Steady growth and development over many years at Global Ground Support is once again showing itself in excellent quarterly financial results. We view GGS' products as reliable and innovative and delivering the customer what they need to do the job. GGS' customers have been responding with large and repeated orders, even during COVID-19. Mike Moore and his team are outstanding examples of professionals who know what they are doing, and who act on their instinct for quality workmanship every day. Thank you Mike and Team!

Long-time shareholders understand that AIRT works to make space for dynamos and dynamic teams. These individuals and groups make a difference by producing a product or service that is valued by others. While we don't have the space or inclination in this press release to highlight developments at all of our ten (10) business units, we want to give a shout-out to everyone that is making things happen day to day, because someday we expect that they will exit from the COVID-19 fog and have a breakout moment.

Long-time AIRT shareholders will have noticed that we have added an interactive Q&A capability, through Slido.com, to our annual meeting process. We intend to keep that link (https://app.sli.do/event/j8drfixw) open and available for shareholder questions. Questions submitted through Slido will be answered "live" and in writing at our Annual Meeting; and via a written response on a quarterly basis, ideally, shortly following our Form 10-Q filings. Note that legal and pragmatic requirements restrict us from answering every question posted, yet we intend to address all reasonable and relevant questions with a written answer. We hope that quarterly Q&A, along with enhanced reporting brought to us by our CFO, Brian Ochocki, will be welcome improvements. We aspire to provide the right level of information and delivering insight to shareholders, without noise and distraction. Your participation in an ongoing Q&A with management will help this process along. Thank you in advance. We anticipate posting Answers to our first set of Slido questions shortly after March 31, 2021."

Business Segment Results

Overnight Air Cargo

• This segment provides air express delivery services, substantially all for FedEx.

• Revenues for this segment decreased 13% to $16.3 million in the quarter ended December 31, 2020 compared to $18.7 million in the prior year quarter, primarily due to a reduction in third-party maintenance revenue.

• Adjusted EBITDA* for this segment was $0.5 million for the quarter ended December 31, 2020, a decrease of $0.2 million when compared to the same quarter a year ago, primarily due to the revenue decrease noted above.

Aviation ground equipment manufacturing and sales ("GGS")

• This segment, which is the world's largest manufacturer of aircraft de-icing equipment, manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, and military and industrial customers.

• Revenues for this segment totaled $20.8 million for the quarter ended December 31, 2020, up 30% versus $15.9 million in the same quarter in 2019. The increase was primarily driven by a higher volume of truck sales to the U.S. Air Force during the three months ended December 31, 2020.

• Adjusted EBITDA* for this segment was $4.3 million in the quarter ended December 31, 2020, an increase of $2.6 million compared to the prior year quarter, due primarily to the revenue increase noted above.

• As of December 31, 2020 this segment's order backlog was $17.3 million versus $29.1 million on December 31, 2019.

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.

• Revenues for this segment totaled $18.1 million for the quarter ended December 31, 2020, a decrease of $20.5 million versus the previous year's third fiscal quarter. The decrease was primarily attributed to the fact that all companies within this segment experienced lower engine and component sales and lower lease income due to the impact of COVID-19.

• Adjusted EBITDA* for this segment was a loss of $1.5 million for the quarter ended December 31, 2020 compared to an Adjusted EBITDA* profit of $3.5 million in the prior year's quarter due to the revenue slowdown caused by the COVID-19 pandemic.

Corporate and Other

• This segment includes expenses attributable to core Corporate functions, investment research, and specialized resources that are available to business units.

• This segment's Adjusted EBITDA* for the quarter ended December 31, 2020 represented a loss of $2.0 million in the quarter, compared to an Adjusted EBITDA* loss of $1.8 million in the same quarter a year ago.

*Adjusted EBITDA is a non-GAAP financial measure; see below for further explanation and reconciliation to GAAP measure.

Non-GAAP Financial Measures

The Company uses adjusted earnings before taxes, interest, and depreciation and amortization ("Adjusted EBITDA"), a non-GAAP financial measure as defined by the SEC, to evaluate the Company's financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.

Adjusted EBITDA is defined as earnings before taxes, interest, and depreciation and amortization, adjusted for specified items. The Company calculates Adjusted EBITDA by removing the impact of specific items and adding back the amounts of interest expense and depreciation and amortization to earnings before income taxes. When calculating Adjusted EBITDA, the Company does not add back depreciation expense for aircraft engines that are on lease, as the Company believes this expense matches with the corresponding revenue earned on engine leases. Depreciation expense for leased engines totaled $0.6 million for the three months ended December 31, 2020 and 2019. Depreciation expense for leased engines totaled $1.7 million and $3.6 million for the nine months ended December 31, 2020 and 2019, respectively.

Management believes that Adjusted EBITDA is a useful measure of the Company's performance because it provides investors additional information about the Company's operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted EBITDA is not intended to replace or be an alternative to operating income from continuing operations, the most directly comparable amounts reported under GAAP.

The tables below provide a reconciliation of operating income from continuing operations to Adjusted EBITDA and Adjusted EBITDA by segment for the three and nine months ended December 31, 2020 and 2019 (in thousands):

Included in the asset impairment, restructuring or impairment charges for the nine months ended December 31, 2020 was a write-down of $0.5 million on the commercial jet engines and parts segment's inventories due to a management decision to monetize two engines by sale to a third party, in which the net carrying values exceeded the estimated proceeds.

The following table shows the Company's Adjusted EBITDA by segment for the three and nine month periods ended December 31, 2020 and 2019, respectively.

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, 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 Form 10-K for the year ended March 31, 2020, as well as the following:

• Conditions in the Company's markets;

• The ability of the Company and its business segments to generate sufficient cash flows from operations or through financings.

• The risk that contracts with FedEx could be terminated or adversely modified;

• The risk that the number of aircraft operated for FedEx could be reduced;

• The risks faced by commercial aircraft operators and maintenance, repair and overhaul companies because they are our customers.

• Our engine values and lease rates, which are dependent on the status of the types of aircraft on which engines are installed, and other factors.

• The Company and its customers operate in a highly regulated industry and changes in economic conditions, laws or regulations may adversely affect our ability to lease or sell our engines or aircraft.

• We may experience losses and delays in connection with repossession of engines or aircraft when a lessee defaults.

• The risk that customers or potential customers will defer significant orders for deicing equipment under contracts with GGS;

• The impact of any terrorist activities or protests on United States soil or abroad;

• The Company's ability to manage its cost structure and operating expenses, or unanticipated capital requirements, and match them to shifting customer service requirements and production or equipment volume levels;

• The risk of injury or other damage arising from accidents involving the Company's overnight air cargo operations, equipment or parts sold and/or services provided;

• Market acceptance of the Company's commercial and military equipment and services;

• Competition from other providers of similar equipment and services;

• Changes in government regulation and technology;

• Changes in the value of marketable securities held as investments;

• Mild winter weather conditions reducing the demand for deicing equipment.

• The Company's ability to meet debt service covenants, obtain additional financing and to refinance existing debt obligations

• The length, severity and impact of the COVID-19 pandemic; and

• The risks and uncertainties related to business acquisitions (including the ability to successfully achieve anticipated benefits), 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 in this press release 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 of 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.

CONTACT:

Air T, Inc.
Brian Ochocki, CFO
bochocki@airt.net
612-843-4302

SOURCE: Air T, Inc.

View source version on accesswire.com:
https://www.accesswire.com/629528/Air-T-Inc-Reports-Third-Quarter-Fiscal-2021-Results