Air T, Inc. · NASDAQ:AIRT
Air T — Q2 FY2021 Earnings Presentation
33 slides from Air T's earnings presentation, Dec 23, 2020
Slide 1: Q2 FY21 Update NOV 2020 - A Portfolio of Powerful Companies
NASDAQ: AIRT Q2 FY21 Update NOV 2020 A PORTFOLIO OF POWERFUL COMPANIES
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 and Operating Highlights
3 ■ AIR T, INC. (NASDAQ: AIRT) is an industrious American company focused on generating after tax cash flow per share. ■ Founded in 1980, our businesses have a history of growing. ■ Current management has been in place since 2013. The two largest shareholders have seats on the Board of Directors. WH
Slide 4: Contents
1. About AIR T, INC. 2. Q1 FY21 Performance 3. Our Growth Factors 4. Appendix - Risk Factors 4 CONTENTS
Slide 5: About Air T, Inc.
ABOUT AIR T, INC. PORIIFOLIO OF POWERFUL COMPANIES
Slide 6: We are an industrious American company established years and growing
We are an industrious American company established 40 years and growing. 6 ■ 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 overco
Slide 7: Investor-Operator Partnership
“Investor-Operator Partnership” is designed to drive short and long-term value creation. 7 “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 resour
Slide 8: FY20 Revenue, Operating Income and Core Segments
$237M 8 FY20 Revenue $7.3M FY20 Operating Income 3 CORE SEGMENTS 10 COMPANIES 400+ EMPLOYEES OVERNIGHT AIR CARGO COMMERCIAL AIRCRAFT & ENGINES AVIATION GROUND SUPPORT EQUIPMENT
Slide 9: Q2 FY21 Highlights
AIR T, INC. Q2 FY21 Highlights (For the Three-Month Period Ended 9/30/20) 9 Q2 Results ■ Q2 FY21 saw revenue declines across all segments, but the largest change was in the Commercial Jet Engines and Parts segments, where revenues were down $11.7M compared to prior year Q2, due to overall declines i
Slide 10: FY21 YTD Highlights
AIR T, INC. FY21 YTD Highlights (For the Six-Month Period Ended 9/30/20) 10 YTD Results ■ YTD FY21 saw revenue declines across both our Air Cargo segment (down $4.6M) and Commercial Jet Engines and Parts segment (down $23.3M). Air Cargo segment revenues declined due to fewer aircraft on lease with F
Slide 11: Commercial Aircraft & Engines Segment
Commercial Aircraft & Engines 11 SEGMENT 1 ■ 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 in this segment include Contrail Aviation Support, JetYard, AirCo, and Worthington Aviatio
Slide 12: Overnight Air Cargo Segment
Overnight Air Cargo 12 SEGMENT 2 ■ We operate two of the seven FedEx feeder airlines. ■ Business units Mountain Air Cargo and CSA Air have a 40 year history with FedEx. An asset-light, predictable business. Revenue, Q2 FY21 $17.3M Revenue, Q2 FY20 $19.7M Operating Income*, Q2 FY21 $0.6M Operating In
Slide 13: Aviation Ground Support Equipment Segment
Aviation Ground Support Equipment 13 SEGMENT 3 ■ We manufacture deicing equipment, scissor lift trucks and other ground support equipment. ■ Sole-source deicer supplier to the US Air Force for 18 years. ■ Highly efficient light manufacturing facility. ■ The segment is comprised of Global Ground Supp
Slide 14: Q2 News: Trust Preferred Warrants (AIRTW)
■ On September 2nd, 2020 we announced that our Board of Directors has approved an extension of the expiration date on our outstanding warrants (AIRTW) to purchase our 8% Trust Preferred (AIRTP) that had been set to expire September 8th 2020. The new expiration date has been set as January 15, 2021.
Slide 15: COVID-19 impacts and PPP loan
■ Two of our core business segments saw significant impacts due to COVID-19. Our Commercial Jet Engines and Parts segment is directly tied to activity levels in the domestic commercial aviation industry. A portion of our Air Cargo Segment revenue has historically been derived from aircraft maintenan
Slide 16: Financial Highlights: Revenue growth and diversification
FY14 FY20 Commercial Aircraft & Engines Overnight Air Cargo Ground Support Equipment FINANCIAL HIGHLIGHTS Over the last six years, revenue has increased 181% and is more diversified. 16 +181% $236M* $84M SEGMENTS REVENUE 62% 38% 34% 22% 44% *Excludes revenue in FY20 earned outside of our core segmen
Slide 17: Non-Operating Assets
Non-Operating Assets 17 AIR T, Inc’s balance sheet includes $9.9 million of public and private securities, as of 9/30/20. OTHER AIR T, INC. Non-Operating Assets (In Millions) 9/30/20 Insignia Systems (ISIG) Stock – 3.5M Shares* $2.3 CCI Investment $3.4 Investments in BCCM Funds $0.5 TFS Partners LLC
Slide 18: Capitalization Table
18 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. AIR T, INC. DIRECT & GUARANTEED Interest Rate Maturity Date 9/3
Slide 19: Financial Highlights: Share price since 2013
FINANCIAL HIGHLIGHTS 19 Since 9/30/2013, the share price of AIRT has increased at 5.7% per annum*. *Reporting period 9/30/13 to 12/2/20, includes $4M Trust Preferred dividend to common shareholders
Slide 20: Financial Highlights: Revenue and operating income since 1994
FINANCIAL HIGHLIGHTS Since 1994, our company has had a history of long-term and sustained financial health. 20Note: FY2017 contained large non-cash impairments and inventory write-downs tied to our investment in Delphax Technologies - 50 100 150 200 250 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9
Slide 21: Growth Strategies
GROWTH STRATEGIES LIO OF POWERFUL COMPANIES
Slide 22: Our four growth strategies
GROWTH STRATEGIES Our four growth strategies are... 22 ■ 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 ca
Slide 23: Reinvest in high-performing businesses
GROWTH STRATEGY 1 We plan to reinvest in projects at our high-performing businesses by... 23 ■ Purchasing commercial aircraft for trading, leasing and part-out. ■ Purchasing engine parts inventory. ■ Funding deicer builds for Global Ground Support.
Slide 24: Acquire new cash-flow generating businesses
GROWTH STRATEGY 2 We seek to acquire new cash-flow generating businesses by... 24 ■ Identifying and acquiring high- performing businesses with edge in the marketplace, which either complement our current portfolio or diversify into industries beyond aviation.
Slide 25: Identify marketable securities or alternative assets
GROWTH STRATEGY 3 We plan to identify great marketable securities or alternative assets by... 25 ■ 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.
Slide 26: Create unique investment products with outside capital partners
GROWTH STRATEGY 4 We plan to create unique investment products with outside capital partners by... 26 ■ Offering thoughtful and sustainable products with attractive return profiles ■ Attracting and retaining sophisticated investment professionals and creating space for talented asset managers.
Slide 27: Appendix: Risk Factors
APPENDIX Risk Factors EUSGATTA A PORTFOLIO OF POWERFUL COMPANIES
Slide 28: Risk factors: highly speculative investment
The purchase of securities of Air T, Inc., the “Company,” is highly speculative and involves a very high degree of risk. An investment in the Company is suitable only for persons who can afford the loss of their entire investment. Accordingly, in making an investment decision with respect to the Com
Slide 29: Other Business Risks
Other Business Risks ● Our business, financial condition and results of operations are dependent upon those of our individual businesses, and our aggregate investment in particular industries. ● Sales of deicing equipment can be affected by weather conditions. ● Our results of operations may be affe
Slide 30: Continued - Other Business Risks
Continued - Other Business Risks ● Liens on our engines or aircraft could exceed the value of such assets, which could negatively affect our ability to repossess, lease or sell a particular engine or aircraft. ● In certain countries, an engine affixed to an aircraft may become an accession to the ai
Slide 31: Continued - Other Business Risks
Continued - Other Business Risks ● Our business strategy includes acquisitions, and acquisitions entail numerous risks, including the risk of management diversion and increased costs and expenses, all of which could negatively affect the Company’s profitability. ● We may sustain losses in our invest
Slide 32: Continued - Other Business Risks
Continued - Other Business Risks ● If our lessees fail to cooperate in returning our aircraft or engines following lease terminations, we may encounter obstacles and are likely to incur significant costs and expenses conducting repossessions. ● If our lessees fail to discharge aircraft liens for whi
Slide 33: Continued - Risks Related to the Offering
Continued - Risks Related to the Offering ● Holders of the Capital Securities will generally have limited voting rights. ● There is no existing public market for the Capital Securities; market prices may fluctuate based on numerous factors. SUMMARY RISK FACTORS 33 For more detail and explanation, pl