AIRT Air T Inc

DENVER, N.C., Feb. 14, 2019 /PRNewswire/ -- Air T, Inc. (NASDAQ: AIRT) is organized as a portfolio of powerful businesses, each of which is independent yet interrelated. These include overnight air cargo operations; ground support equipment manufacturing; ground support equipment maintenance services; and commercial aircraft management, leasing and logistics. Today the Company announced results for its fiscal quarter ended December 31, 2018.

Q3 2019 Overview

• Revenues totaled $63.6 million for the fiscal quarter ended December 31, 2018, a 43% increase over the prior year comparable quarter
• Operating income of $1.5 million, an increase of $0.9 million from the prior year comparable quarter's operating income of $0.6 million
• Non-operating expense of $3.6 million, an increase of $2.3 million over the prior year comparable quarter
• Net loss attributable to Air T stockholders was $2.7 million as compared to net loss of $0.7 million in Q3 2018
• Loss per share was $1.34, compared to the prior comparable quarter's loss per share of $0.33

"While segment operating performance varied significantly, our consolidated third quarter operating results grew nicely from the prior year third quarter, as well as quarter over quarter," stated Nick Swenson, CEO and President of Air T.  "Growth was driven by our Commercial Jet Engines and Parts segment. Congratulations to Joe Kuhn and his team! Their business posted a solid third quarter, with high levels of both revenues and operating income.  Clearly, we have the start of a meaningful platform, and we are looking for innovative ways to enhance and accelerate the growth of this segment.  In contrast, Air Cargo Services reported significantly lower operating results in the period. Higher direct and indirect flight crew expenses have significantly eroded our margins. We are pursuing appropriate accommodation and remain hopeful that Air Cargo will deliver acceptable profit levels --- on time.  Similarly, the third quarter operating performance at Ground Support Maintenance Services sank from the prior year comparable quarter, although results improved sequentially from the second quarter of this year. Our new operating plan got traction in fiscal Q3, as we implemented various micro-actions to sustain a better operating dynamic. These actions included station by station assessments, with a special focus on markets for skilled labor. Management initiated certain rate increases and efficiency improvement plans in the early part of our fourth quarter. Finally, our Ground Support Equipment segment grew revenue at a rapid 26% in the quarter, which then reflected a more modest improvement in operating income.  This segment is growing steadily and profitably under Mike Moore's leadership. As new product launches take hold, and our customers save money by upgrading to the technology solutions integrated into our latest equipment, we expect to continue to deliver real value for customers with jobs to do."

Business Segment Results

Commercial Jet Engines and Parts

• This segment leases commercial jet engines and aircraft; buys, sells and trades in surplus and aftermarket commercial jet engines, engine parts, airframes, and airframe parts, avionics, and other; then delivers the related documents and logistics.
• Recent acquisitions in this segment include AirCo in October 2017 and the acquisition of the assets of Worthington Aviation in May 2018.
• Revenues for this segment totaled $21.0 million in Q3 2019, an increase of $17.1 million over the same period of fiscal 2018. Contrail experienced record levels of sales and income for the quarter.
• Operating income for this segment totaled $2.4 million in Q3 2019 compared to an operating loss of $0.3 million in the prior-year quarter.

Overnight Air Cargo

• The segment provides air express delivery services, substantially all for FedEx.
• Revenues for this segment declined 1% to $17.9 million in Q3 2019 compared to $18.0 million in Q3 2018.
• Operating income for this segment totaled $0.1 million, a decrease of $0.9 million when compared to the operating income of Q3 2018. This decrease is due primarily to our absorption of higher operating costs (mainly increased flight crew costs to meet operational requirements); and higher general and administrative staff needed to meet higher-frequency requirements.

Aviation Ground Support Maintenance Services

• This segment provides ground support equipment maintenance and facilities maintenance services to domestic airlines and aviation service providers across the United States.
• Revenue from this segment totaled $8.1 million in Q3 2019, a decline of 6% over Q3 2018. The decrease in the current quarter is principally due to the closure of two airport locations during fiscal 2018.
• Operating loss for this segment was $0.4 million in the current quarter, compared to a loss of $0.1 million in the same quarter of the prior year.

Aviation Ground Support Equipment

• This segment manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers.
• Revenues for this segment, which is the world's largest manufacturer of aircraft de-icing equipment, totaled $16.3 million for the fiscal quarter ended December 31, 2018. This represents an increase of 26% over the revenue of $12.9 million in the prior comparable quarter. The increase was primarily due to an increase in the unit sales of deicers and catering trucks sold during the quarter.
• Operating income for this segment was $1.2 million in the third quarter, an increase of $0.1 million for Q3 of last year principally due to the higher level of revenues.

Corporate

• This segment includes expenses attributable to core Corporate functions, investment research, and specialized resources that are available to business units.
• This segment's operating loss totaled $1.5 million in the current quarter. In the comparable quarter of the prior year, operating loss totaled $1.3 million when excluding the $1.2 million foreclosed inventory recognized in this segment related to the bankruptcy of Delphax Canada in the third quarter of last year. The $1.2 million related to the foreclosed inventory was eliminated in consolidation.
• The increase in Corporate segment costs in the current quarter is primarily attributable to increased headcount and significant professional fees billed by our former auditor.

Other Investments and Financial Liquidity

• Air T owned approximately 3.5 million shares of common stock of Insignia Systems, Inc. (NASDAQ: ISIG) with a market value of $5.2 million as of December 31, 2018.
• As of December 31, 2018, Air T held $8.2 million of marketable securities (including Insignia at market value of $5.2 million).
• Working capital (defined as current assets less current liabilities) as of December 31, 2018 totaled $15.0 million compared to $30.5 million as of March 31, 2018.

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, aviation ground support maintenance services, and commercial aircraft asset management and logistics. 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 matters discussed in this press release may be considered forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These forward-looking statements are subject to risks, uncertainties and assumptions about our operations and the investments we make, including, among other things, factors discussed under the heading "Risk Factors" in our 10-K, as well as the following:

• 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
• The 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, debt covenants, information technology disruptions, and the impact of future terrorist activities in the United States and abroad.

Forward-looking statements can be identified by the use of words like "believes," "could," "possibly," "probably," "anticipates," "estimates," "projects," "expects," "may," "will," "should," "seek," "intend," "plan," "expect," or "consider" or the negative of these expressions or other variations, or by discussions of strategy that involves risks and uncertainties. All forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual transactions, results, performance or achievements to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. We base these forward-looking statements on current expectations and projections about future events and the information currently available to us. Although we believe that the assumptions for these forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Consequently, no representation or warranty can be given that the estimates, opinions, or assumptions made in or referenced by this prospectus will prove to be accurate. We undertake no obligation to update our forward-looking statements. We caution you that the forward-looking statements in this press release are only estimates and predictions, or statements or current intent. Actual results or outcomes, or actions that we ultimately undertake, could differ materially from those anticipated in the forward-looking statements due to risks, uncertainties or actual events differing from the assumptions underlying these statements. These risks, uncertainties and assumptions include, but are not limited to, those discussed in this press release.

View original content:http://www.prnewswire.com/news-releases/air-t-inc-reports-third-quarter-fiscal-2019-results-300796280.html

SOURCE Air T, Inc.