Air T, Inc. · NASDAQ:AIRT
Air T — Investor Presentation (July 2019)
42 slides from Air T's investor presentation, July 2019
Slide 1: A Portfolio of Powerful Companies: Trust Preferred Security Offering
July 2019 A PORTFOLIO OF POWERFUL COMPANIES A Trust Preferred Security Offering “TruP” 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 doing capital allocation right. ■ Founded in 1980, our businesses have a history of growth and cashflow generation. EXECUTIVE ■ ■ Management owns a significant stake in the company, purchased entirely with personal
Slide 4: Executive Summary: The 8% Trust Preferred Offering
THE 8% TRUST PREFERRED OFFERING ■ AIR T, INC. is raising long-term capital to fund growth. ○ Step 1: Existing shareholders were given a $4 million dividend in the form of a newly issued 8% fixed income trust preferred security, the Alpha Income Preferred (8% EXECUTIVE AIP). ○ Step 2: Existing shareh
Slide 5: Contents
1. The Offering 2. About AIR T, INC. 3. Our Growth Factors CONTENTS 4. The Trust Preferred “TruP” Offering 5. Why Invest Now 6. Appendix - Risk Factors 5
Slide 6: The 8% TruP Offering
THE 8% TruP OFFERING [XG A PORTFOLIO OF POWERFUL COMPANIES
Slide 7: Get in on the ground floor of a new securities offering
Get in on the ground floor of a new securities offering. ■ Through a subsidiary trust, we issued to existing equity shareholders $4 million of a new 8% fixed income trust preferred security, Alpha Income Preferred (“AIP”). Ticker: AIRTP ■ We also issued warrants (Ticker: AIRTW) to acquire $21 millio
Slide 8: About Air T, Inc.
ABOUT AIR T, INC. ETUATA A PORIFOLIO OF POWERFUL COMPANIES
Slide 9: We are an industrious American company established 38 years and growing
We are an industrious American company established 38 years and growing. ■ Our businesses have a history of growth and cash flow generation. ■ We support dynamic, talented individuals and teams that have demonstrated domain knowledge. ■ We work to activate growth and overcome challenges, ultimately
Slide 10: FY2019 Revenue, Adjusted EBITDA and Core Segments
$250M $13.9M 4 12 850+ FY 2019 REVENUE FY 2019 ADJ EBITDA CORE SEGMENTS COMPANIES EMPLOYEES COMMERCIAL AIRCRAFT, AIRCRAFT JET ENGINES & ENGINES & PARTS OVERNIGHT AIR CARGO AVIATION GROUND SUPPORT AVIATION GROUND SUPPORT EQUIPMENT SERVICES 10
Slide 11: Investor-Operator Partnership
“Investor-Operator Partnership” is designed to drive short and long-term value creation. “Remember: The best businesses are managed by dynamic individuals within high-performance teams. We are set up to make space for dynamos and support their enterprises. My team seeks to focus resources, activate
Slide 12: Commercial Aircraft & Engines
SEGMENT 1 Commercial Aircraft & Engines ■ We buy aircraft and engines, then either lease them or part them out. ■ We supply parts to maintenance, repair and overhaul facilities (MRO). ■ Business units include Contrail Aviation Support, JetYard, AirCo and Worthington Aviation Parts, and Stratus Aero
Slide 13: Overnight Air Cargo
SEGMENT 2 Overnight Air Cargo ■ We operate two (2) of the seven (7) FedEx feeder airlines. ■ Business units Mountain Air Cargo and CSA Air have a 38-year history with FedEx. Revenue, 3/31/19 $73.0M Reported EBITDA*, 32.9% 3/31/19 AIR T Companies Since 1982, 1983 *Reported EBITDA excludes Intercompan
Slide 14: Aviation Ground Support Services
SEGMENT 3 Aviation Ground Support Services ■ We provide ground support fleet and facility maintenance services at 85 North American airports. ■ The segment is comprised of Global Aviation Services. Revenue, 3/31/19 $34.3M Reported EBITDA, -$0.8M 3/31/19 AIR T Company Since 2007 *Reported EBITDA excl
Slide 15: Aviation Ground Support Equipment
SEGMENT 4 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 16: Diversified Revenue Streams
REVENUE STREAMS Overnight Air Cargo Commercial Aircraft & Engines Diversified Revenue Streams Ground Equipment Ground Sales Support Services 16
Slide 17: Other Earnings Assets
OTHER Other Earnings Assets AIR T, INC’s balance sheet reflects $9.3 million of public and private securities, as of 3/31/19. AIR T, INC. Non-Operating Assets (In Millions) 3/31/19 Marketable Securities $1.8 Stocks & Bonds Marketable securities held in captive insurance Restricted Investments $0.8 c
Slide 18: Capitalization Table
CAPITALIZATION TABLE AIR T, INC. DIRECT & GUARANTEED Interest Rate Maturity Date 3/31/2019 Pro Forma Revolver Prime - 1% 11/30/2019 $ 12.4 $ 12.4 Term Loans 1mo LIBOR + 2%, 4.50% 1/1/2028 13.1 13.1 AIR T, INC.’s capital Corporate Headquarters Real Estate 1mo LIBOR + 2% 1/1/2028 1.6 1.6 structure is
Slide 19: Revenue has more than doubled and is more diversified
FINANCIAL HIGHLIGHTS Over the last 5 years, Revenue has more than doubled and is more diversified. $250M REVENUE 38% +148% SEGMENTS 14% Overnight Air Cargo $101M Ground Support Equipment 17% 19% Ground Support Services 31% Commercial Aircraft & Engines 52% 29% FY14 FY19 19
Slide 20: Operating Income and Adjusted EBITDA growth
FINANCIAL HIGHLIGHTS Year over year, Operating Income and Adjusted EBITDA* have grown by 90% and 87%, respectively. Operating Income (In Millions) Adjusted EBITDA (In Millions) $8.1M $13.9M $4.2M $7.4M *Excludes DTI and the 21% of Contrail operating income, 20 which is a business unit of the Commerc
Slide 21: Reconciliation Table FY18
RECONCILIATION TABLE OPERATING INCOME FY18 $0.3M $0.0M $7.4M $2.4M $0.2M $0.0M $1.0M $5.0M $4.2M $0.1M $0.3M FY18 OI DTI 21% Professional Adjusted Air T D&A 21% of 100% of Asset Gain on Adjusted Loss Contrail OI fees Operating Contrail DTI D&A Impairment Sale of EBITDA Income D&A Assets *One-Time Ch
Slide 22: Reconciliation Table FY19
RECONCILIATION TABLE OPERATING INCOME FY19 $7.7M $1.2M $0.1M $0.1M $13.9M $0.3M $2.2M $8.1M $1.3M $7.4M FY19 OI DTI 21% One-time Adjusted 100% of 100% of Asset Gain on Adjusted Loss Contrail charges* Operating Air T D&A DTI D&A Impairment Sale of EBITDA NCI Income Assets *One-Time Charges include In
Slide 23: Share price increase since 9/30/2013
FINANCIAL HIGHLIGHTS Since 9/30/2013, the share price of AIRT has increased at 18.3% per annum*. S On June 11, 2019, AIRT executed a 3-for-2 stock split. *Reporting period 9/30/13 to 7/08/19, includes Trust 23 Preferred dividend to common shareholders
Slide 24: History of long-term and sustained financial health
FINANCIAL HIGHLIGHTS Since 1994, our company has had a history of long-term and sustained financial health. 24
Slide 25: Growth Factors
GROWTH FACTORS ETUATA A PORIFOLIO OF POWERFUL COMPANIES
Slide 26: Our 4 growth strategies
GROWTH FACTORS Our 4 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 through third-party capital partne
Slide 27: Reinvest in high-performing businesses
GROWTH FACTOR 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. 27
Slide 28: Acquire new cash-flow generating businesses
GROWTH FACTOR 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. 28
Slide 29: Identify marketable securities or alternative assets
GROWTH FACTOR 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 portfolio securities. 29
Slide 30: Create unique investment products with capital partners
GROWTH FACTOR 4 We plan to create unique investment products with outside capital partners by... ■ Offering thoughtful and sustainable products. ■ Attracting and retaining sophisticated investment professionals and creating space for talented asset managers. 30
Slide 31: The 8% TruP Offering
THE 8% TruP OFFERING EI) A PORGIFOLIO OF POWERFUL COMPANIES 31
Slide 32: Get in on the ground floor
Get in on the ground floor. Through a trust, we issued and distributed $4 million in face value of a new 8% fixed income TruP security, Alpha Income Preferred (AIP), pro rata to existing holders of AIRT common stock. Existing AIRT stockholders also received warrants to purchase up to an additional $
Slide 33: Why Invest Now
WHY INVEST NOW EI) A PORGIFOLIO OF POWERFUL COMPANIES 33
Slide 34: Be part of this investment opportunity
Be part of this investment opportunity. AIR T, INC. is a 38-year established yet growing company with hard assets. Our leadership has a long history of cash generation, and a strong track record of success in the asset management business. This offering is beneficial because it offers participants a
Slide 35: Appendix: Risk Factors
APPENDIX Risk Factors APOR[JFOLIO OF POWERFUL COMPANIES
Slide 36: Summary Risk Factors
For more detail and explanation, please see the Company’s S-1 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 in the Company is suitable only for persons who can afford the
Slide 37: Summary Risk Factors: Other Business Risks
For more detail and explanation, please see the Company’s S-1 filed with the SEC. SUMMARY RISK FACTORS 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. ● Sa
Slide 38: Summary Risk Factors: Other Business Risks (continued)
For more detail and explanation, please see the Company’s S-1 filed with the SEC. SUMMARY RISK FACTORS 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
Slide 39: Summary Risk Factors: Other Business Risks (continued)
For more detail and explanation, please see the Company’s S-1 filed with the SEC. SUMMARY RISK FACTORS 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,
Slide 40: Summary Risk Factors: Other Business Risks (continued)
For more detail and explanation, please see the Company’s S-1 filed with the SEC. SUMMARY RISK FACTORS 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
Slide 41: Summary Risk Factors: Risks Related to the Offering
For more detail and explanation, please see the Company’s S-1 filed with the SEC. SUMMARY RISK FACTORS 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 pric
Slide 42: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 42