Slide 1: A Portfolio of Powerful Companies: Q2 FY23 Update
DEC 2022 A PORTFOLIO OF POWERFUL COMPANIES Q2 FY23 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 focused on generating after tax cash flow per share. 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 shareholde
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. EVGA A PORTIFOLIO 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 an investor match with capital brand and network partners FLYWHEEL generate extremely secure and attractive returns empower dynamic on capital management 8
Slide 9: FY22 Revenue and Adjusted EBITDA; Core Segments
$177M $11.4M 3 11 500 FY22 Revenue FY22 Adj. EBITDA* CORE SEGMENTS COMPANIES EMPLOYEES COMMERCIAL AIRCRAFT & ENGINES AVIATION GROUND SUPPORT OVERNIGHT AIR CARGO EQUIPMENT *See Adjusted EBITDA reconciliation on slide 26 9
Slide 10: AIR T, INC. Financial Highlights
FY Results AIR T, INC. Financial Highlights (For the Twelve-Month Period Ended 3/31/22) FY22 FY21 FY20 Revenue $177.1M $175.1M $236.8M Operating Income $8.8M ($9.2M) $7.3M Adjusted EBITDA* $11.4M ($1.3M) $9.0M ■ FY22 saw revenue increases across both our Air Cargo segment (up $8.1M) and Commercial J
Slide 11: YTD FY23 Financial Highlights
YTD Results AIR T, INC. YTD FY23 Financial Highlights YTD FY23 FY22 Revenue $111.6M $80.2M Operating Income $1.0M $0.7M Adjusted EBITDA* $3.8M $1.4M ■ FY23 saw revenue increases across both our Air Cargo segment (up $4.9M) and Commercial Jet Engines and Parts segment (up $17.3M), and Global Ground S
Slide 12: Commercial Aircraft & Engines
SEGMENT 1 Commercial Aircraft & Engines ■ 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 Aviation.
Slide 13: Overnight Air Cargo
SEGMENT 2 Overnight Air Cargo ■ We operate two of the seven FedEx feeder airlines. ■ Business units Mountain Air Cargo and CSA Air have a 40 year history with FedEx. ■ Air T Companies since 1982, 1983 YTD FY23 FY22 Revenue $42.6M $37.7M Operating Income $1.9M $1.6M An asset-light, predictable busine
Slide 14: Aviation Ground Support Equipment
SEGMENT 3 Aviation Ground Support Equipment ■ 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 Support
Slide 15: Investing For Growth
SEGMENT 4 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 be
Slide 16: News: Crestone Air Partners Spinoff; ERC Tax Credit
Crestone Air Partners Spinoff ■ In July 2022 we announced that we had formed a new wholly- owned subsidiary called Crestone Air Partners who will assume the roles of sourcing and managing aircraft assets of our previously announced aircraft joint venture which was formed in May 2021. NEWS ERC Tax Cr
Slide 17: Revenue up 108% over seven years and more diversified
FINANCIAL HIGHLIGHTS Over the last seven years, revenue has increased 108% and is more diversified. $174M* REVENUE 33% +108% SEGMENTS Commercial Aircraft & Engines $84M Overnight Air Cargo 43% Ground Support Equipment 62% 24% 38% FY14 FY22 *Excludes revenue in FY22 earned outside of our core segment
Slide 18: Non-Operating Assets
OTHER Non-Operating Assets AIR T owns the following public and private securities as of 9/30/22: AIR T, INC. Non-Operating Assets (In Millions) 9/30/22 Insignia Systems (ISIG) Stock – 0.5M Shares* $4.3 CCI Investment (18.98%) $3.4 Investments in BCCM Funds $0.6 Aircraft Asset Management Investments
Slide 19: Capitalization Table
CAPITALIZATION TABLE AIR T, INC. DIRECT & GUARANTEED Interest Rate Maturity Date 9/30/2022 Revolver ($22m Capacity) Greater of 2.5% or Prime - 1% 8/31/2023 $ 17.9 Term Loans A and B 3.42% 8/31/2031 11.0 Corporate Headquarters Real Estate 5.09% 1/1/2028 1.4 Trust Preferred 8% 6/7/2049 25.6 Term Note
Slide 20: 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 21: AIRT share price increase since 2013
FINANCIAL HIGHLIGHTS Since 9/30/2013, the share price of AIRT has increased at 14.5% per annum*+. + Compares to 10.2% return of the SP500 over the same period *Reporting period 9/30/13 to 12/2/22, includes $4M Trust 21 Preferred dividend to common shareholders
Slide 22: Long-term history of sustained financial health
FINANCIAL HIGHLIGHTS Since 1994, our company has had a history of long-term and sustained financial health. Revenue ($ in Millions) Operating Income ($ in Millions) 250 15 200 10 150 5 100 - 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 23: Growth Strategies
GROWTH STRATEGIES EVGA A PORGIFOLIO OF POWERFUL COMPANIES
Slide 24: 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 25: 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. 25
Slide 26: 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. 26
Slide 27: 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. 27
Slide 28: 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. 28
Slide 29: 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 30: Adjusted EBITDA Reconciliation (FY)
FY Results Adjusted EBITDA Reconciliation FY22 FY21 FY20 Operating Income (GAAP) $8.8M ($9.2M) 7.3M Depreciation (excluding leased $1.6M $1.2M $1.3M engine depreciation) Asset Impairment, write-downs, $0.8M $6.6M $0.0M restructuring Gain on sale of PP&E $0.0M ($0.0M) ($0.0M) Security Issuance Expens
Slide 31: Adjusted EBITDA Reconciliation (YTD)
YTD Results Adjusted EBITDA Reconciliation YTD FY23 FY22 Operating Income (GAAP) $1.0M $0.7M Depreciation (excluding leased $1.3M $0.6M engine depreciation) Asset Impairment $1.5M $0.0M Gain on sale of PP&E ($0.0M) $0.0M Security Issuance Expense $0.0M $0.1M Adjusted EBITDA $3.8M $1.4M 31
Slide 32: Appendix: Risk Factors
APPENDIX Risk Factors EMMITT A PORTFOLIO OF POWERFUL COMPANIES
Slide 33: 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 34: 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 35: 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) ● Interruptions in the capital markets could impair our lessees’ ability to finance
Slide 36: 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) ● Despite our substantial indebtedness, we might incur signific