Air T, Inc. · NASDAQ:AIRT
Air T — Q3 FY2025 Earnings Presentation
45 slides from Air T's earnings presentation, Dec 31, 2024
Slide 1: A Portfolio of Powerful Companies: FY25 Q3 Update
As of December 31, 2024 A PORTFOLIO OF POWERFUL COMPANIES FY25 Q3 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
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: FY24 Revenue and Adjusted EBITDA, 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 37 9
Slide 10: Air T, Inc. FY Financial Highlights
FY Results AIR T, INC. FY Financial Highlights (For the Twelve-Month Period Ended 3/31) 2024 2023 2022 2021 2020 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 on
Slide 11: Air T, Inc. YTD FY25 Financial Highlights
FY Results AIR T, INC. YTD FY25 Financial Highlights (For the Nine-Month Period Ended 12/31) 2024 2023 2022 2021 2020 Revenue $225.5M $214.2M $173.0M $125.6M $128.4M Operating Income $5.1M ($0.2M) $1.1M $0.7M ($2.9M) Adjusted EBITDA* $8.6M $2.9M $5.2M $1.9M ($1.3M) *See Adjusted EBITDA reconciliatio
Slide 12: Commercial Jet Engines and Parts
SEGMENT 1 Commercial Jet Engines and Parts Nine-Month Period 2024 2023 Ended 12/31 Revenue $91.9M $90.5M Adjusted EBITDA* $8.8M $2.9M ■ 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). ■ Companie
Slide 13: Overnight Air Cargo
SEGMENT 2 Overnight Air Cargo Nine-Month Period 2024 2023 Ended 12/31 Revenue $92.2M $85.0M Adjusted EBITDA* $5.9M $6.0M ■ 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 and 1983 ■ Air
Slide 14: Ground Equipment Sales
SEGMENT 3 Ground Equipment Sales Nine-Month Period 2024 2023 Ended 12/31 Revenue $33.7M $32.5M Adjusted EBITDA* $0.2M ($0.5M) ■ 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 efficien
Slide 15: Corporate and Other Subcomponent of Operating Income
SEGMENT 4 Corporate and Other Subcomponent of Operating Income (excluding Equity Method Investments) Twelve-Month Period 2024 2023 2022 2021 2020 Ended 3/31 Corporate Overhead ($3.1M)2 ($6.1M) ($5.7M)1 ($5.4M) ($5.3M) Other subsidiaries3 ($5.0M) ($4.5M) ($4.3M) ($4.0M) ($3.8M) Total Corporate and Ot
Slide 16: Corporate Overhead Detail
SEGMENT 4 Corporate Overhead Detail Twelve-Month Period 2024 2023 2022 2021 2020 Ended 3/31 Salaries & benefits ($5.3M) ($4.3M) ($4.0M) ($3.6M) ($3.9M) Audit, tax, legal and ($1.5M) ($1.9M) ($2.5M) ($1.3M) ($2.4M) professional fees Health insurance1 $0.7M ($0.5M) $0.1M ($0.8M) ($0.3M) Other expenses
Slide 17: Corporate and Other Subcomponent of Operating Income (Nine Months)
SEGMENT 4 Corporate and Other Subcomponent of Operating Income (excluding Equity Method Investments) Nine-Month Period Ended 2024 2023 2022 2021 2020 12/31 Corporate Overhead ($4.5M) ($4.3M) ($5.6M) ($3.2M) ($4.2M) Other subsidiaries1 ($3.1M) ($2.9M) ($2.9M) ($3.1M) ($2.9M) Total Corporate and Other
Slide 18: 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 19: Air T Digital
Air T Digital As of 12/31/24 3/31/24 3/31/23 3/31/22 ARR1 $7.3M $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 Dec
Slide 20: Aircraft JVs
Aircraft JVs As of 12/31/24 3/31/24 3/31/23 3/31/22 Aircraft JV Assets Under Management $515M $428M $150M $84M (net of dispositions) Aircraft JV Assets $564M $429M $150M $84M Purchased ■ We manage assets for ourselves and our investor partners. The asset types include leased aircraft, consignments,
Slide 21: BCCM Advisors
BCCM Advisors As of 12/31/24 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 22: News: AAM 24-1 Note and Alerus Credit Agreement
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 note (closed on February 22, 2024) from institutional investors, for a total principal of $30.0M. This $30.0M note bears an annual interest rate of 8.5%, collaterali
Slide 23: Over the last ten years, revenue has increased 232% and is more diversified
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 three core seg
Slide 24: 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) 12/31/24 3/31/24 3/31/23 3/31/22 3/31/21 Lendway, Inc. (LDWY) Stock – 0.5M Shares1,2 $2.1 $2.2 $3.8 $4.6 $4.3 CCI Investment (20.1% as of 12/31/24)3 $4.2 $3.7 $3.1
Slide 25: YTD FY25 Dividends Received from Equity Method Investees
DISTRIBUTIONS AIR T, INC. YTD FY25 Dividends Received from Equity Method Investees (For the Nine-Month Period Ended 12/31) Equity Method Investment (in millions) 2024 2023 Lendway $0.0 $0.0 CCI $0.0 $0.5 CAM $3.9 $1.4 Other $1.2 $0.2 Total $5.1 $2.1 25
Slide 26: 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 27: Calibrated Investments & Capitalization Structure
STRUCTURE Calibrated Investments & Capitalization Structure Tailored, Limited, Convex Exposures • Convexity-promoting organizational design • Kelly-calibrated investments: sized to edge & bankroll • Limit downside: tailored exposures Risk Management: Downside Protection • Anti-fragile company • Isla
Slide 28: Share price of AIRT has increased 10.9% per annum since 12/31/2013
FINANCIAL HIGHLIGHTS Since 12/31/2013, the share price of AIRT has increased by 10.9% per annum*+. $20.38 + Compares to 13.2% return of the S&P 500 over the same period *Reporting period 9/30/13 to 2/5/25, includes $4M Trust Preferred 28 dividend to common shareholders, paid August 12, 2022.
Slide 29: Average Yearly AIRT Stock Price Performance
FINANCIAL HIGHLIGHTS Average Yearly AIRT Stock Price Performance Taring Date | Ending Date mR | 12/34/11 | 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 | 12/31/23 | 12/31/24 12/31/12| 2.7% 12/31/13 eae 12/31/14 area 113.6% 12/
Slide 30: Growth Strategies
GROWTH STRATEGIES ETGTTE A POR|FOLIO OF POWERFUL COMPANIES 30
Slide 31: 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 32: Reinvest in projects at our 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. 32
Slide 33: 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, which either complement our current portfolio or diversify into industries beyond aviation. 33
Slide 34: Identify great 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. 34
Slide 35: 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. 35
Slide 36: 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 37: Adjusted EBITDA Reconciliation (Twelve Months)
FY Results Adjusted EBITDA Reconciliation (For the Twelve-Month Period Ended 3/31) 2024 2023 2022 2021 2020 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 38: Adjusted EBITDA Reconciliation (Nine Months)
FY Results Adjusted EBITDA Reconciliation (For the Nine-Month Period Ended 12/31) 2024 2023 2022 2021 2020 Operating Income (GAAP) $5.1M ($0.2M) $1.1M $0.7M ($2.9M) Depreciation (excluding leased $2.3M $2.1M $1.8M $1.0M $0.9M engine depreciation) Asset Impairment, write-downs, $0.8M $0.3M $2.2M $0.0
Slide 39: Q&A with Management
Q&A WITH MANAGEMENT 39
Slide 40: 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 No questions received in the current quarter Notes: 1. We plan to
Slide 41: Appendix: Risk Factors
APPENDIX Risk Factors ETEGANTA A POR|HFOLIO OF POWERFUL COMPANIES
Slide 42: 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 43: 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 44: 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 45: Summary Risk Factors: Structure and Financing/Liquidity
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