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This press release corrects, replaces and entirely supersedes the prior version published on November 10, 2022 at 4:30 PM EST
DENVER, NC / ACCESSWIRE / November 11, 2022 / 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 equipment manufacturing and sales; commercial jet engines and parts; and corporate and other.
Today the Company is announcing results for the fiscal second quarter ended September 30, 2022:
*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:
"The recovery in aviation continues and some of our businesses are the beneficiary. We think a lot about inflation (distortions in prices); and expect expectations of inflation to be a new factor in unpredictable ways. If inflation persists, will our large balance sheet of tangible assets and inventories provide a tailwind? Or will something else happen? If you are wondering, we don't see any letup in the economy, business activity and the ability of large corporates to ‘take price.' Shortly before the Ukraine War a very knowledgeable friend of ours said he believed the supply side was going to drive higher oil prices. Such a development surprised many.
The scale and intricacies of our balance sheet sometimes do not pair well with our income statement. This quarter our EBITDA demonstrated the aviation rebound but the asset impairments and other balance sheet-driven expenses reduced operating income. GAAP does the best it can with "The Accountancy" and we operate our businesses within the frameworks. At times this means it takes extra work to discern developments or they take time to become discernible. As a friend of mine says, "farm with what you've got."
It's important for us to work to absorb our significant corporate overhead expenses with more scale and diversity from our cash-generating assets and investments. Our Corporate and Other segment's year-to-date Adjusted EBITDA* loss is $4.8 million, which is higher than last year primarily due to higher health claims costs, as well as professional fees incurred in the establishment of our aircraft asset management joint venture. The team believes that AIRT Holdco has a lot of good things going for it and we work hard to make good investments and support our business units. Shareholders who know and appreciate the team here are excited about what the future holds."
Business Segment Results
Overnight Air Cargo
Aviation Ground Equipment Manufacturing and Sales ("GGS")
Commercial Jet Engines and Parts
Corporate and Other
*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 $0.4 million and $18.0 thousand for the three months ended September 30, 2022, and 2021, 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, the most directly comparable amounts reported under GAAP.
The table below provides a reconciliation of operating income to Adjusted EBITDA for the periods ended September 30, 2022, and 2021 (in thousands):Three months endedSix months ended9/30/20229/30/20219/30/20229/30/2021
Operating income$179$704$1,012$699
Depreciation and amortization (excluding leased engines depreciation)6453041,252584
Asset impairment, restructuring or impairment charges1,488-1,536-
(Gain) Loss on disposition of assets(1)-(2)3
Security expenses19603465
Adjusted EBITDA$2,330$1,068$3,832$1,351
Included in the asset impairment, restructuring or impairment charges for the three months ended September 30, 2022 was a write-down of $1.0 million on the commercial jet engines and parts segment's inventory. Also included in that number is an impairment charge of $0.3 million related to previously capitalized costs on a software project that was deemed no longer probable to be completed and placed in service.
The following table shows the Company's Adjusted EBITDA by segment for the periods ended September 30, 2022, and 2021 (in thousands):Three months endedSix months ended9/30/20229/30/20219/30/20229/30/2021
Overnight Air Cargo$1,204$871$2,300$1,617
Ground Equipment Sales1,933742,1241,531
Commercial Jet Engines and Parts9792,0984,2482,024
Corporate and Other(1,786)(1,975)(4,840)(3,821)
Adjusted EBITDA$2,330$1,068$3,832$1,351
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, aviation ground support equipment manufacturing and 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 press release, 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:
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
612-843-4302
SOURCE: Air T, Inc. View source version on accesswire.com: https://www.accesswire.com/725263/CORRECTION-Air-T-Inc-Reports-Second-Quarter-Fiscal-2023-Results