DENVER, NC, June 26, 2020 – Air T, Inc. (NASDAQ: AIRT) is an industrious American company with a networked portfolio of businesses, each of which is independent yet interrelated. We seek to identify and empower individuals and teams who will operate businesses well, increasing value over time. We believe we can apply corporate resources to help activate growth and overcome challenges. We seek to build a valuable enterprise over the long-term.
Our core segments are commercial aircraft asset management; aviation ground support equipment manufacturing; and overnight air cargo.
Today the Company is announcing results for its fiscal year ended March 31, 2020*:
● Revenues from Continuing Operations totaled $236.8 million for the fiscal year ended March 31, 2020, a 10% increase from the prior year.
● Operating Income from Continuing Operations was $7.3 million for the fiscal year ended March 31, 2020, a decrease of 22.6% from the prior year’s Operating Income from Continuing Operations of $9.3 million.
● Net Income per share grew from $0.44 per share for the fiscal year ended March 31, 2019 to $2.73 per share for the fiscal year ended March 31, 2020, an increase of 520.5%.
● Total Equity grew from $23.4 million as of March 31, 2019 to $25.0 million as of March 31, 2020, an increase of 6.8%.
● We distributed $4.0 million face amount of 8% Trust Preferred Securities to shareholders during June of 2019.
*On September 30, 2019 the Company completed the sale of its wholly-owned subsidiary, Global Aviation Services, LLC (“GAS”). The Company received approximately $20.5 million in total proceeds and recognized an after-tax gain of $8.2 million. GAS’ results are included in discontinued operations.
Company Chairman and CEO Nick Swenson said:
“Our 2020 fiscal year end coincided with the arrival of COVID-19. We believe that the people, products, processes and relationships at the heart of each of our businesses had solid momentum going pre-COVID. As a result, we had resilience and a margin of safety as an organization. Yet, the collapse of the aviation market since March 2020 has been a brutal blow which we continue to absorb. The impact of the blow centers on the parts trading and leasing businesses because commercial flying has fallen 85% or more. As a small business, we were thankfully able to access a $8.3 million PPP loan. It’s a critical element in our business plan and has enabled us to keep people employed. Each of our leaders and teams is working to be ready for a better tomorrow. We are focusing on our ability to adjust and adapt, with a goal of turning turmoil into transformation. This is a challenging time and your management is working hard at every level.
Fiscal 2020 included a particularly stellar performance by Mike Moore and his team at Global Ground Support. Mike told me many years ago that his turn-around would really get legs after three (3) to five (5) years, and he was right. Hats off to the fantastic people at GGS!
We are planning to crowdsource questions prior to our August 2020 Annual Shareholders Meeting. To submit questions and/or upvote questions, go to www.slido.com and enter the event code #AIRTQA.”
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 $101.3 million in Fiscal 2020, an increase of $7.3 million over Fiscal 2019. The increase was driven primarily by Contrail trading 14 aircraft and engines in Fiscal 2020 compared to 12 in the previous year.
● Operating income for this segment totaled $8.3 million in Fiscal 2020 compared to operating income of $12.3 million in the prior year primarily due to increased transactional costs for arranging aircraft and engine transactions.
- Overnight Air Cargo
● This segment provides air express delivery services, substantially all for FedEx.
● Revenues for this segment increased 3% to $75.3 million in Fiscal 2020 compared to $73.0 million in Fiscal 2019, despite reduced flying in the Caribbean offset by higher third-party maintenance revenue.
● Operating income for this segment was $0.7 million, a decrease of $1.2 million when compared to the prior year, due primarily to the reduced flying in the Caribbean.
- 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, and military and industrial customers.
● Revenues for this segment totaled $59.2 million for Fiscal 2020, up 25% versus $47.1 million in the prior year, due primarily to a significant increase in deicer sales (124 this year versus 94 last year).
● Operating income for this segment was $7.3 million in Fiscal 2020, an increase of $3.9 million compared to last year, due to the revenue increase noted above as well as gross margin improvement driven by higher-margin deicer sales.
• 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 $7.5 million in Fiscal 2020. In Fiscal 2019, operating loss totaled $6.9 million.
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:
● Conditions in the Company’s markets;
● The ability of the Company and its business segments to generate sufficient cash flows from operations or through financings.
● The risk that contracts with FedEx could be terminated or adversely modified in connection with any renewal;
● The risk that the number of aircraft operated for FedEx will be reduced;
● The risks faced by commercial aircraft operators and maintenance, repair and overhaul companies because they are our customers.
● Our engine values and lease rates, which are dependent on the status of the types of aircraft on which engines are installed, and other factors.
● The Company and its customers operate in a highly regulated industry and changes in economic conditions, laws or regulations may adversely affect our ability to lease or sell our engines or aircraft.
● We may experience losses and delays in connection with repossession of engines or aircraft when a lessee defaults.
● The risk that customers or potential customers will defer significant orders for deicing equipment under its contracts with GGS;
● The impact of any terrorist activities or protests on United States soil or abroad;
● The Company’s ability to manage its cost structure and operating expenses, or unanticipated capital requirements, and match them to shifting customer service requirements and production or equipment volume levels;
● The risk of injury or other damage arising from accidents involving the Company’s overnight air cargo operations, equipment or parts sold and/or services provided;
● Market acceptance of the Company’s commercial and military equipment and services;
● Competition from other providers of similar equipment and services;
● Changes in government regulation and technology;
● Changes in the value of marketable securities held as investments; and
● Mild winter weather conditions reducing the demand for deicing equipment.
● The Company’s ability to meet debt service covenants, obtain additional financing and to refinance existing debt obligations
● The length and severity of the COVID-19 pandemic; 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 of 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