DENVER, N.C., June 29, 2018 /PRNewswire/ -- Air T, Inc.
(NASDAQ: AIRT) is organized as a powerful portfolio of businesses
and financial assets, each of which is independent yet
interrelated. These include overnight air cargo operations, ground
support equipment manufacturing and local maintenance services, and
commercial aircraft asset management and logistics. Today the
Company is reporting improved financial performance for its fiscal
year-ended March 31, 2018.
FY 2018 Overview
- Revenues rose to $194.5 million
for the fiscal year ended March 31,
2018, a 31% increase over the prior year
- Operating income rose to $4.2
million, as compared to prior-year operating loss of
$3.1 million
- Net income attributable to Air T stockholders rose to
$2.3 million versus a net loss of
$3.2 million in fiscal 2017
- Diluted earnings per share increased to $1.11 compared to last year's loss per share of
$1.51
Air T, Inc. Chairman and CEO Nick
Swenson, said: "Our fiscal 2018 operating results reflect
the outstanding performance of our business leaders and employees,
as well as new acquisitions. Together they delivered top line
growth coupled with improvements to bottom line performance,
particularly after adjusting for audit expenses and investments in
our corporate infrastructure. We are looking forward to steady
growth in fiscal 2019. We continuously evaluate acquisitions and
investments that will add to our portfolio of powerful businesses.
Our investments must represent claims on growing free cash flows or
discounts to intrinsic value. Yet people understand that
enterprising and dynamic individuals and teams are at the heart of
our corporate strategy. A large part of our job is making room for
excellent leaders and applying resources as they move their
organizations forward. The more we make sound decisions at the
relevant level, the more we will continue to do better."
Business Segment Results
Aviation Ground Support Equipment
- Revenues for this segment, which is comprised of Global Ground
Support Services, the world's largest manufacturer of aircraft
de-icing equipment, totaled $50.0
million for the fiscal year ended March 31, 2018. This represents an increase of
59% over the revenue of $31.4 million
in the prior year. The revenue increase reflected higher sales of
de-icing and catering trucks to large and long-standing
customers.
- The segment entered fiscal 2019 on a strong footing with a
sales backlog of $13.3 million
compared to $2.8 million a
year-ago.
Overnight Air Cargo
- Revenues for this segment, comprised of Mountain Air Cargo and
CSA Air, rose 5% to $72.8 million in
fiscal 2018 compared to $69.6 million
in the prior fiscal year.
- The revenue increase was primarily due to higher administrative
fees from FedEx as a result of an incremental aircraft lease
arrangement and to cover certain operational costs, principally
flight crew costs.
- Segment maintenance revenues also increased due to increased
scheduled aircraft maintenance in fiscal 2018 compared to the prior
year.
Aviation Ground Support Maintenance Services
- Revenue from this segment, comprised of Global Aviation
Services, one of the fastest growing ground support maintenance
providers in the U.S., offering maintenance services at 88
airports, totaled $35.7 million in
fiscal 2018, a 17% over fiscal 2017.
- The revenue increase is due to growth in services to existing
customers as well as an increase in new customer contracts.
Commercial Jet Engines and Parts
- This segment provides surplus and aftermarket commercial jet
engine parts, airframes, avionics, other aircraft parts and
logistics to the aviation industry. The three companies in this
segment are Contrail, Jet Yard and AirCo. Contrail and Jet Yard
were acquired in July 2016 and
October 2016, respectively, while
AirCo was acquired in May 2017.
- Revenues from this segment totaled $29.5
million in fiscal 2018, an increase of 296% over fiscal 2017
revenue of $7.5 million. This
increase is due to higher volume sales at Contrail as well as full
year ownership of Contrail and Jet Yard in fiscal 2018, and the
acquisition of AirCo in the current year.
- The assets of Worthington Aviation, an aftermarket airframe
parts and logistics company focused on the turbo prop and regional
jet markets, were acquired in May
2018 and will be included in the commercial jet engine and
parts segment starting in the first quarter of fiscal 2019.
Other Investments and Financial Liquidity
- Air T owned approximately 3.4 million shares of common stock of
Insignia Systems, Inc. (NASDAQ: ISIG) with a market value of
$5.3 million as of March 31, 2018
- Air T owned approximately 0.5 million shares of common stock of
Oxbridge Re Holdings Limited (NASDAQ: OXBR) with a market value of
$1.0 million as of March 31, 2018
- Working capital as of March 31,
2018 totaled $30.5 million and
there were zero borrowings under the Company's $10 million revolving credit facility.
ABOUT AIR T, INC.
Established in 1980, Air T Inc. is a
powerful portfolio of businesses and financial assets, each of
which is independent yet interrelated. Its four core segments are:
overnight air cargo, aviation ground support equipment
manufacturing, aviation ground support maintenance services, and
commercial aircraft asset management and logistics. Our ownership
interests are designed to expand, strengthen and diversify Air T's
cash earnings power. Our goal is to build on Air T's core
businesses, and when appropriate, to expand into adjacent and other
industries that we believe fit into the Air T portfolio. 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
and other recently acquired companies, 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.
AIR T, INC. AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME (LOSS)
|
|
|
|
|
|
|
Year Ended March
31,
|
|
|
|
|
|
2018
|
|
2017
|
Operating
Revenues:
|
|
|
|
|
|
|
Overnight air
cargo
|
|
|
$
72,845,353
|
|
$
69,558,334
|
|
Ground equipment
sales
|
|
|
50,004,507
|
|
31,447,408
|
|
Ground support
services
|
|
|
35,698,171
|
|
30,453,246
|
|
Commercial jet
engines and parts
|
|
|
29,506,873
|
|
7,455,797
|
|
Printing equipment
and maintenance
|
|
|
6,144,403
|
|
9,019,155
|
|
Corporate
|
|
|
182,722
|
|
-
|
|
Leasing
|
|
|
137,316
|
|
537,719
|
|
|
|
|
|
194,519,345
|
|
148,471,659
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
Overnight air
cargo
|
|
|
63,049,619
|
|
61,661,072
|
|
Ground equipment
sales
|
|
|
41,567,109
|
|
24,350,264
|
|
Ground support
services
|
|
|
30,135,613
|
|
25,089,412
|
|
Printing equipment
and maintenance
|
|
|
2,975,999
|
|
9,490,906
|
|
Commercial jet
engines and parts
|
|
|
20,502,205
|
|
4,501,030
|
|
Leasing
|
|
|
-
|
|
49,460
|
|
Research and
development
|
|
|
195,653
|
|
1,042,496
|
|
General and
administrative
|
|
|
29,168,766
|
|
22,205,947
|
|
Depreciation,
amortization and impairment
|
|
|
2,678,858
|
|
3,181,845
|
|
|
|
|
|
190,273,822
|
|
151,572,432
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
4,245,523
|
|
(3,100,773)
|
|
|
|
|
|
|
|
|
Non-operating Income
(Loss):
|
|
|
|
|
|
|
Gain on sale of
marketable securities
|
|
|
93,066
|
|
576,162
|
|
Foreign currency gain
(loss)
|
|
|
(228,714)
|
|
286,596
|
|
Other-than-temporary
impairment losses on investments
|
(1,559,972)
|
|
(2,755,318)
|
|
Other investment
income, net
|
|
|
121,860
|
|
1,345,798
|
|
Interest expense and
other
|
|
|
(1,724,771)
|
|
(571,651)
|
|
Gain on asset
retirement obligation
|
|
|
562,500
|
|
-
|
|
Bargain purchase
acquisition gain, net of tax
|
|
501,880
|
|
-
|
|
Unrealized loss on
interest rate swap
|
|
|
(66,706)
|
|
-
|
|
Unrealized gain on
transition to equity method
|
|
721,585
|
|
-
|
|
Equity in income of
associated company
|
|
|
(14,644)
|
|
-
|
|
|
|
|
|
(1,593,916)
|
|
(1,118,413)
|
|
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes
|
|
|
2,651,607
|
|
(4,219,186)
|
|
|
|
|
|
|
|
|
Income
Taxes
|
|
|
195,000
|
|
725,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
|
2,456,607
|
|
(4,944,186)
|
|
|
|
|
|
|
|
|
Net (Income) Loss
Attributable to Non-controlling
|
|
|
|
|
|
Interests
|
|
|
(179,498)
|
|
1,730,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Air T, Inc. Stockholders
|
$
2,277,109
|
|
$
(3,213,539)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
1.11
|
|
$
(1.51)
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
$
1.11
|
|
$
(1.51)
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
2,042,806
|
|
2,125,224
|
|
|
Diluted
|
|
|
2,047,685
|
|
2,125,224
|
AIR T, INC. AND
SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEET
|
|
|
|
|
March 31,
2018
|
|
March 31,
2017
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents (Delphax $241,430 and $328,327)*
|
|
$
4,803,238
|
|
$
2,763,365
|
|
Marketable
securities
|
|
290,449
|
|
2,130,544
|
|
Restricted
cash
|
|
269,659
|
|
890,369
|
|
Restricted
investments
|
|
1,235,405
|
|
-
|
|
Accounts receivable,
less allowance for doubtful accounts
|
|
|
|
|
|
of $801,000
and $979,000 (Delphax $317,000 and $1,728,411)*
|
|
15,157,855
|
|
18,923,787
|
|
Costs and estimated
earnings in excess of billings on uncompleted projects
|
2,012,121
|
|
-
|
|
Notes and other
receivables-current
|
|
658,630
|
|
2,297,007
|
|
Income tax
receivable
|
|
1,557,180
|
|
402,688
|
|
Inventories, net
(Delphax $0 and $1,941,729)*
|
|
34,231,005
|
|
19,778,843
|
|
Prepaid expenses and
other (Delphax $72,269 and $932,794)*
|
|
1,455,566
|
|
1,672,475
|
|
Total Current
Assets
|
|
61,671,108
|
|
48,859,078
|
|
|
|
|
|
|
Investments in
available-for-sale securities
|
|
1,026,920
|
|
2,463,123
|
|
|
|
|
|
|
Property and
equipment, net (Delphax $0 and $8,007)*
|
|
20,273,171
|
|
5,324,488
|
Cash surrender value
of life insurance policies
|
|
2,356,507
|
|
2,251,450
|
Notes and other tax
receivables-long-term
|
|
311,000
|
|
66,771
|
Deferred income
taxes
|
|
-
|
|
204,000
|
Investments in
funds
|
|
324,854
|
|
-
|
Equity method
investments
|
|
5,032,268
|
|
-
|
Other
assets
|
|
420,981
|
|
371,975
|
Intangible assets,
net
|
|
1,312,472
|
|
1,376,699
|
Goodwill
|
|
4,417,605
|
|
4,417,605
|
|
Total
Assets
|
|
$
97,146,886
|
|
$
65,335,189
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts payable
(Delphax $2,145,847 and $2,482,578)*
|
|
$
10,181,143
|
|
$
11,571,156
|
|
Income tax payable
(Delphax $11,312 and $11,312)*
|
|
23,000
|
|
-
|
|
Accrued expenses
(Delphax $3,244,514 and $3,602,162)*
|
|
11,743,973
|
|
8,672,815
|
|
Short-term
debt
|
|
9,229,690
|
|
25,000
|
|
Total Current
Liabilities
|
|
31,177,806
|
|
20,268,971
|
|
|
|
|
|
|
Long-term debt
(Delphax $0 and $0)*
|
|
38,855,260
|
|
18,412,521
|
Deferred income
taxes
|
|
92,000
|
|
8,000
|
Other non-current
liabilities
|
|
785,797
|
|
3,039,402
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
70,910,863
|
|
41,728,894
|
|
|
|
|
|
|
Redeemable
non-controlling interest
|
|
1,992,939
|
|
1,443,901
|
|
|
|
|
|
|
Commitments and
contingencies (Notes 8, 11, and 22)
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
Air T, Inc.
Stockholders' Equity:
|
|
|
|
|
|
Preferred stock,
$1.00 par value, 50,000 shares authorized
|
|
-
|
|
-
|
|
Common stock, $.25
par value; 4,000,000 shares authorized,
|
|
|
|
|
|
2,043,607
shares issued and outstanding at March 31, 2018,
|
|
|
|
|
|
2,042,789
shares issued and outstanding at March 31, 2017
|
|
510,901
|
|
510,696
|
|
Additional paid-in
capital
|
|
4,171,869
|
|
4,205,536
|
|
Retained
earnings
|
|
20,695,981
|
|
18,461,347
|
|
Accumulated other
comprehensive loss
|
|
(260,900)
|
|
(212,047)
|
|
Total Air T, Inc.
Stockholders' Equity
|
|
25,117,851
|
|
22,965,532
|
Non-controlling Interests
|
|
(874,767)
|
|
(803,138)
|
|
Total
Equity
|
|
24,243,084
|
|
22,162,394
|
|
Total
Liabilities and Equity
|
|
$
97,146,886
|
|
$
65,335,189
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts related to
Delphax as of March 31, 2018 and 2017, respectively.
|
|
|
|
|
AIR T, INC. AND
SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
Year Ended March
31,
|
|
|
|
|
|
2018
|
|
2017
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
(loss)
|
$
2,456,607
|
|
$
(4,944,186)
|
|
|
Adjustments to
reconcile net income (loss) to net
|
|
|
|
|
|
cash used in
operating activities:
|
|
|
|
|
|
|
Gain on sale of
marketable securities
|
(93,066)
|
|
(576,162)
|
|
|
|
Loss on sale of
property and equipment
|
30,232
|
|
25,470
|
|
|
|
Change in inventory
reserves
|
(1,851,036)
|
|
2,188,192
|
|
|
|
Change in accounts
receivable reserves
|
(177,394)
|
|
194,286
|
|
|
|
Depreciation,
amortization and impairment
|
2,678,857
|
|
3,181,845
|
|
|
|
Change in cash
surrender value of life insurance
|
(105,057)
|
|
(151,393)
|
|
|
|
Deferred income
taxes
|
(10,566)
|
|
(659,000)
|
|
|
|
Gain on asset
retirement obligation
|
(562,500)
|
|
-
|
|
|
|
Gain on bargain
purchase, net of tax
|
(501,880)
|
|
-
|
|
|
|
Warranty
reserve
|
122,686
|
|
(15,173)
|
|
|
|
Other-than-temporary
impairment loss on investments
|
1,559,972
|
|
2,755,318
|
|
|
|
Unrealized loss on
interest rate swap
|
66,706
|
|
-
|
|
|
|
Unrealized gain on
transition to equity method
|
(721,585)
|
|
-
|
|
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
4,744,262
|
|
(5,524,446)
|
|
|
|
Costs and
estimated earnings in excess of billings on uncompleted
projects
|
(2,012,121)
|
|
-
|
|
|
|
Notes
receivable and other non-trade receivables
|
1,640,461
|
|
(1,600,290)
|
|
|
|
Inventories
|
(6,757,766)
|
|
(7,845,801)
|
|
|
|
Prepaid
expenses and other assets
|
331,466
|
|
(129,532)
|
|
|
|
Accounts
payable
|
(1,689,030)
|
|
4,146,921
|
|
|
|
Accrued
expenses
|
1,664,200
|
|
1,618,100
|
|
|
|
Income taxes
payable/ receivable
|
(1,442,493)
|
|
306,900
|
|
|
|
Non-current
liabilities
|
351,208
|
|
(525,143)
|
|
|
|
Total
adjustments
|
(2,734,444)
|
|
(2,609,908)
|
|
|
Net cash used
in operating activities
|
(277,837)
|
|
(7,554,094)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Purchases of
marketable securities
|
(2,519,045)
|
|
(2,719,369)
|
|
|
Proceeds from sale of
marketable securities
|
720,452
|
|
6,002,601
|
|
|
Net cash used for
business combinations
|
(2,400,000)
|
|
(4,573,700)
|
|
|
Net cash used for
equity method investments
|
(2,301,026)
|
|
-
|
|
|
Investment in
funds
|
(324,854)
|
|
-
|
|
|
Capital
expenditures
|
(20,215,594)
|
|
(2,346,431)
|
|
|
Proceeds from sale of
property and equipment
|
3,859
|
|
6,281
|
|
|
Increase (Decrease)
in restricted cash
|
620,710
|
|
(69,718)
|
|
|
Net cash used
in investing activities
|
(26,415,498)
|
|
(3,700,336)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Proceeds from line of
credit
|
115,533,307
|
|
68,275,140
|
|
|
Payments on line of
credit
|
(119,176,727)
|
|
(49,805,658)
|
|
|
Proceeds from line of
credit - Delphax
|
-
|
|
5,387,338
|
|
|
Payments of debts -
Delphax
|
-
|
|
(7,251,473)
|
|
|
Proceeds from term
loan
|
38,441,000
|
|
-
|
|
|
Payments on term
loan
|
(4,816,825)
|
|
-
|
|
|
Debt issuance
costs
|
(404,845)
|
|
-
|
|
|
Earnout
payments
|
(1,100,000)
|
|
-
|
|
|
Contribution from
non-controlling member
|
252,000
|
|
-
|
|
|
Proceeds from
exercise of stock options
|
8,638
|
|
-
|
|
|
Stock
repurchase
|
-
|
|
(7,917,009)
|
|
|
Net cash
provided by financing activities
|
28,736,548
|
|
8,688,338
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign
currency exchange rates on cash and cash equivalents
|
(3,340)
|
|
(15,998)
|
|
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
2,039,873
|
|
(2,582,090)
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF YEAR
|
2,763,365
|
|
5,345,455
|
CASH AND CASH
EQUIVALENTS AT END OF YEAR
|
$
4,803,238
|
|
$
2,763,365
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULE
OF NON-CASH INVESTING ACTIVITIES:
|
|
|
|
Finished goods
inventory transferred to equipment leased to customers
|
$
251,643
|
|
$
272,622
|
|
Equipment leased to
customers transferred to inventory
|
2,057,417
|
|
-
|
|
Non-controlling
interests in acquired business
|
-
|
|
1,312,501
|
|
Acquired business
earnout contracts and payable
|
-
|
|
3,016,667
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
Cash paid during the
year for:
|
|
|
|
|
|
Interest
|
$
1,065,785
|
|
$
298,150
|
|
|
Income
taxes
|
1,659,064
|
|
1,092,679
|
View original
content:http://www.prnewswire.com/news-releases/diversified-holding-company-air-t-inc-fy-2018-revenue-rose-31-to-194-5m-and-fy-2018-eps-improved-to-1-11--300674692.html
SOURCE Air T, Inc.