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

February 01, 2010 | About:
10qk

10qk

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Air T Inc. (AIRT) filed Quarterly Report for the period ended 2009-12-31.

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 6.73 and P/S ratio of 0.27. The dividend yield of Air T Inc. stocks is 3.23%. Air T Inc. had an annual average earning growth of 8.9% over the past 10 years.AIRT is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.

Highlight of Business Operations:

GGS contributed approximately $25,964,000 and $32,700,000 to the Company s revenues for the nine-month periods ended December 31, 2009 and 2008, respectively, a current year decrease of $6,736,000 (21%). At December 31, 2009, GGS s order backlog was $5.7 million compared to $12.2 million at December 31, 2008 and $13.6 million at September 30, 2009.

Consolidated revenue decreased $1,216,000 (5%) to $22,321,000 for the three-month period ended December 31, 2009 compared to its equivalent prior period. The decrease in revenues resulted from a number of factors. Revenues in the air cargo segment were down $855,000 (8%) to $9,991,000 primarily as a result of decreased flight and maintenance department costs passed through to its customer at cost as the number of aircraft operated at the end of the quarter was 81 compared to 87 at December 31, 2008. The lower level of aircraft operated in the current period also resulted in a $91,000 decrease in administrative fee revenue from FedEx compared to the prior year period. Revenues in the ground equipment sales segment decreased $880,000 (8%) to $9,769,000 principally as a result of a decrease in domestic commercial deicer deliveries during the third quarter of fiscal 2010 compared to the prior year period. GAS revenues increased $518,000 (25%) to $2,561,000 as it continues to expand existing locations as well as add new customers and new service locations.

Operating expenses decreased $1,699,000 (8%) to $20,552,000 for the three-month period ended December 31, 2009 compared to its equivalent prior period. The decrease was due to a number of factors. Operating expenses in the air cargo segment were down $744,000 (8%) primarily as a result of decreased flight and maintenance departments costs passed through to its customer at cost, resulting from the lower number of aircraft operated. Ground equipment sales segment operating costs decreased $960,000 (11%) driven primarily by the current quarter s decrease in domestic commercial deicing units produced. The ground support services segment reported a $148,000 (9%) increase in operating expenses directly related to the increased revenue provided by GAS this quarter. General and administrative expenses decreased $141,000 (5%) to $2,612,000 for the three-month period ended December 31, 2009 compared to its equivalent prior period. This decrease was comprised of two principal items; a $117,000 decrease in professional fees this period related to decreases in spending for consulting and legal fees at GGS, and an $81,000 decrease in compensation expense relating to stock options as we expensed the final portion of our outstanding options during the three-month period ended December 31, 2009.

Consolidated revenue decreased $8,555,000 (12%) to $61,411,000 for the nine-month period ended December 31, 2009 compared to its equivalent prior period. The decrease in revenues resulted from a number of factors. Revenues in the air cargo segment were down $3,269,000 (10%) to $28,594,000 primarily as a result of decreased flight and maintenance department costs passed through to its customer at cost as the number of aircraft operated at the end of the period was 81compared to 87 at December 31, 2008. The lower level of aircraft also resulted in a $309,000 decrease in administrative fee revenue from FedEx compared to the prior year period. Revenues in the ground equipment sales segment decreased $6,735,000 (21%) to $25,965,000 principally as a result of a decrease in domestic commercial deicer revenues during the first nine months of fiscal 2010. GAS revenues increased $1,448,000 (27%) to $6,853,000 as it continues to expand existing locations as well as add new customers and new locations.

Operating expenses decreased $8,004,000 (12%) to $56,577,000 for the nine-month period ended December 31, 2009 compared to its equivalent prior period. The decrease was due to a number of factors. Operating expenses in the air cargo segment were down $2,818,000 (11%) primarily as a result of decreased flight and maintenance departments costs passed through to its customer at cost, as a result of the lower number of aircraft operated. Ground equipment sales segment operating costs decreased $5,159,000 (21%) driven primarily by the current period s decrease in domestic commercial units produced. The ground support services segment reported a $724,000 increase in operating expenses directly related to the increased revenue provided by GAS this period. General and administrative expenses decreased $739,000 (9%) to $7,824,000 for the nine-month period ended December 31, 2009 compared to its equivalent prior period. There were a number of significant components comprising this decrease. First, we had a $220,000 decrease in professional fees this period related to decreases in spending for consulting and legal fees at GGS. The provision for doubtful accounts was $112,000 less in the current period compared to the prior year comparable period. In addition, travel, tradeshow and advertising expense decreased by approximately $129,000, period to period. Compensation expense relating to stock options was $120,000 less in the current period. Finally, profit sharing expense was $104,000 less in the current period based on the decreased earnings.

Non-operating income, net, decreased by $282,000 to $64,000 for the nine-month period ended December 31, 2009. The $550,000 lawsuit settlement in December 2008 was a principal component of this decrease. This was partially offset by the $195,000 retirement plan settlement expense recorded in December 2008. In addition, the Company had a $64,000 decrease in interest expense from the prior period.

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