Air T, Inc. Reports Fiscal 2024 Results
Air T, Inc. (NASDAQ: AIRT) reported its Fiscal 2024 results, highlighting a revenue increase of 16% to $286.8 million compared to the previous fiscal year. Operating income was $1.3 million, reversing a prior fiscal year's operating loss of $4.4 million. Adjusted EBITDA amounted to $5.6 million, a slight decrease from $6.0 million the previous year. The loss per share improved to $2.42 from $4.32. However, total equity dropped significantly by 55.2% to $5.8 million.
The Overnight Air Cargo segment saw revenues rise by 28% to $115.5 million, while the Ground Equipment Sales segment experienced a 23% decline in revenues to $37.2 million. The Commercial Jet Engines and Parts segment reported a revenue increase of 23.4% to $125.5 million. Company CEO Nick Swenson noted that the year laid a strong foundation for a promising FY2025.
- Revenue increased by 16% to $286.8 million.
- Operating income of $1.3 million, reversing a prior operating loss of $4.4 million.
- Loss per share improved to $2.42 from $4.32.
- Overnight Air Cargo segment revenues rose by 28% to $115.5 million.
- Commercial Jet Engines and Parts segment revenues increased by 23.4% to $125.5 million.
- Adjusted EBITDA decreased from $6.0 million to $5.6 million.
- Total equity fell by 55.2% to $5.8 million.
- Ground Equipment Sales segment revenues declined by 23% to $37.2 million.
Insights
The financial results of Air T, Inc. for the fiscal year ended March 31, 2024, provide some important insights into the company's current position and potential future. A 16% increase in revenues to
Though the company managed to turn an operating loss of
In terms of segment performance, the Overnight Air Cargo segment's revenues increased by 28% to
For investors, the mixed results call for cautious optimism. The revenue growth in key segments is encouraging, but the company's declining equity and flat EBITDA growth indicate ongoing challenges that need addressing for sustainable profitability.
Air T, Inc.'s fiscal year results offer a window into the company's diverse business segments and their respective market performances. The Overnight Air Cargo segment’s 28% revenue growth to
However, the Ground Equipment Sales segment's performance, with a 23% decline in revenues to
The Commercial Jet Engines and Parts segment saw a solid revenue boost of
Investors should note the contrasting performances across segments, suggesting that while some parts of the business are thriving, others face significant headwinds. Diversification within Air T’s portfolio might buffer against sector-specific downturns, but it also requires astute management to optimize performance across varied industries.
CHARLOTTE, NC / ACCESSWIRE / June 26, 2024 / 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; ground equipment sales; commercial jet engines and parts; and corporate and other.
Today the Company is announcing results for the Fiscal year ended March 31, 2024:
- Revenues totaled
$286.8 million for the fiscal year ended March 31, 2024, an increase of$39.5 million , or16% from the prior fiscal year. - Operating income was
$1.3 million for the fiscal year ended March 31, 2024, compared to operating loss in the prior fiscal year of$4.4 million . - Adjusted EBITDA* profit of
$5.6 million for the fiscal year ended March 31, 2024, compared to Adjusted EBITDA* profit of$6.0 million in the prior fiscal year. - Loss per share of
$2.42 for the fiscal year ended March 31, 2024, compared to loss per share of$4.32 for the prior fiscal year. - Total Equity decreased from
$13.0 million as of March 31, 2023, to$5.8 million as of March 31, 2024, a decrease of$7.2 million , or55.2% .
*Adjusted EBITDA is a non-GAAP financial measure; see below for further explanation and reconciliation to GAAP measure.
Company Chairman and CEO Nick Swenson commented:
"Our Fiscal Year 2024 was eventful and productive across many of Air T's businesses. We believe our dynamism took a step up. Considering it is difficult to go deep into the most significant items, we offer you a long list to generate the gestalt: Air Cargo continued its wonderful growth in number and type of services provided to our largest customer; GGS initiated a new generation of customer-centric service and product while grinding through an unpredicted slowdown in global deicer industry sales; Contrail continued its expansion and experienced significant margin rebound in the back half; Crestone built out its team and drove asset growth, leading to one quarter of positive cash flow; Stratus continued to deliver strategic capabilities and generated investment ideas and sales channel expansion; our digital aviation groups drove notable revenue growth and new product offerings; and our investees Lendway and Cadillac made important strategic moves. Significantly, last year set us up for what we believe will be a productive and eventful FY2025."
Business Segment Results
Overnight Air Cargo
- This segment provides repair services and air express delivery services, primarily for FedEx.
- Revenues for this segment increased
28% to$115.5 million in Fiscal 2024 compared to$90.5 million in the prior fiscal year, principally attributable to higher labor revenues, higher admin fees and higher FedEx pass through revenues due to increased fleet (85 aircraft in the prior fiscal year compared to 105 in the fiscal year ended March 31, 2024), and the WASI acquisition in January 2023 that contributed a full year's revenues of$7.5 million in the current fiscal year ended March 31, 2024 compared to$0.9 million in the prior fiscal year. - Adjusted EBITDA* for this segment was
$7.1 million for the fiscal year ended March 31, 2024, an increase of$2.6 million when compared to the prior fiscal year, primarily due to the revenue increase noted above.
Ground Equipment Sales ("GGS")
- This segment, which includes the world's largest manufacturer of aircraft deicing 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 were
$37.2 million for Fiscal 2024, down23% versus$48.5 million in the prior fiscal year. The decrease was primarily driven by the lower number of deicing trucks sold in the fiscal year ended March 31, 2024 compared to the prior fiscal year. - Adjusted EBITDA* loss for this segment was
$1.4 million in the fiscal year ended March 31, 2024, a decrease of$4.7 million compared to$3.3 million in theprior fiscal year. - As of March 31, 2024, this segment's order backlog was
$12.6 million versus$13.6 million at March 31, 2023.
Commercial Jet Engines and Parts
- This segment leases commercial jet engines and aircraft; buys, sells and trades in surplus and aftermarket commercial jet engines, engine parts, airframes, and airframe parts, avionics, and other; then delivers the related documents and logistics.
- Revenues for this segment totaled
$125.5 million in Fiscal 2024, an increase of$23.8 million from Fiscal 2023. The increase was primarily driven by Contrail's higher component part sales and higher pass-through revenue at Worthington in transactions that Worthington acted as the principal of the consignment agreements in the fiscal year ended March 31, 2024 compared to the prior fiscal year. In addition, Contrail also sold three engines at zero profit margin in the fiscal year ended March 31, 2024 as they had previously written these assets down to the sales price in the prior fiscal year. - Adjusted EBITDA* for this segment was
$6.1 million for the fiscal year ended March 31, 2024, compared to Adjusted EBITDA* of$7.1 million in the prior fiscal year.
Corporate and Other
- This segment acts as the capital allocator and resource for other consolidated businesses. Further, Corporate and other also comprises smaller businesses and business interests.
- This segment's Adjusted EBITDA* loss decreased by
$2.7 million from Fiscal 2023 to Fiscal 2024. The decrease was primarily driven by$2.4 million higher corporate allocations to other segments related to executive salaries, bonuses and audit fees compared to the prior fiscal year.
*Adjusted EBITDA is a non-GAAP financial measure; see below for further explanation and reconciliation to GAAP measures.
Non-GAAP Financial Measures
The Company uses adjusted earnings before taxes, interest, and depreciation and amortization ("Adjusted EBITDA"), a non-GAAP financial measure as defined by the SEC, to evaluate the Company's financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.
Adjusted EBITDA is defined as earnings before taxes, interest, and depreciation and amortization, adjusted for specified items. The Company calculates Adjusted EBITDA by removing the impact of specific items and adding back the amounts of interest expense and depreciation and amortization to earnings before income taxes. When calculating Adjusted EBITDA, the Company does not add back depreciation expense for aircraft engines that are on lease, as the Company believes this expense matches with the corresponding revenue earned on engine leases. Depreciation expense for leased engines totaled
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, the most directly comparable amounts reported under GAAP.
The table below provides a reconciliation of operating income (loss) from continuing operations to Adjusted EBITDA for the periods ended March 31, 2024, and 2023 (in thousands):
| Twelve Months Ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
Operating income (loss) from continuing operations | $ | 1,264 | $ | (4,407 | ) | |||
Depreciation and amortization (excluding leased engines depreciation) | 2,798 | 2,525 | ||||||
Asset impairment, restructuring or impairment charges | 1,195 | 7,840 | ||||||
Loss on sale of property and equipment | 18 | 8 | ||||||
TruPs issuance expenses | 347 | 63 | ||||||
Adjusted EBITDA | $ | 5,622 | $ | 6,029 | ||||
The following table shows the Company's Adjusted EBITDA by segment for the periods ended March 31, 2024, and 2023 (in thousands):
| Twelve Months Ended | ||||||||
| March 31, 2024 | March 31, 2023 | |||||||
Overnight Air Cargo | $ | 7,142 | $ | 4,505 | ||||
Ground Equipment Sales | (1,409 | ) | 3,314 | |||||
Commercial Jet Engines and Parts | 6,119 | 7,105 | ||||||
Corporate and Other | (6,230 | ) | (8,895 | ) | ||||
Adjusted EBITDA | $ | 5,622 | $ | 6,029 | ||||
NOTE REGARDING STAKEHOLDER QUESTIONS
If you have questions related to this release or other Air T matters, please use our interactive Q&A capability, through Slido.com, accessible from our website, to submit your questions. We intend to keep that link open and available for shareholder questions. Questions submitted through Slido will be answered "live" and in writing at our Annual Meeting, and via a written response on a quarterly basis. Note that legal and pragmatic requirements restrict us from answering every question posted, yet we intend to address all reasonable and relevant questions with a written answer.
ABOUT AIR T, INC.
Established in 1980, Air T Inc. is a portfolio of powerful businesses and financial assets, each of which is independent yet interrelated. Its core segments are overnight air cargo, ground equipment sales, commercial jet engines and parts, and corporate and other. We seek to expand, strengthen and diversify Air T's after-tax cash flow per share. Our goal is to build Air T's core businesses, and when appropriate, to expand into adjacent and other industries. We seek to activate growth and overcome challenges while delivering meaningful value for all stakeholders. For more information, visit www.airt.net.
FORWARD-LOOKING STATEMENTS
Certain statements in this Report, including those contained in "Overview," are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Company's financial condition, results of operations, plans, objectives, future performance and business. Forward-looking statements include those preceded by, followed by or that include the words "believes", "pending", "future", "expects," "anticipates," "estimates," "depends" or similar expressions. These forward-looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements, because of, among other things, potential risks and uncertainties, such as:
- An inability to finance our operations through bank or other financing or through the sale or issuance of debt or equity securities;
- Economic and industry conditions in the Company's markets;
- The risk that contracts with FedEx Corporation ("FedEx") could be terminated or adversely modified;
- The risk that the number of aircraft operated for FedEx will be reduced;
- The risk that GGS customers will defer or reduce significant orders for deicing equipment;
- The impact of any terrorist activities or armed conflict on United States soil or abroad;
- The Company's ability to manage its cost structure for operating expenses, or unanticipated capital requirements, and match them to shifting customer service requirements and production volume levels;
- The Company's ability to meet debt service covenants and to refinance existing debt obligations;
- The 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;
- Market acceptance and operational success of the Company's relatively new aircraft asset management business and related aircraft capital joint venture; and
- Despite our current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt, which could further exacerbate the risks associated with our substantial leverage.
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.
CONTACT
Air T, Inc. Brian Ochocki, CFO
bochocki@airt.net
612-843-4302
SOURCE: Air T, Inc.
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FAQ
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