Slide 1: FY24 Q2 Update: A Portfolio of Powerful Companies
NASDAQ: AIRT FY24 Q2 Update A PORTFOLIO OF POWERFUL COMPANIES September 30, 2023
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: Who We Are, Operating Highlights, Executive Summary
3 ■ AIR T, INC. (NASDAQ: AIRT) is an industrious American company focusing on growing intrinsic value per share at a high rate. ■ 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 shareholders have se
Slide 4: Contents
1. About AIR T, INC. 2. Performance 3. Our Growth Strategies 4. Appendix - Risk Factors 4 CONTENTS
Slide 5: About AIR T, INC.
ABOUT AIR T, INC. EUG A POR|IFOLIO OF POWERFUL COMPANIES
Slide 6: Industrious American company established 40+ 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 overc
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: Air T Flywheel
Identify good ideas Build a brand and industrious Match with network capital partners AIRTING FLYWHEEL Secure and empower Generate extremely attractive returns on capital dynamic management EUSA A PORGIFOLIO OF POWERFUL COMPANIES
Slide 9: FY23 Revenue, Adj. EBITDA, Core Segments
$247M 9 FY23 Revenue $6.0M FY23 Adj. EBITDA* 3 CORE SEGMENTS 14 COMPANIES 584 EMPLOYEES OVERNIGHT AIR CARGO COMMERCIAL JET ENGINES AND PARTS GROUND EQUIPMENT SALES *See Adjusted EBITDA reconciliation on slide 34
Slide 10: FY23 Financial Highlights
AIR T, INC. FY23 Financial Highlights (For the Twelve-Month Period Ended 3/31) 10 FY Results ■ FY23 saw a 40% revenue increase across all segments. This includes a $44.0M increase in Commercial Jet Engines and Parts, which was driven by higher component sales due to more activity in the aviation ind
Slide 11: YTD FY24 Financial Highlights
AIR T, INC. YTD FY24 Financial Highlights (For the Six-Month Period Ended 9/30) 11 FY Results ■ YTD FY24 saw a 35% revenue increase compared to YTD FY23 across all segments. This includes a $24.5M increase in Commercial Jet Engines and Parts, which was driven by higher component sales due to more ac
Slide 12: Commercial Jet Engines and Parts Segment
Commercial Jet Engines and Parts 12 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, AirCo, AirCo Services, Worthington, Jet Yard, Air’Zo
Slide 13: Overnight Air Cargo Segment
Overnight Air Cargo 13 SEGMENT 2 ■ 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 added Worldwide Aircraft Services (WASI) to this segment in Q4 FY23. ■ Revenues and oper
Slide 14: Ground Equipment Sales Segment
Ground Equipment Sales 14 SEGMENT 3 ■ We manufacture deicing equipment, scissor lift trucks, and other ground support equipment. ■ Sole-source deicer supplier to the US Air Force for 19 years. ■ Highly efficient light manufacturing facility. ■ The segment is comprised of Global Ground Support LLC. ■
Slide 15: Corporate and Other Subcomponent of Operating Income
15 SEGMENT 4 FY23 FY22 FY21 FY20 Corporate ($6.0M) ($5.6M)1 ($5.4M) ($5.3M) Other2 ($4.6M) ($4.4M) ($4.0M) ($3.8M) Total Corporate and Other ($10.6M) ($10.0M)1 ($9.4M) ($9.1M) Corporate and Other Subcomponent of Operating Income 1 Excludes one-time Employee Retention Credit of $9.1M. Reported FY22 O
Slide 16: Investing For Growth
16 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 financial futures for a
Slide 17: Air T Digital
Air T Digital 17 ■ We invest in companies that provide digital aviation and other business services that generate recurring subscription revenues. As of 9/30/23 6/30/23 3/31/23 3/31/22 ARR1 $5.4M $5.0M $4.7M $3.9M 1ARR, or Annual Recurring Revenue, is defined as the monthly recurring revenue as of S
Slide 18: BCCM and Aircraft JVs
BCCM and Aircraft JVs 18 ■ We manage assets for our investor partners. The asset types include leased aircraft, consignments, teardowns as well as domestic and African equities. ■ Through 9/30/23, Air T’s asset management activities have not generated positive Adjusted EBITDA. As of 9/30/23 6/30/23
Slide 19: WASI Acquisition
■ On January 31, 2023, we completed the acquisition of Worldwide Aircraft Services (“WASI”), an aircraft repair station that began operations in 1986 located in Springfield, MO, for $3.1M. 19 WASI Acquisition NEWS
Slide 20: Financial Highlights: Revenue up 187% over ten years
FY14 FY23 Commercial Aircraft & Engines Overnight Air Cargo Ground Support Equipment FINANCIAL HIGHLIGHTS Over the last ten years, revenue has increased 187% and is more diversified. 20 +187% $240M* $84M SEGMENTS REVENUE 62% 38% 38% 20% 42% *Excludes revenue in FY23 earned outside of our core segmen
Slide 21: Non-Operating Assets
Non-Operating Assets 21 AIR T, Inc. owns the following public and private securities: OTHER AIR T, INC. Non-Operating Assets (In Millions) 9/30/23 3/31/23 3/31/22 3/31/21 3/31/20 Lendway, Inc. (LDWY) Stock – 0.5M Shares1,2 $2.5 $3.8 $4.6 $4.3 $2.6 CCI Investment (20.1% as of 9/30/23)3 $4.0 $3.1 $2.6
Slide 22: Capitalization Table
22 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
Slide 23: Calibrated Bets & Capitalization Structure
Calibrated Bets & Capitalization Structure 23 Risk Management: Downside Protection • Anti-fragile company • Islands of segregated assets and businesses • Market-driven and savvy risk management program that oversees all of the company STRUCTURE Tailored, Limited, Convex Exposures • Convexity-promoti
Slide 24: Financial Highlights: AIRT share price since 2013
FINANCIAL HIGHLIGHTS 24 Since 9/30/2013, the share price of AIRT has increased by 13.6% per annum*+. *Reporting period 9/30/13 to 11/9/23, includes $4M Trust *Preferred dividend to common shareholders + Compares to 9.9% return of the S&P 500 over the same period $25.59
Slide 25: Average Yearly AIRT Stock Price Performance IRR
FINANCIAL HIGHLIGHTS 25 Average Yearly AIRT Stock Price Performance IRR 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/12 2.7% 12/31/13 22.2% 45.6% 12/31/14 47.2% 76.4% 113.6% 12/31/15 32.2% 43.9% 43.0% -4.3% 12/31/16 23.5% 29.3% 24.
Slide 26: Growth Strategies
GROWTH STRATEGIES PAN A POR{IFOLIO OF POWERFUL COMPANIES
Slide 27: Our four growth strategies
GROWTH STRATEGIES Our four growth strategies are... 27 ■ 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 28: Reinvest in high-performing businesses
GROWTH STRATEGY 1 We plan to reinvest in projects at our high-performing businesses by... 28 ■ Purchasing commercial aircraft for trading, leasing and part-out. ■ Purchasing engine parts inventory. ■ Funding deicer builds for Global Ground Support.
Slide 29: Acquire new cash-flow generating businesses
GROWTH STRATEGY 2 We seek to acquire new cash-flow generating businesses by... 29 ■ Identifying and acquiring high- performing businesses with edge in the marketplace, which either complement our current portfolio or diversify into industries beyond aviation.
Slide 30: Identify marketable securities or alternative assets
GROWTH STRATEGY 3 We plan to identify great marketable securities or alternative assets by... 30 ■ 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 31: Create unique investment products with outside capital partners
GROWTH STRATEGY 4 We plan to create unique investment products with outside capital partners by... 31 ■ Offering thoughtful and sustainable products with attractive return profiles ■ Attracting and retaining sophisticated investment professionals and creating space for talented asset managers.
Slide 32: Theoretical Toy Model: Public Company versus Private Equity Fund
Theoretical Toy Model Public Company versus Private Equity Fund 32 TOY MODEL ASSUMPTIONS Annual Return on Investment 5% Taxes Paid by PE Fund @ 7-year Intervals 30% Year Public Company $1 Private Equity Fund $1 Taxes Paid 0 $1.00 $1.00 $0.00 7 $1.34 $1.24 $0.10 14 $1.89 $1.59 $0.15 21 $2.65 $2.04 $0
Slide 33: Adjusted EBITDA Reconciliation (FY)
Adjusted EBITDA Reconciliation 33 FY Results FY23 FY22 FY21 FY20 Operating Income (GAAP) ($4.4M) $8.8M* ($9.2M) 7.3M Depreciation (excluding leased engine depreciation) $2.5M $1.6M $1.2M $1.3M Asset Impairment, write-downs, restructuring $7.8M $0.8M $6.6M $0.0M Gain on sale of PP&E $0.0M $0.0M ($0.0
Slide 34: Adjusted EBITDA Reconciliation (Six Months)
Adjusted EBITDA Reconciliation 34 FY Results FY24 FY23 FY22 FY21 Operating Income (GAAP) $1.4M $1.0M $0.7M ($4.0M) Depreciation (excluding leased engine depreciation) $1.4M $1.3M $0.6M $0.7M Asset Impairment, write-downs, restructuring $0.0M $1.5M $0.0M $0.7M Gain on sale of PP&E ($0.0M) ($0.0M) $0.
Slide 35: Q&A with Management
35 Q&A WITH MANAGEMENT
Slide 36: Interactive Q&A through Slido
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 36 No questions received in the current quarter Notes: 1. We plan
Slide 37: Appendix: Risk Factors
APPENDIX Risk Factors EUSA A PORGIFOLIO OF POWERFUL COMPANIES
Slide 38: Summary Risk Factors
SUMMARY RISK FACTORS 38 For more detail and explanation, please see the Company’s public filings including its Form S-3 and prospectus supplements filed with the SEC. The purchase of securities of Air T, Inc., the “Company,” is highly speculative and involves a very high degree of risk. An investmen
Slide 39: Risks Related to Our Segment Operations
Risks Related to Our Segment Operations ● The operating results of our four segments may fluctuate, particularly our commercial jet engine and parts segment. ● Our Air Cargo Segment is dependent on a significant customer. ● Our dry-lease agreements with FedEx subject us to operating risks. ● Because
Slide 40: Risks Related to Our Segment Operations (continued)
Risks Related to Our Segment Operations (continued) ● Our lessees may fail to adequately insure our aircraft or engines which could subject us to additional costs. ● If our lessees fail to cooperate in returning our aircraft or engines following lease terminations, we may encounter obstacles and are
Slide 41: Risks Related to Our Structure and Financing/Liquidity Risks (continued)
Risks Related to Our Structure and Financing/Liquidity Risks (continued) ● Our current financing arrangements require compliance with financial and other covenants and a failure to comply with such covenants could adversely affect our ability to operate. ● Future acquisitions and dispositions of bus