DENVER, NC, August 14, 2020 – Air T, Inc. (NASDAQ: AIRT) is an industrious American company with a portfolio of businesses, each of which is independent yet interrelated. We seek dynamic individuals and teams to operate companies using processes that increase value over time. We believe we can apply corporate resources to help activate growth and overcome challenges.

Our core segments are overnight air cargo; aviation ground support equipment manufacturing; and commercial aircraft asset management.

Today the Company is announcing results for the quarter ended June 30, 2020:

● Revenues from Continuing Operations totaled $37.0 million for the quarter ended June 30, 2020, a decrease of $10.2 million, or 22% from the prior year comparable quarter.
● Operating Loss from Continuing Operations was $0.3 million for the quarter, a decrease of $1.3 million from last year’s first quarter Operating Income from Continuing Operations of $1.0 million.
● Adjusted EBITDA* of $0.1 million, compared to $1.5 million in the same quarter a year ago.
● Loss per share of $0.29 for the quarter, compared with Income per share of $0.79 for the same quarter last year.
● Total Equity decreased from $25.0 million as of March 31, 2020 to $24.5 million as of June 30, 2020, a decrease of 2.0%.

* Adjusted EBITDA is a non-GAAP financial measure; see “Non-GAAP Financial Measures” (below) further explanation and reconciliation to GAAP measure.

Company Chairman and CEO Nick Swenson said:

“Our June 2020 Quarter just ended reflects a brutal blow from Covid, particularly impactful on our aircraft parts trading and leasing businesses. We are working to do more with less revenue and activity. This is a challenge, yet made somewhat easier because we are a small company—therefore able to maneuver and flex more easily. And AIRT has a diversified set of businesses.

The PPP loan and the prospect of its forgiveness has allowed us to retain almost all of our employees. And we are grateful for the government’s fiscal response and opportunity to keep our highly skilled teams together. It’s been a struggle and we continue to operate in a highly uncertain environment. Operating dynamics change week by week. For example, several businesses have had to re-institute Covid restrictions after partial reductions several weeks ago. We remain vigilant and focused on protecting our people.

Progress. We’ve made some by finding the right person to lead our air cargo operations. Mike Bandalan, longtime MAC executive, was promoted to be the MAC/CSA CEO in Spring 2019. He and his team have done an absolutely stellar job of transforming MAC back to the future. He has strengthened our relationship with FedEx and set up his organization to take on more and bigger challenges. Congrats, Mike Bandalan, on leading your organization through to a better place, and for building the organizational confidence that comes with executing a business plan successfully!

Long-time AIRT shareholders will have noticed that we added an interactive Q&A capability, through, to our annual meeting process. We intend to keep that link ( open and available for shareholder questions. Relevant questions will be answer “live” at the annual meeting or via a written response on a quarterly basis, coincident with our 10Q filings. Note that legal and pragmatic requirements will not allow us to answer every question posted, yet we intend to address all reasonable and relevant questions with a written answer. We hope that continuous Q&A, along with improvements in reporting by our able new CFO Brian Ochocki, will be welcome improvements in time. We aspire to provide the right pixelation, delivering insight into our operations, without noise and distraction. Your participation in an ongoing Q&A with management will help this process along. Thank you in advance.”

Business Segment Results

Overnight Air Cargo
● This segment provides air express delivery services, substantially all for FedEx.
● Revenues for this segment decreased 12% to $16.2 million for the quarter ended June 30, 2020 compared to $18.3 million in the prior year quarter, primarily due to a reduction in third-party maintenance revenue.
● Adjusted EBITDA* for this segment for the quarter ended June 30, 2020 was $0.6 million, an increase of $0.6 million when compared to the same quarter a year ago. The improvement was due primarily to lower operating costs, which were driven by a much more efficient operation in the current quarter.

Aviation Ground Support Equipment
● This segment, which is the world’s largest manufacturer of aircraft de-icing equipment, manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, and military and industrial customers.
● Revenues for this segment totaled $15.8 million for the quarter ended June 30, 2020, up 29% versus $12.2 million in the same quarter in 2019, due primarily to sales of catering trucks in the quarter (compared with no catering truck sold in the same quarter last year).
● Adjusted EBITDA* for this segment was $2.3 million for the quarter ended June 30, 2020, an increase of $0.9 million compared to the same quarter last year, due to the revenue increase noted above.
● As of June 30, 2020 the order backlog was $48.7 million, compared to $31.8 million on June 30, 2019.

Commercial Jet Engines and Parts
● This segment leases commercial jet engines and aircraft; buys, sells, leases and trades in surplus and aftermarket commercial jet engines, engine parts, airframes, airframe parts and avionics; then delivers the related documents and logistics.
● Revenues for this segment totaled $4.7 million during the quarter ended June 30, 2020, a decrease of $11.6 million over the previous year’s first quarter. The decrease was driven by the unprecedented slowdown in commercial aviation traffic caused by the COVID-19 pandemic.
● Adjusted EBITDA* for this segment for the quarter ended June 30, 2020 was a loss of $0.8 million compared to Adjusted EBITDA of $2.0 million in the prior year’s quarter due to the revenue slowdown caused by the COVID-19 pandemic.

Corporate and Other
• This segment includes expenses attributable to core Corporate functions, investment research, and specialized resources that are available to business units.
• This segment’s Adjusted EBITDA* represented a loss of $1.8 million in the quarter, compared to a loss of $1.5 million in the same quarter a year ago.

* Adjusted EBITDA is a non-GAAP financial measure; see “Non-GAAP Financial Measures” (below) further explanation and reconciliation to GAAP measure.

Non-GAAP Financial Measures

The Company uses adjusted earnings before taxes, interest, and depreciation and amortization (“Adjusted EBITDA”), a non-GAAP financial measure as defined by the SEC, to evaluate the Company’s financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP
financial measures.

Adjusted EBTDA is defined as earnings before taxes, interest, and depreciation and amortization, adjusted for specified items. The Company calculates Adjusted EBITDA by removing the impact of specific items and adding back the amounts of interest expense and depreciation and amortization to earnings before income taxes. When calculating Adjusted EBITDA, the Company does not add back
depreciation expense for aircraft engines that are on lease, as the Company believes this expense matches with the corresponding revenue earned on engine leases. Depreciation expense for leased engines totaled $0.2 million and $1.6 million for the quarters ended June 30, 2020 and 2019, respectively.

Management believes that Adjusted EBITDA is a useful measure of the Company’s performance because it provides investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted EBITDA is not intended to replace or be an alternative to Operating Income from Continuing Operations, the most directly comparable amounts reported under GAAP.

The tables below provide a reconciliation of Operating Income from Continuing Operations to Adjusted EBITDA and Adjusted EBITDA for the consolidated entity and by segment for the quarters ended June 30, 2020 and 2019 (in thousands):

Established in 1980, Air T Inc. is a portfolio of powerful businesses and financial assets, each of which is independent yet interrelated. Its core segments are overnight air cargo, aviation ground support equipment manufacturing, and commercial aircraft asset management and logistics. We seek to expand, strengthen and diversify Air T’s after-tax cash flow per share. Our goal is to build Air T’s core businesses, and when appropriate, to expand into adjacent and other industries. We seek to activate growth and overcome challenges while delivering meaningful value for all stakeholders. For more information, visit

Certain matters discussed in this press release may be considered forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These forward-looking statements are subject to risks, uncertainties and assumptions about our operations and the investments we make, including, among other things, factors discussed under the heading “Risk Factors” in our 10-K, as well as the following:

● Conditions in the Company’s markets;
● The ability of the Company and its business segments to generate sufficient cash flows from operations or through financings.
● The risk that contracts with FedEx could be terminated or adversely modified in connection with any renewal;
● The risk that the number of aircraft operated for FedEx will be reduced;
● The risks faced by commercial aircraft operators and maintenance, repair and overhaul companies because they are our customers.
● Our engine values and lease rates, which are dependent on the status of the airline industry and types of aircraft on which engines are installed, and other factors.
● The Company and its customers operate in a highly regulated industry and changes in economic conditions, laws or regulations may adversely affect our ability to lease or sell our engines or aircraft.
● We may experience losses and delays in connection with repossession of engines or aircraft when a lessee defaults.
● The risk that customers or potential customers will defer significant orders for deicing equipment;
● The Company’s ability to manage its cost structure and operating expenses, or unanticipated capital requirements, and match them to shifting requirements and production or equipment volume levels;
● The risk of injury or other damage arising from accidents involving the Company’s overnight air cargo operations, equipment or parts sold and/or services provided;
● Market acceptance of the Company’s commercial and military equipment and services;
● Competition from other providers of similar equipment and services;
● Changes in government regulation and technology;
● Changes in the value of marketable securities held as investments;
● Mild winter weather conditions reducing the demand for deicing equipment.
● The Company’s ability to meet debt service covenants, obtain additional financing and to refinance existing debt obligations
● The length and severity of the COVID-19 pandemic; and
● The risks and uncertainties related to business acquisitions (including the ability to successfully achieve the anticipated benefits of acquisitions) inflation rates, competition, changes in technology or government regulation, debt covenants, information technology disruptions, and the impact of future terrorist activities in the United States and abroad.

Forward-looking statements can be identified by the use of words like “believes,” “could,” “possibly,” “probably,” “anticipates,” “estimates,” “projects,” “expects,” “may,” “will,” “should,” “seek,” “intend,” “plan,” “expect,” or “consider” or the negative of these expressions or other variations, or by discussions of strategy that involves risks and uncertainties. All forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. We base these forward-looking statements on current expectations and projections about future events and the information currently available to us. Although we believe that the assumptions for these forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Consequently, no representation or warranty can be given that the estimates, opinions, or assumptions made in or referenced in this press release will prove to be accurate. We undertake no obligation to update our forward-looking statements. We caution you that the forward-looking statements in this press release are only estimates and predictions, or statements of current intent. Actual results or outcomes, or actions that we ultimately undertake, could differ materially from those anticipated in the forward-looking statements due to risks, uncertainties or actual events differing from the assumptions underlying these statements. These risks, uncertainties and assumptions include, but are not limited to, those discussed in this press release.

Air T, Inc.
Brian Ochocki, CFO