Air T, Inc. · NASDAQ:AIRT
Air T — Q2 FY2025 Earnings Presentation
43 slides from Air T's earnings presentation, Sep 30, 2024
Slide 1: A Portfolio of Powerful Companies: FY25 Q2 Update
September 30, 2024 A PORTFOLIO OF POWERFUL COMPANIES FY25 Q2 Update NASDAQ: AIRT
Slide 2: Safe Harbor
Statements in this document, 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 e
Slide 3: Executive Summary: Who We Are
WHO WE ARE ■ AIR T, INC. (NASDAQ: AIRT) is an industrious American company focusing on growing intrinsic value per share at a high rate. EXECUTIVE ■ Founded in 1980, our businesses have a history of growth and cash flow generation. ■ Current management has been in place since 2013. The two largest s
Slide 4: Contents
1. About AIR T, INC. CONTENTS 2. Performance 3. Our Growth Strategies 4. Appendix - Risk Factors 4
Slide 5: About Air T, Inc.
ABOUT AIR T, INC. ETGTTE A POR|FOLIO OF POWERFUL COMPANIES
Slide 6: We are an industrious American company established 40+ years and growing
We are an industrious American company established 40+ years and growing. ■ Our businesses have a history of growth and cash flow generation. ■ We seek to identify and empower individuals and teams who will operate businesses well, increasing value over time. ■ We work to activate growth and overcom
Slide 7: Investor-Operator Partnership
“Investor-Operator Partnership” is designed to drive short and long-term value creation. “We want our businesses to be managed by dynamic individuals within high-performance teams. We are set up to make space for dynamos and support their enterprises. The holding company team seeks to focus resource
Slide 8: Flywheel
Identify good ideas Build a brand and industrious Match with network capital partners FLYWHEEL Generate Secure and extremely empower attractive returns dynamic on capital management 88
Slide 9: Revenue, Adjusted EBITDA and Core Segments
$287M $5.6M 3 14 624 FY24 Revenue FY24 Adj. EBITDA* CORE SEGMENTS COMPANIES EMPLOYEES COMMERCIAL JET ENGINES AND PARTS GROUND EQUIPMENT SALES OVERNIGHT AIR CARGO *See Adjusted EBITDA reconciliation on slide 35 9
Slide 10: FY24 Financial Highlights
FY Results AIR T, INC. FY24 Financial Highlights (For the Twelve-Month Period Ended 3/31) FY24 FY23 FY22 FY21 FY20 Revenue $286.8M $247.3M $177.1M $175.1M $236.8M Operating Income $1.3M ($4.4M) $8.8M ($9.2M) $7.3M Adjusted EBITDA* $5.6M $6.0M $11.4M ($1.3M) $9.0M *See Adjusted EBITDA reconciliation
Slide 11: YTD FY25 Financial Highlights
FY Results AIR T, INC. YTD FY25 Financial Highlights (For the Six-Month Period Ended 9/30) FY25 FY24 FY23 FY22 FY21 Revenue $147.7M $150.4M $111.6M $80.2M $72.6M Operating Income $3.3M $1.4M $1.0M $0.7M ($4.0M) Adjusted EBITDA* $5.9M $3.1M $3.8M $1.4M ($2.6M) *See Adjusted EBITDA reconciliation on s
Slide 12: Commercial Jet Engines and Parts
SEGMENT 1 Commercial Jet Engines and Parts Six-Month Period FY25 FY24 Ended 9/30 Revenue $59.2M $66.3M Adjusted EBITDA* $5.8M $3.0M ■ We buy aircraft and engines, then either lease, trade, or send them to part out. ■ We supply parts to maintenance, repair, and overhaul facilities (MRO). ■ Companies
Slide 13: Overnight Air Cargo
SEGMENT 2 Overnight Air Cargo Six-Month Period FY25 FY24 Ended 9/30 Revenue $61.6M $56.0M Adjusted EBITDA* $3.9M $4.1M ■ We operate two of the seven FedEx feeder airlines. ■ Business units Mountain Air Cargo and CSA Air have a 41-year history with FedEx. ■ Air T Companies since 1982, 1983 ■ Air T ad
Slide 14: Ground Equipment Sales
SEGMENT 3 Ground Equipment Sales Six-Month Period FY25 FY24 Ended 9/30 Revenue $21.8M $24.0M Adjusted EBITDA* $0.0M ($0.0M) ■ We manufacture deicing equipment, scissor lift trucks, and other ground support equipment. ■ Sole-source deicer supplier to the US Air Force for 20 years. ■ Highly efficient
Slide 15: Corporate and Other Subcomponent of Operating Income
SEGMENT 4 Corporate and Other Subcomponent of Operating Income FY24 FY23 FY22 FY21 FY20 Corporate ($3.1M)2 ($6.0M) ($5.6M)1 ($5.4M) ($5.3M) Other3 ($5.0M) ($4.6M) ($4.4M) ($4.0M) ($3.8M) Total Corporate and Other ($8.1M) ($10.6M) ($10.0M)1 ($9.4M) ($9.1M) 1 Excludes one-time Employee Retention Credi
Slide 16: Investing For Growth
Investing For Growth Investment manager focused on unearthing fundamentally attractive small and mid-cap opportunities. Allows us to further expand upon our idea generation capabilities to identify, analyze, develop and execute innovative investment strategies that are aimed at building better finan
Slide 17: Air T Digital
Air T Digital As of 9/30/24 3/31/24 3/31/23 3/31/22 ARR1 $7.0M $5.9M $4.7M $3.9M ■ We invest in companies that provide digital aviation and other business services that generate recurring subscription revenues. 1ARR, or Annual Recurring Revenue, is defined as the monthly recurring revenue as of Sept
Slide 18: Aircraft JVs
Aircraft JVs As of 9/30/24 3/31/24 3/31/23 3/31/22 Aircraft JV Assets $451M $429M $150M $84M Under Management Aircraft JV Assets $402M $428M $150M $84M Purchased ■ We manage assets for ourselves and our investor partners. The asset types include leased aircraft, consignments, and teardowns. ■ Our Ai
Slide 19: BCCM Advisors
BCCM Advisors As of 9/30/24 3/31/24 3/31/23 3/31/22 BCCM Assets Under $41M $37M $33M $43M Management ■ Air T‘s wholly-owned management company, BCCM Advisors, is the manager of a fund focused on growth “at-a- reasonable-price” US Equities, as well as a fund dedicated to equity compounders in Africa.
Slide 20: News
AAM 24-1, LLC ■ On October 16, 2024, the Air T wholly-owned subsidiary AAM 24-1, LLC, added $15.0M to the original principal of $15.0M (closed on February 22, 2024), for a total principal of $30.0M. This $30.0M note bears an annual interest rate of 8.5%, collateralized by our equity investments from
Slide 21: Over the last ten years, revenue has increased 232%
FINANCIAL HIGHLIGHTS Over the last ten years, revenue has increased 232% and is more diversified. $278M* REVENUE 45% SEGMENTS +232% Commercial Aircraft & Engines Overnight Air Cargo Ground Support Equipment 42% $84M 62% 13% 38% FY14 FY24 *Excludes revenue in FY24 earned outside of our core segments.
Slide 22: Non-Operating Assets
OTHER Non-Operating Assets AIR T, Inc. owns the following public and private securities: AIR T, INC. Non-Operating Assets (in millions) 9/30/24 3/31/24 3/31/23 3/31/22 3/31/21 Lendway, Inc. (LDWY) Stock – 0.5M Shares1,2 $1.8 $2.2 $3.8 $4.6 $4.3 CCI Investment (20.1% as of 9/30/24)3 $4.5 $3.7 $3.1 $2
Slide 23: YTD FY25 Dividends from Equity Method Investees
DISTRIBUTIONS AIR T, INC. YTD FY25 Dividends from Equity Method Investees (For the Six-Month Period Ended 9/30) Equity Method Investment (in millions) 9/30/24 9/30/23 Lendway $0.0 $0.0 CCI $0.0 $0.5 CAM $2.3 $1.2 Other $1.0 $0.1 Total $3.3 $1.8 23
Slide 24: Capitalization Table
CAPITALIZATION TABLE AIR T, INC.’s capital structure is designed to appropriately shape our bet sizes; in part by utilizing non-recourse leverage For example, AIR T guarantees Contrail’s bank loans to a maximum limit of $1.6 million. 1We entered interest rate swaps to provide a fixed rate of 5.09% a
Slide 25: Calibrated Bets & Capitalization Structure
STRUCTURE Calibrated Bets & Capitalization Structure Tailored, Limited, Convex Exposures • Convexity-promoting organizational design • Kelly-calibrated bets: sized to edge & bankroll • Limit downside: tailored exposures Risk Management: Downside Protection • Anti-fragile company • Islands of segrega
Slide 26: Share price of AIRT has increased 7.4% per annum
FINANCIAL HIGHLIGHTS Since 12/31/2013, the share price of AIRT has increased by 7.4% per annum*+. $15.16 + Compares to 12.2% return of the S&P 500 over the same period *Reporting period 9/30/13 to 11/8/24, includes $4M Trust 26 *Preferred dividend to common shareholders
Slide 27: Average Yearly AIRT Stock Price Performance
FINANCIAL HIGHLIGHTS Average Yearly AIRT Stock Price Performance Starting Date ige | 2/aia4 | 42/37/12 | 12/31/13 | 12/31/14 | 12/31/15 12/31/17 12/31/19 | 12/31/20 | 12/31/24 | 12/31/22 | 12/31/23 12/31/12 |_2.7% 12/31/13 [SIs 12/31/14 [eae rendoee 12/31/15 [pseneae | asses | 12/31/16 | easoens een
Slide 28: Growth Strategies
GROWTH STRATEGIES ETGTTE A POR|FOLIO OF POWERFUL COMPANIES
Slide 29: Our four growth strategies
GROWTH STRATEGIES Our four growth strategies are... ■ Invest to build our current high-performing businesses. ■ Seek to acquire new cash-flow generating businesses. ■ Identify great marketable securities or alternative assets. ■ Create unique investment products and fund alongside third- party capit
Slide 30: Reinvest in high-performing businesses
GROWTH STRATEGY 1 We plan to reinvest in projects at our high-performing businesses by... ■ Purchasing commercial aircraft for trading, leasing and part-out. ■ Purchasing engine parts inventory. ■ Funding deicer builds for Global Ground Support. 30
Slide 31: Acquire new cash-flow generating businesses
GROWTH STRATEGY 2 We seek to acquire new cash-flow generating businesses by... ■ Identifying and acquiring high- performing businesses with edge in the marketplace, which either complement our current portfolio or diversify into industries beyond aviation. 31
Slide 32: Identify marketable securities or alternative assets
GROWTH STRATEGY 3 We plan to identify great marketable securities or alternative assets by... ■ Searching for another committed activist opportunity. ■ Investing in distressed and high yield securities. ■ Investing in small cap securities. ■ Further investing in our current securities portfolio. 32
Slide 33: Create unique investment products with outside capital partners
GROWTH STRATEGY 4 We plan to create unique investment products with outside capital partners by... ■ Offering thoughtful and sustainable products with attractive return profiles ■ Attracting and retaining sophisticated investment professionals and creating space for talented asset managers. 33
Slide 34: Theoretical Toy Model: Public Company versus Private Equity Fund
TOY MODEL Theoretical Toy Model Public Company versus Private Equity Fund Question: Does a permanent capital vehicle like a ASSUMPTIONS public company have a structural advantage compared Annual Return on Investment 5% to a 7-year PE fund vehicle? Taxes Paid by PE Fund @ 7-year Intervals 30% Hypothe
Slide 35: Adjusted EBITDA Reconciliation (Twelve-Month)
FY Results Adjusted EBITDA Reconciliation (For the Twelve-Month Period Ended 3/31) FY24 FY23 FY22 FY21 FY20 Operating Income (GAAP) $1.3M ($4.4M) $8.8M* ($9.2M) 7.3M Depreciation (excluding leased $2.8M $2.5M $1.6M $1.2M $1.3M engine depreciation) Asset Impairment, write-downs, $1.2M $7.8M $0.8M $6.
Slide 36: Adjusted EBITDA Reconciliation (Six-Month)
FY Results Adjusted EBITDA Reconciliation (For the Six-Month Period Ended 9/30) YTD as of 9/30 FY25 FY24 FY23 FY22 FY21 Operating Income (GAAP) $3.3M $1.4M $1.0M $0.7M ($4.0M) Depreciation (excluding leased $1.7M $1.4M $1.3M $0.6M $0.7M engine depreciation) Asset Impairment, write-downs, $0.5M $0.0M
Slide 37: Q&A with Management
Q&A WITH MANAGEMENT 37
Slide 38: Interactive Q&A through Slido.com
Our interactive Q&A capability, through Slido.com, allows shareholders to ask questions of our management. Recently submitted questions have been answered below. To submit your own question, go to (https://app.sli.do/event/j8drfixw).1 How does the company go about sourcing information from each such
Slide 39: Appendix: Risk Factors
APPENDIX Risk Factors ETEGANTA A POR|HFOLIO OF POWERFUL COMPANIES
Slide 40: Summary Risk Factors
For more detail and explanation, please see the Company’s public filings including its Form S-3 and prospectus supplements filed with the SEC. SUMMARY RISK FACTORS The purchase of securities of Air T, Inc., the “Company,” is highly speculative and involves a very high degree of risk. An investment i
Slide 41: Summary Risk Factors: Segment Operations
For more detail and explanation, please see the Company’s public filings including its Form S-3 and prospectus supplements filed with the SEC. SUMMARY RISK FACTORS Risks Related to Our Segment Operations ● The operating results of our four segments may fluctuate, particularly our commercial jet engi
Slide 42: Summary Risk Factors: Segment Operations (continued)
For more detail and explanation, please see the Company’s public filings including its Form S-3 and prospectus supplements filed with the SEC. SUMMARY RISK FACTORS Risks Related to Our Segment Operations (continued) ● Our lessees may fail to adequately insure our aircraft or engines which could subj
Slide 43: Summary Risk Factors: Structure and Financing (continued)
For more detail and explanation, please see the Company’s public filings including its Form S-3 and prospectus supplements filed with the SEC. SUMMARY RISK FACTORS Risks Related to Our Structure and Financing/Liquidity Risks (continued) ● Future acquisitions and dispositions of businesses and invest