DENVER, N.C., Feb. 14, 2018 /PRNewswire/ -- Air T, Inc.
("Air T" or the "Company") (NASDAQ: AIRT) today reported
consolidated net loss attributable to Air T, Inc. stockholders of
$672,000 ($0.33 per diluted share) for the fiscal 2018
third quarter ended December 31, 2017
as compared to consolidated net income attributable to Air T, Inc.
stockholders of $1,220,000
($0.60 per diluted share) for the
fiscal 2017 comparable period.
Consolidated revenues increased $8,732,000 (24%) from $35,769,000 to $44,501,000 for the quarter ended December 31, 2017 compared to the comparable
quarter in the prior fiscal year. Consolidated operating income
decreased $1,088,000 (66%) from
operating income of $1,639,000 to
operating income of $552,000 for the
quarter ended December 31, 2017
compared to the comparable quarter in the prior fiscal year. The
reduction was principally due to higher general and administrative
expenses and depreciation charges in the current quarter compared
to the prior year comparable quarter.
Overnight air cargo revenues increased $930,000 (5%) from $17,100,000 in the quarter ended December 31, 2017 to $18,029,000 during the prior-year comparable
quarter. This segment's operating income increased by $280,000 (39%) from $717,000 to $997,000 due principally to the impact of the
June 1, 2017 amendment to the
aircraft dry-lease agreements with the segment's air cargo customer
that increased the administrative fees payable under these
agreements and due to an increase in billable maintenance
hours.
Ground equipment sales revenue, net of intercompany
eliminations, increased $7,511,000
(139%) from $5,400,000 to
$12,911,000 during the quarter ended
December 31, 2017 compared to the
prior-year comparable quarter due to increased deicing truck sales.
Ground equipment sales operating income, net of intercompany
eliminations, increased by $1,237,000
(803%) from an operating loss of $154,000 to $1,083,000 due to the volume of deicer units sold
during the quarter. The segment's order backlog was $17,900,000 million at December 31, 2017, as compared to $2,800,000 million at March 31, 2017 and $11,200,000 million at December 31, 2016.
Ground support services revenue increased $1,064,000 (14%) from $7,580,000 to $8,643,000, as a result of the segment's growth
in new markets and services offered to new and existing customers
and strong parts sales. Operating loss for this segment for
the same period increased by $74,000
(180%) from an operating loss of $41,000 to $115,000
primarily as a result of an increase in labor and related expenses
associated with increased headcount for new business.
The printing equipment and maintenance segment revenue, net of
intercompany eliminations, decreased by $1,748,000 (66%) from $2,654,000 to $906,000 compared to the comparable quarter of
the prior fiscal year, while operating income, net of
intercompany eliminations, decreased by $881,000 from operating income of
$1,021,000 in the prior-year
comparable quarter to operating income of $140,000 for the quarter ended December 31, 2017.
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 cash and equity membership units in Contrail Aviation
representing 21% of the total equity membership units in Contrail
Aviation. Additionally, Air T, through a subsidiary, Stratus Aero
Partners ("Stratus"), acquired 100% of the outstanding equity
interests of Jet Yard, LLC ("Jet Yard") on October 3, 2016. In May
2017, the Company's newly formed subsidiaries, AirCo, LLC
and AirCo Services, LLC (collectively, "AirCo") acquired the
inventory and principal business assets, and assumed specified
liabilities, of Aircraft Instrument and Radio Company, Inc., and
Aircraft Instrument and Radio Services, Inc. The acquired
business, which is based in Wichita,
Kansas, distributes and sells airplane and aviation parts
and maintains a license under Part 145 of the regulations of the
Federal Aviation Administration. Stratus, Contrail Aviation, Jet
Yard and AirCo comprised the commercial jet engines and parts
segment of the Company's operations during the quarter ended
December 31, 2017, which contributed
revenues of $3,931,000, net of
intercompany eliminations, while generating a segment operating
loss, net of intercompany eliminations, of $292,000.
On December 21, 2017, the Company
refinanced its previously existing financing arrangement with
Branch Banking and Trust Company ("BB&T) by entering into a
Credit Agreement ("MBT Credit Agreement") with Minnesota Bank &
Trust ("MBT"), pursuant to which MBT extended to the Company an
aggregate of $26,900,000 in financing
in the form of a floating-rate, $10,000,000 revolving credit facility, and three,
fixed-rate amortizing term loans in the amounts of $10,000,000 ("Term Loan A"), $5,000,000 ("Term Loan B") and $1,900,000 ("Term Loan C"), respectively. The
interest rate on the $10,000,000
revolving note floats at a rate equal to the prime rate plus one
percent (1%); the interest rate on Term Note A floats at the month
LIBOR rate plus two percent (2%); the interest rate on Term Note B
is fixed at four and one-half percent (4.50%); and, the interest on
Term Note C floats at a rate equal to prime minus one percent (1%),
subject to a floor of three and one quarter percent
(3.25%). In connection with the financing, the Company entered
into a swap agreement to fix the interest rate on Term Note A at
four and 56/100ths percent (4.56%). The revolving note is due
on November 30, 2019, Term Loan A and
Term Loan B mature in ten years from the date of issuance, and Term
Loan C matures on January 1, 2019.
Amounts outstanding under this financing arrangement was
$22,248,489. The loans are guaranteed
by certain subsidiaries of the Company, secured by a first lien on
all personal property of the Company and the guaranteeing
subsidiaries. The Company applied a portion of the proceeds
from the financing to refinance the obligations of the Company and
certain of its subsidiaries under its prior revolving credit
facility with BB&T.
UNAUDITED FINANCIAL
HIGHLIGHTS
|
(In thousands, except
per share data)
|
|
|
Three Months Ended
December 31,
|
|
Nine Months Ended
December,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
Revenues
|
$
44,501
|
|
$
35,769
|
|
$
141,060
|
|
$
104,785
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
$
552
|
|
$
1,639
|
|
$
3,240
|
|
$
(4,412)
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
$
(714)
|
|
$
1,665
|
|
$
994
|
|
$
(5,244)
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Air T, Inc. Stockholders
|
$
(672)
|
|
$
1,220
|
|
$
718
|
|
$
(3,447)
|
|
|
|
|
|
|
|
|
Net Eanings (Loss)
Per Share - Diluted
|
$
(0.33)
|
|
$
0.60
|
|
$
0.35
|
|
$
(1.60)
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding - Diluted
|
2,043
|
|
2,048
|
|
2,048
|
|
2,152
|
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, 2017 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 aircraft engine aftermarket and
parts. 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, which 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, and risks and uncertainties related to business
acquisitions, including the ability to successfully achieve the
anticipated benefits of the acquisitions, 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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SOURCE Air T, Inc.