ATSG Reports Second Quarter 2024 Results
Air Transport Services Group (ATSG) reported its Q2 2024 results, showing a decline in revenues and earnings compared to Q2 2023. Key highlights include:
- Revenues of $488 million, down from $529 million
- GAAP EPS from Continuing Operations of $0.11, versus $0.49
- Adjusted EBITDA of $130.4 million, compared to $157.1 million
- Free Cash Flow of $91.8 million, up from negative $1.3 million
Despite the decline, ATSG raised its 2024 Adjusted EBITDA outlook to approximately $526 million. The company leased four Boeing 767 Freighters to customers since June 30 and expects improved performance in the second half of 2024, particularly in Q4.
Il gruppo Air Transport Services (ATSG) ha riportato i risultati del secondo trimestre 2024, mostrando un calo dei ricavi e degli utili rispetto al secondo trimestre 2023. I principali punti salienti includono:
- Ricavi di 488 milioni di dollari, in diminuzione rispetto ai 529 milioni
- EPS GAAP da Operazioni Continuative di 0,11 dollari, rispetto a 0,49 dollari
- EBITDA rettificato di 130,4 milioni di dollari, rispetto a 157,1 milioni di dollari
- Flusso di cassa libero di 91,8 milioni di dollari, rispetto a un negativo di 1,3 milioni di dollari
Nonostante il calo, ATSG ha aggiornato le sue previsioni di EBITDA rettificato per il 2024 a circa 526 milioni di dollari. L'azienda ha noleggiato quattro Boeing 767 Freighters ai clienti dal 30 giugno e prevede un miglioramento delle prestazioni nella seconda metà del 2024, in particolare nel quarto trimestre.
El grupo Air Transport Services (ATSG) presentó sus resultados del segundo trimestre de 2024, mostrando una disminución en los ingresos y ganancias en comparación con el segundo trimestre de 2023. Los principales puntos destacados incluyen:
- Ingresos de 488 millones de dólares, por debajo de los 529 millones
- EPS GAAP de Operaciones Continuas de 0,11 dólares, en comparación con 0,49 dólares
- EBITDA ajustado de 130,4 millones de dólares, en comparación con 157,1 millones
- Flujo de caja libre de 91,8 millones de dólares, mejorando desde un negativo de 1,3 millones de dólares
A pesar de la disminución, ATSG aumentó su pronóstico de EBITDA ajustado para 2024 a aproximadamente 526 millones de dólares. La empresa ha arrendado cuatro Boeing 767 Freighters a clientes desde el 30 de junio y espera un rendimiento mejorado en la segunda mitad de 2024, especialmente en el cuarto trimestre.
항공 운송 서비스 그룹(ATSG)은 2024년 2분기 결과를 발표했으며, 2023년 2분기와 비교하여 수익과 수익이 감소했습니다. 주요 하이라이트는 다음과 같습니다:
- 수익 4억 8천8백만 달러로, 5억 2천9백만 달러에서 감소
- 계속 운영에서의 GAAP EPS는 0.11 달러로, 0.49 달러와 비교
- 조정된 EBITDA는 1억 3천4백만 달러로, 1억 5천7백만 달러에 비해 감소
- 자유 현금 흐름은 9천1백만 달러로, 마이너스 130만 달러에서 증가
감소에도 불구하고 ATSG는 2024년 조정된 EBITDA 전망을 약 5억 2천6백만 달러로 상향 조정했습니다. 회사는 6월 30일 이후 고객에게 4대의 보잉 767 화물기를 임대했으며, 2024년 하반기, 특히 4분기 성과 개선을 예상하고 있습니다.
Le groupe Air Transport Services (ATSG) a annoncé ses résultats du deuxième trimestre 2024, montrant une baisse des revenus et des bénéfices par rapport au deuxième trimestre 2023. Les faits saillants comprennent :
- Revenus de 488 millions de dollars, contre 529 millions de dollars
- EPS GAAP des opérations continues de 0,11 dollar, contre 0,49 dollar
- EBITDA ajusté de 130,4 millions de dollars, contre 157,1 millions de dollars
- Flux de trésorerie libre de 91,8 millions de dollars, en hausse par rapport à un négatif de 1,3 million de dollars
Malgré cette baisse, ATSG a relevé ses perspectives d'EBITDA ajusté pour 2024 à environ 526 millions de dollars. L'entreprise a loué quatre Boeing 767 Freighters à des clients depuis le 30 juin et s'attend à une amélioration des performances dans la seconde moitié de 2024, en particulier au quatrième trimestre.
Die Air Transport Services Group (ATSG) hat ihre Ergebnisse für das zweite Quartal 2024 veröffentlicht, die einen Rückgang der Einnahmen und Gewinne im Vergleich zum zweiten Quartal 2023 zeigen. Die wichtigsten Highlights umfassen:
- Einnahmen von 488 Millionen Dollar, ein Rückgang von 529 Millionen Dollar
- GAAP EPS aus fortgeführten Betrieben von 0,11 Dollar, im Vergleich zu 0,49 Dollar
- Bereinigtes EBITDA von 130,4 Millionen Dollar, gegenüber 157,1 Millionen Dollar
- Freier Cashflow von 91,8 Millionen Dollar, ein Anstieg von minus 1,3 Millionen Dollar
Trotz des Rückgangs hat ATSG seine Prognose für das bereinigte EBITDA 2024 auf etwa 526 Millionen Dollar angehoben. Das Unternehmen hat seit dem 30. Juni vier Boeing 767 Frachter an Kunden vermietet und erwartet eine Verbesserung der Leistung in der zweiten Jahreshälfte 2024, insbesondere im vierten Quartal.
- Raised 2024 Adjusted EBITDA outlook to $526 million
- Generated strong Free Cash Flow of $91.8 million in Q2
- Leased four Boeing 767 Freighters to customers since June 30
- Reduced capital spending forecast for 2024 to $390 million, down from $410 million
- Revenues decreased to $488 million from $529 million in Q2 2023
- GAAP EPS from Continuing Operations declined to $0.11 from $0.49
- Adjusted EBITDA decreased to $130.4 million from $157.1 million
- CAM's pretax earnings decreased by 51% to $15 million
- ACMI Services reported a pretax loss of $7 million, compared to earnings of $24 million in Q2 2023
ATSG's Q2 2024 results show a mixed performance. While revenues declined
- Adjusted EBITDA of
$130.4 million , down17% year-over-year - Strong free cash flow of
$91.8 million , a significant improvement - Leased 4 Boeing 767 freighters since June 30, showing market demand
The decline in earnings is primarily due to fewer block hours flown and the return of older aircraft. However, the company's ability to generate strong free cash flow and secure new leases indicates resilience in its business model. The raised full-year guidance suggests management's confidence in H2 2024 performance, particularly Q4.
ATSG's Q2 results reflect the evolving dynamics of the air cargo market. The company is navigating a transition period, phasing out older 767-200 freighters while introducing newer models and Airbus A321-200s. This fleet modernization strategy is important for long-term competitiveness but impacts short-term financials.
The addition of 14 new freighter leases, including 11 767-300s and 3 A321-200s, demonstrates ATSG's ability to adapt to market demands. The planned introduction of A330 freighters in Q4 2024 further diversifies their fleet offering. However, the 10% decrease in block hours highlights ongoing challenges in the air cargo market, possibly due to global economic uncertainties and shifts in e-commerce patterns.
ATSG's performance indicates a transitional phase in the air cargo market. The company's focus on medium wide-body freighters positions it well for the growing e-commerce and express delivery sectors. The successful leasing of four aircraft post-Q2 and the mention of "momentum in global markets" suggest potential upside.
However, the
- Recovery in block hours in H2 2024
- Success of the A330 freighter introduction
- Further lease commitments for available aircraft
These factors will be important in determining ATSG's growth trajectory and market position in the evolving air cargo landscape.
Raises 2024 Adjusted EBITDA Outlook
Generates Strong Free Cash Flow
Leases Four Boeing 767 Freighters to Customers since June 30
Second Quarter Results
-
Revenues of
, versus$488 million $529 million -
GAAP Earnings per Share (diluted) from Continuing Operations of
, versus$0.11 $0.49 -
GAAP Pretax Earnings from Continuing Operations of
, versus$10.7 million $49.7 million -
Adjusted Pretax* Earnings of
, versus$17.3 million $57.9 million -
Adjusted EPS* of
, versus$0.19 $0.57 -
Adjusted EBITDA* of
, versus$130.4 million $157.1 million -
Free Cash Flow was
, versus negative$91.8 million $1.3 million
Mike Berger, chief executive officer of ATSG, said, "Our second quarter results were affected by fewer block hours by our airlines and the scheduled return of Boeing 767-200 freighters since a year ago. We beat our internal expectations for the quarter, however, and are positioned for further improvement in the second half of the year, particularly in the fourth quarter. We're encouraged by the free cash flow we're generating and have again raised our full year guidance for Adjusted EBITDA. We have leased four aircraft to customers since the end of June and are encouraged by the momentum we're seeing in the global markets we serve. We remain proud of the service levels we deliver every day and are particularly pleased that we met commitments to our customer Amazon during this year's Prime Week."
* Adjusted EPS (Earnings per Share), Adjusted Pretax Earnings, Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Free Cash Flow, and Adjusted Free Cash Flow are non-GAAP financial measures used in this release, which are defined and reconciled to the most directly comparable financial measures calculated and presented in accordance with GAAP at the end of this release.
Segment Results
Cargo Aircraft Management (CAM)
-
Aircraft leasing and related revenues decreased
7% for the second quarter, including the benefit of revenues from fourteen additional freighter leases, including eleven additional 767-300s and three Airbus A321-200s since the end of June 2023. These lease revenues were more than offset by the scheduled returns of nine 767-200 freighters and four 767-300 freighters over that same period. Revenue reductions associated with the 767-200 fleet include the effect of fewer cycles operated by lessees under our 767-200 engine power program. -
CAM’s second quarter pretax earnings decreased
, or$16 million 51% , to versus the prior-year quarter. The biggest driver of the year-over-year decrease was the previously mentioned reduction in 767-200 freighter lease and engine power program revenues. Segment interest expense increased by$15 million and depreciation increased by$4 million versus the prior-year quarter.$9 million - CAM leased three 767s and sold five others to external customers in the second quarter. Six 767-200 freighters were returned by external customers upon lease expiration. At the end of the second quarter, eighty-seven CAM-owned freighter aircraft were leased to external customers, one more than a year ago.
- Twenty-three CAM-owned aircraft were in or awaiting conversion to freighters at the end of the second quarter, six fewer than at the end of the prior-year quarter. This included twelve 767s, six A321s, and five A330s. Two of the A330s are expected to complete conversion and be leased to an external customer in the fourth quarter 2024.
ACMI Services
-
Pretax loss was
in the second quarter, versus earnings of$7 million in the second quarter of 2023. Revenue block hours for ATSG's airlines decreased$24 million 10% versus the prior-year quarter. Cargo block hours decreased11% for the second quarter, reflecting the removal of certain 767-200 freighter aircraft from service and less international flying versus the prior year. Passenger block hours decreased4% in the quarter. In addition to the reduced flying hours and reduced revenues, ACMI Services experienced increased expenses for crew training, maintenance, travel and ground service rates. Of the decrease in pretax earnings, was attributable to an increase in non-cash amortization for Amazon warrants.$3 million
2024 Outlook
Taking into account the four aircraft leases that commenced since the end of June, ATSG expects Adjusted EBITDA of approximately
ATSG expects capital spending for 2024 to be
Berger added, “We are on track to achieve our improved 2024 outlook. We expect contracted pricing increases and seasonal charter opportunities in the fourth quarter, which should drive improved sequential results in our ACMI Services segment. This expected improvement, combined with momentum in our core leasing business, positions us well to drive earnings growth in 2025. We are ahead of our target for positive free cash flow for the year, with
Non-GAAP Financial Measures
This release, including the attached tables, contains financial measures that are calculated and presented in accordance with Generally Accepted Accounting Principles ("GAAP") in
The historical non-GAAP financial measures included in this release are reconciled to the most directly comparable financial measure calculated and presented in accordance with GAAP in the non-GAAP reconciliation tables included later in this release. The Company does not provide a reconciliation of projected Adjusted EBITDA or Adjusted EPS, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K, because it is unable to predict with reasonable accuracy the value of certain adjustments and as a result, the comparable GAAP measures are unavailable without unreasonable efforts. For example, certain adjustments can be significantly impacted by the re-measurements of financial instruments including stock warrants issued to a customer. The Company’s earnings on a GAAP basis, including its earnings per share on a GAAP basis, and the non-GAAP adjustments for gains and losses resulting from the re-measurement of stock warrants, will depend on, among other things, the future prices of ATSG stock, interest rates, and other assumptions which are highly uncertain. As a result, the Company believes such reconciliations of forward-looking information would imply a degree of precision and certainty that could be confusing to investors.
Conference Call
ATSG will host an investor conference call on Friday, August 9, 2024, at 10 a.m. Eastern Time to review its results for the second quarter of 2024, and its outlook for the remainder of the year. Live call participants must register via this link, which is also available at ATSG’s website (www.atsginc.com) under “Investors” and “Presentations.” Once registered, call participants will receive dial-in numbers and a unique Personal Identification Number (PIN) that must be entered to join the live call. Listen-only access to live and replay versions of the call, including slides, will be available via a webcast link at the same ATSG website location. Slides that accompany management’s discussion of first-quarter results may be downloaded from there starting shortly before the start of the call at 10 a.m.
About ATSG
ATSG is a leading provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. ATSG, through its leasing and airline subsidiaries, is the world's largest owner and operator of converted Boeing 767 freighter aircraft. Through its principal subsidiaries, including three airlines with separate and distinct
Cautionary Note Regarding Forward-Looking Statements
Throughout this release, Air Transport Services Group, Inc. (“ATSG") makes “forward-looking statements” within the meaning of the
AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (In thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
REVENUES |
|
$ |
488,410 |
|
|
$ |
529,339 |
|
|
$ |
973,927 |
|
|
$ |
1,030,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and benefits |
|
|
164,079 |
|
|
|
170,458 |
|
|
|
335,561 |
|
|
|
347,173 |
|
Depreciation and amortization |
|
|
91,879 |
|
|
|
82,691 |
|
|
|
182,259 |
|
|
|
167,419 |
|
Maintenance, materials and repairs |
|
|
46,727 |
|
|
|
50,436 |
|
|
|
96,610 |
|
|
|
94,269 |
|
Fuel |
|
|
65,577 |
|
|
|
67,271 |
|
|
|
129,122 |
|
|
|
134,026 |
|
Contracted ground and aviation services |
|
|
21,726 |
|
|
|
19,682 |
|
|
|
37,432 |
|
|
|
37,470 |
|
Travel |
|
|
32,180 |
|
|
|
31,222 |
|
|
|
62,626 |
|
|
|
60,775 |
|
Landing and ramp |
|
|
4,505 |
|
|
|
4,744 |
|
|
|
8,535 |
|
|
|
8,868 |
|
Rent |
|
|
7,698 |
|
|
|
8,274 |
|
|
|
15,230 |
|
|
|
16,386 |
|
Insurance |
|
|
2,557 |
|
|
|
2,684 |
|
|
|
5,293 |
|
|
|
5,232 |
|
Other operating expenses |
|
|
20,161 |
|
|
|
22,136 |
|
|
|
36,934 |
|
|
|
41,652 |
|
|
|
|
457,089 |
|
|
|
459,598 |
|
|
|
909,602 |
|
|
|
913,270 |
|
OPERATING INCOME |
|
|
31,321 |
|
|
|
69,741 |
|
|
|
64,325 |
|
|
|
117,164 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
218 |
|
|
|
180 |
|
|
|
457 |
|
|
|
395 |
|
Non-service component of retiree benefit costs |
|
|
(1,086 |
) |
|
|
(3,218 |
) |
|
|
(2,171 |
) |
|
|
(6,436 |
) |
Net gain on financial instruments |
|
|
2,946 |
|
|
|
1,818 |
|
|
|
5,301 |
|
|
|
78 |
|
Loss from non-consolidated affiliate |
|
|
(1,254 |
) |
|
|
(2,107 |
) |
|
|
(1,333 |
) |
|
|
(2,513 |
) |
Interest expense |
|
|
(21,403 |
) |
|
|
(16,672 |
) |
|
|
(43,391 |
) |
|
|
(32,377 |
) |
|
|
|
(20,579 |
) |
|
|
(19,999 |
) |
|
|
(41,137 |
) |
|
|
(40,853 |
) |
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
|
10,742 |
|
|
|
49,742 |
|
|
|
23,188 |
|
|
|
76,311 |
|
INCOME TAX EXPENSE |
|
|
(3,314 |
) |
|
|
(11,720 |
) |
|
|
(7,141 |
) |
|
|
(18,148 |
) |
EARNINGS FROM CONTINUING OPERATIONS |
|
|
7,428 |
|
|
|
38,022 |
|
|
|
16,047 |
|
|
|
58,163 |
|
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAXES |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
NET EARNINGS |
|
$ |
7,428 |
|
|
$ |
38,022 |
|
|
$ |
16,047 |
|
|
$ |
58,163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE - CONTINUING OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.11 |
|
|
$ |
0.54 |
|
|
$ |
0.25 |
|
|
$ |
0.82 |
|
Diluted |
|
$ |
0.11 |
|
|
$ |
0.49 |
|
|
$ |
0.24 |
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES - CONTINUING OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
65,028 |
|
|
|
70,722 |
|
|
|
65,000 |
|
|
|
71,259 |
|
Diluted |
|
|
67,301 |
|
|
|
79,515 |
|
|
|
67,268 |
|
|
|
81,276 |
|
AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share data) |
||||||||
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
|
$ |
28,714 |
|
|
$ |
53,555 |
|
Accounts receivable, net of allowance of |
|
|
205,740 |
|
|
|
215,581 |
|
Inventory |
|
|
50,548 |
|
|
|
49,939 |
|
Prepaid supplies and other |
|
|
30,476 |
|
|
|
26,626 |
|
TOTAL CURRENT ASSETS |
|
|
315,478 |
|
|
|
345,701 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
2,819,077 |
|
|
|
2,820,769 |
|
Customer incentive |
|
|
140,764 |
|
|
|
60,961 |
|
Goodwill and acquired intangibles |
|
|
477,320 |
|
|
|
482,427 |
|
Operating lease assets |
|
|
65,399 |
|
|
|
54,060 |
|
Other assets |
|
|
121,447 |
|
|
|
118,172 |
|
TOTAL ASSETS |
|
$ |
3,939,485 |
|
|
$ |
3,882,090 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
255,386 |
|
|
$ |
227,652 |
|
Accrued salaries, wages and benefits |
|
|
47,677 |
|
|
|
56,650 |
|
Accrued expenses |
|
|
11,119 |
|
|
|
10,784 |
|
Current portion of debt obligations |
|
|
54,825 |
|
|
|
54,710 |
|
Current portion of lease obligations |
|
|
21,465 |
|
|
|
20,167 |
|
Unearned revenue |
|
|
38,310 |
|
|
|
30,226 |
|
TOTAL CURRENT LIABILITIES |
|
|
428,782 |
|
|
|
400,189 |
|
Long term debt |
|
|
1,577,328 |
|
|
|
1,707,572 |
|
Stock warrant obligations |
|
|
17,079 |
|
|
|
1,729 |
|
Post-retirement obligations |
|
|
16,195 |
|
|
|
19,368 |
|
Long term lease obligations |
|
|
45,591 |
|
|
|
34,990 |
|
Other liabilities |
|
|
97,357 |
|
|
|
64,292 |
|
Deferred income taxes |
|
|
291,767 |
|
|
|
285,248 |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Preferred stock, 20,000,000 shares authorized, including 75,000 Series A Junior Participating Preferred Stock |
|
|
— |
|
|
|
— |
|
Common stock, par value |
|
|
658 |
|
|
|
652 |
|
Additional paid-in capital |
|
|
912,968 |
|
|
|
836,270 |
|
Retained earnings |
|
|
605,256 |
|
|
|
589,209 |
|
Accumulated other comprehensive loss |
|
|
(53,496 |
) |
|
|
(57,429 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
|
1,465,386 |
|
|
|
1,368,702 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
3,939,485 |
|
|
$ |
3,882,090 |
|
AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED SUMMARY OF CASH FLOWS (UNAUDITED) (In thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING CASH FLOWS |
|
$ |
137,101 |
|
|
$ |
192,198 |
|
|
$ |
263,521 |
|
|
$ |
408,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft acquisitions and freighter conversions |
|
|
(43,153 |
) |
|
|
(138,556 |
) |
|
|
(115,048 |
) |
|
|
(303,164 |
) |
Planned aircraft maintenance, engine overhauls and other non-aircraft additions to property and equipment |
|
|
(27,344 |
) |
|
|
(55,568 |
) |
|
|
(57,770 |
) |
|
|
(109,761 |
) |
Proceeds from property and equipment |
|
|
25,219 |
|
|
|
585 |
|
|
|
26,114 |
|
|
|
10,445 |
|
Acquisitions and investments in businesses |
|
|
— |
|
|
|
— |
|
|
|
(9,800 |
) |
|
|
(800 |
) |
TOTAL INVESTING CASH FLOWS |
|
|
(45,278 |
) |
|
|
(193,539 |
) |
|
|
(156,504 |
) |
|
|
(403,280 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal payments on secured debt |
|
|
(331,218 |
) |
|
|
(65,103 |
) |
|
|
(471,323 |
) |
|
|
(90,317 |
) |
Proceeds from revolver borrowings |
|
|
245,000 |
|
|
|
35,000 |
|
|
|
340,000 |
|
|
|
140,000 |
|
Payments for financing costs |
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
|
|
(511 |
) |
Purchase of common stock |
|
|
— |
|
|
|
(14,956 |
) |
|
|
— |
|
|
|
(36,874 |
) |
Taxes paid for conversion of employee awards |
|
|
(72 |
) |
|
|
(25 |
) |
|
|
(535 |
) |
|
|
(1,578 |
) |
TOTAL FINANCING CASH FLOWS |
|
|
(86,290 |
) |
|
|
(45,111 |
) |
|
|
(131,858 |
) |
|
|
10,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH |
|
$ |
5,533 |
|
|
$ |
(46,452 |
) |
|
$ |
(24,841 |
) |
|
$ |
16,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
$ |
23,181 |
|
|
$ |
89,602 |
|
|
$ |
53,555 |
|
|
$ |
27,134 |
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
28,714 |
|
|
$ |
43,150 |
|
|
$ |
28,714 |
|
|
$ |
43,150 |
|
AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES PRETAX EARNINGS FROM CONTINUING OPERATIONS AND ADJUSTED PRETAX EARNINGS SUMMARY NON-GAAP RECONCILIATION (In thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft leasing and related revenues |
|
$ |
107,566 |
|
|
$ |
115,281 |
|
|
$ |
216,211 |
|
|
$ |
232,355 |
|
Customer incentive |
|
|
(3,097 |
) |
|
|
(3,903 |
) |
|
|
(6,193 |
) |
|
|
(8,933 |
) |
Total CAM |
|
|
104,469 |
|
|
|
111,378 |
|
|
|
210,018 |
|
|
|
223,422 |
|
ACMI Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACMI services revenue |
|
|
342,255 |
|
|
|
367,003 |
|
|
|
666,895 |
|
|
|
701,922 |
|
Customer incentive |
|
|
(4,076 |
) |
|
|
(816 |
) |
|
|
(4,892 |
) |
|
|
(1,608 |
) |
Total ACMI Services |
|
|
338,179 |
|
|
|
366,187 |
|
|
|
662,003 |
|
|
|
700,314 |
|
Other Activities |
|
|
97,640 |
|
|
|
110,789 |
|
|
|
206,680 |
|
|
|
221,377 |
|
Total Revenues |
|
|
540,288 |
|
|
|
588,354 |
|
|
|
1,078,701 |
|
|
|
1,145,113 |
|
Eliminate internal revenues |
|
|
(51,878 |
) |
|
|
(59,015 |
) |
|
|
(104,774 |
) |
|
|
(114,679 |
) |
Customer Revenues |
|
$ |
488,410 |
|
|
$ |
529,339 |
|
|
$ |
973,927 |
|
|
$ |
1,030,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax Earnings (Loss) from Continuing Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAM, inclusive of interest expense |
|
|
15,247 |
|
|
|
31,020 |
|
|
|
28,656 |
|
|
|
65,220 |
|
ACMI Services, inclusive of interest expense |
|
|
(7,076 |
) |
|
|
24,054 |
|
|
|
(10,561 |
) |
|
|
21,643 |
|
Other Activities |
|
|
2,973 |
|
|
|
(1,299 |
) |
|
|
5,280 |
|
|
|
(645 |
) |
Net, unallocated interest expense |
|
|
(1,008 |
) |
|
|
(526 |
) |
|
|
(1,984 |
) |
|
|
(1,036 |
) |
Non-service components of retiree benefit costs |
|
|
(1,086 |
) |
|
|
(3,218 |
) |
|
|
(2,171 |
) |
|
|
(6,436 |
) |
Net gain on financial instruments |
|
|
2,946 |
|
|
|
1,818 |
|
|
|
5,301 |
|
|
|
78 |
|
Loss from non-consolidated affiliates |
|
|
(1,254 |
) |
|
|
(2,107 |
) |
|
|
(1,333 |
) |
|
|
(2,513 |
) |
Earnings from Continuing Operations before Income Taxes (GAAP) |
|
$ |
10,742 |
|
|
$ |
49,742 |
|
|
$ |
23,188 |
|
|
$ |
76,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Pretax Earnings from Continuing Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add contra-revenue from customer incentive |
|
|
7,173 |
|
|
|
4,719 |
|
|
|
11,085 |
|
|
|
10,541 |
|
Add loss from non-consolidated affiliates |
|
|
1,254 |
|
|
|
2,107 |
|
|
|
1,333 |
|
|
|
2,513 |
|
Less net gain on financial instruments |
|
|
(2,946 |
) |
|
|
(1,818 |
) |
|
|
(5,301 |
) |
|
|
(78 |
) |
Less non-service components of retiree benefit costs |
|
|
1,086 |
|
|
|
3,218 |
|
|
|
2,171 |
|
|
|
6,436 |
|
Add net charges for hangar foam incident |
|
|
— |
|
|
|
(28 |
) |
|
|
— |
|
|
|
13 |
|
Adjusted Pretax Earnings (non-GAAP) |
|
$ |
17,309 |
|
|
$ |
57,940 |
|
|
$ |
32,476 |
|
|
$ |
95,736 |
|
Adjusted Pretax Earnings (non-GAAP) excludes certain items included in GAAP-based Pretax Earnings (Loss) from Continuing Operations before Income Taxes because these items are distinctly different in their predictability among periods, or not closely related to our operations. Presenting this measure provides investors with a comparative metric of fundamental operations, while highlighting changes to certain items among periods. Adjusted Pretax Earnings should not be considered an alternative to Earnings from Continuing Operations Before Income Taxes or any other performance measure derived in accordance with GAAP.
AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES ADJUSTED EARNINGS FROM CONTINUING OPERATIONS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION NON-GAAP RECONCILIATION (In thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) from Continuing Operations Before Income Taxes |
|
$ |
10,742 |
|
|
$ |
49,742 |
|
|
$ |
23,188 |
|
|
$ |
76,311 |
|
Interest Income |
|
|
(218 |
) |
|
|
(180 |
) |
|
|
(457 |
) |
|
|
(395 |
) |
Interest Expense |
|
|
21,403 |
|
|
|
16,672 |
|
|
|
43,391 |
|
|
|
32,377 |
|
Depreciation and Amortization |
|
|
91,879 |
|
|
|
82,691 |
|
|
|
182,259 |
|
|
|
167,419 |
|
EBITDA from Continuing Operations (non-GAAP) |
|
$ |
123,806 |
|
|
$ |
148,925 |
|
|
$ |
248,381 |
|
|
$ |
275,712 |
|
Add contra-revenue from customer incentive |
|
|
7,173 |
|
|
|
4,719 |
|
|
|
11,085 |
|
|
|
10,541 |
|
Add start-up loss from non-consolidated affiliates |
|
|
1,254 |
|
|
|
2,107 |
|
|
|
1,333 |
|
|
|
2,513 |
|
Less net gain on financial instruments |
|
|
(2,946 |
) |
|
|
(1,818 |
) |
|
|
(5,301 |
) |
|
|
(78 |
) |
Less non-service components of retiree benefit costs |
|
|
1,086 |
|
|
|
3,218 |
|
|
|
2,171 |
|
|
|
6,436 |
|
Add net charges for hangar foam fire suppression system discharge |
|
|
— |
|
|
|
(28 |
) |
|
|
— |
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (non-GAAP) |
|
$ |
130,373 |
|
|
$ |
157,123 |
|
|
$ |
257,669 |
|
|
$ |
295,137 |
|
Management uses Adjusted EBITDA (non-GAAP, defined below) to assess the performance of the Company's operating results among periods. It is a metric that facilitates the comparison of financial results of underlying operations. Additionally, these non-GAAP adjustments are similar to the adjustments used by lenders in the Company’s senior secured credit facility to assess financial performance and determine the cost of borrowed funds. The adjustments also remove the non-service cost components of retiree benefit plans because they are not closely related to ongoing operating activities. To improve comparability between periods, the adjustments also exclude from EBITDA from Continuing Operations the recognition of charges related to the discharge of a foam fire suppression system in a Company aircraft hangar, net of related insurance recoveries. Management presents EBITDA from Continuing Operations (defined below), as a subtotal toward calculating Adjusted EBITDA.
EBITDA from Continuing Operations (non-GAAP) is defined as Earnings (Loss) from Continuing Operations Before Income Taxes plus net interest expense, depreciation, and amortization expense. Adjusted EBITDA is defined as EBITDA from Continuing Operations less financial instrument revaluation gains or losses, non-service components of retiree benefit costs, amortization of warrant-based customer incentive costs recorded in revenue, charge off of debt issuance costs upon refinancing, costs from non-consolidated affiliates and charges related to the discharge of a foam fire suppression system, net of insurance recoveries.
AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES CASH FLOWS NON-GAAP RECONCILIATION (In thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH FLOWS FROM OPERATING ACTIVITIES (GAAP) |
|
$ |
137,101 |
|
|
$ |
192,198 |
|
|
$ |
263,521 |
|
|
$ |
408,576 |
|
Sustaining capital expenditures |
|
|
(27,344 |
) |
|
|
(55,568 |
) |
|
|
(57,770 |
) |
|
|
(109,761 |
) |
ADJUSTED FREE CASH FLOW (non-GAAP) |
|
$ |
109,757 |
|
|
$ |
136,630 |
|
|
$ |
205,751 |
|
|
$ |
298,815 |
|
Aircraft acquisitions and freighter conversions |
|
|
(43,153 |
) |
|
|
(138,556 |
) |
|
|
(115,048 |
) |
|
|
(303,164 |
) |
Proceeds from property and equipment |
|
|
25,219 |
|
|
|
585 |
|
|
|
26,114 |
|
|
|
10,445 |
|
Acquisitions and investments in businesses |
|
|
— |
|
|
|
— |
|
|
|
(9,800 |
) |
|
|
(800 |
) |
FREE CASH FLOW (non-GAAP) |
|
$ |
91,823 |
|
|
$ |
(1,341 |
) |
|
$ |
107,017 |
|
|
$ |
5,296 |
|
Sustaining capital expenditures includes cash outflows for planned aircraft maintenance, engine overhauls, information systems and other non-aircraft additions to property and equipment. It does not include expenditures for aircraft acquisitions and related passenger-to-freighter conversion costs.
Adjusted Free Cash Flow (non-GAAP) includes cash flow from operating activities net of expenditures for planned aircraft maintenance, engine overhauls and other non-aircraft additions to property and equipment. Free Cash Flow (non-GAAP) is net cash from operating activities reduced for net cash flows from investing activities. Management believes that adjusting GAAP operating cash flows is useful for investors to evaluate the company's ability to generate adjusted free cash flow for growth initiatives, debt service, stock buybacks or other discretionary allocations of capital.
AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE
NON-GAAP RECONCILIATION
(In thousands)
Management presents Adjusted Earnings and Adjusted Earnings Per Share, both non-GAAP financial measures, to provide additional information regarding earnings per share without the volatility otherwise caused by the items below among periods.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||||||||||||||||||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||||||||||||||||||
|
|
$ |
|
|
$ Per Share |
|
|
$ |
|
|
$ Per Share |
|
|
$ |
|
|
$ Per Share |
|
|
$ |
|
|
$ Per Share |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from Continuing Operations - basic (GAAP) |
$ |
7,428 |
|
|
|
|
|
|
$ |
38,022 |
|
|
|
|
|
|
$ |
16,047 |
|
|
|
|
|
|
$ |
58,163 |
|
|
|
|
|
|
Gain from warrant revaluation, net tax1 |
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
(148 |
) |
|
|
|
|
Convertible notes interest charges, net of tax 2 |
|
|
158 |
|
|
|
|
|
|
|
780 |
|
|
|
|
|
|
|
317 |
|
|
|
|
|
|
|
1,556 |
|
|
|
|
|
Earnings from Continuing Operations - diluted (GAAP) |
|
|
7,586 |
|
|
|
0.11 |
|
|
|
38,802 |
|
|
$ |
0.49 |
|
|
|
16,364 |
|
|
$ |
0.24 |
|
|
|
59,571 |
|
|
$ |
0.73 |
|
Adjustments, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer incentive 3 |
|
|
5,434 |
|
|
|
0.08 |
|
|
|
3,665 |
|
|
|
0.05 |
|
|
|
8,427 |
|
|
|
0.13 |
|
|
|
8,211 |
|
|
|
0.11 |
|
Non-service component of retiree benefits4 |
|
|
823 |
|
|
|
0.01 |
|
|
|
2,499 |
|
|
|
0.03 |
|
|
|
1,653 |
|
|
|
0.02 |
|
|
|
5,012 |
|
|
|
0.06 |
|
Derivative and warrant revaluation5 |
|
|
(2,232 |
) |
|
|
(0.02 |
) |
|
|
(1,411 |
) |
|
|
(0.02 |
) |
|
|
(4,034 |
) |
|
|
(0.06 |
) |
|
|
95 |
|
|
|
0.00 |
|
Loss from affiliates6 |
|
|
950 |
|
|
|
0.01 |
|
|
|
1,636 |
|
|
|
0.02 |
|
|
|
1,010 |
|
|
|
0.02 |
|
|
|
1,953 |
|
|
|
0.02 |
|
Hangar foam incident7 |
|
|
— |
|
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
|
|
0.00 |
|
Adjusted Earnings and Adjusted Earnings Per Share (non-GAAP) |
|
$ |
12,561 |
|
|
$ |
0.19 |
|
|
$ |
45,169 |
|
|
$ |
0.57 |
|
|
$ |
23,420 |
|
|
$ |
0.35 |
|
|
$ |
74,852 |
|
|
$ |
0.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
|
|
Shares |
|
|
|
|
|
|
Shares |
|
|
|
|
|
|
Shares |
|
|
|
|
|
||||
Weighted Average Shares - diluted1 |
|
|
67,301 |
|
|
|
|
|
|
|
79,515 |
|
|
|
|
|
|
|
67,268 |
|
|
|
|
|
|
|
81,276 |
|
|
|
|
|
Adjusted Earnings and Adjusted Earnings Per Share should not be considered as alternatives to Earnings (Loss) from Continuing Operations, Weighted Average Shares - diluted or Earnings (Loss) Per Share from Continuing Operations or any other performance measure derived in accordance with GAAP. Adjusted Earnings and Adjusted Earnings Per Share should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP.
-
Under
U.S. GAAP, certain warrants are reflected as a liability and unrealized warrant gains are typically removed from diluted earnings per share (“EPS”) calculations, while unrealized warrant losses are not removed because they are dilutive to EPS. For each quarter, additional shares assumes that Amazon net settled its remaining warrants that were above the strike price. Each year reflects an average of the quarterly shares. -
Under
U.S. GAAP, certain types of convertible debt are treated under the "if-convert method" if dilutive for EPS. Stock-based compensation awards are treated under the "treasury stock method" if dilutive for EPS. The non-GAAP presentation adds the dilutive effects that were excluded under GAAP. - Removes the amortization of the warrant-based customer incentives which are recorded against revenue over the term of the related aircraft leases and customer contracts.
- Removes the non-service component effects of employee post-retirement plans.
- Removes gains and losses from financial instruments, including derivative interest rate instruments and warrant revaluations.
- Removes losses for the Company's non-consolidated affiliates.
- Removes charges related to the discharge of a foam fire suppression system in a Company aircraft hangar, net of related insurance recoveries.
AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES AIRCRAFT FLEET |
||||||||||||||||
Aircraft Types |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2023 |
|
December 31, 2023 |
|
June 30, 2024 |
|
|
||||||||
|
|
Freighter |
|
Passenger |
|
Freighter |
|
Passenger |
|
Freighter |
|
Passenger |
|
Freighter |
|
Passenger |
Aircraft in service |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B767-200 2 |
|
24 |
|
3 |
|
22 |
|
3 |
|
18 |
|
3 |
|
17 |
|
3 |
B767-300 |
|
83 |
|
8 |
|
87 |
|
8 |
|
93 |
|
10 |
|
106 |
|
10 |
B777-200 |
|
— |
|
3 |
|
— |
|
3 |
|
— |
|
3 |
|
— |
|
3 |
B757-200 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
B757 Combi |
|
— |
|
4 |
|
— |
|
4 |
|
— |
|
4 |
|
— |
|
4 |
A321-200 |
|
— |
|
— |
|
3 |
|
— |
|
3 |
|
— |
|
4 |
|
— |
A330 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
2 |
|
— |
Total Aircraft in Service |
|
107 |
|
18 |
|
112 |
|
18 |
|
114 |
|
20 |
|
129 |
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft available for lease |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B767-200 |
|
2 |
|
— |
|
1 |
|
— |
|
— |
|
— |
|
— |
|
— |
B767-300 |
|
— |
|
— |
|
3 |
|
— |
|
2 |
|
— |
|
3 |
|
— |
A321 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
5 |
|
— |
A330 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
Total Aircraft Available for Lease |
|
2 |
|
— |
|
4 |
|
— |
|
2 |
|
— |
|
8 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft in Cargo Modification |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B767-300 |
|
20 |
|
— |
|
9 |
|
— |
|
5 |
|
— |
|
2 |
|
— |
A321 |
|
9 |
|
— |
|
6 |
|
— |
|
6 |
|
— |
|
— |
|
— |
A330 |
|
— |
|
— |
|
2 |
|
— |
|
4 |
|
— |
|
3 |
|
— |
Feedstock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B767 |
|
— |
|
— |
|
5 |
|
— |
|
7 |
|
— |
|
5 |
|
— |
A321 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
A330 |
|
— |
|
— |
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
Total Aircraft |
|
138 |
|
18 |
|
139 |
|
18 |
|
139 |
|
20 |
|
148 |
|
20 |
Aircraft in Service |
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
June 30, |
|
December 31, |
|
|
2023 |
|
2023 |
|
2024 |
|
2024 Projected 1 |
|
|
|
|
|
|
|
|
|
Dry leased without CMI |
|
38 |
|
42 |
|
47 |
|
52 |
Dry leased with CMI |
|
48 |
|
48 |
|
40 |
|
40 |
Customer provided for CMI |
|
15 |
|
16 |
|
17 |
|
27 |
ACMI/Charter3 |
|
24 |
|
24 |
|
30 |
|
30 |
- Projected aircraft levels for December 31, 2024 include customer commitments for new leases, management's estimates of existing lease renewals, aircraft expected to complete the freighter modification process and scheduled aircraft acquisitions during 2024.
- As Boeing 767-200 aircraft are retired from service, management plans to use the engines and related parts to support the remaining Boeing 767 fleet and part sales.
- ACMI/Charter includes four Boeing 767 passenger aircraft leased from external companies through December 31, 2023 and six Boeing 767 passenger aircraft leased from external companies after December 31, 2023.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808710366/en/
Quint Turner, ATSG Inc. Chief Financial Officer
937-366-2303
Source: Air Transport Services Group, Inc.
FAQ
What were ATSG's Q2 2024 revenue and earnings results?
How did ATSG's Free Cash Flow perform in Q2 2024?
Has ATSG updated its 2024 Adjusted EBITDA outlook?
How many aircraft did ATSG lease to customers since June 30, 2024?