MAIDEN, N.C., Feb. 13, 2017 /PRNewswire/ -- Air T, Inc. (Air T)
(NASDAQ: AIRT) today reported consolidated net earnings of
$856,000 ($0.42 per diluted share) for fiscal 2017's third
quarter ended December 31, 2016
compared to consolidated net earnings of $2,971,000 ($1.24
per diluted share) for the similar fiscal 2016 period.
Consolidated revenues net of intercompany eliminations decreased
by $10,849,000 (23%) to $35,769,000 for the quarter ended December 31, 2016 compared to $46,619,000 in the same quarter in the prior
fiscal year. Consolidated operating income net of intercompany
eliminations decreased by $2,251,000
(58%) to $1,639,000 for the quarter
ended December 31, 2016, as compared
to $3,890,000 for the same quarter in
the prior fiscal year.
Ground equipment sales segment revenue decreased by $17,698,000 (87%) this quarter compared to the
prior year comparable quarter. The decrease in the segment's
revenue is attributable primarily to the large order of deicers
from a major airline in the prior year quarter that did not reoccur
this fiscal year. Operating income for the ground equipment sales
segment decreased by $4,754,000 to an
operating loss of $913,000 in the
current year quarter as a result of the decrease in sales volumes
compared to the prior-year quarter. At December 31, 2016, ground equipment sales'
backlog was $11.2 million, as
compared to $10.8 million at
December 31, 2015.
Revenues in the overnight air cargo segment decreased by
$1,575,000 (8%) attributable to
decreased maintenance cost passed through to the customer as well
as decreased administrative fee revenues reflecting the lower
administrative fee amount paid under an amendment to the dry-lease
agreements that became effective on June 1,
2016. In addition, the segment's maintenance revenue was
reduced as a result of lower maintenance billable hours in response
to a customer directive. Operating income for the air cargo segment
decreased by $383,000 from the
prior-year quarter resulting from the decreased administrative fee,
lower billable maintenance hours and higher operating costs not
passed through to the customer, principally increased flight crew
costs.
Revenues in the ground support services segment increased
$1,021,000 (16%) primarily as a
result of the company's growth in new markets and services offered
to new and existing customers. Operating results for the ground
support services segment improved by $28,000 from the prior year quarter to an
operating loss of $41,000 primarily
as increased revenues began to offset the costs of infrastructure
improvements made in prior periods to position the segment for
growth.
On November 24, 2015, Air T
acquired from Delphax Technologies Inc. ("Delphax") shares of its
Series B Preferred Stock then convertible into approximately 38% of
the shares of Delphax common stock outstanding after conversion and
other equity and debt interests in Delphax and its Canadian
subsidiary. Air T has concluded that as a result of its acquisition
of these interests, Delphax is required to be consolidated with Air
T for financial reporting purposes since the November 24, 2015 acquisition date and reports
these results in its printing equipment and maintenance segments.
The operating income attributable to Delphax included in
consolidated net income for the three months ended
December 31, 2016 was approximately $388,000 attributable to Air T, Inc. stockholders
compared to an operating loss of $336,000 in the prior-year period. A number
of factors led to this improvement at Delphax. Delphax has
significantly reduced operating expenses during the last two
quarters, as Delphax significantly curtailed its production
activities during this period. At the same time, the segment had
more sales of legacy consumable products in the quarter than
anticipated. Such sales included certain products against which a
lower-of-cost-or-market reserve had previously been established
and, as such, the related gross margin upon sale was higher than
normal.
On July 18, 2016, Contrail
Aviation Support, LLC ("Contrail Aviation"), a subsidiary of the
Company, completed the purchase of substantially all of the assets
of Contrail Aviation Support, Inc. The acquisition consideration
included equity membership units in Contrail Aviation representing
21% of the total equity membership units in Contrail Aviation. Air
T, through a subsidiary, acquired 100% of the outstanding equity
interests of Jet Yard, LLC ("Jet Yard") on October 3, 2016. Contrail Aviation and Jet Yard
comprise the commercial jet engines segment of the Company's
operations. The operating income attributable to Contrail Aviation
and Jet Yard included in consolidated net income for the three
months ended December 31, 2016 was approximately $491,000 attributable to Air T, Inc.
stockholders.
FINANCIAL
HIGHLIGHTS
|
(In thousands, except
per share data)
|
|
|
Three Months Ended
December 31,
|
|
Nine Months Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
Revenues
|
$
35,769
|
|
$
46,619
|
|
$
104,785
|
|
$
113,631
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
$
1,639
|
|
$
3,890
|
|
$
(4,412)
|
|
$
8,346
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
$
1,665
|
|
$
2,446
|
|
$
(5,244)
|
|
$
5,504
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Air T, Inc. Stockholders
|
$
856
|
|
$
2,971
|
|
$
(1,752)
|
|
$
6,029
|
|
|
|
|
|
|
|
|
Net Earnings (Loss)
Per Share - Diluted
|
$
0.42
|
|
$
1.24
|
|
$
(0.81)
|
|
$
2.52
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding - Diluted
|
2,048
|
|
2,397
|
|
2,152
|
|
2,397
|
For a more detailed presentation and discussion of the Company's
results of operations and financial condition, please read the
Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 2016 filed today with
the Securities and Exchange Commission. Copies of the Form
10-Q may be accessed on the Internet at the SEC's website:
http://www.sec.gov.
About Air T, Inc.
Established in 1980, Air T, Inc. is a diversified holding
company with four core industry segments: overnight air cargo,
aviation ground support equipment manufacturing, aviation ground
support maintenance services, and commercial jet engines. Our
ownership interests consist of a broad set of operating and
financial assets that are designed to expand, strengthen and
diversify Air T's cash earnings power. Our goal is to build
on Air T's core businesses, to expand into adjacent industries, and
when appropriate, to acquire companies that we believe fit into the
Air T family. For more information, visit www.airt.net.
Forward-looking Statements
Statements in this press release that 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 Company's ability to recover
on its investments, including its investments in Delphax, the
timing and amounts of future orders under the Company's Global
Ground Support subsidiary's contract with the United States Air
Force, inflation rates, competition, changes in technology or
government regulation, information technology disruptions, 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. The Company is under no obligation,
and it expressly disclaims any obligation, to update or alter any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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visit:http://www.prnewswire.com/news-releases/air-t-inc-reports-unaudited-third-quarter-earnings-300406099.html
SOURCE Air T, Inc.