DENVER, NC, February 14, 2020 – Air T, Inc. (NASDAQ:AIRT) is organized as a portfolio of powerful businesses, each of which is independent yet interrelated. These include overnight air cargo operations; ground support equipment manufacturing; and commercial aircraft management, leasing and logistics. Today the Company announced results for its fiscal quarter ended December 31, 2019.
Q3 2020 Overview
• Revenues totaled $73.3 million for the fiscal quarter ended December 31, 2019, a 32% increase from the prior year comparable quarter.
• Operating income was $3.7 million, an increase of $1.8 million from the prior year comparable quarter’s operating income of $1.9 million.
• A non-operating loss of $2.5 million, a decrease of $1.1 million over the operating loss of $3.6 million in the prior year comparable quarter.
• Net loss attributable to Air T stockholders was $0.4 million as compared to net loss of $2.7 million in the prior year comparable quarter.
• Loss from continuing operations per share was $0.07 compared to the prior year comparable quarter’s loss per share of $0.77.
Company Chairman and CEO Nick Swenson said, “In our corporate system, businesses held together in a kind of federation, it is oftentimes difficult to pinpoint themes and developments that are driving the whole. This quarter it is obvious that we are benefitting greatly from the completely unrelated successes of both Contrail Aviation Support and Global Ground Support. The profitable growth of both of these businesses is the result of franchises hard-won, over many years of delivering for customers. We are working hard to maintain edge and process that can deliver for the long-term.”
Business Segment Results
- Commercial Jet Engines and Parts
• This segment leases commercial jet engines and aircraft; buys, sells and trades in surplus and aftermarket commercial jet engines, engine parts, airframes, and airframe parts, avionics, and other; then delivers the related documents and logistics.
• Revenues for this segment totaled $38.5 million in Q3 2020, an increase of $17.5 million over the same period of fiscal 2019. The increase was driven by the sale of 7 assets in the current quarter, compared to 2 assets sold in prior comparable quarter.
• Operating income for this segment totaled $3.4 million in Q3 2020 compared to operating income of $2.4 million in the prior-year quarter. The change was due to increased sales at Contrail, partially offset by higher operating costs in the segment.
- Overnight Air Cargo
• The segment provides air express delivery services, substantially all for FedEx.
• Revenues for this segment increased 5% to $18.7 million in Q3 2020 compared to $17.9 million in Q3 2019, due primarily to higher third-party maintenance revenue.
• Operating income for this segment was $0.6 million, an increase of $0.5 million when compared to the operating income of Q3 2019, due primarily to the revenue increase and achieving a fully-staffed pilot roster, which reduced pilot incentive pay.
- Aviation Ground Support Equipment
• This segment, which is the world’s largest manufacturer of aircraft de-icing equipment, manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers.
• Revenues for this segment totaled $15.9 million for the fiscal quarter ended December 31, 2019, down slightly versus $16.3 million in the prior comparable quarter.
• Operating income for this segment was $1.6 million in the second quarter, an increase of $0.5 million compared to the same quarter last year, principally due to a more favorable mix of higher-margin orders than the same quarter a year ago.
• This segment includes expenses attributable to core Corporate functions, investment research, and specialized resources that are available to business units.
• This segment’s operating loss totaled $1.6 million in the current quarter. In the comparable quarter of the prior year, operating loss totaled $1.5 million.
Other Investments and Financial Liquidity
• Air T owned approximately 3.5 million shares of common stock of Insignia Systems, Inc. (NASDAQ: ISIG) with a market value of $2.6 million as of December 31, 2019.
• As of December 31, 2019, Air T held $3.9 million in marketable securities.
• Working capital (defined as current assets less current liabilities) as of December 31, 2019 totaled $40.8 million compared to $18.6 million as of March 31, 2019.
About Air T, Inc.
Established in 1980, Air T Inc. is a portfolio of powerful businesses and financial assets, each of which is independent yet interrelated. Its core segments are overnight air cargo, aviation ground support equipment manufacturing, and commercial aircraft asset management and logistics. We seek to expand, strengthen and diversify Air T’s after-tax cash flow per share. Our goal is to build Air T’s core businesses, and when appropriate, to expand into adjacent and other industries. We seek to activate growth and overcome challenges while delivering meaningful value for all stakeholders. For more information, visit www.airt.net.
Certain matters discussed in this press release may be considered forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These forward-looking statements are subject to risks, uncertainties and assumptions about our operations and the investments we make, including, among other things, factors discussed under the heading “Risk Factors” in our 10-K, as well as the following:
• The risk that contracts with major customers will be terminated, modified or not extended;
• Future economic conditions and their impact on the Company’s customers, particularly the air delivery business and the commercial airline industry;
• The Company’s ability to recover on its investments, including its investments at recently acquired companies,
• The timing and amounts of future orders of deicing and other specialized equipment at our Global Ground Support subsidiary;
• The timing, financing and amounts of commercial aircraft, engines and parts; and
• The risks and uncertainties related to business acquisitions (including the ability to successfully achieve the anticipated benefits of the acquisitions) inflation rates, competition, changes in technology or government regulation, debt covenants, information technology disruptions, and the impact of future terrorist activities in the United States and abroad.
Forward-looking statements can be identified by the use of words like “believes,” “could,” “possibly,” “probably,” “anticipates,” “estimates,” “projects,” “expects,” “may,” “will,” “should,” “seek,” “intend,” “plan,” “expect,” or “consider” or the negative of these expressions or other variations, or by discussions of strategy that involves risks and uncertainties. All forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. We base these forward-looking statements on current expectations and projections about future events and the information currently available to us. Although we believe that the assumptions for these forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Consequently, no representation or warranty can be given that the estimates, opinions, or assumptions made in or referenced by this prospectus will prove to be accurate. We undertake no obligation to update our forward-looking statements. We caution you that the forward-looking statements in this press release are only estimates and predictions, or statements or current intent. Actual results or outcomes, or actions that we ultimately undertake, could differ materially from those anticipated in the forward-looking statements due to risks, uncertainties or actual events differing from the assumptions underlying these statements. These risks, uncertainties and assumptions include, but are not limited to, those discussed in this press release.
Air T, Inc.
Brian Ochocki, CFO