection with the DLJ acquisition, seven members of Global Technology
Partners, LLC, including Messrs. Hermann and Kaminski, were granted options to  
purchase 44,612 shares of DeCrane Holdings common stock effective July 30, 1999.
The options vest over a three-year period, subject to acceleration if the       
foregoing DLJ affiliates sell any of their shares of common stock. Those options
will be exercisable at an exercise price equal to the price paid for DeCrane    
Holdings common stock by DLJ Merchant Banking and its affiliates. In December   
1998, six members of Global Technology Partners, including Messrs. Hermann and  
Kaminski, purchased for approximately $704,000, newly issued shares of preferred
and common stock of DeCrane Holdings. DeCrane Aircraft loaned one-half of the   
purchase price for such shares to those members with interest at applicable     
federal rates. The loans are repayable out of the proceeds from the sale of such
stock and are secured by such stock. DeCrane Holdings has indemnified Global    
Technology Partners against some claims and liabilities including, liabilities  
under the Securities Act.                                                       

    The Board of Directors of DeCrane Holdings extended the management incentive
plan to independent non-management directors, and issued options to purchase    
3,260 shares of DeCrane Holdings common stock to Mr. Fort, the only director    
presently qualifying for such plan.                                             

In connection with our acquisition of PPI in April 1999, DLJ Merchant   
Banking invested an additional $12.5 million of capital in DeCrane Holdings by  
purchasing 543,478 additional shares of its common stock, for $23.00 per share. 
DeCrane Holdings, in turn, contributed the proceeds to DeCrane Aircraft. Three  
members of Global Technology Partners, including Messrs. Hermann and Kaminski,  
also purchased 10,869 newly issued shares of DeCrane Holdings common stock at   
$23.00 per share. DeCrane Aircraft loaned one-half of the purchase price for    
such shares to those members with interest at applicable federal rates. The     
loans are repayable out of the proceeds from the sale of such stock and are     
secured by such stock.                                                          

 In December 1999, management purchased 171,295 shares of DeCrane Holdings
common stock for $23.00 per share. The total purchase price was $3.9 million, of
which one-half was paid in cash at closing and one-half was loaned to management
by DeCrane Aircraft with interest at applicable federal rates. The loans are    
repayable out of the proceeds from the sale of such stock and are secured by    
such stock.                                                                     

   The following table sets forth all indebtedness owed to us by our executive
officers and directors which individually exceed $60,000 as required by the     
rules of the Securities and Exchange Commission. All indebtedness set forth     
below results from the above-described purchases of DeCrane Holdings preferred  
and common stock and is payable to DeCrane Aircraft. The indebtedness, plus     
accrued interest, is payable upon the sale of the DeCrane Holdings stock held as
collateral for each of the loans. See "Management" for information regarding    
each individual's relationship with DeCrane Aircraft and DeCrane Holdings.      

                                                        · Enlarge/Download Table

                                                                           TOTAL INDEBTEDNESS TO DECRANE AIRCRAFT 
                                           NUMBER OF SHARES                       AS OF DECEMBER 31, 1999         
                                         HELD AS COLLATERAL(A)            ----------------------------------------
                                         ---------------------  INTEREST                   ACCRUED                
NAME                                     PREFERRED    COMMON    RATE(B)   PRINCIPAL(C)   INTEREST(D)    TOTAL(E)  
----                                     ---------   ---------  --------  ------------   -----------   -----------
                                                                                                                  
R. Jack DeCrane.........................     --       56,521      5.74%     $649,991       $1,124       $651,115  
Charles H. Becker.......................     --       17,391      5.74       199,996          346        200,342  
Richard J. Kaplan.......................     --       21,739      5.74       249,998          432        250,430  
Jeffrey A. Nerland......................     --        6,521      5.74        74,991          130         75,121  
Jeffrey F. Smith........................     --        8,695      5.74        99,992          173        100,165  
Dr. Robert J. Hermann...................    714       13,184       (f)       145,664        5,375        151,039  
Dr. Paul G. Kaminski....................    714       13,184       (f)       145,664        5,375        151,039  

------------------------                                                        

(a) Reflects the number of shares of DeCrane Holdings preferred and common stock
held by DeCrane Aircraft as collateral for the loans.                   

(b) Reflects the applicable federal rate of interest charged on the loans.      
Interest is compounded annually.                                        

(c) Reflects the original principal amount of the loans.                        

(d) Reflects accrued interest payable through December 31, 1999.                

(e) Reflects the maximum amount of indebtedness during the year ended           
December 31, 1999.                                                      

(f) Loans in the principal amount of $104,000 are at 4.33% and loans in the     
principal amount of $41,664 are at 5.54%.                               

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DESCRIPTION OF WARRANTS 

The warrants have been issued pursuant to a warrant agreement between   
DeCrane Holdings and State Street Bank and Trust Company, as warrant agent, a   
copy of which is available as set forth above under "Business--Where You Can Get
More Information."                                                              

GENERAL                                                                         

  There are 100,000 warrants outstanding. Each warrant, when exercised, will
entitle the holder thereof to receive 1.55 fully paid and non-assessable shares 
of DeCrane Holdings common stock, at an exercise price of $23.00 per share. The 
exercise price and the number of warrant shares are both subject to adjustment  
in special cases described below. The holders of all of the warrants would be   
entitled, in the aggregate, to purchase shares of common stock representing     
approximately 5% of common stock on a fully diluted basis on the date of this   
prospectus, assuming exercise of all outstanding warrants issued by DeCrane     
Holdings, including the separately-issued DLJ warrants. Unless exercised, the   
warrants will automatically expire at 5:00 p.m. New York City time on           
September 30, 2008.                                                             

    The warrants may be exercised by surrendering to us the warrant certificates
evidencing the warrants to be exercised with the accompanying form of election  
to purchase properly completed and executed, together with payment of the       
exercise price. Payment of the exercise price may be made in cash in United     
States dollars by wire transfer or by certified or official bank check to the   
order of DeCrane Holdings. Upon surrender of the warrant certificate and payment
of the exercise price, we will deliver or cause to be delivered, to or upon the 
written order of such holder, stock certificates representing the number of     
whole warrant shares to which the holder is entitled. If less than all of the   
warrants evidenced by a warrant certificate are to be exercised, a new warrant  
certificate will be issued for the remaining number of warrants. Holders of     
warrants will be able to exercise their warrants only if a registration         
statement relating to the warrant shares underlying the warrants is then in     
effect, or the exercise of such warrants is exempt from the registration        
requirements of the Securities Act, and such securities are qualified for sale  
or exempt from qualification under the applicable securities laws of the states 
in which the various holders of warrants or other persons to whom it is proposed
that warrant shares be issued on exercise of the warrants reside.               

  No fractional warrant shares will be issued upon exercise of the warrants.
DeCrane Holdings will pay to the holder of the warrant at the time of exercise  
an amount in cash equal to the current market value of any such fractional      
warrant shares less a corresponding fraction of the exercise price.             

   The holders of the warrants will have no right to vote on matters submitted
to the stockholders of DeCrane Holdings and will have no right to receive       
dividends. The holders of the warrants will not be entitled to share in the     
assets of DeCrane Holdings in the event of liquidation, dissolution or the      
winding up of DeCrane Holdings. In the event a bankruptcy or reorganization is  
commenced by or against DeCrane Holdings, a bankruptcy court may hold that      
unexercised warrants are executory contracts which may be subject to rejection  
by DeCrane Holdings with approval of the bankruptcy court, and the holders of   
the warrants may, even if sufficient funds are available, receive nothing or a  
lesser amount as a result of any such bankruptcy case than they would be        
entitled to if they had exercised their warrants prior to the commencement of   
any such case.                                                                  

ADJUSTMENTS                                                                     

  The number of warrant shares purchasable upon exercise of the warrants and
the exercise price will be subject to adjustment in some events including:      

 - the payment by DeCrane Holdings of dividends and other distributions on
the common stock in common stock,                                   

- subdivisions, combinations and reclassifications of the common stock, 

    - the issuance to all holders of common stock of rights, options or warrants
  entitling them to subscribe for common stock or securities convertible
      into, or exchangeable or exercisable for, common stock at a price which is
  less than the Fair Market Value, as defined below, per share of common
stock,                                                              

- some distributions to all holders of common stock of any of DeCrane   
     Holdings' assets or debt securities or any rights or warrants to purchase
   any such securities, excluding those rights and warrants referred to in
the preceding bullet point,                                         

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 - the issuance of shares of common stock for consideration per share less
than the then Fair Market Value per share of common stock, excluding
  securities issued in transactions referred to in the first four bullet
   points above or the next bullet point below, and subject to exceptions,

- the issuance of securities convertible into or exchangeable for common
     stock for a conversion or exchange price plus consideration received upon
      issuance less than the then Fair Market Value per share of common stock at
the time of issuance of such convertible or exchangeable security,  
     excluding securities issued in transactions referred to in the first four
bullet points above, and                                            

- other events that could have the effect of depriving holders of the   
warrants of the benefit of all or a portion of the purchase rights  
evidenced by the warrants.                                          

    Adjustments to the exercise price will be calculated to the nearest cent. No
adjustment need be made for any of the foregoing transactions if warrant holders
are to participate in the transaction on a basis and with notice that the Board 
of Directors determines to be fair and appropriate in light of the basis and    
notice and on which other holders of common stock participate in the            
transaction.                                                                    

The following defined terms are used above:                                     

 "FAIR MARKET VALUE" per security, at any date of determination, means

          (1) in connection with a sale to a party that is not an affiliate of
      DeCrane Holdings in an arm's-length transaction, a "Non-Affiliate Sale,"
the price per security at which such security is sold, and        

          (2) in connection with any sale to an affiliate of DeCrane Holdings,

             (a) the last price per security at which such security was sold
          in a Non-Affiliate Sale within the three-month period preceding such
date of determination or                                  

           (b) if clause (a) is not applicable, the fair market value of
          such security determined in good faith by a majority of the board of
directors of DeCrane Holdings, including a majority of the
        Disinterested Directors, as defined below, and approved in a board
           resolution delivered to the warrant agent, or a nationally recognized
      investment banking, appraisal or valuation firm, which is not an
       affiliate of DeCrane Holdings, in each case, taking into account,
          among all other factors deemed relevant by the board of directors or
       such investment banking, appraisal or valuation firm, the trading
           price and volume of such security on any national securities exchange
     or automated quotation system on which such security is traded.

"DISINTERESTED DIRECTOR" means, in connection with any issuance of  
  securities that gives rise to a determination of the Fair Market Value
     thereof, each member of the board of directors of DeCrane Holdings who is
      not an officer, employee, director or other Affiliate of the party to whom
     DeCrane Holdings is proposing to issue the securities giving rise to such
determination.                                                      

   No adjustment in the exercise price will be required unless such adjustment
would require an increase or decrease of at least one percent in the exercise   
price; PROVIDED, HOWEVER, that any adjustment that is not made will be carried  
forward and taken into account in any subsequent adjustment. In the case of some
types of consolidations or mergers of DeCrane Holdings, or the sale of all or   
substantially all of the assets of DeCrane Holdings to another corporation,     

  - each warrant will thereafter be exercisable for the right to receive the
 kind and amount of shares of stock or other securities or property to
which such holder would have been entitled as a result of such      
     consolidation, merger or sale had the warrants been exercised immediately
prior thereto, and                                                  

- the person formed by or surviving any such consolidation or merger, if
   other than DeCrane Holdings, or to which such sale shall have been made
will assume the obligations of DeCrane Holdings under the warrant   
agreement.                                                          

RESERVATION OF SHARES                                                           

 DeCrane Holdings has authorized and reserved for issuance and will at all
times reserve and keep available such number of shares of common stock as will  
be issuable upon the exercise of all outstanding warrants. Such shares of common
stock, when paid for and issued, will be duly and validly issued, fully paid    

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and non-assessable, free of preemptive rights and free from all taxes, liens,   
charges and security interests with respect to the issuance thereof.            

AMENDMENT                                                                       

From time to time, DeCrane Holdings and the warrant agent, without the  
consent of the holders of the warrants, may amend or supplement the warrant     
agreement for some purposes, including curing defects or inconsistencies or     
making any change that does not adversely affect the legal rights of any holder.
Any amendment or supplement to the warrant agreement that adversely affects the 
legal rights of the holders of the warrants will require the written consent of 
the holders of a majority of the then outstanding warrants, excluding warrants  
held by DeCrane Holdings or any of its affiliates. The consent of each holder of
the warrants affected will be required for any amendment pursuant to which the  
exercise price would be increased or the number of warrant shares purchasable   
upon exercise of warrants would be decreased, other than pursuant to adjustments
provided in the warrant agreement.                                              

ADDITIONAL INFORMATION                                                          

Anyone who receives this prospectus may obtain a copy of the warrant    
agreement and warrant registration rights agreement without charge by writing to
DeCrane Holdings at 2361 Rosecrans Avenue, Suite 180, El Segundo, California    
90245.                                                                          

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DESCRIPTION OF CAPITAL STOCK

GENERAL                                                                         

   DeCrane Holdings is authorized to issue an aggregate of 4,500,000 shares of
common stock, par value $.01 per share, of which 3,571,827 are outstanding and  
owned by 33 shareholders, excluding shares reserved for issuance upon exercise  
of the 155,000 warrants described in this prospectus, 150,000 warrants          
outstanding and issued to DLJ affiliates and 400,869 management incentive stock 
options. DeCrane Holdings is authorized to issue up to 2,500,000 shares of      
preferred stock, par value $.01 per share, in one or more series, of which      
342,417 are outstanding. There is no existing trading market for either the     
common or preferred stock. The following is a summary of the rights and         
privileges pertaining to the common stock and preferred stock. For a full       
description of the capital stock, reference is made to DeCrane Holdings'        
certificate of incorporation currently in effect, a copy of which is available  
from DeCrane Holdings. See "Where You Can Get More Information" at the end of   
the "Business" section.                                                         

COMMON STOCK                                                                    

VOTING RIGHTS                                                           

The holders of common stock are entitled to one vote per share on all   
matters submitted for action by the shareholders. There is no provision for     
cumulative voting with respect to the election of directors. Accordingly, the   
holders of more than 50% of the shares of common stock can, if they choose to do
so, elect the board of directors and determine most matters on which            
stockholders are entitled to vote. Pursuant to the Investors' Agreement, the    
shareholders who are party to such agreement have agreed to vote their shares to
cause the DLJ affiliates owing common stock of DeCrane Holdings to select all   
six of DeCrane Holdings' directors. See "Related Party Transactions."           

DIVIDEND RIGHTS                                                         

  Holders of common stock are entitled to share equally, share for share, if
dividends are declared on common stock, whether payable in cash, property or    
securities of DeCrane Holdings.                                                 

LIQUIDATION RIGHTS                                                      

In the event of any voluntary or involuntary liquidation, dissolution or
winding up of DeCrane Holdings, after payment has been made from the funds      
available therefore to the holders of preferred stock, if any, for the full     
amount to which they are entitled, the holders of the shares of common stock are
entitled to share equally, share for share, in the assets available for         
distribution. Holders of common stock have no conversion, redemption or         
preemptive rights.                                                              

PREFERRED STOCK                                                                 

    The board of directors of DeCrane Holdings has authorized the designation of
1,360,000 shares of 14% Senior Exchangeable Redeemable Preferred Stock due 2009,
par value $0.01 per share, of which 342,417 shares have been issued and are     
outstanding. Holders of the DeCrane Holdings preferred stock are entitled to    
receive, when, as and if declared by the board of directors, dividends at a rate
equal to 14% per annum, subject to increases of 0.25% for each quarter that no  
dividend is paid, up to a maximum of an additional 5%. Prior to September 30,   
2003, dividends are not paid in cash but instead accrete in liquidation value.  
Shares have a liquidation preference of $100, subject to increase through       
accretion, plus accrued and unpaid cash dividends. The DeCrane Holdings         
preferred stock is mandatorily redeemable on August 28, 2009 and is redeemable  
at DeCrane Holdings' option:                                                    

 - prior to September 30, 2001 with the net cash proceeds of public equity
   offerings at a redemption price equal to 114% of liquidation value plus
accrued and unpaid cash dividends,                                  

    - on or after September 30, 2003, at a redemption price equal to the 107% of
liquidation value plus accrued and unpaid cash dividends,           

- on or after September 30, 2004 at a redemption price of 104.667% of   
liquidation value plus accrued and unpaid cash dividends,           

- on or after September 30, 2005 at a redemption price of 102.333% of   
liquidation value plus accrued and unpaid cash dividends,           

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- on or after September 30, 2006 at a redemption price of 100.000% of   
liquidation value plus accrued and unpaid cash dividends, or        

- in the event of a change of control, as defined in the Certificate of 
   Designation for the preferred stock, at a redemption price equal to the
   present value of all remaining dividends, premium and liquidation value
     payments that would become due on the DeCrane Holdings preferred stock as
    if the DeCrane Holdings preferred stock was to remain outstanding and be
   redeemed on September 30, 2003, computed using a discount rate equal to
the Treasury Rate plus 50 basis points.                             

   Upon the occurrence of a change of control, each holder will have the right
to require DeCrane Holdings to repurchase all or any part of such holder's      
DeCrane Holdings preferred stock at an offer price equal to 101% of the         
liquidation preference thereof plus accrued and unpaid cash dividends. Holders  
of the DeCrane Holdings preferred stock are not entitled to voting rights;      
PROVIDED that DeCrane Holdings has agreed that it will not amend or modify its  
charter so as to adversely affect the holders of the DeCrane Holdings preferred 
stock or create, authorize or issue securities prior to or on a par with the    
DeCrane Holdings preferred stock without the consent of the holders thereof. In 
addition, if and whenever                                                       

- four consecutive or any six quarterly dividend payments are not made, 

 - DeCrane Holdings fails to fulfill its obligations to redeem the DeCrane
      Holdings preferred stock on August 28, 2009 or in the event of a change of
control,                                                            

   - DeCrane Holdings makes any payments on the Common Stock or other security
    ranking junior to or on parity with the DeCrane Holdings preferred stock
in violation of the Certificate of Designations, or                 

   - DeCrane Holdings amends its charter or creates parity or prior securities
in violation of the Certificate of Designations,                    

the number of directors will be increased by two and the holders of the DeCrane 
Holdings preferred stock will be entitled to elect the additional directors     
until such violation is remedied.                                               

  We may, at our option, at any time on any dividend payment date so long as
no shares are held by any DLJ affiliate, exchange the shares of DeCrane Holdings
preferred stock for 14% senior subordinated exchange debentures of DeCrane      
Holdings due September 30, 2009. Those exchange debentures will be subordinated 
to all senior debt of DeCrane Holdings and will contain customary covenants and 
events of default, including covenants that limit the ability of DeCrane        
Holdings and its subsidiaries to incur debt, pay dividends and acquire or make  
equity investments in other companies.                                          

   In addition, we may issue additional shares of preferred stock from time to
time in one or more series and with such designations and preferences for each  
series as shall be stated in the resolutions providing for the designation and  
issue of each such series adopted by our board of directors. The board of       
directors is authorized by our Certificate of Incorporation to determine the    
voting, dividend, redemption and liquidation preferences and limitations        
pertaining to such series. The board of directors, without shareholder approval,
may issue preferred stock with voting and other rights that could adversely     
affect all of the rights of the holders of the common stock and could have      
antitakeover effects. We have no present plans to issue any additional shares of
preferred stock. The ability of the board of directors to issue preferred stock 
without stockholder approval could have the effect of delaying, deferring or    
preventing a change in control of DeCrane Holdings or the removal of existing   
management.                                                                     

SECTION 203 OF DELAWARE GENERAL CORPORATION LAW                                 

    DeCrane Holdings is a Delaware corporation and subject to Section 203 of the
Delaware General Corporation Law. Section 203 prevents an "interested           
stockholder" (defined generally as a person owning 15% or more of a             
corporation's outstanding voting stock) from engaging in a "business            
combination," as defined in Section 203, with a Delaware corporation for three  
years following the date such person became an interested stockholder, subject  
to some exceptions such as transactions done with the approval of the board of  
directors and of the holders of at least two-thirds of the outstanding shares of
voting stock not owned by the interested stockholder. The existence of this     
provision would be expected to have an anti-takeover effect, including possibly 
discouraging takeover attempts that might result in a premium over the market   
price for the shares of DeCrane Holdings common stock.                          

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DLJ WARRANTS                                                                    

 Each of the 150,000 warrants issued to affiliates of DLJ Merchant Banking
entitles the holder thereof to purchase one share of common stock of DeCrane    
Holdings at an exercise price of not less than $0.01 per share subject to       
customary antidilution provisions, which differ in some respects than those     
contained in the warrants which are the subject of this prospectus, and other   
customary terms. The DLJ warrants are exercisable at any time prior to 5:00     
p.m., New York time, on August 28, 2009. The exercise of the DLJ warrants also  
is subject to applicable federal and state securities laws.                     

The holders of the DLJ warrants are entitled to request six demand      
registrations with respect to the DLJ warrants, together with all or any portion
of any preferred stock and the common stock owned by them, which rights will be 
immediately exercisable, subject to customary deferral and cutback provisions.  
In addition, the holders of the DLJ warrants are entitled to unlimited piggyback
registration rights with respect to such warrants, subject to customary cutback 
provisions.                                                                     

TRANSFER AGENT AND REGISTRAR                                                    

 The transfer agent and registrar for the DeCrane Holdings common stock is
the Secretary of DeCrane Holdings.                                              

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FEDERAL INCOME TAX CONSEQUENCES 

  This section is a summary of federal income tax considerations relevant to
the offered securities. It is not a complete analysis of all potential tax      
effects. We have not considered foreign or state taxes, gift taxes or gift      
taxes, among other things, and your individual tax liabilities and consequences 
also depend on your own circumstances. We based this summary on U.S. federal tax
law, regulations, pronouncements and judicial decisions now in effect. All of   
the laws and rules may change, and changes can be made retroactively as well.   

    YOU SHOULD CONSULT YOUR OWN TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES TO
YOU OF PARTICIPATING IN THIS EXCHANGE OFFER.                                    

The registration of existing warrants as contemplated by this prospectus
should not be a taxable event. However, dividends paid on common stock received 
upon the exercise of a warrant will be taxed as ordinary income.                

U.S. HOLDERS                                                                    

As used herein, the term "U.S. holder" means a beneficial owner of an   
offered security that for United States federal income tax purposes is a citizen
or resident of the United States, a corporation created or organized in or under
the laws of the United States or of any political subdivision thereof, an estate
the income of which is subject to United States federal income taxation         
regardless of its source, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or 
more United States persons have the authority to control all substantial        
decisions of the trust.                                                         

    A U.S. holder will generally not recognize any gain or loss upon exercise of
any warrants (except with respect to any cash received in lieu of a fractional  
warrant share). A U.S. holder will have an initial tax basis in the warrant     
shares received on exercise of the warrants equal to the sum of its tax basis in
the warrants and the aggregate cash exercise price, if any, paid in respect of  
such exercise. A U.S. holder's holding period in such warrant shares will       
commence on the day after the warrants are exercised.                           

    If a warrant expires without being exercised, a U.S. holder will recognize a
capital loss in an amount equal to its tax basis in the warrant. Upon the sale  
or exchange of a warrant, a U.S. holder will generally recognize a capital gain 
or loss equal to the difference, if any, between the amount realized on such    
sale or exchange and the U.S. holder's tax basis in such warrant. Such capital  
gain or loss will be long-term capital gain or loss if, at the time of such sale
or exchange, the warrant has been held for more than one year.                  

BACKUP WITHHOLDING AND INFORMATION REPORTING                            

Some noncorporate U.S. holders may be subject to backup withholding at a
rate of 31% dividends received with respect to, and the proceeds of a           
disposition of, warrant shares. Backup withholding will apply only if the U.S.  
holder                                                                          

   - fails to furnish its Taxpayer Identification Number which, in the case of
an individual, is his or her social security number,                

- furnishes an incorrect number,                                        

  - is notified by the IRS that it has failed to properly report payments of
interest or dividends or                                            

    - under some circumstances, fails to certify, under penalty of perjury, that
 it has furnished a correct Tax Identification Number and has not been
      notified by the IRS that it is subject to backup withholding. U.S. holders
should consult their tax advisors regarding their qualification for 
     exemption from backup withholding and the procedure for obtaining such an
exemption if applicable. The amount of any backup withholding from a
   payment to a U.S. holder is not an additional tax and is allowable as a
credit against such U.S. holder's United States federal income tax  
     liability and may entitle such U.S. holder to a refund, PROVIDED that the
required information is furnished to the IRS.                       

NON-U.S. HOLDERS                                                                

   "Non-U.S. holder" means an owner of an offered security that is, for United
States federal income tax purposes, a nonresident alien individual, a foreign   
corporation, a nonresident alien fiduciary of a foreign estate or trust, or a   
foreign partnership one or more of the members of which is a nonresident alien  
individual, a foreign corporation or a nonresident alien fiduciary of a foreign 
estate or trust.                                                                

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  Under present United States federal tax law, and subject to the discussion
below concerning backup withholding:                                            

-  Dividends paid to a non-U.S. holder of warrant shares, and after     
  December 31, 1999, any deemed dividends resulting from some kinds of
       adjustments to the number of warrant shares to be issued on exercise of a
    warrant, generally will be subject to withholding tax at a 30% rate or
     such lower rate as may be specified by an applicable income tax treaty.

  -  A non-U.S. holder of a warrant or warrant shares will not be subject to
     United States federal income tax on gain realized on the sale, exchange
or other disposition of such warrant or warrant shares, unless    

     -  such holder is an individual who is present in the United States for
         183 days or more in the taxable year of the disposition, and either
   the gain is attributable to an office or other fixed place of
     business maintained by such individual in the United States or,
       generally, such individual has a "tax home" in the United States,

      -  such gain is effectively connected with the Non-U.S. Holder's conduct
of a trade or business in the United States, or           

-  the warrant or warrant share was a "United States Real Property
       Interest" as defined in Section 897(c)(1) of the Internal Revenue
       Code at any time during the five year period prior to the sale or
           exchange or at any time during the time that the non-U.S. holder held
such warrant or warrant share, whichever time was shorter.

A warrant or warrant share would be a United States Real Property 
      Interest only if, at any time during the five years prior to the sale or
  exchange of such warrant or warrant share, or at any time during the
 period that the non-U.S. holder held such warrant or warrant share,
    whichever time was shorter, DeCrane Holdings had been a "United States
       real property holding corporation" as defined in Section 897(c)(2) of the
      Internal Revenue Code and the non-U.S. holder directly or constructively
      had owned more than 5% of such series of common stock. We do not believe
      that the foregoing was or is likely to become the case regarding DeCrane
Holdings.                                                         

-  An individual non-U.S. holder who is treated as the owner of, or has made    
 some specific types of lifetime transfers of, an interest in a warrant or
 warrant shares will be required to include the value thereof in his gross
estate for U.S. federal estate tax purposes, and may be subject to U.S. 
federal estate tax unless an applicable estate tax treaty provides      
otherwise.                                                              

 Currently, for purposes of determining whether tax is to be withheld at a
30% rate or at a reduced treaty rate, we ordinarily will presume that dividends 
paid on or before December 31, 1999 to an address in a foreign country are paid 
to a resident of such country, unless we know that such presumption is not      
warranted. Under Treasury Regulations effective for payments after December     
31, 1999, non-U.S. holders will be required to satisfy applicable certification 
requirements to claim treaty benefits.                                          

   If a non-U.S. holder of a warrant or warrant share is engaged in a trade or
business in the United States, and if dividends with respect to warrant shares  
or gain realized on the sale, exchange or other disposition of warrants or      
warrant shares is effectively connected with the conduct of such trade or       
business, the non-U.S. holder, although exempt from the withholding tax         
discussed in the preceding paragraphs, will generally be subject to regular     
United States income tax on such effectively connected income in the same manner
as if it were a U.S. Holder. See "--U.S. Holders" above. In lieu of the         
certificate described in the preceding paragraph, such a holder will be required
to provide to the withholding agent a properly executed IRS Form 4224 on or     
after January 1, 2000, a Form W-8, to claim an exemption from withholding tax.  
In addition, if such non-U.S. holder is a foreign corporation, it may be subject
to a 30% branch profits tax, unless reduced or eliminated by an applicable      
treaty, on its earnings and profits for the taxable year attributable to such   
effectively connected income, subject to several adjustments.                   

BACKUP WITHHOLDING AND INFORMATION REPORTING                            

Backup withholding, described above under "--U.S. Holders--Backup       
Withholding and Information Reporting," generally will not apply to dividends   
paid on or before December 31, 1999 to a non-U.S. holder at an address outside  
the United States, PROVIDED that DeCrane Holdings or its paying agent does not  
have actual knowledge that the payee is a United States person. Under Treasury  
Regulations effective for                                                       

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payments made after December 31, 1999, however, a non-U.S. holder will be       
subject to backup withholding unless applicable certification requirements are  
met.                                                                            

   Under current Treasury Regulations, payments on the sale, exchange or other
disposition of a warrant or warrant share made to or through a foreign office of
a broker generally will not be subject to backup withholding. However, if such  
broker is                                                                       

- a United States person,                                               

- a controlled foreign corporation for United States federal income tax 
purposes,                                                           

  - a foreign person 50 percent or more of whose gross income is effectively
connected with a United States trade or business for a specified    
three-year period or                                                

- in the case of payments made after December 31, 1999, a foreign       
  partnership which has some specific types of connections to the United
States,                                                             

then information reporting, but not backup withholding, will be required unless 
the broker has in its records documentary evidence that the beneficial owner is 
not a United States person and several other conditions are met, or the         
beneficial owner otherwise establishes an exemption. Backup withholding may     
apply to any payment that such broker is required to report if the broker has   
actual knowledge that the payee is a United States person. Payments to or       
through the United States office of a broker will be subject to backup          
withholding and information reporting unless the holder certifies, under        
penalties of perjury, that it is not a United States person or otherwise        
establishes an exemption.                                                       

Non-U.S. holders of warrants or warrant shares should consult their tax 
advisers regarding the application of information reporting and backup          
withholding in their particular situations, the availability of an exemption    
therefrom, and the procedure for obtaining such an exemption, if available. Any 
amount withheld from a payment to a non-U.S. holder under the backup withholding
rules is not an additional tax and is allowable as a credit against such        
holder's United States federal income tax liability, if any, or may entitle such
holder to a refund, if the required information is furnished to the IRS.        

PLAN OF DISTRIBUTION

This prospectus is to be used in connection with offers and sales of the
offered securities by the holders thereof from time to time. DLJ Securities     
Corporation may act as a principal or agent for one party when acting as        
principal or as agent for both parties, and may receive compensation in the form
of discounts and commissions, including from both parties when it acts as agent 
for both. Those sales will be made at prevailing market prices at the time of   
sale, at prices related thereto or at negotiated prices.                        

DLJ Merchant Banking Partners II, L.P. and several of its affiliates    
beneficially own approximately 83.7% of the common stock of DeCrane Holdings, on
a fully diluted basis assuming exercise of all outstanding warrants and options.
Thompson Dean, Susan C. Schnabel and Timothy J. White, each of whom is a        
principal of DLJ Merchant Banking, are members of the Board of Directors of     
DeCrane Holdings. DLJ Capital Funding, Inc. acted as syndication agent in       
connection with the bank credit facility of DeCrane Aircraft, for which it      
received customary fees and expenses. DLJ Bridge Finance Inc. purchased the     
bridge notes which were refinanced by the initial offering of DeCrane Aircraft's
12% Series A Senior Subordinated Notes due 2008, for which it received customary
fees and expenses. DLJ Securities Corporation acted as dealer/manager in        
connection with the tender offer in the DLJ acquisition, as arranger in         
connection with the bank credit facility, and as the initial purchaser of the   
old notes, and is the financial advisor to DeCrane Holdings and DeCrane         
Aircraft. DLJ Merchant Banking, DLJ Capital Funding, Inc. and DLJ Bridge        
Finance, Inc. are affiliates of DLJ Securities Corporation.                     

We will not receive any proceeds from any sales of the warrants or any  
warrant shares.                                                                 

DLJ Securities Corporation has, from time to time, provided investment  
banking and other financial advisory services to us, for which it has received  
customary compensation, and will provide such services and financial advisory   
services to us in the future. DLJ Securities Corporation was the initial        
purchaser in the initial offering of the old notes and received an underwriting 
discount of approximately $3.3 million in connection therewith. See "Related    
Party Transactions."                                                            

We have entered into a warrant registration rights agreement with DLJ   
Securities Corporation regarding the use by DLJ of this prospectus. Pursuant to 
such agreement, we have agreed to bear all registration expenses incurred under 
that agreement, and to indemnify DLJ Securities Corporation against some        
liabilities, including liabilities under the Securities Act.                    

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LEGAL MATTERS 

The validity of the warrants offered hereby was passed upon for DeCrane 
Holdings by Spolin & Silverman LLP, Santa Monica, California and Davis, Polk &  
Wardwell, New York, New York.                                                   

EXPERTS 

   The following financial statements included in this prospectus have been so
included in reliance on the reports of PricewaterhouseCoopers LLP, independent  
accountants, given on the authority of said firm as experts in auditing and     
accounting:                                                                     

- the consolidated balance sheets as of December 31, 1998 and the       
      consolidated statements of operations, of stockholders' equity and of cash
  flows for the four months ended December 31, 1998 of DeCrane Holdings,
Co., the consolidated balance sheet as of December 31, 1997 and the 
      consolidated statements of operations, of stockholders' equity and of cash
     flows for the years ended December 31, 1996 and 1997 and the eight months
     ended August 31, 1998 of DeCrane Aircraft Holdings, Inc., the predecessor
to DeCrane Holdings, Co.;                                           

    - the balance sheets as of September 30, 1996 and 1997 and the statements of
   income, of stockholder's equity and of cash flows for each of the three
years in the period ended September 30, 1997 of Avtech Corporation; 

- the consolidated balance sheets as of June 30, 1997 and 1998 and the  
      consolidated statements of operations, of stockholders' equity and of cash
flows for the years then ended of PATS, Inc.;                       

   - the balance sheets as of December 31, 1997 and 1998 and the statements of
      income, of stockholders' equity and of cash flows for the years then ended
of Custom Woodwork & Plastics, Inc.; and                            

   - the balance sheets as of December 31, 1998 and September 30, 1999 and the
    statements of income, of partners' equity and of cash flows for the year
   ended December 31, 1998 and the nine months ended September 30, 1999 of
The Infinity Partners, Ltd.                                         

   The following financial statements included in this prospectus have been so
included in reliance on the report of Baird, Kurtz & Dobson, independent        
accountants, given on the authority of said firm as experts in auditing and     
accounting:                                                                     

  - the consolidated balance sheets as of December 31, 1997 and 1998 and the
      consolidated statements of income, stockholders' equity and cash flows for
 the period from June 12, 1997 to December 31, 1997 and the year ended
    December 31, 1998 of PPI Holdings, Inc., and the consolidated statements
      of income, stockholders' equity and cash flows for the year ended December
31, 1996 and for the period from January 1, 1997 to June 11, 1997 of
Precision Pattern Inc., the predecessor to PPI Holdings, Inc.; and  

   - the balance sheets as of December 31, 1997 and 1998 and the statements of
      income, of stockholders' equity and of cash flows for the years then ended
of PCI NewCo, Inc.                                                  

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INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

                                                                · Download Table

                                                                PAGE  
                                                              --------
                                                                      
Basis of Presentation.......................................    P-2   
Unaudited Pro Forma Consolidated Balance Sheet as of                  
  September 30, 1999........................................    P-3   
Unaudited Pro Forma Consolidated Statement of Operations for          
  the:                                                                
  Twelve months ended September 30, 1999....................    P-4   
  Year ended December 31, 1998..............................    P-5   
  Nine months ended September 30, 1998......................    P-6   
  Nine months ended September 30, 1999......................    P-7   
Notes to Unaudited Pro Forma Consolidated Financial Data....    P-8   

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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA 
BASIS OF PRESENTATION 

 The following unaudited pro forma consolidated financial data for DeCrane
Holdings is based on our historical financial statements adjusted to reflect:   

- our 1998 acquisition of DeCrane Aircraft in connection with the       
DLJ acquisition;                                                    

- our 1998 Avtech and Dettmers acquisitions;                            

   - our 1999 PATS, PPI and Custom Woodwork acquisitions, which were completed
prior to September 30, 1999; and                                    

- our 1999 PCI NewCo, International Custom Interiors and Infinity       
acquisitions, which were completed subsequent to September 30, 1999.

 For additional information on the 1998 acquisitions, see the notes to our
audited 1998 consolidated financial statements included elsewhere in this       
prospectus. For additional information on the 1999 acquisitions, see the notes  
to our unaudited 1999 consolidated financial statements included elsewhere in   
this prospectus.                                                                

   Unaudited pro forma consolidated statements of operations are presented for
the twelve months ended September, 30, 1999, the year ended December 31, 1998   
and the nine months ended September 30, 1998 and 1999. The statements reflect   
the DLJ acquisition and all of our acquisitions as if they had occurred as of   
January 1, 1998. The unaudited pro forma consolidated balance sheet reflects the
PCI NewCo, International Custom Interiors and Infinity acquisitions as of       
September 30, 1999; all of the 1998 acquisitions and the 1999 PATS, PPI and     
Custom Woodwork acquisitions had occurred by that date and are therefore        
reflected in our historical balance sheet.                                      

The pro forma adjustments are based upon available information and      
assumptions management believes are reasonable under the circumstances. The     
unaudited pro forma consolidated financial data and accompanying notes should be
read in conjunction with our historical audited and unaudited financial         
statements and related notes and the historical audited financial statements and
related notes of the companies we acquired included elsewhere in this           
prospectus. The pro forma financial data does not purport to represent what our 
actual results of operations or actual financial position would have been if the
transactions described above in fact occurred on such dates or to project our   
results of operations or financial position for any future period or date.      

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UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999

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                                                            COMPANIES ACQUIRED SUBSEQUENT               
                                                DECRANE        TO SEPTEMBER 30,1999(2)                  
                                               HOLDINGS     ------------------------------              
                                             HISTORICAL(1)  HISTORICAL(3)     ADJUSTMENTS      PRO FORMA
                                             -------------  -------------     ------------     ---------
                                                              (DOLLARS IN THOUSANDS)                    
                                                                                                        
ASSETS                                                                                                  

Current assets                                                                                          
  Cash and cash equivalents.................    $  3,139       $1,182           $    209 (4)   $  4,530 
  Accounts receivable, net..................      40,074        3,634                 --         43,708 
  Inventories...............................      51,290        2,197                111 (5)     53,598 
  Deferred income taxes.....................       2,916           --                 --          2,916 
  Prepaid expenses and other current                                                                    
    assets..................................       2,847        1,233             (1,128)(6)      2,952 
                                                --------       ------           --------       -------- 
    Total current assets....................     100,266        8,246               (808)       107,704 
                                                --------       ------           --------       -------- 

Property and equipment, net.................      36,531        1,431                 --         37,962 
                                                --------       ------           --------       -------- 

Other assets, principally intangibles, net                                                              
  Goodwill and other intangibles............     309,729           --             23,513 (7)    333,242 
  Deferred financing costs..................      10,699           --              1,700 (8)     12,399 
  Other assets..............................       1,174            3                 --          1,177 
                                                --------       ------           --------       -------- 
    Net other assets, principally                                                                       
      intangibles...........................     321,602            3             25,213        346,818 
                                                --------       ------           --------       -------- 

      Total assets..........................    $458,399       $9,680           $ 24,405       $492,484 
                                                ========       ======           ========       ======== 

LIABILITIES AND STOCKHOLDERS' EQUITY                                                                    

Current liabilities                                                                                     
  Short-term borrowings.....................    $    401       $   --           $     --       $    401 
  Current portion of long-term                                                                          
    obligations.............................       3,682          660                 20 (9)      4,362 
  Accounts payable..........................       8,749          764                 --          9,513 
  Accrued expenses..........................      23,546        1,396                 --         24,942 
  Income taxes payable......................       4,638          298                 --          4,936 
                                                --------       ------           --------       -------- 
    Total current liabilities...............      41,016        3,118                 20         44,154 
                                                --------       ------           --------       -------- 

Long-term obligations                                                                                   
  Senior revolving credit facility..........      13,500           --            (13,500)(10)        -- 
  Senior term facility......................     165,950           --             44,350 (10)   210,300 
  Senior subordinated notes.................     100,000           --                 --        100,000 
  Other long-term obligations...............       1,644          772               (675)(10)     1,741 
                                                --------       ------           --------       -------- 
    Total long-term obligations.............     281,094          772             30,175        312,041 
                                                --------       ------           --------       -------- 

Deferred income taxes.......................      21,522           --                 --         21,522 
Other long-term liabilities.................       4,904           --                 --          4,904 
Mandatorily redeemable preferred stock......      39,785           --                 --         39,785 

Stockholders' equity........................      70,078        5,790             (5,790)(11)    70,078 
                                                --------       ------           --------       -------- 

      Total liabilities and stockholders'                                                               
        equity..............................    $458,399       $9,680           $ 24,405       $492,484 
                                                ========       ======           ========       ======== 

See accompanying Notes to Unaudited Pro Forma Consolidated Financial Data.

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30, 1999

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                                                              ACQUISITION ADJUSTMENTS (13)              
                                                 DECRANE      ----------------------------              
                                                 HOLDINGS     HISTORICAL                                
                                              HISTORICAL(12)  RESULTS(14)     ADJUSTMENTS      PRO FORMA
                                              --------------  -----------     ------------     ---------
                                                              (DOLLARS IN THOUSANDS)                    
                                                                                                        
Revenues.....................................    $222,180       $73,095         $   (382)(15)  $294,893 
Cost of sales................................     149,740        49,741           (5,277)(16)   194,204 
                                                 --------       -------         --------       -------- 

    Gross profit.............................      72,440        23,354            4,895        100,689 

Selling, general and administrative                                                                     
  expenses...................................      34,611         6,009               --         40,620 
Nonrecurring charges.........................          --           262             (262)(18)        -- 
Nonrecurring bonuses and employment contract                                                            
  termination expenses.......................          --           360             (360)(19)        -- 
Amortization of intangible assets............      11,852           209            2,864 (21)    14,925 
                                                 --------       -------         --------       -------- 

    Operating income.........................      25,977        16,514            2,653         45,144 

Interest expense.............................      24,986           516            7,917 (22)    33,419 
Other income.................................        (157)          (24)              --           (181)
                                                 --------       -------         --------       -------- 

Income (loss) before provision for income                                                               
  taxes and extraordinary item...............       1,148        16,022           (5,264)        11,906 

Provision for income taxes (benefit).........         507          (287)           6,984 (24)     7,204 
                                                 --------       -------         --------       -------- 

Income (loss) before extraordinary item                                                                 
  (25).......................................    $    641       $16,309         $(12,248)      $  4,702 
                                                 ========       =======         ========       ======== 

See accompanying Notes to Unaudited Pro Forma Consolidated Financial Data.

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

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                                                             ACQUISITION ADJUSTMENTS (13)              
                                                             ----------------------------              
                                                 DECRANE     HISTORICAL                                
                                               HOLDINGS(12)  RESULTS(14)     ADJUSTMENTS      PRO FORMA
                                               ------------  -----------     ------------     ---------
                                                              (DOLLARS IN THOUSANDS)                   
                                                                                                       
Revenues......................................   $150,433     $118,495         $   (458)(15)  $268,470 
Cost of sales.................................    102,840       81,494              541 (16)   184,875 
                                                 --------     --------         --------       -------- 

    Gross profit (loss).......................     47,593       37,001             (999)        83,595 

Selling, general and administrative                                                                    
  expenses....................................     25,993       13,650           (1,728)(17)    37,915 
Nonrecurring charges..........................      3,632        1,479           (5,111)(18)        -- 
Nonrecurring bonuses and employment contract                                                           
  termination expenses........................         --        4,072           (4,072)(19)        -- 
ESOP contribution.............................         --          530             (530)(20)        -- 
Amortization of intangible assets.............      4,495          328           10,151 (21)    14,974 
                                                 --------     --------         --------       -------- 

    Operating income..........................     13,473       16,942              291         30,706 

Interest expense..............................      9,217        1,354           24,580 (22)    35,151 
Other expenses (income).......................      1,182          (35)            (600)(23)       547 
                                                 --------     --------         --------       -------- 

Income (loss) before provision for income                                                              
  taxes and extraordinary item................      3,074       15,623          (23,689)        (4,992)

Provision for income taxes (benefit)..........        224          578             (415)(24)       387 
                                                 --------     --------         --------       -------- 

Income (loss) before extraordinary item                                                                
  (25)........................................   $  2,850     $ 15,045         $(23,274)      $ (5,379)
                                                 ========     ========         ========       ======== 

See accompanying Notes to Unaudited Pro Forma Consolidated Financial Data.

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1998

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                                                              ACQUISITION ADJUSTMENTS(13)                
                                                             -----------------------------               
                                                 DECRANE     HISTORICAL                                  
                                               HOLDINGS(12)  RESULTS(14)       ADJUSTMENTS      PRO FORMA
                                               ------------  -----------       -----------      ---------
                                                                (DOLLARS IN THOUSANDS)                   
                                                                                                         
Revenues......................................   $106,089       $91,191          $   (377)(15)  $196,903 
Cost of sales.................................     71,181        63,474             3,911 (16)   138,566 
                                                 --------       -------          --------       -------- 
    Gross profit (loss).......................     34,908        27,717            (4,288)        58,337 
Selling, general and administrative                                                                      
  expenses....................................     18,889        11,402            (1,728)(17)    28,563 
Nonrecurring charges..........................      3,632         1,417            (5,049)(18)     --    
Nonrecurring bonuses and employment contract                                                             
  termination expenses........................     --             3,832            (3,832)(19)     --    
ESOP contribution.............................     --               530              (530)(20)     --    
Amortization of intangible assets.............      2,149           243             8,840 (21)    11,232 
                                                 --------       -------          --------       -------- 
    Operating income (loss)...................     10,238        10,293            (1,989)        18,542 
Interest expense..............................      4,115           992            21,503 (22)    26,610 
Other expenses (income).......................      1,028           (40)             (600)(23)       388 
                                                 --------       -------          --------       -------- 
Income (loss) before provision for income                                                                
  taxes and extraordinary item................      5,095         9,341           (22,892)        (8,456)
Provision for income taxes (benefit)..........      2,386            38            (3,937)(24)    (1,513)
                                                 --------       -------          --------       -------- 
Income (loss) before extraordinary item                                                                  
  (25)........................................   $  2,709       $ 9,303          $(18,955)      $ (6,943)
                                                 ========       =======          ========       ======== 

See accompanying Notes to Unaudited Pro Forma Consolidated Financial Data.

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1999

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                                                                ACQUISITION ADJUSTMENTS(13)               
                                                  DECRANE      -----------------------------              
                                                  HOLDINGS     HISTORICAL                                 
                                               HISTORICAL(12)  RESULTS(14)       ADJUSTMENTS     PRO FORMA
                                               --------------  -----------       -----------     ---------
                                                                  (DOLLARS IN THOUSANDS)                  
                                                                                                          
Revenues......................................    $177,836        $45,791          $  (301)(15)  $223,326 
Cost of sales.................................     118,081         31,721           (1,907)(16)   147,895 
                                                  --------        -------          -------       -------- 
    Gross profit..............................      59,755         14,070            1,606         75,431 
Selling, general and administrative                                                                       
  expenses....................................      27,507          3,761           --             31,268 
Nonrecurring charges..........................     --                 200             (200)(18)     --    
Nonrecurring bonuses and employment contract                                                              
  termination expenses........................     --                 120             (120)(19)     --    
Amortization of intangible assets.............       9,506            124            1,553 (21)    11,183 
                                                  --------        -------          -------       -------- 
    Operating income..........................      22,742          9,865              373         32,980 
Interest expense..............................      19,884            154            4,840 (22)    24,878 
Other income..................................        (311)           (29)          --               (340)
                                                  --------        -------          -------       -------- 
Income (loss) before provision for income                                                                 
  taxes and extraordinary item................       3,169          9,740           (4,467)         8,442 
Provision for income taxes (benefit)..........       2,669           (827)           3,462 (24)     5,304 
                                                  --------        -------          -------       -------- 
Income (loss) before extraordinary item.......    $    500        $10,567          $(7,929)      $  3,138 
                                                  ========        =======          =======       ======== 

See accompanying Notes to Unaudited Pro Forma Consolidated Financial Data.

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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA                        

(1) Reflects our financial position subsequent to our 1998 Avtech and Dettmers
   acquisitions, our 1998 acquisition of DeCrane Aircraft in connection with
the DLJ acquisition and our 1999 PATS, PPI and Custom Woodwork        
  acquisitions. Excludes the effect of our PCI NewCo, International Custom
   Interiors and Infinity acquisitions that occurred subsequent to September
  30, 1999 and the effect of an approximate $9.5 million pre-tax charge we
     will incur in the fourth quarter of 1999 in connection with the Hollingsead
and Elsinore Engineering restructuring.                               

 (2) Reflects our acquisition of the following companies subsequent to September
30, 1999:                                                             

- substantially all of the assets of PCI NewCo on October 6, 1999;    

   - all of the common stock of International Custom Interiors on October 8,
1999; and                                                         

- substantially all of the assets of Infinity on December 17, 1999.   

     Concurrently with the Infinity acquisition, we also increased our term debt
borrowings and repaid borrowings existing under our revolving credit  
facility. Pro forma sources and uses of funds for the acquisitions and
   senior term debt borrowings, had they occurred on September 30, 1999, are
as follows:                                                           

                                                        · Enlarge/Download Table

                                                         HISTORICAL   RECLASSIFICATION(C)   PRO FORMA
                                                         ----------   -------------------   ---------
                                                                    (DOLLARS IN THOUSANDS)           
                                                                                                     
SOURCES:                                                                                             

Senior credit facility:                                                                              
  Working capital revolving credit facility (a).........   $   491          $   (491)        $ --    
  Acquisition revolving credit facility (a).............    11,500           (11,500)          --    
  Term A facility (b)...................................     5,000          --                 5,000 
  Term D facility (b)...................................    40,000          --                40,000 
                                                           -------          --------         ------- 
    Total sources.......................................   $56,991          $(11,991)        $45,000 
                                                           =======          ========         ======= 

USES:                                                                                                

Purchase of net assets and common stock.................   $28,091          $--              $28,091 
Acquisition fees and expenses...........................     1,500          --                 1,500 
Senior credit facility:.................................                                             
  Acquisition revolving credit facility (c).............    25,000           (11,500)         13,500 
  Working capital revolving credit facility (c).........       700              (700)          --    
  Financing fees and expenses...........................     1,700          --                 1,700 
  Excess cash (c).......................................    --                   209             209 
                                                           -------          --------         ------- 
    Total uses..........................................   $56,991          $(11,991)        $45,000 
                                                           =======          ========         ======= 

------------------------                                                        

    (a) Reflects borrowings for our PCI NewCo and International Custom Interiors
acquisitions.                                                   

(b) Reflects senior term debt borrowings.                               

(c) A portion of the proceeds from the senior term debt borrowings in   
       December 1999 was used to repay then existing working capital revolving
    credit facility borrowings. The pro forma balance sheet reflects the
   repayment of $13.5 million of acquisition revolving credit facility
       borrowings outstanding as of September 30, 1999 and the excess funds as
cash.                                                           

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 (3) Reflects the historical financial position of companies acquired subsequent
to September 30, 1999 as follows:                                     

                                                        · Enlarge/Download Table

                                                              INTERNATIONAL                     
                                                      PCI        CUSTOM                         
                                                     NEWCO      INTERIORS     INFINITY   TOTAL  
                                                    --------  -------------   --------  --------
                                                               (DOLLARS IN THOUSANDS)           
                                                                                                
ASSETS                                                                                          

Current assets                                                                                  
  Cash and cash equivalents........................  $  410      $  168        $  604    $1,182 
  Accounts receivable, net.........................   1,116         494         2,024     3,634 
  Inventories......................................     764         341         1,092     2,197 
  Prepaid expenses and other current assets........      56         421           756     1,233 
                                                     ------      ------        ------    ------ 
    Total current assets...........................   2,346       1,424         4,476     8,246 
                                                     ------      ------        ------    ------ 
Property and equipment, net........................     304          80         1,047     1,431 
Other assets.......................................   --              3         --            3 
                                                     ------      ------        ------    ------ 
    Total assets...................................  $2,650      $1,507        $5,523    $9,680 
                                                     ======      ======        ======    ====== 
LIABILITIES AND STOCKHOLDERS' AND PARTNERS' EQUITY                                              

Current liabilities                                                                             
  Current portion of long-term obligations.........  $--         $  228        $  432    $  660 
  Accounts payable.................................      94          64           606       764 
  Accrued expenses.................................     224          32         1,140     1,396 
  Income taxes payable.............................   --            298         --          298 
                                                     ------      ------        ------    ------ 
    Total current liabilities......................     318         622         2,178     3,118 
Other long-term obligations........................   --         --               772       772 
Stockholders' and partners' equity.................   2,332         885         2,573     5,790 
                                                     ------      ------        ------    ------ 
    Total liabilities and equity...................  $2,650      $1,507        $5,523    $9,680 
                                                     ======      ======        ======    ====== 

(4) Reflects excess cash received in connection with the senior term debt     
borrowings.                                                           

(5) Reflects the increase in PCI NewCo's inventory to its estimated fair value
as of the acquisition date.                                           

(6) Reflects the elimination of notes receivable not acquired, which were due 
 from former International Custom Interiors stockholders and an Infinity
partner.                                                              

(7) Reflects the excess of the PCI NewCo, International Custom Interiors and  
  Infinity purchase prices over the fair value of the assets acquired. For
  purposes of this pro forma consolidated financial data, we allocated the
excess purchase prices to goodwill and amortized the amounts on a     
     straight-line basis over 30 years. Such allocations are preliminary and may
change upon completion of the final valuations of the assets acquired.

 (8) Reflects financing fees and expenses for the December 1999 senior term debt
borrowings.                                                           

(9) Reflects the net increase in the current portion of our long-term         
obligations caused by:                                                

   - a $650,000 increase to reflect the current portion of our $45.0 million
of senior term debt borrowings; offset by                         

  - a $630,000 decrease to reflect the elimination of International Custom
Interiors and Infinity debt not assumed.                          

(10) Reflects the net increase in the long-term portion or our long-term      
obligations caused by:                                              

- our $45.0 million of senior term debt borrowings for our PCI NewCo, 
 International Custom Interiors and Infinity acquisitions; offset by

    - the $13.5 million of senior revolving credit facility borrowings repaid;
and                                                               

  - a $675,000 decrease to reflect the elimination of International Custom
Interiors and Infinity debt not assumed.                          

 The terms of the senior credit facility are described in our historical
consolidated financial statements                                     

included elsewhere in this prospectus.                                

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(11) Reflects the elimination of PCI NewCo, International Custom Interiors and
Infinity stockholders' and partners' equity upon acquisition.       

(12) For the twelve months and the nine months ended September 30, 1999,      
reflects our historical results of operations subsequent to our     
   acquisition of DeCrane Aircraft in connection with the DLJ acquisition.
    For the year ended December 31, 1998, reflects our historical results of
    operations for the four months ended December 31, 1998 subsequent to our
      acquisition of DeCrane Aircraft in connection with the DLJ acquisition and
      the historical results of operations of DeCrane Aircraft, our predecessor,
     for the eight months ended August 31, 1998 prior to its acquisition by us
     as summarized in the table below. For the nine months ended September 30,
 1998, reflects our historical results of operations for the one month
      ended September 30, 1998 subsequent to our acquisition of DeCrane Aircraft
  in connection with the DLJ and the historical results of operations of
    DeCrane Aircraft, our predecessor, for the eight months ended August 31,
  1998 prior its acquisition by us as summarized in the table below. The
   data was derived from our historical audited and unaudited consolidated
financial statements included elsewhere in this prospectus.         

                                                        · Enlarge/Download Table

                                    YEAR ENDED DECEMBER 31, 1998         NINE MONTHS ENDED SEPTEMBER 30, 1998  
                                -------------------------------------   ---------------------------------------
                                                EIGHT        TWELVE                       EIGHT         NINE   
                                  FOUR         MONTHS        MONTHS         ONE          MONTHS        MONTHS  
                                 MONTHS     (PREDECESSOR)     TOTAL        MONTH      (PREDECESSOR)     TOTAL  
                                ---------   -------------   ---------   -----------   -------------   ---------
                                                            (DOLLARS IN THOUSANDS)                             
                                                                                                               
Revenues.......................  $60,356       $90,077      $150,433      $16,012        $90,077      $106,089 
Cost of sales..................   42,739        60,101       102,840       11,080         60,101        71,181 
                                 -------       -------      --------      -------        -------      -------- 
Gross profit...................   17,617        29,976        47,593        4,932         29,976        34,908 

Selling, general and                                                                                           
  administrative expenses......   10,274        15,719        25,993        3,170         15,719        18,889 
Nonrecurring charges...........    --            3,632         3,632       --              3,632         3,632 
Amortization of intangible                                                                                     
  assets.......................    3,148         1,347         4,495          802          1,347         2,149 
                                 -------       -------      --------      -------        -------      -------- 
Operating income...............    4,195         9,278        13,473          960          9,278        10,238 
Interest expense...............    6,867         2,350         9,217        1,765          2,350         4,115 
Other expenses.................      335           847         1,182          181            847         1,028 
                                 -------       -------      --------      -------        -------      -------- 
Income (loss) before provision                                                                                 
  for income taxes and                                                                                         
  extraordinary item...........   (3,007)        6,081         3,074         (986)         6,081         5,095 
Provision for income taxes                                                                                     
  (benefit)....................   (2,668)        2,892           224         (506)         2,892         2,386 
                                 -------       -------      --------      -------        -------      -------- 
Income (loss) before                                                                                           
  extraordinary item...........  $  (339)      $ 3,189      $  2,850      $  (480)       $ 3,189      $  2,709 
                                 =======       =======      ========      =======        =======      ======== 

(13) Reflects the historical results of operations for companies we acquired  
    and adjustments for DLJ's acquisition of us for the periods not included
in our historical results.                                          

(14) Reflects the results of operations of companies we acquired that are not 
 included in our historical results. The results of operations for the
      companies we acquired are for the periods from the beginning of the period
   presented to the dates indicated below. For periods subsequent to those
dates, their respective results of operations are included in our   
historical results.                                                 

(a) Avtech--June 25, 1998;                                            

(b) Dettmers--June 29, 1998;                                          

(c) PATS--January 21, 1999;                                           

(d) PPI--April 22, 1999;                                              

(e) Custom Woodwork--August 4, 1999;                                  

(f) PCI NewCo--September 30, 1999;                                    

(g) International Custom Interiors--September 30, 1999; and           

(h) Infinity--September 30, 1999.                                     

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  Tables summarizing the acquired companies' results of operations for the
  twelve months ended September 30, 1999, the year ended December 31, 1998
     and the nine months ended September 30, 1998 and 1999 are summarized below.

                                                        · Enlarge/Download Table

                                                                                     INTERNATIONAL                    
                                                               CUSTOM       PCI         CUSTOM                        
                                           PATS      PPI      WOODWORK     NEWCO       INTERIORS    INFINITY          
                                           (C)       (D)        (E)         (F)           (G)         (H)      TOTAL  
                                         --------  --------  ----------   --------   -------------  --------  --------
                                                                    (DOLLARS IN THOUSANDS)                            
                                                                                                                      
TWELVE MONTHS ENDED SEPTEMBER 30, 1999                                                                                
Revenues................................ $10,459   $22,869     $6,133      $8,869       $4,724      $20,041   $73,095 
Cost of sales...........................   8,962    13,261      2,801       6,282        3,531       14,904    49,741 
                                         -------   -------     ------      ------       ------      -------   ------- 
Gross profit............................   1,497     9,608      3,332       2,587        1,193        5,137    23,354 
Selling, general and administrative                                                                                   
  expenses..............................   1,226     1,659        381         667          504        1,572     6,009 
Nonrecurring charges....................     262        --         --          --           --           --       262 
Nonrecurring bonuses and employment                                                                                   
  contract termination expenses.........     360        --         --          --           --           --       360 
Amortization of intangible assets.......      --       209         --          --           --           --       209 
                                         -------   -------     ------      ------       ------      -------   ------- 
Operating income (loss).................    (351)    7,740      2,951       1,920          689        3,565    16,514 
Interest expense (income)...............     123       384        (16)          8          (21)          38       516 
Other expenses (income).................      16       (28)        (2)         (6)          (4)          --       (24)
                                         -------   -------     ------      ------       ------      -------   ------- 
Income (loss) before provision for                                                                                    
  income taxes and extraordinary item...    (490)    7,384      2,969       1,918          714        3,527    16,022 
Provision for income taxes (benefit)....    (575)       --         --          --          288           --      (287)
                                         -------   -------     ------      ------       ------      -------   ------- 
Income before extraordinary item........ $    85   $ 7,384     $2,969      $1,918       $  426      $ 3,527   $16,309 
                                         =======   =======     ======      ======       ======      =======   ======= 

------------------------                                                        
Notes (c) through (h) appear at the beginning of this note.           

                                                        · Enlarge/Download Table


                                                                                      CUSTOM      PCI   
                                         AVTECH    DETTMERS     PATS       PPI       WOODWORK    NEWCO  
                                          (A)        (B)        (C)        (D)         (E)        (F)   
                                        --------   --------   --------   --------   ----------  --------
                                                             (DOLLARS IN THOUSANDS)                     
                                                                                                        
YEAR ENDED DECEMBER 31, 1998                                                                            
Revenues............................... $20,984     $2,013    $33,348    $37,714      $4,480     $7,933 
Cost of sales..........................  13,267      1,454     24,321     24,376       2,358      5,807 
                                        -------     ------    -------    -------      ------     ------ 
Gross profit (loss)....................   7,717        559      9,027     13,338       2,122      2,126 

Selling, general and administrative                                                                     
  expenses.............................   3,695        760      4,906      2,218         397        536 
Nonrecurring charges...................   1,229         --        250         --          --         -- 
Nonrecurring bonuses and employment                                                                     
  contract termination expenses........   3,592         --        480         --          --         -- 
ESOP contribution......................     300         --        230         --          --         -- 
Amortization of intangible assets......      --         --         --        328          --         -- 
                                        -------     ------    -------    -------      ------     ------ 
Operating income (loss)................  (1,099)      (201)     3,161     10,792       1,725      1,590 

Interest expense (income)..............     (60)        13        296      1,096         (35)        35 
Other expenses (income)................     (35)        --         --          5          (2)        (7)
                                        -------     ------    -------    -------      ------     ------ 
Income (loss) before provision for                                                                      
  income taxes and extraordinary                                                                        
  item.................................  (1,004)      (214)     2,865      9,691       1,762      1,562 

Provision for income taxes (benefit)...    (322)        --      1,013         --          --         -- 
                                        -------     ------    -------    -------      ------     ------ 
Income (loss) before extraordinary                                                                      
  item................................. $  (682)    $ (214)   $ 1,852    $ 9,691      $1,762     $1,562 
                                        =======     ======    =======    =======      ======     ====== 


                                        INTERNATIONAL                                                   
                                           CUSTOM                                                       
                                          INTERIORS     INFINITY                                        
                                             (G)          (H)       TOTAL                               
                                        -------------   --------   --------                             
                                              (DOLLARS IN THOUSANDS)                                    
                                                                                                        
YEAR ENDED DECEMBER 31, 1998                                                                            
Revenues...............................    $1,887       $10,136    $118,495                             
Cost of sales..........................     1,913         7,998     81,494                              
                                           ------       -------    -------                              
Gross profit (loss)....................       (26)        2,138     37,001                              
Selling, general and administrative                                                                     
  expenses.............................       422           716     13,650                              
Nonrecurring charges...................        --            --      1,479                              
Nonrecurring bonuses and employment                                                                     
  contract termination expenses........        --            --      4,072                              
ESOP contribution......................        --            --        530                              
Amortization of intangible assets......        --            --        328                              
                                           ------       -------    -------                              
Operating income (loss)................      (448)        1,422     16,942                              
Interest expense (income)..............        (2)           11      1,354                              
Other expenses (income)................         4            --        (35)                             
                                           ------       -------    -------                              
Income (loss) before provision for                                                                      
  income taxes and extraordinary                                                                        
  item.................................      (450)        1,411     15,623                              
Provision for income taxes (benefit)...      (113)           --        578                              
                                           ------       -------    -------                              
Income (loss) before extraordinary                                                                      
  item.................................    $ (337)      $ 1,411    $15,045                              
                                           ======       =======    =======                              

------------------------                                                        
Notes (a) through (h) appear at the beginning of this note.           

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                                                        · Enlarge/Download Table


                                                                                      CUSTOM      PCI   
                                         AVTECH    DETTMERS     PATS       PPI       WOODWORK    NEWCO  
                                          (A)        (B)        (C)        (D)         (E)        (F)   
                                        --------   --------   --------   --------   ----------  --------
                                                             (DOLLARS IN THOUSANDS)                     
                                                                                                        
NINE MONTHS ENDED SEPTEMBER 30, 1998                                                                    
Revenues............................... $20,984     $2,013    $23,340    $27,602      $3,319     $5,756 
Cost of sales..........................  13,267      1,454     16,588     19,550       1,760      4,272 
                                        -------     ------    -------    -------      ------     ------ 
Gross profit...........................   7,717        559      6,752      8,052       1,559      1,484 

Selling, general and administrative                                                                     
  expenses.............................   3,695        760      3,971      1,503         278        389 
Nonrecurring charges...................   1,229         --        188         --          --         -- 
Nonrecurring bonuses and employment                                                                     
  contract termination expenses........   3,592         --        240         --          --         -- 
ESOP contribution......................     300         --        230         --          --         -- 
Amortization of intangible assets......      --         --         --        243          --         -- 
                                        -------     ------    -------    -------      ------     ------ 
Operating income (loss)................  (1,099)      (201)     2,123      6,306       1,281      1,095 

Interest expense (income)..............     (60)        13        196        839         (30)        25 
Other expenses (income)................     (35)        --         (5)        --          --         (4)
                                        -------     ------    -------    -------      ------     ------ 
Income (loss) before provision for                                                                      
  income taxes and extraordinary                                                                        
  item.................................  (1,004)      (214)     1,932      5,467       1,311      1,074 

Provision for income taxes (benefit)...    (322)        --        344         --          --         -- 
                                        -------     ------    -------    -------      ------     ------ 
Income (loss) before extraordinary                                                                      
  item................................. $  (682)    $ (214)   $ 1,588    $ 5,467      $1,311     $1,074 
                                        =======     ======    =======    =======      ======     ====== 


                                        INTERNATIONAL                                                   
                                           CUSTOM                                                       
                                          INTERIORS     INFINITY                                        
                                             (G)          (H)       TOTAL                               
                                        -------------   --------   --------                             
                                              (DOLLARS IN THOUSANDS)                                    
                                                                                                        
NINE MONTHS ENDED SEPTEMBER 30, 1998                                                                    
Revenues...............................    $1,916       $ 6,261    $91,191                              
Cost of sales..........................     1,439         5,144     63,474                              
                                           ------       -------    -------                              
Gross profit...........................       477         1,117     27,717                              
Selling, general and administrative                                                                     
  expenses.............................       410           396     11,402                              
Nonrecurring charges...................        --            --      1,417                              
Nonrecurring bonuses and employment                                                                     
  contract termination expenses........        --            --      3,832                              
ESOP contribution......................        --            --        530                              
Amortization of intangible assets......        --            --        243                              
                                           ------       -------    -------                              
Operating income (loss)................        67           721     10,293                              
Interest expense (income)..............        --             9        992                              
Other expenses (income)................         4            --        (40)                             
                                           ------       -------    -------                              
Income (loss) before provision for                                                                      
  income taxes and extraordinary                                                                        
  item.................................        63           712      9,341                              
Provision for income taxes (benefit)...        16            --         38                              
                                           ------       -------    -------                              
Income (loss) before extraordinary                                                                      
  item.................................    $   47       $   712    $ 9,303                              
                                           ======       =======    =======                              

------------------------                                                        
Notes (a) through (h) appear at the beginning of this note.           

                                                        · Enlarge/Download Table

                                                                                     INTERNATIONAL                    
                                                               CUSTOM       PCI         CUSTOM                        
                                           PATS      PPI      WOODWORK     NEWCO       INTERIORS    INFINITY          
                                           (C)       (D)        (E)         (F)           (G)         (H)      TOTAL  
                                         --------  --------  ----------   --------   -------------  --------  --------
                                                                    (DOLLARS IN THOUSANDS)                            
                                                                                                                      
NINE MONTHS ENDED SEPTEMBER 30, 1999                                                                                  
Revenues................................ $   451   $12,757     $4,972      $6,692       $4,753      $16,166   $45,791 
Cost of sales...........................   1,229     8,435      2,203       4,747        3,057       12,050    31,721 
                                         -------   -------     ------      ------       ------      -------   ------- 
Gross profit (loss).....................    (778)    4,322      2,769       1,945        1,696        4,116    14,070 

Selling, general and administrative                                                                                   
  expenses..............................     291       944        262         520          492        1,252     3,761 
Nonrecurring charges....................     200        --         --          --           --           --       200 
Nonrecurring bonuses and employment                                                                                   
  contract termination expenses.........     120        --         --          --           --           --       120 
Amortization of intangible assets.......      --       124         --          --           --           --       124 
                                         -------   -------     ------      ------       ------      -------   ------- 
Operating income (loss).................  (1,389)    3,254      2,507       1,425        1,204        2,864     9,865 

Interest expense (income)...............      23       127        (11)         (2)         (19)          36       154 
                                         -------   -------     ------      ------       ------      -------   ------- 
Other expenses (income).................      11       (33)        --          (3)          (4)          --       (29)
                                         -------   -------     ------      ------       ------      -------   ------- 
Income (loss) before provision for                                                                                    
  income taxes and extraordinary item...  (1,423)    3,160      2,518       1,430        1,227        2,828     9,740 

Provision for income taxes (benefit)....  (1,244)       --         --          --          417           --      (827)
                                         -------   -------     ------      ------       ------      -------   ------- 
Income (loss) before extraordinary                                                                                    
  item.................................. $  (179)  $ 3,160     $2,518      $1,430       $  810      $ 2,828   $10,567 
                                         =======   =======     ======      ======       ======      =======   ======= 

------------------------                                                        
Notes (c) through (h) appear at the beginning of this note.           

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(15) Reflects the elimination of intercompany sales.                            

(16) Reflects the net change in cost of sales attributable to the following:    

                                                        · Enlarge/Download Table

                                                                                            NINE MONTHS    
                                                         TWELVE MONTHS                         ENDED       
                                                             ENDED        YEAR ENDED       SEPTEMBER 30,   
                                                         SEPTEMBER 30,   DECEMBER 31,   -------------------
                                                             1999            1998         1998       1999  
                                                         -------------   ------------   --------   --------
                                                                       (DOLLARS IN THOUSANDS)              
                                                                                                           
Increase (decrease) in cost of goods sold (a):                                                             
  DLJ acquisition.......................................    $(3,289)        $    --     $ 3,289    $    -- 
  PPI, Custom Woodwork and PCI NewCo acquisitions.......     (1,606)          1,717       1,717     (1,606)
Decrease in depreciation expense (b)....................         --            (658)       (658)        -- 
Elimination of intercompany sales.......................       (382)           (458)       (377)      (301)
Work force reductions attributable to merging the                                                          
  companies acquired....................................         --             (60)        (60)        -- 
                                                            -------         -------     -------    ------- 
Net increase (decrease) in cost of sales                    $(5,277)        $   541     $ 3,911    $(1,907)
                                                            =======         =======     =======    ======= 

------------------------                                                        

(a) To reflect cost of goods sold based on the fair value of inventory  
   acquired in conjunction with the DLJ acquisition and the companies we
acquired as if all occurred on January 1, 1998.                   

 (b) To reflect a decrease in depreciation expense resulting from the fair
      value and remaining economic useful lives of depreciable assets acquired
in connection with the DLJ acquisition.                           

(17) Reflects the net decrease in selling, general and administrative expenses  
attributable to the following:                                          

                                                        · Enlarge/Download Table

                                                                                            NINE MONTHS    
                                                         TWELVE MONTHS                         ENDED       
                                                             ENDED        YEAR ENDED       SEPTEMBER 30,   
                                                         SEPTEMBER 30,   DECEMBER 31,   -------------------
                                                             1999            1998         1998       1999  
                                                         -------------   ------------   --------   --------
                                                                       (DOLLARS IN THOUSANDS)              
                                                                                                           
Decrease in compensation expense (a)....................    $    --         $(1,775)    $(1,775)    $   -- 
Decrease in investor relations expenses (b).............         --            (221)       (221)        -- 
Other,