Air T, Inc. · NASDAQ:AIRT
Air T — Q2 2021 Earnings Presentation
33 slides from Air T's earnings presentation, November 2020
Slide 1: A Portfolio of Powerful Companies: Q2 FY21 Update
NOV 2020 A PORTFOLIO OF POWERFUL COMPANIES Q2 FY21 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 growing. ■ Current management has been in place since 2013. The two largest shareholders have seats on the Boa
Slide 4: Contents
1. About AIR T, INC. CONTENTS 2. Q1 FY21 Performance 3. Our Growth Factors 4. Appendix - Risk Factors 4
Slide 5: About AIR T, INC.
ABOUT AIR T, INC. ENA A PORTFOLIO 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 overcome
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: FY20 Revenue, Operating Income, Core Segments
$237M $7.3M 3 10 400+ FY20 Revenue FY20 Operating Income CORE SEGMENTS COMPANIES EMPLOYEES COMMERCIAL AIRCRAFT & ENGINES AVIATION GROUND SUPPORT OVERNIGHT AIR CARGO EQUIPMENT 8
Slide 9: AIR T, INC. Q2 FY21 Highlights
Q2 Results AIR T, INC. Q2 FY21 Highlights (For the Three-Month Period Ended 9/30/20) Q2 FY21 Q2 FY20 Change Revenue $35.6M $50.7M ($15.1M) Operating ($3.7M) $0.5M ($4.2M) Income ■ Q2 FY21 saw revenue declines across all segments, but the largest change was in the Commercial Jet Engines and Parts seg
Slide 10: AIR T, INC. FY21 YTD Highlights
YTD Results AIR T, INC. FY21 YTD Highlights (For the Six-Month Period Ended 9/30/20) YTD FY21 YTD FY20 Change Revenue $72.6M $97.9M ($25.3M) Operating ($3.9M) $1.5M ($5.4M) Income ■ YTD FY21 saw revenue declines across both our Air Cargo segment (down $4.6M) and Commercial Jet Engines and Parts segm
Slide 11: 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 12: 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. Revenue, Q2 FY21 $17.3M Revenue, Q2 FY20 $19.7M Operating Income*, Q2 FY21 $0.6M Operating Income*, Q2 FY20 $0.3M Air T Companies Sinc
Slide 13: 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 14: Q2 News: Trust Preferred Warrants (AIRTW)
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 h
Slide 15: Q2 News: COVID-19 Update
COVID-19 Update ■ 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 ai
Slide 16: Over the last six years, revenue has increased 181%
FINANCIAL HIGHLIGHTS Over the last six years, revenue has increased 181% and is more diversified. $236M* REVENUE 44% +181% SEGMENTS Commercial Aircraft & Engines Overnight Air Cargo $84M 34% Ground Support Equipment 62% 22% 38% FY14 FY20 *Excludes revenue in FY20 earned outside of our core segments.
Slide 17: Non-Operating Assets
OTHER Non-Operating Assets AIR T, Inc’s balance sheet includes $9.9 million of public and private securities, as of 9/30/20. 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 In
Slide 18: Capitalization Table
CAPITALIZATION TABLE AIR T, INC. DIRECT & GUARANTEED Interest Rate Maturity Date 9/30/2020 Revolver ($17m Capacity) Prime - 1% 8/31/2021 $ 0.9 Term Loans 1mo LIBOR + 2%, 4.50% 1/1/2028 10.9 Corporate Headquarters Real Estate 1mo LIBOR + 2% 1/1/2028 1.5 AIR T, INC.’s capital Trust Preferred 8% 6/7/20
Slide 19: Share price of AIRT has increased at 5.7% per annum
FINANCIAL HIGHLIGHTS 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 $4M Trust 19 Preferred dividend to common shareholders
Slide 20: Long-term history of sustained financial health since 1994
FINANCIAL HIGHLIGHTS Since 1994, our company has had a history of long-term and sustained financial health. Revenue ($ in Millions) Operating Income ($ in Millions) 250 10 8 200 6 150 4 100 2 50 - 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201
Slide 21: Growth Strategies
GROWTH STRATEGIES ENUATTA A PORTFOLIO OF POWERFUL COMPANIES
Slide 22: Our four growth strategies are...
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 23: 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. 23
Slide 24: 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. 24
Slide 25: 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. 25
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... ■ Offering thoughtful and sustainable products with attractive return profiles ■ Attracting and retaining sophisticated investment professionals and creating space for talented asset managers. 26
Slide 27: Appendix: Risk Factors
APPENDIX Risk Factors ENTE A PORTFOLIO OF POWERFUL COMPANIES
Slide 28: 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 29: 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 30: Summary Risk Factors: 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 31: Summary Risk Factors: 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 32: Summary Risk Factors: 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 33: 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