DENVER, NC / ACCESSWIRE / June 25, 2021 / Air T, Inc. (NASDAQ:AIRT) is an industrious American company with a portfolio of businesses, each of which is independent yet interrelated. We seek dynamic individuals and teams to operate companies using processes that increase value over time. We believe we can apply corporate resources to help activate growth and overcome challenges.
Our core segments are overnight air cargo; aviation ground equipment manufacturing and sales; commercial jet engines and parts; and corporate and other.
Today the Company is announcing results for the fiscal year ended March 31, 2021:
- Revenues from Continuing Operations totaled $175.1 million for the fiscal year ended March 31, 2021, a decrease of $61.7 million, or 26.0% from the prior year.
- Operating Loss from Continuing Operations was $9.2 million for the fiscal ended March 31, 2021, a decrease of $16.5 million from the prior year's Operating Income from Continuing Operations of $7.3 million.
- Adjusted EBITDA* loss of $1.3 million for the year ended March 31, 2021, compared to an Adjusted EBITDA* profit of $9.0 million in the prior year.
- Loss per share of $2.53 for the year ended March 31, 2021, compared to income per share of $2.74 for the prior year.
- Total Equity decreased from $25.0 million as of March 31, 2020 to $14.7 million as of March 31, 2021, a decrease of 41.2%.
*Adjusted EBITDA is a non-GAAP financial measure; see below for further explanation and reconciliation to GAAP measure.
Company Chairman and CEO Nick Swenson commented:
"Air T's management is thankful to the people who made a difference in Fiscal 2021. They focused and worked together to make the best out of a difficult time. If you are an Air T stakeholder of some kind, we recommend you seek out the good people of Air T and thank them for the good work they have done in a turbulent world. While the pandemic reduced revenues from some of our businesses by over 80% and they had nowhere to hide, we want to highlight two outstanding performers during the past year. First, as often before, we thank Mike Moore and his Global Ground Support team for knocking it out of the park in fiscal 2021. With a fistful of orders in hand, and the threat of operational chaos, they powered through and delivered a great operational and financial result. The other Mike, Mike Bandalan of Mountain Air Cargo, also demonstrated excellent leadership with the support of his team. The transformation begun when Bandalan took the helm was accelerated during the past year. The essential needs of all the quarantined households were met by the ‘classic MAC service' that Mike has renewed! Finally, a shout-out to the Contrail team and the Corporate team for their persistence in completing the multi-partner Contrail JV. We drew on our pragmatism and sense of humor to solve the many issues arising from a four-partner JV entity!"
We have great expectations about the way a snappy economic rebound will play through many of our businesses. Our teams are ready, willing and able to take on this new type of challenge-growth. I'm not inclined to patter on about the future. Instead, I simply ask you to patiently ‘watch this space.' I believe we are better coordinated, better managed, and as determined and resilient as ever. This means we are well-positioned to continue working hard to deliver dynamic forward motion."
Business Segment Results
Overnight Air Cargo
- This segment provides air express delivery services, substantially all for FedEx.
- Revenues for this segment decreased 12.0% to $66.3 million in Fiscal 2021 compared to $75.3 million in the prior year, principally attributable to lower sales to maintenance customers outside of FedEx as a result of COVID-19 and lower admin fees from FedEx due to fewer operating aircraft (66 aircraft in fiscal 2021 compared to 69 aircraft in fiscal 2020).
- Adjusted EBITDA* for this segment was $2.2 million for the year ended March 31, 2021, an increase of $1.4 million when compared to the prior year, primarily due to increased operating efficiencies achieved in Fiscal 2021.
Aviation ground equipment manufacturing and sales ("GGS")
- 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 $60.7 million for Fiscal 2021, up 2.5% versus $59.2 million in the prior year. The increase was primarily driven by a higher volume of truck sales to the U.S. Air Force.
- Adjusted EBITDA* for this segment was $9.1 million in the year ended March 31, 2021, an increase of $1.5 million compared to the prior year, due primarily to the revenue increase noted above.
- As of March 31, 2021 this segment's order backlog was $10.3 million versus $51.5 million on March 31,2020.
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 $46.8 million in Fiscal 2021, a decrease of $54.5 million versus Fiscal 2020. The decrease is primarily attributable to the fact that all the companies within this segment had lower engine and component sales and lease income due to the impact of COVID-19.
- Adjusted EBITDA* for this segment was a loss of $3.9 million for the year ended March 31, 2021 compared to an Adjusted EBITDA* profit of $8.7 million in the prior year predominantly due to the revenue decrease caused by the COVID-19 pandemic.
Corporate and Other
- This segment includes expenses attributable to core Corporate functions, investment research, and specialized resources that are available to business units.
- This segment's Adjusted EBITDA* loss for the year ended March 31, 2021 represented a loss of $8.8 million, compared to an Adjusted EBITDA* loss of $8.2 million in the prior year.
*Adjusted EBITDA is a non-GAAP financial measure; see below for further explanation and reconciliation to GAAP measure.
Non-GAAP Financial Measures
The Company uses adjusted earnings before taxes, interest, and depreciation and amortization ("Adjusted EBITDA"), a non-GAAP financial measure as defined by the SEC, to evaluate the Company's financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.
Adjusted EBITDA is defined as earnings before taxes, interest, and depreciation and amortization, adjusted for specified items. The Company calculates Adjusted EBITDA by removing the impact of specific items and adding back the amounts of interest expense and depreciation and amortization to earnings before income taxes. When calculating Adjusted EBITDA, the Company does not add back depreciation expense for aircraft engines that are on lease, as the Company believes this expense matches with the corresponding revenue earned on engine leases. Depreciation expense for leased engines totaled $1.9 million and $4.4 million for the fiscal year ended March 31, 2021 and 2020, respectively.
Management believes that Adjusted EBITDA is a useful measure of the Company's performance because it provides investors additional information about the Company's operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted EBITDA is not intended to replace or be an alternative to operating income from continuing operations, the most directly comparable amounts reported under GAAP.
The tables below provide a reconciliation of operating income from continuing operations to Adjusted EBITDA and Adjusted EBITDA by segment for the fiscal year ended March 31, 2021 and 2020 (in thousands):
Twelve Months Ended
|Operating (loss) income from continuing operations|
|Depreciation and amortization (excluding leased engines depreciation)|
|Asset impairment, restructuring or impairment charges|
|Gain on sale of property and equipment|
|Security issuance expenses|
Included in the asset impairment, restructuring or impairment charges for the fiscal year ended March 31, 2021 was a write-down of $6.4 million on the commercial jet engines and parts segment's inventory. Of the total write-down, $0.5 million was driven by a management decision to monetize two engines by sale to a third party, in which the net carrying values exceeded the estimated proceeds during the quarter ended September 30, 2020. The remaining write-down was attributable to our evaluation of the carrying value of inventory as of March 31, 2021, where we compared its cost to its net realizable value and considered factors such as physical condition, sales patterns and expected future demand to estimate the amount necessary to write down any slow moving, obsolete or damaged inventory.
The following table shows the Company's Adjusted EBITDA by segment for the fiscal year ended March 31, 2021 and 2020, respectively.
Twelve Months Ended
|Overnight Air Cargo|
|Ground Equipment Sales|
|Commercial Jet Engines and Parts|
|Corporate and Other|
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 Form 10-K, as well as the following:
- Economic conditions in the Company's markets, particularly the aviation industry;
- The risk that contracts with FedEx could be terminated or adversely modified;
- The risk that the number of aircraft operated for FedEx could 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 GGS customers will defer or reduce significant orders for deicing and other equipment;
- Mild winter weather conditions reducing the demand for deicing equipment.
- The impact of any terrorist activities on United States soil or abroad;
- 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;
- The Company's ability to manage its cost structure for operating expenses, or unanticipated capital requirements, and match them to shifting customer service requirements and production volume levels;
- The Company's ability to meet debt service covenants and to refinance existing debt obligations;
- The ability of the Company and its business segments to generate sufficient cash flows from operations or through financings.
- 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;
- Market acceptance and operational success of the Company's new aircraft asset management business and related new aircraft capital joint venture;
- The risks and uncertainties related to business acquisitions (including the ability to successfully achieve anticipated benefits) 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; and
- The length and severity of the COVID-19 pandemic.
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 in this press release 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
SOURCE: Air T, Inc.
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