AIR TRANS SVCS GROUPINC COM (ATSG, Financial) filed Quarterly Report for the period ended 2009-09-30.
AIR TRANSPORT SERVICES GROUP, INC. is a leading provider of air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. Through five principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier Certificates, ATSG also provides aircraft leasing, aircraft maintenance services, airport ground services, fuel management, specialized transportation management, and air charter brokerage services. ATSG subsidiaries include ABX Air, Inc., Air Transport International, LLC, Cargo Aircraft Management, Inc., Capital Cargo International Airlines, Inc., and LGSTX Services, Inc. Air Trans Svcs Groupinc Com has a market cap of $189.9 million; its shares were traded at around $2.99 with a P/E ratio of 9.7 and P/S ratio of 0.1.
ACMI Services revenues, excluding directly reimbursed fuel expenses, were $70.3 million and $208.1 million for the third quarter and first nine months of 2009, decreasing 12% and 1%, respectively, compared to the corresponding periods of 2008. Block hours increased 12% and 8% for the third quarter and first nine months of 2009, respectively, reflecting additional Boeing 767 and Boeing 757 aircraft placed into service since mid 2008. The decline in revenues is due to the lower cost of aviation fuel for those ACMI, block space and charter contracts that include fuel in their price. The price per gallon of aviation fuel in 2009 declined approximately 50% compared to 2008. Excluding those contracts that include fuel, revenues per block hour declined 4% and remained unchanged for the third quarter and first nine months of 2009, respectively, compared to the corresponding 2008 periods. ACMI Services results included revenues of $5.6 million from Boeing 767 freighter aircraft that ABX supplied to DHL during the first nine months of 2009 under short-term supplemental agreements.
Pre-tax segment earnings for CAM were $6.1 million and $16.7 million for the third quarter and first nine months of 2009 compared to $4.0 million and $13.2 million for the corresponding 2008 periods. The increase in pre-tax earnings reflects six additional aircraft that CAM has placed in service since September 2008. CAMs results reflect an allocation of interest expense based on prevailing interest rates and the carrying value of its operating assets. CAMs revenues for the three and nine month period ended September 30, 2009 include $12.9 million and $36.1 million for the leasing of aircraft to ATI, CCIA and ABX. During the first nine months of 2009, CAM leased four additional aircraft to ATSG airlines.
Revenues from all other activities increased $2.1 million and $8.0 million in the third quarter and first nine months of 2009 compared to the corresponding 2008 periods. Increased revenues were primarily a result of an increase in aircraft and facility maintenance services when compared to 2008. Pre-tax earnings from all other activities were $0.1 million and $2.9 million during the third quarter and first nine months of 2009 compared to a $0.2 million loss and a $2.2 million loss in the corresponding 2008 periods. Improved pre-tax earnings for the third quarter of 2009 compared to the third quarter of 2008 were driven by higher maintenance and postal revenues. These improvements were partially offset by an increase in the proportion of overhead cost that the Company does not recover through its DHL ACMI and Hub services agreements, the latter of which expired on August 15, 2009 offset. Improved earnings for the first nine months of 2009 reflected increased sales of surplus aircraft and aircraft parts compared to 2008. Additionally, our pre-tax loss for the 2008 year included a one-time charge of $2.5 million stemming from an arbitration ruling in 2008. Internal sales and earnings were eliminated from the consolidated results.
Net earnings from continued operations improved $11.6 million for the first nine months of 2009 compared to the corresponding period of 2008. Improved earnings included increased revenues from the DHL ACMI agreement. Due to contractual amendments stemming from DHLs restructuring plans, revenues for the first nine months of 2009 included additional amounts in lieu of annual incremental revenues that ABX historically recorded only in the fourth quarter of each year. Additionally, 2009 included revenues specified by the S&R agreement to facilitate the wind-down of DHLs U.S. network. By comparison, operating results from continued operations for the first nine months of 2008 included one-time charges totaling $3.8 million stemming from an arbitration ruling in July 2008. During 2009, improved CAM earnings of $3.5 million, lower non reimbursed interest expense of $1.6 million and gains from the sale of surplus aircraft of $2.2 million were offset by higher income tax expenses of $7.1 million and increased non reimbursed overhead cost compared to the first nine months of 2008.
Other operating expenses include professional fees, utilities, and the cost of parts sold to non-DHL customers. Other operating expenses increased $0.3 million and decreased $1.6 million during the three and nine month periods ended September 30, 2009, respectively, compared to the corresponding periods of 2008. During the second quarter of 2008, the Company recorded a charge of $2.5 million for professional fees stemming from an arbitration matter. DHLs removal of aircraft from service in conjunction with its U.S. restructuring plans in 2009 also resulted in lower expenses.
Read the The complete ReportATSG is in the portfolios of Mohnish Pabrai of Pabrai Mohnish.
AIR TRANSPORT SERVICES GROUP, INC. is a leading provider of air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. Through five principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier Certificates, ATSG also provides aircraft leasing, aircraft maintenance services, airport ground services, fuel management, specialized transportation management, and air charter brokerage services. ATSG subsidiaries include ABX Air, Inc., Air Transport International, LLC, Cargo Aircraft Management, Inc., Capital Cargo International Airlines, Inc., and LGSTX Services, Inc. Air Trans Svcs Groupinc Com has a market cap of $189.9 million; its shares were traded at around $2.99 with a P/E ratio of 9.7 and P/S ratio of 0.1.
Highlight of Business Operations:
Our pre-tax earnings from the ACMI agreement decreased by $0.4 million in the third quarter and increased by $8.0 million for the first nine months of 2009 compared to the corresponding periods of 2008. Our pre-tax earnings from the ACMI agreement includes approximately $1.8 million and $9.0 million of mark-up above our cost incurred under the ACMI agreement for the third quarter and for the first nine months of 2009 compared to approximately $2.3 million and $7.3 million of mark-up above our costs for the corresponding periods of 2008.ACMI Services revenues, excluding directly reimbursed fuel expenses, were $70.3 million and $208.1 million for the third quarter and first nine months of 2009, decreasing 12% and 1%, respectively, compared to the corresponding periods of 2008. Block hours increased 12% and 8% for the third quarter and first nine months of 2009, respectively, reflecting additional Boeing 767 and Boeing 757 aircraft placed into service since mid 2008. The decline in revenues is due to the lower cost of aviation fuel for those ACMI, block space and charter contracts that include fuel in their price. The price per gallon of aviation fuel in 2009 declined approximately 50% compared to 2008. Excluding those contracts that include fuel, revenues per block hour declined 4% and remained unchanged for the third quarter and first nine months of 2009, respectively, compared to the corresponding 2008 periods. ACMI Services results included revenues of $5.6 million from Boeing 767 freighter aircraft that ABX supplied to DHL during the first nine months of 2009 under short-term supplemental agreements.
Pre-tax segment earnings for CAM were $6.1 million and $16.7 million for the third quarter and first nine months of 2009 compared to $4.0 million and $13.2 million for the corresponding 2008 periods. The increase in pre-tax earnings reflects six additional aircraft that CAM has placed in service since September 2008. CAMs results reflect an allocation of interest expense based on prevailing interest rates and the carrying value of its operating assets. CAMs revenues for the three and nine month period ended September 30, 2009 include $12.9 million and $36.1 million for the leasing of aircraft to ATI, CCIA and ABX. During the first nine months of 2009, CAM leased four additional aircraft to ATSG airlines.
Revenues from all other activities increased $2.1 million and $8.0 million in the third quarter and first nine months of 2009 compared to the corresponding 2008 periods. Increased revenues were primarily a result of an increase in aircraft and facility maintenance services when compared to 2008. Pre-tax earnings from all other activities were $0.1 million and $2.9 million during the third quarter and first nine months of 2009 compared to a $0.2 million loss and a $2.2 million loss in the corresponding 2008 periods. Improved pre-tax earnings for the third quarter of 2009 compared to the third quarter of 2008 were driven by higher maintenance and postal revenues. These improvements were partially offset by an increase in the proportion of overhead cost that the Company does not recover through its DHL ACMI and Hub services agreements, the latter of which expired on August 15, 2009 offset. Improved earnings for the first nine months of 2009 reflected increased sales of surplus aircraft and aircraft parts compared to 2008. Additionally, our pre-tax loss for the 2008 year included a one-time charge of $2.5 million stemming from an arbitration ruling in 2008. Internal sales and earnings were eliminated from the consolidated results.
Net earnings from continued operations improved $11.6 million for the first nine months of 2009 compared to the corresponding period of 2008. Improved earnings included increased revenues from the DHL ACMI agreement. Due to contractual amendments stemming from DHLs restructuring plans, revenues for the first nine months of 2009 included additional amounts in lieu of annual incremental revenues that ABX historically recorded only in the fourth quarter of each year. Additionally, 2009 included revenues specified by the S&R agreement to facilitate the wind-down of DHLs U.S. network. By comparison, operating results from continued operations for the first nine months of 2008 included one-time charges totaling $3.8 million stemming from an arbitration ruling in July 2008. During 2009, improved CAM earnings of $3.5 million, lower non reimbursed interest expense of $1.6 million and gains from the sale of surplus aircraft of $2.2 million were offset by higher income tax expenses of $7.1 million and increased non reimbursed overhead cost compared to the first nine months of 2008.
Other operating expenses include professional fees, utilities, and the cost of parts sold to non-DHL customers. Other operating expenses increased $0.3 million and decreased $1.6 million during the three and nine month periods ended September 30, 2009, respectively, compared to the corresponding periods of 2008. During the second quarter of 2008, the Company recorded a charge of $2.5 million for professional fees stemming from an arbitration matter. DHLs removal of aircraft from service in conjunction with its U.S. restructuring plans in 2009 also resulted in lower expenses.
Read the The complete ReportATSG is in the portfolios of Mohnish Pabrai of Pabrai Mohnish.
