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.