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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.