Air T, Inc. Reports Unaudited Second Quarter Earnings

DENVER, N.C., Nov. 14, 2017 /PRNewswire/ -- Air T, Inc. (Air T) (NASDAQ: AIRT) today reported consolidated net income attributable to Air T, Inc. stockholders of $422,000 ($0.21 per diluted share) for the fiscal 2018 second quarter ended September 30, 2017 as compared to consolidated net income attributable to Air T, Inc. stockholders of $1,084,000 ($0.53 per diluted share) for the fiscal 2017 comparable period.

Consolidated revenues increased $10,339,000 (27%) from $38,523,000 to $48,861,000 for the quarter ended September 30, 2017 compared to the comparable quarter in the prior fiscal year. Consolidated operating income decreased $546,000 (53%) from operating income of $1,022,000 to operating income of $476,000 for the quarter ended September 30, 2017 compared to the comparable quarter in the prior fiscal year. The reduction was principally due to higher corporate level expenses in the current quarter compared to the prior year comparable quarter.

Overnight air cargo revenues increased $930,000 (5%) from $17,151,000 in the quarter ended September 30, 2017 to $18,081,000 during the prior-year comparable quarter. This segment's operating income increased by $456,000 to $897,000 due principally to the impact of the June 1, 2017 amendment to the aircraft dry-lease agreements with the segment's air cargo customer that increased the administrative fees payable under these agreements and due to an increase in billable maintenance hours.

Ground equipment sales revenue, net of intercompany eliminations, increased $4,427,000 (40%) from $11,089,000 to $15,516,000 during the quarter ended September 30, 2017 compared to the prior-year comparable quarter due to increased deicing truck sales.  Ground equipment sales operating income, net of intercompany eliminations, decreased by $78,000 (6%) to $1,165,000 due to pricing on certain deicers units sold during the quarter. The segment's order backlog was $20,400,000 million at September 30, 2017, as compared to $2,800,000 million at March 31, 2017 and $9,800,000 million at September 30, 2016.

Ground support services revenue increased $1,763,000 (25%) from $7,038,000 to $8,801,000, as a result of the segment's growth in new markets and services offered to new and existing customers and strong parts sales.  Operating income for this segment for the same period increased by $517,000 (215%) from a net operating loss of $241,000 in the prior-year comparable quarter primarily as a result of new business and improved rates and changes.

The printing equipment and maintenance segment revenue, net of intercompany eliminations, decreased by $425,000 (25%) compared to the comparable quarter of the prior fiscal year, while net operating loss, net of intercompany eliminations, increased by $405,000 to $432,000.

On July 18, 2016, Contrail Aviation Support, LLC ("Contrail Aviation"), a subsidiary of the Company, completed the purchase of substantially all of the assets of Contrail Aviation Support, Inc. The acquisition consideration included cash and equity membership units in Contrail Aviation representing 21% of the total equity membership units in Contrail Aviation. Additionally, Air T, through a subsidiary, Stratus Aero Partners ("Stratus"), acquired 100% of the outstanding equity interests of Jet Yard, LLC ("Jet Yard") on October 3, 2016. In May 2017, the Company's newly formed subsidiaries, AirCo, LLC and AirCo Services, LLC (collectively, "AirCo") acquired the inventory and principal business assets, and assumed specified liabilities, of Aircraft Instrument and Radio Company, Inc., and Aircraft Instrument and Radio Services, Inc.  The acquired business, which is based in Wichita, Kansas, distributes and sells airplane and aviation parts and maintains a license under Part 145 of the regulations of the Federal Aviation Administration. Stratus, Contrail Aviation, Jet Yard and AirCo comprised the commercial jet engines and parts segment of the Company's operations during the quarter ended September 30, 2017, which contributed revenues of $5,125,000, net of intercompany eliminations, while generating a segment operating loss, net of intercompany eliminations, of $50,000.

On September 7, 2017, the Company's subsidiary, Space Age Insurance Company ("SAIC"), invested $500,000 for a 40% interest in TFS Partners LLC ("TFS Partners"), a single-purpose investment entity organized by SAIC and other investors for the purpose of making an investment in a limited liability company, The Fence Store LLC ("Fence Store LLC"), organized for the purpose of acquiring substantially all of the assets of The Fence Store, Inc. ("Fence Store Inc.").  TFS Partners acquired a 60% interest in Fence Store LLC, which has completed the purchase of substantially all of the assets of Fence Store Inc.  Prior to this transaction, Fence Store Inc. operated a business under the tradename "Town and Country Fence" selling and installing residential and commercial fencing in the greater Twin Cities, Minnesota area.  Fence Store LLC has continued this business. The Company accounts for its investment in TFS Partners using the equity method of accounting.

For a more detailed presentation and discussion of the Company's results of operations and financial condition, please read the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed today with the Securities and Exchange Commission.  Copies of the Form 10-Q may be accessed on the Internet at the SEC's website: http://www.sec.gov.

About Air T, Inc.

Established in 1980, Air T, Inc. is a diversified holding company with four core industry segments: overnight air cargo, aviation ground support equipment manufacturing, aviation ground support maintenance services, and aircraft engine aftermarket and parts.  Our ownership interests consist of a broad set of operating and financial assets that are designed to expand, strengthen and diversify Air T's cash earnings power.  Our goal is to build on Air T's core businesses, to expand into adjacent industries, and when appropriate, to acquire companies that we believe fit into the Air T family.  For more information, visit www.airt.net.

Forward-looking Statements

Statements in this press release, which contain more than historical information, may be considered forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), which are subject to risks and uncertainties.  Actual results may differ materially from those expressed in the forward-looking statements because of important potential risks and uncertainties, including but not limited to, the risk that contracts with major customers will be terminated or not extended, future economic conditions and their impact on the Company's customers, the Company's ability to recover on its investments, including its investments in Delphax, the timing and amounts of future orders under the Company's Global Ground Support subsidiary's contract with the United States Air Force, and 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, information technology disruptions, and the impact of future terrorist activities in the United States and abroad. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. The Company is under no obligation, and it expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise..

SOURCE Air T, Inc.

Related Links

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