Air T, Inc. Reports First Quarter Earnings

MAIDEN, N.C., Aug. 5, 2015 — Air T, Inc. (NASDAQ: AIRT) today reported consolidated net loss of approximately $736,000 ($0.31 per diluted share) for the quarter ended June 30, 2015 compared to consolidated net income of approximately $73,000 ($0.03 per diluted share) for the first quarter of the prior fiscal year.

Consolidated revenues increased by approximately $580,000 (3%) to $22,359,000 for the quarter ended June 30, 2015 compared to the same quarter in the prior fiscal year. Operating income decreased $1,148,000 to $1,049,000 in the first quarter compared to the prior year quarter. Each of the company’s operating segments experienced decreases in operating income as compared to the prior year’s quarter ended June 30.

Revenues decreased at the company’s ground equipment sales segment comprised of its Global Ground Support subsidiary (GGS) by $1,273,000 (24%) to $4,039,000 compared to the first quarter of the prior fiscal year.  GGS had an operating loss of approximately$424,000 for the quarter, compared to an operating loss of $180,000 in the prior year’s comparable quarter.  Operating loss increased in the segment as a result of reduced segment revenues and increased employee benefit costs and service technician costs. In addition, operations for the prior year quarter included a $188,000 gain from sale of leased ground support equipment, which did not recur in the current quarter. Order flow at GGS is above last years’ levels, with backlog at June 30, 2015 of $39.9 million as compared to $21.8 million at June 30, 2014 and $2.8 million at March 31, 2015. Backlog at June 30, 2015 includes an order received in June 2015 to supply approximately $32 million of aircraft deicing vehicles to a major U.S.-based airline, expected to be filled in the third fiscal quarter of the current fiscal year.

Revenues from the air cargo segment increased $1,208,000 (10%) to $12,889,000 compared to the first quarter of the prior fiscal year, while operating income decreased $309,000 (57%) to $236,000. Administrative fee revenues increased to reflect the greater administrative fee amount paid under the new dry-lease agreements which became effective on June 1, 2015. The quarter was also positively impacted by the addition of an additional ATR aircraft during the quarter. Operating income decreased principally due to a$129,000 expense, related to an FAA-mandated update of our operations manuals; unusually high health benefit costs; increased expenses reflecting the transition to the new dry-lease agreements; and reduced contract labor revenue driven by the decrease in calendar maintenance checks as compared to the prior comparable quarter.

Revenues from our ground support services segment increased by $644,000 (13%) to $5,430,000 compared to the first quarter of the prior fiscal year as a result of the addition of new operating locations, and growth in the services offered to new and existing customers.  Operating income for the segment decreased by $444,000 (200%) to an operating loss of $222,000 for the quarter compared to the prior year quarter.  The decrease in operating income over the prior year quarter was primarily due to the significant increase in operating costs required to position the segment for anticipated growth, as well as increased maintenance and parts expense in select markets where GAS operates under fixed-price contracts.

 

FINANCIAL HIGHLIGHTS

(In thousands, except per share)

Quarter Ended

6/30/2015

6/30/2014

Operating Revenues

$         22,359

$         21,779

Net Income (Loss)

$             (736)

$                73

Net Earnings (Loss) Per Share- Diluted

$            (0.31)

$             0.03

Average Common Shares Outstanding-Diluted

2,373

2,380

Air T, through its subsidiaries, provides overnight air freight service to the express delivery industry, manufactures and sells aircraft deicers and other special purpose industrial equipment, and provides ground support equipment and facilities maintenance to airlines.  Air T is one of the largest, small-aircraft air cargo operators in the United States.  Air T’s Mountain Air Cargo and CSA Air subsidiaries currently operate a fleet of single and twin-engine turbo-prop aircraft daily in the eastern half of the United States, Puerto Rico and the Caribbean Islands.  Air T’s Global Ground Support subsidiary manufactures deicing and other specialized military and industrial equipment and is one of the largest providers of deicers in the world.  The Global Aviation Services subsidiary provides ground support equipment and facilities maintenance to domestic airline customers.

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 June 30, 2015 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.

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, uncertainty regarding legal actions against the Company, future economic conditions and their impact on the Company’s customers, the timing and amounts of future orders under our contract with the United States Air Force, the timing of shipment of current orders received by GGS, inflation rates, competition, changes in technology or government regulation, 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.  We are under no obligation, and we expressly disclaim 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.