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Air T Inc. Reports Operating Results (10-Q)

January 27, 2011 | About:
10qk

10qk

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Air T Inc. (AIRT) filed Quarterly Report for the period ended 2010-12-31.

Air T Inc has a market cap of $24.8 million; its shares were traded at around $10.23 with a P/E ratio of 9.6 and P/S ratio of 0.3. The dividend yield of Air T Inc stocks is 3.2%. Air T Inc had an annual average earning growth of 14.3% over the past 10 years.Hedge Fund Gurus that owns AIRT: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns AIRT: HOTCHKIS & WILEY of Hotchkis & Wliey Capital Management LLC.

Highlight of Business Operations:

MAC and CSA combined contributed approximately $29,964,000 and $28,594,000 to the Company s revenues for the nine-month periods ended December 31, 2010 and 2009, respectively, a current year increase of $1,370,000 (5%).

GGS contributed approximately $20,980,000 and $25,964,000 to the Company s revenues for the nine-month periods ended December 31, 2010 and 2009, respectively. The $4,984,000 (19%) decrease in revenues was due largely to no military deicing units being delivered in the current period. Revenues from sales to the USAF were down $11,661,000 (94%) for the current nine-month period compared to the prior year comparable period, while commercial domestic sales were up $3,318,000 (43%) and international sales were up $3,359,000 (58%) over the same periods. At December 31, 2010, GGS s total order backlog was $19.0 million compared to $5.7 million at December 31, 2009 and $1.3 million at March 31, 2010.

Consolidated revenue decreased $8,000 to $22,313,000 for the three-month period ended December 31, 2010 compared to its equivalent prior period. A number of offsetting factors made up this minimal decrease. Revenues in the ground equipment segment increased $267,000 (3%) to $10,036,000. While the increase in that segment was minimal, there was a significant swing in the product and customer mix principally resulting from the lack of deicer sales to the USAF during the third quarter of fiscal 2011, offset by increased deicer sales in the commercial domestic and international markets. Revenues in the air cargo segment were up $728,000 (7%) largely as a result of increases in administrative fee revenue and maintenance labor revenue relating to the four ATR-72 aircraft that were delivered by FedEx during the prior quarter, as well as flight and maintenance operating costs passed through to our customer at cost. Heavy maintenance on one of the ATR-72 aircraft was completed and it was placed into revenue service during the third quarter and we expect heavy maintenance work on the remaining three aircraft to be completed by the end of our current fiscal year. Finally, revenues in the ground support services segment were down $1,003,000 (39%) resulting from the reduction in scope of work performed for Delta within this segment.

Operating expenses increased $847,000 (4%) to $21,399,000 for the three-month period ended December 31, 2010 compared to its equivalent prior period. The increase was due to a number of offsetting factors. Ground equipment sales segment operating costs increased $899,000 (12%). Gross margins on equipment sales are down from the comparable quarter of a year ago, reflecting a very competitive commercial market both domestically and internationally, as well as changes in customer and product mix. Operating expenses in the air cargo segment were up $600,000 (7%), corresponding to the percentage increase in segment revenues. Operating expenses in the ground support services segment decreased by $652,000 (36%) largely a result of the reduction in work performed for Delta. General and administrative expenses increased by $19,000 or less than 1%.

Consolidated revenue decreased $3,903,000 (6%) to $57,508,000 for the nine-month period ended December 31, 2010 compared to its equivalent prior period. The decrease in revenues resulted from a number of factors. Revenues in the ground equipment sales segment decreased $4,984,000 (19%) to $20,980,000 principally as a result of a decrease in military deicer units and revenues during the first nine months of fiscal 2011, partially offset by increases in commercial domestic and international deicer sales. Revenues in the air cargo segment were up $1,370,000 (5%) primarily as a result of increased administrative fee and maintenance labor revenues generated by the additional four ATR-72 aircraft that were delivered during the second quarter as well as increased flight and maintenance operating costs passed through to the customer at cost. In addition, GAS provided revenues of $6,564,000 during the nine-month period ended December 31, 2010, compared to revenue of $6,853,000 in the prior year comparable period, the decrease principally due to the reduction in scope of work performed for Delta that took effect in September 2010.

Operating expenses decreased $1,210,000 (2%) to $55,367,000 for the nine-month period ended December 31, 2010 compared to its equivalent prior period. The decrease was due to a number of factors. Ground equipment sales segment operating costs decreased $2,100,000 (11%) following the decrease in revenues for this segment. Gross margins on equipment sales are down from the comparable quarter of a year ago, reflecting a very competitive commercial market both domestically and internationally, as well as changes in customer and product mix. Operating expenses in the air cargo segment were up $1,274,000 (5%) tracking the increased revenues in the segment. The ground support services segment reported a $36,000 decrease in operating expenses related to the decreased revenue provided by GAS this period. General and administrative expenses decreased $304,000 (4%) to $7,520,000 for the nine-month period ended December 31, 2010 compared to its equivalent prior period. There were a number of significant components comprising this decrease. Professional fee expense decreased by $132,000, compensation expense relating to stock options has declined and was $131,000 less in the current period and profit sharing expense was $331,000 less in the current period based on the decreased earnings. Offsetting these decreases was an increase in travel expense of $82,000 and lesser increases in salaries and benefits, rent and information technology costs.

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