Diversified Holding Company Air T, Inc. FY 2018 Revenue Rose 31% to $194.5M and FY 2018 EPS Improved to $1.11

DENVER, N.C.June 29, 2018 — Air T, Inc. (NASDAQ: AIRT) is organized as a powerful portfolio of businesses and financial assets, each of which is independent yet interrelated. These include overnight air cargo operations, ground support equipment manufacturing and local maintenance services, and commercial aircraft asset management and logistics.  Today the Company is reporting improved financial performance for its fiscal year-ended March 31, 2018.

FY 2018 Overview

  • Revenues rose to $194.5 million for the fiscal year ended March 31, 2018, a 31% increase over the prior year
  • Operating income rose to $4.2 million, as compared to prior-year operating loss of $3.1 million
  • Net income attributable to Air T stockholders rose to $2.3 million versus a net loss of $3.2 million in fiscal 2017
  • Diluted earnings per share increased to $1.11 compared to last year’s loss per share of $1.51

Air T, Inc. Chairman and CEO Nick Swenson, said: “Our fiscal 2018 operating results reflect the outstanding performance of our business leaders and employees, as well as new acquisitions. Together they delivered top line growth coupled with improvements to bottom line performance, particularly after adjusting for audit expenses and investments in our corporate infrastructure. We are looking forward to steady growth in fiscal 2019. We continuously evaluate acquisitions and investments that will add to our portfolio of powerful businesses. Our investments must represent claims on growing free cash flows or discounts to intrinsic value. Yet people understand that enterprising and dynamic individuals and teams are at the heart of our corporate strategy. A large part of our job is making room for excellent leaders and applying resources as they move their organizations forward. The more we make sound decisions at the relevant level, the more we will continue to do better.”

Business Segment Results

Aviation Ground Support Equipment

  • Revenues for this segment, which is comprised of Global Ground Support Services, the world’s largest manufacturer of aircraft de-icing equipment, totaled $50.0 million for the fiscal year ended March 31, 2018. This represents an increase of 59% over the revenue of $31.4 million in the prior year. The revenue increase reflected higher sales of de-icing and catering trucks to large and long-standing customers.
  • The segment entered fiscal 2019 on a strong footing with a sales backlog of $13.3 million compared to $2.8 milliona year-ago.

Overnight Air Cargo

  • Revenues for this segment, comprised of Mountain Air Cargo and CSA Air, rose 5% to $72.8 million in fiscal 2018 compared to $69.6 million in the prior fiscal year.
  • The revenue increase was primarily due to higher administrative fees from FedEx as a result of an incremental aircraft lease arrangement and to cover certain operational costs, principally flight crew costs.
  • Segment maintenance revenues also increased due to increased scheduled aircraft maintenance in fiscal 2018 compared to the prior year.

Aviation Ground Support Maintenance Services

  • Revenue from this segment, comprised of Global Aviation Services, one of the fastest growing ground support maintenance providers in the U.S., offering maintenance services at 88 airports, totaled $35.7 million in fiscal 2018, a 17% over fiscal 2017.
  • The revenue increase is due to growth in services to existing customers as well as an increase in new customer contracts.

Commercial Jet Engines and Parts

  • This segment provides surplus and aftermarket commercial jet engine parts, airframes, avionics, other aircraft parts and logistics to the aviation industry. The three companies in this segment are Contrail, Jet Yard and AirCo. Contrail and Jet Yard were acquired in July 2016 and October 2016, respectively, while AirCo was acquired in May 2017.
  • Revenues from this segment totaled $29.5 million in fiscal 2018, an increase of 296% over fiscal 2017 revenue of $7.5 million. This increase is due to higher volume sales at Contrail as well as full year ownership of Contrail and Jet Yard in fiscal 2018, and the acquisition of AirCo in the current year.
  • The assets of Worthington Aviation, an aftermarket airframe parts and logistics company focused on the turbo prop and regional jet markets, were acquired in May 2018 and will be included in the commercial jet engine and parts segment starting in the first quarter of fiscal 2019.

Other Investments and Financial Liquidity

  • Air T owned approximately 3.4 million shares of common stock of Insignia Systems, Inc. (NASDAQ: ISIG) with a market value of $5.3 million as of March 31, 2018
  • Air T owned approximately 0.5 million shares of common stock of Oxbridge Re Holdings Limited (NASDAQ: OXBR) with a market value of $1.0 million as of March 31, 2018
  • Working capital as of March 31, 2018 totaled $30.5 million and there were zero borrowings under the Company’s $10 million revolving credit facility.

ABOUT AIR T, INC.
Established in 1980, Air T Inc. is a powerful portfolio of businesses and financial assets, each of which is independent yet interrelated. Its four core segments are: overnight air cargo, aviation ground support equipment manufacturing, aviation ground support maintenance services, and commercial aircraft asset management and logistics. Our ownership interests are designed to expand, strengthen and diversify Air T’s cash earnings power.  Our goal is to build on Air T’s core businesses, and when appropriate, to expand into adjacent and other industries that we believe fit into the Air T portfolio.  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 and other recently acquired companies, 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.

AIR T, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Year Ended March 31,

2018

2017

Operating Revenues:

Overnight air cargo

$             72,845,353

$            69,558,334

Ground equipment sales

50,004,507

31,447,408

Ground support services

35,698,171

30,453,246

Commercial jet engines and parts

29,506,873

7,455,797

Printing equipment and maintenance

6,144,403

9,019,155

Corporate

182,722

Leasing

137,316

537,719

194,519,345

148,471,659

Operating Expenses:

Overnight air cargo

63,049,619

61,661,072

Ground equipment sales

41,567,109

24,350,264

Ground support services

30,135,613

25,089,412

Printing equipment and maintenance

2,975,999

9,490,906

Commercial jet engines and parts

20,502,205

4,501,030

Leasing

49,460

Research and development

195,653

1,042,496

General and administrative

29,168,766

22,205,947

Depreciation, amortization and impairment

2,678,858

3,181,845

190,273,822

151,572,432

Operating Income (Loss)

4,245,523

(3,100,773)

Non-operating Income (Loss):

Gain on sale of marketable securities

93,066

576,162

Foreign currency gain (loss)

(228,714)

286,596

Other-than-temporary impairment losses on investments

(1,559,972)

(2,755,318)

Other investment income, net

121,860

1,345,798

Interest expense and other

(1,724,771)

(571,651)

Gain on asset retirement obligation

562,500

Bargain purchase acquisition gain, net of tax

501,880

Unrealized loss on interest rate swap

(66,706)

Unrealized gain on transition to equity method

721,585

Equity in income of associated company

(14,644)

(1,593,916)

(1,118,413)

Income (Loss) Before Income Taxes

2,651,607

(4,219,186)

Income Taxes

195,000

725,000

Net Income (Loss)

2,456,607

(4,944,186)

Net (Income) Loss Attributable to Non-controlling

Interests

(179,498)

1,730,647

Net Income (Loss) Attributable to Air T, Inc. Stockholders

$               2,277,109

$            (3,213,539)

Earnings (Loss) Per Share:

Basic

$                        1.11

$                     (1.51)

Diluted

$                        1.11

$                     (1.51)

Weighted Average Shares Outstanding:

Basic

2,042,806

2,125,224

Diluted

2,047,685

2,125,224

AIR T, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

March 31, 2018

March 31, 2017

ASSETS

Current Assets:

Cash and cash equivalents (Delphax $241,430 and $328,327)*

$                4,803,238

$             2,763,365

Marketable securities

290,449

2,130,544

Restricted cash 

269,659

890,369

Restricted investments

1,235,405

Accounts receivable, less allowance for doubtful accounts

  of $801,000 and $979,000 (Delphax $317,000 and $1,728,411)*

15,157,855

18,923,787

Costs and estimated earnings in excess of billings on uncompleted projects

2,012,121

Notes and other receivables-current

658,630

2,297,007

Income tax receivable

1,557,180

402,688

Inventories, net (Delphax $0 and $1,941,729)*

34,231,005

19,778,843

Prepaid expenses and other (Delphax $72,269 and $932,794)*

1,455,566

1,672,475

  Total Current Assets

61,671,108

48,859,078

Investments in available-for-sale securities

1,026,920

2,463,123

Property and equipment, net (Delphax $0 and $8,007)*

20,273,171

5,324,488

Cash surrender value of life insurance policies

2,356,507

2,251,450

Notes and other tax receivables-long-term

311,000

66,771

Deferred income taxes

204,000

Investments in funds

324,854

Equity method investments

5,032,268

Other assets 

420,981

371,975

Intangible assets, net 

1,312,472

1,376,699

Goodwill 

4,417,605

4,417,605

  Total Assets

$              97,146,886

$           65,335,189

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable (Delphax $2,145,847 and $2,482,578)*

$              10,181,143

$           11,571,156

Income tax payable (Delphax $11,312 and $11,312)*

23,000

Accrued expenses (Delphax $3,244,514 and $3,602,162)*

11,743,973

8,672,815

Short-term debt 

9,229,690

25,000

 Total Current Liabilities   

31,177,806

20,268,971

Long-term debt (Delphax $0 and $0)*

38,855,260

18,412,521

Deferred income taxes

92,000

8,000

Other non-current liabilities 

785,797

3,039,402

 Total Liabilities   

70,910,863

41,728,894

Redeemable non-controlling interest

1,992,939

1,443,901

Commitments and contingencies (Notes 8, 11, and 22)

Equity:

  Air T, Inc. Stockholders’ Equity:

Preferred stock, $1.00 par value, 50,000 shares authorized

Common stock, $.25 par value; 4,000,000 shares authorized,

  2,043,607 shares issued and outstanding at March 31, 2018,

  2,042,789 shares issued and outstanding at March 31, 2017

510,901

510,696

Additional paid-in capital

4,171,869

4,205,536

Retained earnings

20,695,981

18,461,347

Accumulated other comprehensive loss

(260,900)

(212,047)

     Total Air T, Inc. Stockholders’ Equity

25,117,851

22,965,532

  Non-controlling Interests

(874,767)

(803,138)

  Total Equity

24,243,084

22,162,394

  Total Liabilities and Equity  

$              97,146,886

$           65,335,189

* Amounts related to Delphax as of March 31, 2018 and 2017, respectively.

AIR T, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended March 31,

2018

2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$          2,456,607

$         (4,944,186)

Adjustments to reconcile net income (loss) to net

  cash used in operating activities:

Gain on sale of marketable securities

(93,066)

(576,162)

Loss on sale of property and equipment

30,232

25,470

Change in inventory reserves

(1,851,036)

2,188,192

Change in accounts receivable reserves

(177,394)

194,286

Depreciation, amortization and impairment

2,678,857

3,181,845

Change in cash surrender value of life insurance

(105,057)

(151,393)

Deferred income taxes

(10,566)

(659,000)

Gain on asset retirement obligation

(562,500)

Gain on bargain purchase, net of tax

(501,880)

Warranty reserve

122,686

(15,173)

Other-than-temporary impairment loss on investments

1,559,972

2,755,318

Unrealized loss on interest rate swap

66,706

Unrealized gain on transition to equity method

(721,585)

Change in operating assets and liabilities:

  Accounts receivable

4,744,262

(5,524,446)

  Costs and estimated earnings in excess of billings on uncompleted projects

(2,012,121)

  Notes receivable and other non-trade receivables

1,640,461

(1,600,290)

  Inventories

(6,757,766)

(7,845,801)

  Prepaid expenses and other assets

331,466

(129,532)

  Accounts payable

(1,689,030)

4,146,921

  Accrued expenses

1,664,200

1,618,100

  Income taxes payable/ receivable

(1,442,493)

306,900

  Non-current liabilities

351,208

(525,143)

Total adjustments  

(2,734,444)

(2,609,908)

 Net cash used in operating activities

(277,837)

(7,554,094)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of marketable securities

(2,519,045)

(2,719,369)

Proceeds from sale of marketable securities

720,452

6,002,601

Net cash used for business combinations 

(2,400,000)

(4,573,700)

Net cash used for equity method investments

(2,301,026)

Investment in funds

(324,854)

Capital expenditures

(20,215,594)

(2,346,431)

Proceeds from sale of property and equipment

3,859

6,281

Increase (Decrease) in restricted cash

620,710

(69,718)

 Net cash used in investing activities

(26,415,498)

(3,700,336)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from line of credit

115,533,307

68,275,140

Payments on line of credit

(119,176,727)

(49,805,658)

Proceeds from line of credit – Delphax

5,387,338

Payments of debts – Delphax

(7,251,473)

Proceeds from term loan

38,441,000

Payments on term loan

(4,816,825)

Debt issuance costs

(404,845)

Earnout payments

(1,100,000)

Contribution from non-controlling member

252,000

Proceeds from exercise of stock options

8,638

Stock repurchase

(7,917,009)

 Net cash provided by financing activities

28,736,548

8,688,338

Effect of foreign currency exchange rates on cash and cash equivalents

(3,340)

(15,998)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

2,039,873

(2,582,090)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

2,763,365

5,345,455

CASH AND CASH EQUIVALENTS AT END OF YEAR

$          4,803,238

$          2,763,365

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:

Finished goods inventory transferred to equipment leased to customers

$             251,643

$             272,622

Equipment leased to customers transferred to inventory

2,057,417

Non-controlling interests in acquired business 

1,312,501

Acquired business earnout contracts and payable

3,016,667

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the year for:

Interest

$          1,065,785

$             298,150

Income taxes

1,659,064

1,092,679

 

SOURCE Air T, Inc.

Air T, Inc. Reports Unaudited Third Quarter 2018 Earnings

DENVER, N.C.Feb. 14, 2018 — Air T, Inc. (“Air T” or the “Company”) (NASDAQ: AIRT) today reported consolidated net loss attributable to Air T, Inc. stockholders of $672,000 ($0.33 per diluted share) for the fiscal 2018 third quarter ended December 31, 2017 as compared to consolidated net income attributable to Air T, Inc. stockholders of $1,220,000 ($0.60 per diluted share) for the fiscal 2017 comparable period.

Consolidated revenues increased $8,732,000 (24%) from $35,769,000 to $44,501,000 for the quarter ended December 31, 2017 compared to the comparable quarter in the prior fiscal year. Consolidated operating income decreased $1,088,000 (66%) from operating income of $1,639,000 to operating income of $552,000 for the quarter ended December 31, 2017 compared to the comparable quarter in the prior fiscal year. The reduction was principally due to higher general and administrative expenses and depreciation charges in the current quarter compared to the prior year comparable quarter.

Overnight air cargo revenues increased $930,000 (5%) from $17,100,000 in the quarter ended December 31, 2017 to $18,029,000 during the prior-year comparable quarter. This segment’s operating income increased by $280,000 (39%) from $717,000 to $997,000 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 $7,511,000 (139%) from $5,400,000 to $12,911,000 during the quarter ended December 31, 2017 compared to the prior-year comparable quarter due to increased deicing truck sales.  Ground equipment sales operating income, net of intercompany eliminations, increased by $1,237,000 (803%) from an operating loss of $154,000 to $1,083,000 due to the volume of deicer units sold during the quarter. The segment’s order backlog was $17,900,000 million at December 31, 2017, as compared to $2,800,000 million at March 31, 2017 and $11,200,000 million at December 31, 2016.

Ground support services revenue increased $1,064,000 (14%) from $7,580,000 to $8,643,000, as a result of the segment’s growth in new markets and services offered to new and existing customers and strong parts sales.  Operating loss for this segment for the same period increased by $74,000 (180%) from an operating loss of $41,000 to $115,000primarily as a result of an increase in labor and related expenses associated with increased headcount for new business.

The printing equipment and maintenance segment revenue, net of intercompany eliminations, decreased by $1,748,000 (66%) from $2,654,000 to $906,000 compared to the comparable quarter of the prior fiscal year, while operating income, net of intercompany eliminations, decreased by $881,000 from operating income of $1,021,000in the prior-year comparable quarter to operating income of $140,000 for the quarter ended December 31, 2017.

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 December 31, 2017, which contributed revenues of $3,931,000, net of intercompany eliminations, while generating a segment operating loss, net of intercompany eliminations, of $292,000.

On December 21, 2017, the Company refinanced its previously existing financing arrangement with Branch Banking and Trust Company (“BB&T) by entering into a Credit Agreement (“MBT Credit Agreement”) with Minnesota Bank & Trust (“MBT”), pursuant to which MBT extended to the Company an aggregate of $26,900,000 in financing in the form of a floating-rate, $10,000,000 revolving credit facility, and three, fixed-rate amortizing term loans in the amounts of $10,000,000 (“Term Loan A”), $5,000,000 (“Term Loan B”) and $1,900,000 (“Term Loan C”), respectively. The interest rate on the $10,000,000 revolving note floats at a rate equal to the prime rate plus one percent (1%); the interest rate on Term Note A floats at the month LIBOR rate plus two percent (2%); the interest rate on Term Note B is fixed at four and one-half percent (4.50%); and, the interest on Term Note C floats at a rate equal to prime minus one percent (1%), subject to a floor of three and one quarter percent (3.25%). In connection with the financing, the Company entered into a swap agreement to fix the interest rate on Term Note A at four and 56/100ths percent (4.56%). The revolving note is due on November 30, 2019, Term Loan A and Term Loan B mature in ten years from the date of issuance, and Term Loan C matures on January 1, 2019. Amounts outstanding under this financing arrangement was $22,248,489. The loans are guaranteed by certain subsidiaries of the Company, secured by a first lien on all personal property of the Company and the guaranteeing subsidiaries. The Company applied a portion of the proceeds from the financing to refinance the obligations of the Company and certain of its subsidiaries under its prior revolving credit facility with BB&T.

UNAUDITED FINANCIAL HIGHLIGHTS

(In thousands, except per share data)

Three Months Ended December 31,

Nine Months Ended December,

2017

2016

2017

2016

Operating Revenues

$           44,501

$            35,769

$         141,060

$         104,785

Operating Income (Loss)

$                552

$              1,639

$             3,240

$            (4,412)

Net Income (Loss)

$               (714)

$              1,665

$                994

$            (5,244)

Net Income (Loss) Attributable to Air T, Inc. Stockholders

$               (672)

$              1,220

$                718

$            (3,447)

Net Eanings (Loss) Per Share – Diluted

$              (0.33)

$                0.60

$               0.35

$              (1.60)

Weighted Average Shares Outstanding – Diluted

2,043

2,048

2,048

2,152

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 December 31, 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.

Air T, Inc. Reports Unaudited Second Quarter 2018 Earnings

DENVER, N.C.Nov. 14, 2017 — 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 CitiesMinnesota area.  Fence Store LLC has continued this business. The Company accounts for its investment in TFS Partners using the equity method of accounting.

UNAUDITED FINANCIAL HIGHLIGHTS

(In thousands, except per share data)

Three Months Ended September 30,

Six Months Ended September 30,

2017

2016

2017

2016

Operating Revenues

$          48,861

$            38,523

$          96,559

$        69,016

Operating Income (Loss)

$               476

$              1,022

$            2,688

$        (6,052)

Net Income (Loss)

$               478

$              1,080

$            1,708

$        (6,910)

Net Income (Loss) Attributable to Air T, Inc. Stockholders

$               422

$              1,084

$            1,390

$        (4,667)

Net Earnings (Loss) Per Share – Diluted

$              0.21

$                0.53

$              0.68

$          (2.11)

Weighted Average Shares Outstanding – Diluted

2,047

2,048

2,047

2,208

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.

Air T, Inc. Reports Unaudited Fiscal First Quarter 2018 Earnings

DENVER, N.C.Oct. 26, 2017 — Air T, Inc. (Air T) (NASDAQ: AIRT) today reported consolidated net income attributable to Air T, Inc. stockholders of $968,000 ($0.47 per diluted share) for the fiscal 2018 first quarter ended June 30, 2017 as compared to consolidated net loss attributable to Air T, Inc. stockholders of $5,751,000 ($2.42 per diluted share) for the fiscal 2017 comparable period.

Consolidated revenue increased $17,204,000 (56%) from $30,493,000 to $47,697,000 for the quarter ended June 30, 2017 compared to the comparable quarter in the prior fiscal year. Consolidated operating income increased $9,286,000(131%) from an operating loss of $7,073,000 to operating income of $2,213,000 for the quarter ended June 30, 2017compared to the comparable quarter in the prior fiscal year principally due to significant negative operating results of Delphax Technologies Inc. (“Delphax”), including related asset impairments, in the prior-year period that did not recur in the quarter ended June 30, 2017.

Overnight air cargo revenues increased $105,000 (1%) from $16,637,000 to $16,742,000 compared to the prior-year comparable quarter. The segment’s operating income decreased by $163,000 to $817,000 due to higher operating costs not passed through to the customer, principally increased flight crew costs.

Ground equipment sales revenue, net of intercompany eliminations, increased $1,695,000 (40%) from $4,254,000 to $5,950,000 this quarter compared to the prior-year comparable quarter due to increased deicing truck sales.  Ground equipment sales operating income, net of intercompany eliminations, increased by $307,000 (218%) from a net operating loss of $141,000 in the prior year comparable quarter. The segment’s order backlog was $16.4 million at June 30, 2017, as compared to $2.8 million at March 31, 2017 and $12.1 million at June 30, 2016.

Ground support services revenue increased $2,313,000 (34%) from $6,800,000 to $9,113,000, as a result of the segment’s growth in new markets and in services offered to new and existing customers and strong parts sales.  Operating income for this segment for the same period increased by $467,000 (424%) from a net operating loss of $110,000 in the prior-year comparable quarter primarily due to the impact of increased revenues.

On November 24, 2015, Air T acquired from Delphax shares of its Series B Preferred Stock, then convertible into approximately 38% of the shares of Delphax common stock outstanding after conversion, and other equity and debt interests in Delphax and its Canadian subsidiary. Air T has concluded that as a result of its acquisition of these interests, Delphax is required to be consolidated with Air T for financial reporting purposes since the November 24, 2015acquisition date and reports these results in its printing equipment and maintenance segment.  Delphax’s net income or loss is attributed to Air T and the holders of non-controlling interests in Delphax.  As described in greater detail in the Company’s Form 8-K dated October 5, 2017, Air T concluded it was not appropriate to base attribution of Delphax’s net income or loss to non-controlling interests solely on the Company’s ownership of the Series B Preferred Stock and that the attribution methodology should be based on consideration of all of Air T’s investments in Delphax. As a result of the application of the above-described attribution methodology, for the quarter ended June 30, 2017, the attribution of Delphax net income to non-controlling interests was 3.4% and, for the quarter ended June 30, 2016, the attribution of Delphax net loss to non-controlling interests was 33%. Revenues from Delphax, net of intercompany eliminations, increased by $571,000 (22%) compared to the comparable quarter of the prior fiscal year, while operating income, net of intercompany eliminations, increased by $7,915,000 (113%) to $924,000 due to significant negative operating results of Delphax in the prior-year comparable quarter, including related asset impairments described above, that did not recur in the quarter ended June 30, 2017.

Results for the quarter ended June 30, 2017 include a non-operating charge of approximately $771,000 related to the Company’s investment in marketable securities of Insignia Systems, Inc. (“Insignia”). While the Company does not intend to liquidate its securities holdings in Insignia within twelve months, the Company recognized an impairment loss on the investment during the quarter ended June 30, 2017 due in part to the magnitude of the loss position in the investment, which increased sharply during the quarter.

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, 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, Incorporated, 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. Contrail Aviation, Jet Yard and AirCo comprised the commercial jet engines and parts segment of the Company’s operations during the quarter ended June 30, 2017, which contributed revenues of $12,725,000, net of intercompany eliminations, while segment operating income, net of intercompany eliminations, was $811,000.

On June 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 CitiesMinnesota area.  Fence Store LLC has continued this business. The Company accounts for its investment in TFS Partners using the equity method of accounting.

FINANCIAL HIGHLIGHTS
(In thousands, except per share data)

Three Months Ended June 30,

2017

2016

Operating Revenues

$         47,697

$         30,493

Operating Income (Loss)

$           2,213

$          (7,073)

Net Income (Loss)

$           1,230

$          (7,989)

Net Income (Loss) Attributable to Air T, Inc. Stockholders

$              968

$          (5,751)

Earnings (Loss) Per Share – Diluted

$             0.47

$            (2.42)

Weighted Average Shares Outstanding – Diluted

2,048

2,373

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, 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, 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.

Air T, Inc. Reports Unaudited First Quarter 2018 Earnings

DENVER, N.C.Oct. 26, 2017 — Air T, Inc. (Air T) (NASDAQ: AIRT) today reported consolidated net income attributable to Air T, Inc. stockholders of $968,000 ($0.47 per diluted share) for the fiscal 2018 first quarter ended June 30, 2017 as compared to consolidated net loss attributable to Air T, Inc. stockholders of $5,751,000 ($2.42 per diluted share) for the fiscal 2017 comparable period.

Consolidated revenue increased $17,204,000 (56%) from $30,493,000 to $47,697,000 for the quarter ended June 30, 2017 compared to the comparable quarter in the prior fiscal year. Consolidated operating income increased $9,286,000(131%) from an operating loss of $7,073,000 to operating income of $2,213,000 for the quarter ended June 30, 2017compared to the comparable quarter in the prior fiscal year principally due to significant negative operating results of Delphax Technologies Inc. (“Delphax”), including related asset impairments, in the prior-year period that did not recur in the quarter ended June 30, 2017.

Overnight air cargo revenues increased $105,000 (1%) from $16,637,000 to $16,742,000 compared to the prior-year comparable quarter. The segment’s operating income decreased by $163,000 to $817,000 due to higher operating costs not passed through to the customer, principally increased flight crew costs.

Ground equipment sales revenue, net of intercompany eliminations, increased $1,695,000 (40%) from $4,254,000 to $5,950,000 this quarter compared to the prior-year comparable quarter due to increased deicing truck sales.  Ground equipment sales operating income, net of intercompany eliminations, increased by $307,000 (218%) from a net operating loss of $141,000 in the prior year comparable quarter. The segment’s order backlog was $16.4 million at June 30, 2017, as compared to $2.8 million at March 31, 2017 and $12.1 million at June 30, 2016.

Ground support services revenue increased $2,313,000 (34%) from $6,800,000 to $9,113,000, as a result of the segment’s growth in new markets and in services offered to new and existing customers and strong parts sales.  Operating income for this segment for the same period increased by $467,000 (424%) from a net operating loss of $110,000 in the prior-year comparable quarter primarily due to the impact of increased revenues.

On November 24, 2015, Air T acquired from Delphax shares of its Series B Preferred Stock, then convertible into approximately 38% of the shares of Delphax common stock outstanding after conversion, and other equity and debt interests in Delphax and its Canadian subsidiary. Air T has concluded that as a result of its acquisition of these interests, Delphax is required to be consolidated with Air T for financial reporting purposes since the November 24, 2015acquisition date and reports these results in its printing equipment and maintenance segment.  Delphax’s net income or loss is attributed to Air T and the holders of non-controlling interests in Delphax.  As described in greater detail in the Company’s Form 8-K dated October 5, 2017, Air T concluded it was not appropriate to base attribution of Delphax’s net income or loss to non-controlling interests solely on the Company’s ownership of the Series B Preferred Stock and that the attribution methodology should be based on consideration of all of Air T’s investments in Delphax. As a result of the application of the above-described attribution methodology, for the quarter ended June 30, 2017, the attribution of Delphax net income to non-controlling interests was 3.4% and, for the quarter ended June 30, 2016, the attribution of Delphax net loss to non-controlling interests was 33%. Revenues from Delphax, net of intercompany eliminations, increased by $571,000 (22%) compared to the comparable quarter of the prior fiscal year, while operating income, net of intercompany eliminations, increased by $7,915,000 (113%) to $924,000 due to significant negative operating results of Delphax in the prior-year comparable quarter, including related asset impairments described above, that did not recur in the quarter ended June 30, 2017.

Results for the quarter ended June 30, 2017 include a non-operating charge of approximately $771,000 related to the Company’s investment in marketable securities of Insignia Systems, Inc. (“Insignia”). While the Company does not intend to liquidate its securities holdings in Insignia within twelve months, the Company recognized an impairment loss on the investment during the quarter ended June 30, 2017 due in part to the magnitude of the loss position in the investment, which increased sharply during the quarter.

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, 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, Incorporated, 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. Contrail Aviation, Jet Yard and AirCo comprised the commercial jet engines and parts segment of the Company’s operations during the quarter ended June 30, 2017, which contributed revenues of $12,725,000, net of intercompany eliminations, while segment operating income, net of intercompany eliminations, was $811,000.

On June 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 CitiesMinnesota area.  Fence Store LLC has continued this business. The Company accounts for its investment in TFS Partners using the equity method of accounting.

FINANCIAL HIGHLIGHTS
(In thousands, except per share data)

Three Months Ended June 30,

2017

2016

Operating Revenues

$         47,697

$         30,493

Operating Income (Loss)

$           2,213

$          (7,073)

Net Income (Loss)

$           1,230

$          (7,989)

Net Income (Loss) Attributable to Air T, Inc. Stockholders

$              968

$          (5,751)

Earnings (Loss) Per Share – Diluted

$             0.47

$            (2.42)

Weighted Average Shares Outstanding – Diluted

2,048

2,373

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, 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, 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.

Air T, Inc. Reports Fiscal 2017 Results

MAIDEN, N.C.Oct. 13, 2017 — Air T, Inc. (Air T) (NASDAQ: AIRT) today reported a consolidated net loss attributable to Air T, Inc. stockholders of $3,214,000 ($1.51 per diluted share) for fiscal 2017, which ended March 31, 2017, compared to restated consolidated net income attributable to Air T, Inc. stockholders of $4,414,000 ($1.84 per diluted share) for fiscal 2016.

Consolidated revenues increased by $260,000 to $148,472,000 for the fiscal year ended March 31, 2017 compared to $148,212,000 in the prior fiscal year.  Air T is reporting an operating loss of $3,101,000 for the fiscal year ended March 31, 2017, as compared to the $6,032,000 operating income generated in the prior fiscal year.

Ground equipment sales segment revenue decreased by $19,728,000 (39%) for fiscal 2017 compared to the prior fiscal year. The decrease in the segment’s revenue is attributable primarily to the large order of deicers from a major airline in the prior year that did not reoccur in the 2017 fiscal year. Operating income for the ground equipment sales segment, pre-intercompany eliminations, decreased by $4,108,000 (63%) to $2,379,000 for the 2017 fiscal year as a result of the decrease in revenue compared to the prior fiscal year. At March 31, 2017, ground equipment sales’ backlog was $2.8 million, as compared to $10.0 million at March 31, 2016.

Revenues in the overnight air cargo segment increased by $1,331,000 (2%) for fiscal 2017 compared to the prior fiscal year. This increase in the segment’s revenue is attributable to increased administrative fees paid under dry-lease agreements which became effective on June 1, 2015 and impacted the segment’s revenue for the full fiscal year 2017 compared to only ten months in the prior fiscal year. Somewhat offsetting the increased administrative fees, the segment’s maintenance revenues decreased as a result of lower pass-through maintenance revenues. Operating income for the air cargo segment decreased by $560,000 from the prior fiscal year due to higher operating costs not passed through to the customer, principally attributable to increased flight crew costs.

Revenues in the ground support services segment increased $5,619,000 (23%) primarily as a result of growth in new markets and services offered to new and existing customers. Operating results for the ground support services segment improved by $535,000 from the prior year to an operating loss of $501,000 for fiscal 2017 as increased revenues began to offset the costs of infrastructure improvements made in prior periods to position the segment for growth.

On November 24, 2015, Air T acquired from Delphax Technologies Inc. (“Delphax”) shares of its Series B Preferred Stock then convertible into approximately 38% of the shares of Delphax common stock outstanding after conversion and other equity and debt interests in Delphax and its Canadian subsidiary. Air T has concluded that as a result of its acquisition of these interests, Delphax is required to be consolidated with Air T for financial reporting purposes since the November 24, 2015 acquisition date and reports these results in its printing equipment and maintenance segment.  Delphax’s net income or loss is attributed to Air T and the holders of non-controlling interests in Delphax.  As described in greater detail below and in the Company’s Form 8-K dated October 5, 2017, Air T concluded it was not appropriate to base attribution of Delphax’s net income or loss to non-controlling interests solely on the Company’s ownership of the Series B Preferred Stock and that the attribution methodology should be based on consideration of all of Air T’s investments in Delphax.  As a result of the application of the above-described attribution methodology reflecting consideration of all of Air T’s investments in Delphax, for the 2017 fiscal year Delphax’s net loss was attributed 30% to non-controlling interests and 70% to Air T, Inc. stockholders. For the 2016 fiscal year (as restated) Delphax’s net loss was attributed 33% to non-controlling interests and 67% attributable to Air T, Inc. stockholders.  The net loss of Delphax included in consolidated net loss attributable to Air T, Inc. stockholders for the fiscal year ended March 31, 2017, pre-intercompany eliminations, was approximately $4,437,000 compared to a Delphax loss attributable to Air T, Inc. stockholders for the fiscal year ended March 31, 2016, pre-intercompany eliminations, of $1,332,000.  This increased loss at Delphax was principally associated with asset impairments and severance charges related to a previously reported significant decline in Delphax’s business outlook during the first quarter of fiscal year 2017. Further, Delphax was consolidated in the Company’s results for only a portion of the prior fiscal year.

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 equity membership units in Contrail Aviation representing 21% of the total equity membership units in Contrail Aviation. Additionally, Air T, through a subsidiary, acquired 100% of the outstanding equity interests of Jet Yard, LLC (“Jet Yard”) on October 3, 2016. Contrail Aviation and Jet Yard comprised the commercial jet engines and parts segment of the Company’s operations during the 2017 fiscal year, which contributed revenues of $7,456,000 in the fiscal year. The operating income of the segment attributable to Air T, Inc. stockholders for the fiscal year ended March 31, 2017, pre-intercompany eliminations, was approximately $535,000.

FINANCIAL HIGHLIGHTS

(In thousands, except per share data)

Year Ended March 31

2017

2016

(As Restated)*

Operating Revenues

$           148,472

$            148,212

Operating Income (Loss)

$             (3,101)

$                6,032

Net Income (Loss)

$             (4,944)

$                3,758

Net Income (Loss) Attributable to Air T, Inc. Stockholders

$             (3,214)

$                4,414

Earnings (Loss) Per Share – Diluted

$               (1.51)

$                  1.84

Weighted Average Shares Outstanding – Diluted

2,125

2,397

__________________

*   

As described below, the Company’s financial statements at and for the fiscal year ended March 31, 2016 have been restated.

For a more detailed presentation and discussion of the Company’s results of operations and financial condition, please read the Company’s Annual Report on Form 10-K for the year ended March 31, 2017 filed today with the Securities and Exchange Commission.  Copies of the Form 10-K may be accessed on the Internet at the SEC’s website: http://www.sec.gov.

Restatement of Prior Period Financial Statements

As reported in Air T’s Form 8-K dated October 5, 2017, the Company had concluded that the Company’s consolidated financial statements previously issued for periods ending after the Company’s acquisition of debt and equity investments in Delphax in November 2015 could no longer be relied upon due to an error in the attribution of Delphax net income or loss to non-controlling interests.  Such consolidated financial statements reflected an attribution for relevant periods of 62% of Delphax’s net income or loss to non-controlling interests in the determination of consolidated net income attributable to Air T, Inc. stockholders.  Such attribution was based on the Company’s ownership of the Series B Preferred Stock, which represented approximately 38% of the shares of Delphax common stock that would be outstanding assuming conversion of Series B Preferred Stock held by the Company.  Air T has concluded that it was not appropriate to base attribution of Delphax’s net income or loss to non-controlling interests solely on the Company’s ownership of the Series B Preferred Stock and that the attribution methodology should be based on consideration of all of Air T’s investments in Delphax.  As a result of the application of an attribution methodology based on such a consideration of all of Air T’s investments in Delphax, for the relevant periods of the financial statements listed below the attribution of Delphax net income or losses to non-controlling interests should have been 33%, except that for the three months ended June 30, 2016, the attribution of Delphax losses to non-controlling interests should have been 32%.  As a result, Air T has today filed amendments to its periodic reports listed below to restate its financial statements at and for the periods listed below and to otherwise amend and expand related disclosures:

  • at and for the three and nine months ended December 31, 2015 included in the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2015 (the “Q3 2016 Form 10-Q”),
  • at and for the fiscal year ended March 31, 2016 included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2016 (the “2016 Form 10-K”),
  • at June 30, 2016 and March 31, 2016 and for the three months ended June 30, 2016 included in the Company’s Quarterly report on Form 10-Q for the period ended June 30, 2016 (the “Q1 2017 Form 10-Q”),
  • at September 30, 2016 and March 31, 2016 and for the three and six months ended September 30, 2016 included in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2016 (the “Q2 2017 Form 10-Q”), and
  • at December 31, 2016 and March 31, 2016 and for the three and nine months ended December 31, 2016 and 2015 included in the Company’s Form 10-Q for the period ended December 31, 2016 (together with the Q1 2017 Form 10-Q and the Q2 2017 Form 10-Q, the “2017 Form 10-Qs,” and such financial statements in the Q3 2016 Form 10-Q, the 2016 Form 10-K and the 2017 Form 10-Qs being collectively referred to as the “Subject Financial Statements”).

The amount of the Company’s consolidated net income (loss) (which is presented prior to attribution of net loss (income) attributable to non-controlling interests in the Company’s consolidated statements of income) presented in such restated financial statements does not differ from the consolidated net income (loss) previously reported in the respective Subject Financial Statements.  Similarly, the correction of the attribution of Delphax’s net income or loss for the relevant periods reflected in such restated financial statements did not affect the Company’s assets, liabilities or cash flows at and for each of these periods from the amounts previously reported in the respective Subject Financial Statements.

For a more detailed presentation and discussion of the restatement of the Subject Financial Statements, please read the Company’s Amendment No. 1 on Form 10-Q/A for the period ended December 31, 2015, the Company’s Amendment No. 1 on Form 10-K/A for the fiscal year ended March 31, 2016, the Company’s Amendment No. 1 on Form 10-Q/A for the period ended June 30, 2016, the Company’s Amendment No. 1 on Form 10-Q/A for the period ended September 30, 2016, and the Company’s Amendment No. 1 on Form 10‑Q/A for the period ended December 31, 2016, each filed today with the Securities and Exchange Commission.  These filings 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 commercial jet engines 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 that 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, inflation rates, competition, changes in technology or government regulation, information technology disruptions, the impact of future terrorist activities in the United States and abroad and other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017. 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.

Air T, Inc. Reports Unaudited Third Quarter Fiscal 2017 Earnings

MAIDEN, N.C., Feb. 13, 2017 — Air T, Inc. (Air T) (NASDAQ: AIRT) today reported consolidated net earnings of $856,000 ($0.42 per diluted share) for fiscal 2017’s third quarter ended December 31, 2016 compared to consolidated net earnings of $2,971,000 ($1.24 per diluted share) for the similar fiscal 2016 period.

Consolidated revenues net of intercompany eliminations decreased by $10,849,000 (23%) to $35,769,000 for the quarter ended December 31, 2016 compared to $46,619,000 in the same quarter in the prior fiscal year. Consolidated operating income net of intercompany eliminations decreased by $2,251,000 (58%) to $1,639,000 for the quarter ended December 31, 2016, as compared to $3,890,000 for the same quarter in the prior fiscal year.

Ground equipment sales segment revenue decreased by $17,698,000 (87%) this quarter compared to the prior year comparable quarter. The decrease in the segment’s revenue is attributable primarily to the large order of deicers from a major airline in the prior year quarter that did not reoccur this fiscal year. Operating income for the ground equipment sales segment decreased by $4,754,000 to an operating loss of $913,000 in the current year quarter as a result of the decrease in sales volumes compared to the prior-year quarter. At December 31, 2016, ground equipment sales’ backlog was $11.2 million, as compared to $10.8 million at December 31, 2015.

Revenues in the overnight air cargo segment decreased by $1,575,000 (8%) attributable to decreased maintenance cost passed through to the customer as well as decreased administrative fee revenues reflecting the lower administrative fee amount paid under an amendment to the dry-lease agreements that became effective on June 1, 2016. In addition, the segment’s maintenance revenue was reduced as a result of lower maintenance billable hours in response to a customer directive. Operating income for the air cargo segment decreased by $383,000 from the prior-year quarter resulting from the decreased administrative fee, lower billable maintenance hours and higher operating costs not passed through to the customer, principally increased flight crew costs.

Revenues in the ground support services segment increased $1,021,000 (16%) primarily as a result of the company’s growth in new markets and services offered to new and existing customers. Operating results for the ground support services segment improved by $28,000 from the prior year quarter to an operating loss of $41,000 primarily as increased revenues began to offset the costs of infrastructure improvements made in prior periods to position the segment for growth.

On November 24, 2015, Air T acquired from Delphax Technologies Inc. (“Delphax”) shares of its Series B Preferred Stock then convertible into approximately 38% of the shares of Delphax common stock outstanding after conversion and other equity and debt interests in Delphax and its Canadian subsidiary. Air T has concluded that as a result of its acquisition of these interests, Delphax is required to be consolidated with Air T for financial reporting purposes since the November 24, 2015 acquisition date and reports these results in its printing equipment and maintenance segments. The operating income attributable to Delphax included in consolidated net income for the three months ended December 31, 2016 was approximately $388,000 attributable to Air T, Inc. stockholders compared to an operating loss of $336,000 in the prior-year period. A number of factors led to this improvement at Delphax. Delphax has significantly reduced operating expenses during the last two quarters, as Delphax significantly curtailed its production activities during this period. At the same time, the segment had more sales of legacy consumable products in the quarter than anticipated. Such sales included certain products against which a lower-of-cost-or-market reserve had previously been established and, as such, the related gross margin upon sale was higher than normal.

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 equity membership units in Contrail Aviation representing 21% of the total equity membership units in Contrail Aviation. Air T, through a subsidiary, acquired 100% of the outstanding equity interests of Jet Yard, LLC (“Jet Yard”) on October 3, 2016. Contrail Aviation and Jet Yard comprise the commercial jet engines segment of the Company’s operations. The operating income attributable to Contrail Aviation and Jet Yard included in consolidated net income for the three months ended December 31, 2016 was approximately $491,000 attributable to Air T, Inc. stockholders.

FINANCIAL HIGHLIGHTS

(In thousands, except per share data)

Three Months Ended December 31,

Nine Months Ended December 31,

2016

2015

2016

2015

Operating Revenues

$ 35,769

$ 46,619

$ 104,785

$ 113,631

Operating Income (Loss)

$ 1,639

$ 3,890

$ (4,412)

$ 8,346

Net Income (Loss)

$ 1,665

$ 2,446

$ (5,244)

$ 5,504

Net Income (Loss) Attributable to Air T, Inc. Stockholders

$ 856

$ 2,971

$ (1,752)

$ 6,029

Net Earnings (Loss) Per Share – Diluted

$ 0.42

$ 1.24

$ (0.81)

$ 2.52

Weighted Average Shares Outstanding – Diluted

2,048

2,397

2,152

2,397

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 December 31, 2016 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 commercial jet engines. 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 that 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, 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.

Air T, Inc. Reports Unaudited Second Quarter Fiscal 2017 Earnings

MAIDEN, N.C., Nov. 14, 2016 — Air T, Inc. (Air T) (NASDAQ: AIRT) today reported consolidated net earnings of $1,069,000($0.52 per diluted share) for fiscal 2017’s second quarter ended September 30, 2016 compared to consolidated net earnings of $3,794,000 ($1.58 per diluted share) for the similar fiscal 2016 period.

Consolidated revenues net of intercompany eliminations decreased by $6,131,000 (14%) to $38,523,000 for the quarter ended September 30, 2016 compared to $44,654,000 in the same quarter in the prior fiscal year. Consolidated operating income net of intercompany eliminations decreased by $4,483,000 (81%) to $1,022,000 for the quarter ended September 30, 2016, as compared to $5,505,000 the same quarter in the prior fiscal year.

Ground equipment sales segment revenue decreased by $10,194,000 (48%) this quarter compared to the prior year comparable quarter last year. The decrease in the segment’s revenue is attributable primarily to the large order of deicers from a major airline in the prior year quarter that did not reoccur this fiscal year. Operating income net of intercompany eliminations, for the ground equipment sales segment decreased by $3,120,000 as a result of the decrease in sales volumes compared to the prior year quarter. At September 30, 2016, ground equipment sales backlog was $9.8 million, as compared to $24.4 million at September 30, 2015. Revenues in the overnight air cargo segment decreased by $235,000 (1%). Administrative fee revenues decreased reflecting the lower administrative fee amount paid under an amendment to the new dry-lease agreements which became effective on June 1, 2016. In addition, the segment’s maintenance revenues decreased as a result of the lower billable hours compared to the prior year quarter. Operating income for the air cargo segment decreased by $1,038,000 resulting from the lower administrative fee amount paid under the new dry-lease agreements, as well as maintenance revenue decrease as a result of the lower maintenance billable hours, coupled with higher operating costs not passed through to the customer, principally increased flight crew costs, during the three-month period ended September 30, 2016. Revenues in the ground support services segment increased $1,053,000 (18%) primarily as a result of the company’s growth in new markets and services offered to new and existing customers. Operating results for the ground support services segment improved by $30,000 from the prior year quarter primarily as increased revenues began to offset the costs of infrastructure improvements made in prior periods to position the segment for growth.

FINANCIAL HIGHLIGHTS
(In thousands, except per share data)

Three Months Ended September 30,

Six Months Ended September 30,

2016

2015

2016

2015

Operating Revenues

$          38,523

$            44,654

$          69,016

$        67,012

Operating Income (Loss)

$            1,022

$              5,505

$          (6,052)

$          4,456

Net Income (Loss)

$            1,080

$              3,794

$          (6,910)

$          3,058

Net Income (Loss) Attributable to
Air T, Inc. Stockholders

$            1,069

$              3,794

$          (2,608)

$          3,058

Net Earnings (Loss) Per Share – Diluted

$              0.52

$                1.58

$            (1.18)

$            1.28

Weighted Average Shares Outstanding – Diluted

2,048

2,397

2,208

2,396

On November 24, 2015, Air T purchased from Delphax Technologies Inc. (“Delphax”) shares of its Series B Preferred Stock then convertible into approximately 38% of the shares of Delphax common stock outstanding after conversion and a warrant to purchase additional shares of Delphax Series B Preferred Stock and from Delphax’s Canadian subsidiary a $2.5 million five-year senior subordinated promissory note.  Air T has concluded that as a result of its acquisition of these interests, Delphax is required to be consolidated with Air T for financial reporting purposes since the November 24, 2015 acquisition date. The operating loss attributable to Delphax included in consolidated net income for the three months ended September 30, 2016 was approximately $12,000.

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, Inc. The acquisition consideration consisted of (i) $4,033,368 in cash, $300,000 of which is being held in an escrow account to secure indemnification payments, (ii) equity membership units in Contrail Aviation representing 21% of the total equity membership units in Contrail Aviation, and (iii) certain contingent additional deferred consideration payments. The operating income attributable to Contrail Aviation included in consolidated net income for the three months ended September 30, 2016 was approximately $43,000.

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, 2016 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 commercial jet engines. 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 that 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, 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.

Air T, Inc. Reports Unaudited First Quarter Earnings

MAIDEN, N.C., Aug. 15, 2016 /PRNewswire/ — Air T, Inc. (Air T) (NASDAQ: AIRT) today reported consolidated net loss attributable to Air T, Inc. stockholders of $3,676,000 ($1.55 per diluted share) for the fiscal 2017 first quarter ended June 30, 2016 as compared to consolidated net loss of $736,000 ($0.31 per diluted share) for the similar fiscal 2016 comparable period.  As discussed below, Air T’s consolidated financial results include the results of Delphax Technologies, Inc. (“Delphax”) sinceNovember 24, 2015.

Consolidated revenue increased $8,135,000 (36%) to $30,493,000 for the quarter ended June 30, 2016 compared to the comparable quarter in the prior fiscal year. Consolidated operating loss increased $6,024,000 (574%) to $7,073,000 for the quarter ended June 31, 2016 compared to the comparable quarter in the prior fiscal year.

Overnight air cargo revenues increased $3,748,000 (29%) to $16,637,000 compared to the prior year comparable quarter. Administrative fee revenues increased to reflect the greater administrative fee amount paid under the dry-lease agreements which became effective on June 1, 2015. In addition, maintenance revenues increased to reflect the higher hourly maintenance labor rate under these agreements during the full current-year quarter. The segment’s operating income increased by$1,074,000 to $979,000 as a result of the same factors discussed above.

Ground equipment sales revenue increased $215,000 (5%) to $4,254,000 this quarter compared to the prior year comparable quarter.  Ground equipment sales operating loss decreased by $378,000 (73%) to $141,000 from the prior year comparable quarter, principally attributable to increased sales volume this quarter. At June 30, 2016, ground equipment sales backlog was$12.1 million, compared to $10.0 million at March 31, 2016 and $39.9 million at June 30, 2015.

Ground support services segment revenue increased  $1,370,000 (25%) to $6,800,000, as a result of the company’s growth in new markets and in services offered to new and existing customers.  Operating loss for this segment for the same period decreased by $225,000 (67%), to $110,000, as increased revenues began to offset the costs of infrastructure improvements made in prior periods to position the segment for growth.

Consolidated revenue increased by $2,560,000 due to the inclusion of Delphax in consolidated results for the current-year quarter. Operating income was adversely affected by Delphax’s $6,935,000 operating loss for the quarter, which includes$5,610,000 in aggregate impairment of tangible and intangible assets and accruals for severance actions.

Results for the quarter ended June 30, 2016 include a non-operating charge of approximately $1,502,000 related to an other-than-temporary impairment of the Company’s investment in marketable securities of Insignia Systems, Inc.

 

FINANCIAL HIGHLIGHTS
(In thousands, except per share data)

Three Months Ended June 30,

2016

2015

Operating Revenues

$          30,493

$        22,359

Operating Loss

$          (7,073)

$        (1,049)

Net Loss

$          (7,989)

$           (736)

Net Loss Attributable to Air T, Inc. Stockholders

$          (3,676)

$           (736)

Loss Per Share – Diluted

$            (1.55)

$          (0.31)

Weighted Average Shares Outstanding – Diluted

2,373

2,373

 

On November 24, 2015, Air T purchased from Delphax shares of its Series B Preferred Stock then convertible into approximately 38% of the shares of Delphax common stock outstanding after conversion, a warrant to purchase additional shares of Delphax Series B Preferred Stock and a $2.5 million five-year senior subordinated promissory note.  Air T has concluded that as a result of its acquisition of these interests, Delphax is required to be consolidated with Air T for financial reporting purposes since theNovember 24, 2015 acquisition date.  The operating loss attributable to Delphax included in consolidated net income for the three months ended June 30, 2016 was approximately $6,935,000.  Net loss attributable to Air T, Inc. stockholders reflects a GAAP adjustment to net loss to eliminate the Delphax net loss attributable to the interests in Delphax not held by Air T.

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, 2016 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 surplus 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, visitwww.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, 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.

Air T, Inc. Reports Fiscal 2016 Results

MAIDEN, N.C., June 29, 2016 — Air T, Inc. (NASDAQ Capital Market: AIRT) today reported consolidated net income attributable to Air T, Inc. stockholders of $4,943,000 ($2.06 per diluted share) for fiscal 2016, which ended March 31, 2016, compared to net income of $2,484,000 ($1.04 per diluted share) for fiscal 2015.  Consolidated net income was$3,758,000 for the fiscal year 2016.

Consolidated revenue for fiscal 2016 was $148,212,000 compared to $112,181,000 for fiscal 2015, representing a 32% increase. On a segment basis, air cargo revenue increased $18,362,000 (37%) to $68,227,000, ground equipment sales revenue increased by $9,405,000 (23%) to $51,176,000, and ground support services revenue increased by $4,288,000 (21%) to$24,835,000. Air cargo revenues were up principally due to the greater administrative fee amount paid under the dry-lease agreements entered into on June 1, 2015 with the Company’s air cargo customer. In addition, the segment’s maintenance revenues increased to reflect the higher hourly maintenance labor rates in effect under these agreements. The increase in the revenues of the ground equipment sales segment is attributable to a $14.4 million increase in sales of commercial deicers and a$954,000 increase in the sales of catering trucks. The ground support services revenue increased with growth into new markets and services for both new and existing customers and strong annual part sales.

The $2,459,000 increase in fiscal 2016’s net income attributable to Air T, Inc. stockholders represented a 99% increase from the prior year.  Operating income in the ground equipment sales segment was up $2,716,000 (74%) principally due to the significant order by a major airline company received in June 2015 and completed in the second and third fiscal quarters along with continued improvement in production efficiencies obtained in connection with the assembly of similar units.  At March 31, 2016, backlog at the ground equipment sales segment was $10.0 million, compared to $2.8 million at March 31, 2015. Operating income of the air cargo segment improved by a greater amount due to the impact of the new dry-lease agreements, including the increase in the labor maintenance rate which had not been adjusted since 2008. Operating loss in our ground support services segment increased as costs under fixed-price service contracts in place in certain markets significantly exceeded the revenue associated with those contracts, and the segment continued to position itself for growth with investments in facility upgrades and administrative infrastructure. The company’s printing equipment and maintenance segment incurred an operating loss of $1,967,000 from November 24, 2015 to March 31, 2016. The Company acquired its interests in Delphax Technologies Inc. (“Delphax”), which comprises this segment, on November 24, 2015.

FINANCIAL HIGHLIGHTS

(In thousands, except per share data)

Year Ended March 31,

2016

2015

Operating Revenues

$        148,212

$      112,181

Operating Income

$            6,032

$          3,417

Net Income

$            3,758

$          2,484

Net Income Attributable to Air T, Inc. Stockholders

$            4,943

$          2,484

Earnings Per Share – Diluted

$              2.06

$            1.04

Weighted Average Shares Outstanding – Diluted

2,397

2,380

 

Air T has several business segments.  Air T is one of the largest, small-aircraft air cargo operators in the United States.  Its Mountain Air Cargo and CSA Air subsidiaries, which comprise the air cargo segment, 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, which comprises the ground equipment sales segment, 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, which comprises the ground support services segment, provides ground support equipment and facilities maintenance to domestic airline customers.  During the fiscal quarter ended December 31, 2015, Air T completed an investment in Delphax, which designs, manufactures and sells advanced digital print production systems, and organized Air T Global Leasing, LLC, a subsidiary which provides funding for equipment leasing transactions, including transactions for the leasing of equipment manufactured by Global Ground Support and Delphax and transactions initiated by third parties unrelated to equipment manufactured by Air T or any of its subsidiaries.

For a more detailed presentation and discussion of the Company’s results of operations and financial condition, please read the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2016 filed today with the Securities and Exchange Commission.  Copies of the Form 10-K 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, future economic conditions and their impact on the Company’s customers, the timing and amounts of future orders under Global Ground Support’s contract with the United States Air Force, 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.