Core Viewpoint - Air T, Inc. (AIRT) reported mixed financial results for the fiscal year ended June 30, 2025, with revenue growth but increased net losses, highlighting both strengths in certain segments and weaknesses in others [1][2][7]. Revenue and Earnings Performance - AIRT reported revenues of $70.9 million for Q1 fiscal 2026, a 6.7% increase from $66.4 million in the prior-year quarter [2] - The company posted a net loss of $1.6 million, compared to a loss of $0.3 million in the same quarter last year, with loss per share widening to $0.61 from $0.12 [2] - Operating income improved to $0.4 million from a loss of $0.6 million in the prior-year quarter [2] Segment Results - Ground Support Equipment and Digital Solutions showed strong contributions, while Commercial Aircraft, Engines, and Parts experienced weakness [3] - Overnight Air Cargo revenues increased by 0.7% to $30.6 million, but adjusted EBITDA decreased by 17.2% to $1.6 million due to lower maintenance margins [5] - Ground Support Equipment revenues surged by 104.9% to $15.1 million, with adjusted EBITDA turning positive at $1.4 million from a loss of $0.5 million [5] - The Commercial Aircraft, Engines, and Parts segment saw revenues decline by 16.3% to $21.9 million, primarily due to weaker component sales, with adjusted EBITDA down 54.7% to $0.8 million [6] - Digital Solutions revenues rose by 24.9% to $2.1 million, narrowing adjusted EBITDA loss to $0.1 million from $0.3 million [6] Key Business Metrics - Adjusted EBITDA was $1.5 million, up 71.1% from $0.9 million in the prior year [4] - Investment balance in equity method investees increased to $19.9 million from $19 million at the end of March 2025 [4] Management Commentary - Chairman and CEO Nick Swenson expressed satisfaction with the company's performance and highlighted strategic initiatives for long-term value creation, particularly in Ground Support Equipment and Digital Solutions [7] Factors Influencing Performance - Revenue growth was driven by strong demand for deicing trucks in Ground Support Equipment, which more than doubled sales compared to the prior year [8] - Overnight Air Cargo performance remained steady, supported by FedEx-related operations, although profitability declined due to lower-margin maintenance activities [8] - Digital Solutions benefited from customer acquisition momentum in subscription software [8] Expense and Non-Operating Results - Consolidated operating expenses increased by 5.1% year over year, mainly due to higher costs in Ground Support Equipment [9] - Non-operating results were less favorable, with a non-operating loss of $1.3 million compared to income of $0.7 million in the prior year, attributed to higher interest expenses and weaker contributions from equity method investments [9] Strategic Developments - On May 15, 2025, AIRT's subsidiary Mountain Air Cargo acquired Royal Aircraft Services for $1.2 million, integrating it into the Overnight Air Cargo segment [12] - On July 15, 2025, Contrail's subsidiary sold two Airbus A321 aircraft for over $18 million, transferring lease obligations to the buyer, reflecting ongoing portfolio restructuring [12]

[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) This section provides essential details regarding the FORM 8-K filing, including registrant information, filing specifics, registered securities, and emerging growth company status [Registrant Information](index=1&type=section&id=Registrant%20Information) This section details the registrant, AIR T, INC., a Delaware corporation, including its principal executive offices and contact information - Registrant Name: **AIR T, INC.**[3](index=3&type=chunk) - Jurisdiction of Incorporation: **Delaware**[3](index=3&type=chunk) - Principal Executive Offices: **11020 David Taylor Drive, Suite 305, Charlotte, North Carolina 28262**[4](index=4&type=chunk) - Registrant's Telephone Number: **(980) 595-2840**[4](index=4&type=chunk) [Filing Details](index=1&type=section&id=Filing%20Details) This section specifies the nature of the filing as a Form 8-K Current Report, filed pursuant to the Securities Exchange Act of 1934, with the earliest event reported on August 13, 2025 - Form Type: **FORM 8-K CURRENT REPORT**[2](index=2&type=chunk) - Date of Earliest Event Reported: **August 13, 2025**[3](index=3&type=chunk) - Filing Purpose: Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934[3](index=3&type=chunk) [Securities Registered](index=1&type=section&id=Securities%20Registered) This part lists the classes of securities registered by AIR T, INC. under Section 12(b) of the Act, including their trading symbols and the exchanges on which they are registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock | AIRT | NASDAQ Capital Market | | Alpha Income Preferred Securities (also referred to as 8% Cumulative Capital Securities) ("AIP") | AIRTP | NASDAQ Global Market | [Emerging Growth Company Status](index=2&type=section&id=Emerging%20Growth%20Company%20Status) The registrant indicates that it is not an emerging growth company as defined by the Securities Act of 1933 or the Securities Exchange Act of 1934 - Status: **Not an emerging growth company**[6](index=6&type=chunk) [Current Report Items](index=3&type=section&id=Current%20Report%20Items) This section details the specific items reported in the Form 8-K, including financial results and a list of exhibits [Item 2.02 Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Air T, Inc. announced its financial results for the quarter ended June 30, 2025, via a press release issued on August 13, 2025, which is furnished as Exhibit 99.1. The company clarifies that this information is 'furnished' and not 'filed' for specific legal purposes under the Exchange Act - Event: Air T, Inc. issued a press release announcing financial results for the quarter ended **June 30, 2025**[7](index=7&type=chunk) - Date of Press Release: **August 13, 2025**[7](index=7&type=chunk) - Exhibit Reference: The full text of the press release is furnished as **Exhibit 99.1**[7](index=7&type=chunk) - Legal Disclaimer: The information is deemed 'furnished' and not 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934, and not incorporated by reference into other filings unless expressly stated[7](index=7&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits included with this Current Report on Form 8-K, specifically the press release detailing financial results and the Inline XBRL for the cover page | Exhibit Number | Description | | :------------- | :---------------------------------------------- | | 99.1 | Press Release of Air T, Inc. dated August 13, 2025 | | 104 | Inline XBRL for the cover page of this Current Report on Form 8-K | [Signatures](index=4&type=section&id=SIGNATURES) This section confirms the official signing of the Form 8-K report by the authorized corporate officer [Signature Details](index=4&type=section&id=Signature%20Details) The report was duly signed on behalf of AIR T, INC. by Tracy Kennedy, Chief Financial Officer, on August 13, 2025, in compliance with the Securities Exchange Act of 1934 - Signatory: **Tracy Kennedy, Chief Financial Officer**[12](index=12&type=chunk) - Date of Signature: **August 13, 2025**[11](index=11&type=chunk)

[PART I - Financial Information](index=4&type=section&id=PART%20I%20-%20Financial%20Information) This part provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Air T, Inc. and its subsidiaries [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Air T, Inc. and its subsidiaries, including statements of income, comprehensive income, balance sheets, cash flows, equity, and detailed notes, for the periods ended June 30, 2025, and March 31, 2025 [Condensed Consolidated Statements of Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) This statement details the company's operating revenues, expenses, and net loss for the three months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Operating Revenues | $70,870 | $66,411 | | Operating Expenses | $70,424 | $66,988 | | Operating Income (Loss) | $446 | $(577) | | Non-operating (Expense) Income | $(1,253) | $680 | | (Loss) Income before income taxes | $(807) | $103 | | Income Tax (Benefit) Expense | $(136) | $71 | | Net (Loss) Income | $(671) | $32 | | Net Loss Attributable to Air T, Inc. Stockholders | $(1,636) | $(335) | | Basic Loss per share | $(0.61) | $(0.12) | | Diluted Loss per share | $(0.61) | $(0.12) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents the net loss and other comprehensive income components, including foreign currency translation and reclassification of interest rate swaps Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net (Loss) Income | $(671) | $32 | | Foreign currency translation gain (loss) | $413 | $(50) | | Reclassification of interest rate swaps into earnings | $12 | $(203) | | Redemption of non-controlling interest | — | $146 | | Other | $(243) | $1 | | Total Other Comprehensive Gain (Loss) | $182 | $(106) | | Total Comprehensive Loss | $(489) | $(74) | | Comprehensive Income Attributable to Non-controlling Interests | $(965) | $(367) | | Comprehensive Loss Attributable to Air T, Inc. Stockholders | $(1,454) | $(441) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' deficit as of June 30, 2025, and March 31, 2025 Condensed Consolidated Balance Sheets (in thousands) | Category | June 30, 2025 | March 31, 2025 | | :------------------------------------ | :-------------- | :------------- | | **ASSETS** | | | | Cash and cash equivalents | $14,460 | $5,932 | | Total Current Assets | $92,933 | $78,507 | | Total Assets | $190,037 | $173,778 | | **LIABILITIES AND STOCKHOLDERS' DEFICIT** | | | | Total Current Liabilities | $49,051 | $47,661 | | Long-term debt | $117,762 | $101,226 | | Total Liabilities | $184,745 | $168,242 | | Redeemable non-controlling interests | $8,210 | $7,054 | | Total Air T, Inc. Stockholders' Deficit | $(4,630) | $(3,216) | | Total Deficit | $(2,918) | $(1,518) | | Total Liabilities and Deficit | $190,037 | $173,778 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines the cash flows from operating, investing, and financing activities for the three months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(1,095) | $113 | | Net cash (used in) provided by investing activities | $(2,724) | $2,008 | | Net cash provided by (used in) financing activities | $12,577 | $(1,291) | | Effect of foreign currency exchange rates on cash and cash equivalents | $(292) | $32 | | Net Increase in Cash and Cash Equivalents and Restricted Cash | $8,466 | $862 | | Cash and Cash Equivalents and Restricted Cash at End of Period | $15,223 | $8,705 | [Condensed Consolidated Statements of Equity](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This statement details changes in equity components, including common stock, retained earnings, and non-controlling interests, for the period ended June 30, 2025 Condensed Consolidated Statements of Equity (in thousands) | Equity Component | Balance, March 31, 2025 | Net Income (Loss) | Distributions to NCI | Stock Compensation Expense | Foreign Currency Translation Gain | Reclassification of Interest Rate Swaps | Allocation of Comprehensive Income | Allocation of Comprehensive Income to Redeemable NCI | Balance, June 30, 2025 | | :------------------------------------ | :---------------------- | :------------------ | :------------------- | :------------------------- | :------------------------------ | :------------------------------------- | :------------------------------------------------ | :------------------------------------------------------- | :--------------------- | | Common Stock (Amount) | $758 | — | — | — | — | — | — | — | $758 | | Treasury Stock (Amount) | $(6,404) | — | — | — | — | — | — | — | $(6,404) | | Additional Paid-In Capital | $947 | — | — | $40 | — | — | — | — | $987 | | Retained Earnings | $2,130 | $(1,636) | — | — | — | — | — | — | $494 | | Accumulated Other Comprehensive Income (Loss) | $(647) | — | — | — | $413 | $12 | $5 | $(248) | $(465) | | Non-controlling Interests | $1,698 | $52 | $(38) | — | — | — | — | — | $1,712 | | **Total Equity (Deficit)** | **$(1,518)** | **$(1,584)** | **$(38)** | **$40** | **$413** | **$12** | **$5** | **$(248)** | **$(2,918)** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanatory notes supporting the unaudited condensed consolidated financial statements, covering accounting policies, acquisitions, and other financial disclosures [1. Financial Statement Presentation](index=14&type=section&id=1.%20Financial%20Statement%20Presentation) This note clarifies the basis of presentation for the unaudited condensed consolidated financial statements and discusses the impact of new accounting standards - The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP, with certain information condensed or omitted per SEC rules, and are not necessarily indicative of full-year results[23](index=23&type=chunk)[24](index=24&type=chunk) - The Company is evaluating the impact of new FASB ASUs 2023-09 (Income Taxes) and 2024-03 (Expense Disaggregation) on its consolidated financial statements and disclosures, effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively[26](index=26&type=chunk)[27](index=27&type=chunk) [2. Acquisitions](index=15&type=section&id=2.%20Acquisitions) This note details the acquisition of Royal Aircraft Services, LLC by Mountain Air Cargo, Inc. on May 15, 2025 - On May 15, 2025, Mountain Air Cargo, Inc. (a wholly-owned subsidiary) acquired Royal Aircraft Services, LLC, an aircraft maintenance and repair company, for **$1.2 million**, net of cash acquired, integrating it into the Overnight Air Cargo segment[28](index=28&type=chunk) [3. Revenue Recognition](index=16&type=section&id=3.%20Revenue%20Recognition) This note describes the company's revenue recognition policies across various streams and provides disaggregated revenue data - The Company generates revenue from product sales (point-in-time), support services (over time, based on input/output methods), software services (ratably over subscription terms), and leasing revenue[31](index=31&type=chunk)[32](index=32&type=chunk) Disaggregated Revenues by Type (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Product Sales | $44,710 | $40,515 | | Support Services | $20,649 | $23,037 | | Leasing Revenue | $2,210 | $518 | | Software Services | $2,096 | $1,678 | | Other | $1,155 | $633 | | **Total** | **$70,870** | **$66,411** | Outstanding Contract Liabilities (in thousands) | Contract Liabilities | As of June 30, 2025 | As of April 1, 2025 | Recognized as Revenue (3 months ended June 30, 2025) | | :----------------------- | :------------------ | :------------------ | :--------------------------------------------------- | | Outstanding | $7,781 | $4,199 | $(1,577) | [4. Accrued Expenses and Other](index=19&type=section&id=4.%20Accrued%20Expenses%20and%20Other) This note provides a breakdown of accrued expenses and other current liabilities as of June 30, 2025, and March 31, 2025 Accrued Expenses and Other (in thousands) | Category | June 30, 2025 | March 31, 2025 | | :---------------------- | :-------------- | :------------- | | Salaries, wages and related | $6,477 | $6,235 | | Profit sharing and bonus | $827 | $2,980 | | Other Deposits | $2,965 | $513 | | Deferred Income | $4,816 | $3,686 | | Accrued insurance payable | $2,949 | $1,336 | | Other | $2,589 | $1,941 | | **Total** | **$20,623** | **$16,691** | [5. Income Taxes](index=19&type=section&id=5.%20Income%20Taxes) This note discusses the income tax benefit and expense, effective tax rates, and the impact of recent tax legislation for the periods presented - For the three months ended June 30, 2025, the Company recorded a **$0.1 million income tax benefit** at an effective tax rate (ETR) of **16.9%**, primarily due to valuation allowances, foreign rate differentials, and the Foreign-Derived Intangible Income (FDII) deduction[35](index=35&type=chunk) - For the three months ended June 30, 2024, the Company recorded income tax expense of **$71.0 thousand** at an ETR of **68.9%**, influenced by valuation allowances and foreign rate differentials[37](index=37&type=chunk) - The 'One Big Beautiful Bill Act,' signed July 4, 2025, is being evaluated for its full effects but is not expected to materially impact the financial statements for the period ended June 30, 2025, as it was enacted after the quarter-end[36](index=36&type=chunk) [6. Net Loss Per Share](index=19&type=section&id=6.%20Net%20Loss%20Per%20Share) This note presents the basic and diluted net loss per share attributable to Air T, Inc. stockholders for the three months ended June 30, 2025 and 2024 Net Loss Per Share (in thousands, except per share figures) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net Loss Attributable to Air T, Inc. Stockholders | $(1,636) | $(335) | | Basic Loss per share | $(0.61) | $(0.12) | | Diluted Loss per share | $(0.61) | $(0.12) | | Weighted Average Shares Outstanding (Basic) | 2,703 | 2,761 | | Weighted Average Shares Outstanding (Diluted) | 2,703 | 2,761 | [7. Intangible Assets and Goodwill](index=20&type=section&id=7.%20Intangible%20Assets%20and%20Goodwill) This note provides details on the net book value of intangible assets and changes in goodwill by segment Intangible Assets, Net Book Value (in thousands) | Intangible Asset Category | June 30, 2025 | March 31, 2025 | | :-------------------------- | :-------------- | :------------- | | Purchased software | $298 | $316 | | Internally developed software | $2,601 | $2,547 | | In-place lease and other | $609 | $634 | | Customer relationships | $6,305 | $6,005 | | Patents | $24 | $25 | | Other | $431 | $423 | | In-process software | $170 | $70 | | **Total Intangible Assets** | **$10,438** | **$10,020** | - Goodwill increased from **$10.5 million** at March 31, 2025, to **$11.9 million** at June 30, 2025, primarily due to the Royal acquisition (**$1.0 million**) and foreign currency translation adjustments at Shanwick (**$0.3 million**)[42](index=42&type=chunk) Goodwill by Segment (at cost, in thousands) | Goodwill by Segment | June 30, 2025 | March 31, 2025 | | :-------------------------------- | :-------------- | :------------- | | Overnight air cargo | $1,121 | $76 | | Commercial aircraft, engines and parts | $4,227 | $4,227 | | Digital solutions | $6,555 | $6,239 | | **Total reportable segment goodwill** | **$11,903** | **$10,542** | [8. Investments in Securities and Derivative Instruments](index=21&type=section&id=8.%20Investments%20in%20Securities%20and%20Derivative%20Instruments) This note describes the company's use of interest rate swaps and the fair value measurement of marketable equity securities - The Company uses interest rate swaps for risk management, but as of June 30, 2025, all previously designated cash flow hedging instruments are no longer effective hedges[44](index=44&type=chunk) - A new floating-to-fixed interest rate swap for a **$2.3 million** loan was entered into on February 28, 2025, with fair value changes recognized directly into earnings, as hedge accounting was not applied[45](index=45&type=chunk) - Marketable equity securities are carried at fair value (Level 1), with immaterial gross unrealized gains and losses for the three months ended June 30, 2025 and 2024[48](index=48&type=chunk)[49](index=49&type=chunk) [9. Equity Method Investments](index=22&type=section&id=9.%20Equity%20Method%20Investments) This note details the company's significant equity method investments and their contribution to net income or loss - The Company holds significant equity method investments in Lendway, Inc. (**27.5% ownership**), Cadillac Casting, Inc. (**20.1% ownership**), and Crestone Asset Management, LLC (**90% economic common interests**)[50](index=50&type=chunk)[52](index=52&type=chunk)[56](index=56&type=chunk) Equity Method Investment Balances (in thousands) | Investment | June 30, 2025 | March 31, 2025 | | :-------------------------- | :-------------- | :------------- | | Lendway | $858 | $729 | | CCI | $3,860 | $3,889 | | CAM | $13,385 | $12,428 | | Other equity method investments | $1,797 | $1,957 | | **Total** | **$19,900** | **$19,003** | Net (Loss) Income Attributable to Air T, Inc. Stockholders from Equity Method Investees (in thousands) | Investment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Lendway | $123 | $(290) | | CCI | $(29) | $674 | | CAM | $(251) | $1,495 | | Other equity method investments | $138 | $44 | | **Total** | **$(19)** | **$1,923** | [10. Inventories](index=24&type=section&id=10.%20Inventories) This note provides a breakdown of inventories, net of reserves, by category as of June 30, 2025, and March 31, 2025 Inventories, Net of Reserves (in thousands) | Inventory Category | June 30, 2025 | March 31, 2025 | | :----------------- | :-------------- | :------------- | | Raw Materials | $7,275 | $6,928 | | Work in process | $3,078 | $2,342 | | Finished Goods | $4,084 | $5,358 | | Aircraft parts | $30,440 | $28,794 | | Reserves | $(4,991) | $(4,906) | | **Total Inventories, net** | **$39,886** | **$38,516** | [11. Lessor Arrangements](index=24&type=section&id=11.%20Lessor%20Arrangements) This note outlines the company's leasing activities as a lessor, including depreciation expense and future minimum rental payments - The Company leases equipment (aircraft and engines) and offices to third parties[65](index=65&type=chunk) - Depreciation expense for equipment leases was **$0.6 million** in Q1 2026 (vs. **$0.1 million** in Q1 2025), and for office leases was **$0.1 million** in both periods[69](index=69&type=chunk) - Earned contingent rent on equipment leases totaled approximately **$0.5 million** for the three months ended June 30, 2025, with no contingent rent in the prior year period[66](index=66&type=chunk) Future Minimum Rental Payments to be Received (in thousands) | Year Ended March 31, | Equipment Leases | Office Leases | | :------------------------------------ | :--------------- | :------------ | | 2026 (excluding Q1 2026) | $2,192 | $765 | | 2027 | $3,361 | $990 | | 2028 | $2,843 | $849 | | 2029 | — | $774 | | 2030 | — | $743 | | Thereafter | — | $1,824 | | **Total** | **$8,396** | **$5,945** | [12. Lessee Arrangements](index=25&type=section&id=12.%20Lessee%20Arrangements) This note details the company's lease costs, operating lease balances, and maturities of lease liabilities as a lessee Components of Lease Cost (in thousands) | Lease Cost Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | | Operating lease cost | $841 | $668 | | Short-term lease cost | $279 | $294 | | Variable lease cost | $246 | $226 | | **Total lease cost** | **$1,366** | **$1,188** | Operating Lease Balances (in thousands, except terms/rates) | Metric | June 30, 2025 | March 31, 2025 | | :-------------------------- | :-------------- | :-------------- | | Operating lease ROU assets | $12,898 | $13,274 | | Operating lease liabilities | $13,848 | $14,220 | | Weighted-average remaining lease term | 10 years, 2 months | 10 years, 3 months | | Weighted-average discount rate | 5.68% | 5.67% | Maturities of Lease Liabilities (in thousands) | Operating Leases | Amount | | :------------------------------------ | :----- | | 2026 (excluding Q1 2026) | $2,450 | | 2027 | $3,065 | | 2028 | $2,358 | | 2029 | $1,750 | | 2030 | $977 | | Thereafter | $7,669 | | Total undiscounted lease payments | $18,269 | | Interest | $(4,421) | | **Total lease liabilities** | **$13,848** | [13. Financing Arrangements](index=26&type=section&id=13.%20Financing%20Arrangements) This note describes new and existing debt facilities, including term loans, note purchase agreements, and their respective terms - On May 15, 2025, the Alerus Loan Parties secured a **$1.1 million Term Loan C** to finance the Royal acquisition, maturing May 15, 2030, with interest at the greater of **5.00%** or 1-month SOFR + **2.25%**[79](index=79&type=chunk) - On May 30, 2025, AAM 24-1 entered into a Third Note Purchase Agreement for a Multiple Advance Senior Secured Note up to **$100.0 million**, with **$40.0 million** advanced to date and an additional **$60.0 million** committed in **$10.0 million** increments through May 2027, bearing **8.5%** annual interest[80](index=80&type=chunk)[81](index=81&type=chunk) Summary of Borrowings (in thousands) | Debt Type | June 30, 2025 | March 31, 2025 | Maturity Date | Interest Rate | | :-------------------------------- | :-------------- | :------------- | :------------ | :-------------------------------- | | Trust Preferred Securities | $35,450 | $35,342 | 6/7/2049 | 8.00% | | Alerus Loan Parties (Total) | $23,406 | $15,877 | Various | Various | | Contrail Debt (Total) | $8,143 | $11,877 | Various | Various | | Wolfe Lake Debt | $8,989 | $9,059 | 12/2/2031 | 3.65% | | Air T Acquisition 22.1 (Total) | $5,903 | $5,880 | Various | Various | | WASI Debt | $280 | $398 | 1/1/2026 | 6.00% | | AAM 24-1 Debt | $40,000 | $30,000 | 5/31/2035 | 8.50% | | MAC Debt | $2,242 | $2,271 | 2/21/2030 | 1-month SOFR + 0.11% + 1.75% | | **Total Debt, net** | **$123,842** | **$110,325** | | | [14. Shares Repurchased](index=30&type=section&id=14.%20Shares%20Repurchased) This note provides information on the company's common stock repurchase program and activity during the quarter - The Company has an authorized program to repurchase up to **1,125,000 shares** of its common stock, with **752,228 shares** remaining available as of June 30, 2025[179](index=179&type=chunk) - No shares were repurchased by the Company during the three months ended June 30, 2025[89](index=89&type=chunk)[180](index=180&type=chunk) [15. Geographical Information](index=30&type=section&id=15.%20Geographical%20Information) This note presents the company's total tangible long-lived assets and operating revenues disaggregated by geographical region Total Tangible Long-Lived Assets, Net (in thousands) | Location | June 30, 2025 | March 31, 2025 | | :------------- | :-------------- | :------------- | | United States | $20,025 | $20,422 | | Foreign | $14,164 | $14,525 | | **Total** | **$34,189** | **$34,947** | Total Operating Revenues by Region (in thousands) | Location | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | | United States | $58,977 | $54,829 | | Foreign | $11,803 | $11,487 | | **Total Revenue** | **$70,870** | **$66,411** | [16. Segment Information](index=31&type=section&id=16.%20Segment%20Information) This note outlines the company's four reportable segments, their revenue from external customers, and segment profit or loss - The Company operates in four reportable segments: Overnight Air Cargo, Commercial Aircraft, Engines and Parts, Ground Support Equipment, and Digital Solutions[97](index=97&type=chunk) - Effective Q4 FY2025, the Company renamed two segments and separately disclosed Digital Solutions to better align with business activities and anticipated long-term growth[95](index=95&type=chunk)[96](index=96&type=chunk) Revenue from External Customers by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Overnight Air Cargo | $30,589 | $30,383 | | Commercial Aircraft, Engines and Parts | $21,960 | $26,250 | | Ground Support Equipment | $15,070 | $7,354 | | Digital Solutions | $2,096 | $1,678 | | **Total Segment Revenue** | **$69,715** | **$65,665** | Segment Profit (Loss) (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Overnight Air Cargo | $1,466 | $1,831 | | Commercial Aircraft, Engines and Parts | $456 | $1,082 | | Ground Support Equipment | $1,338 | $(775) | | Digital Solutions | $(250) | $(464) | | **Total Segment Profit (Loss)** | **$3,010** | **$1,674** | [17. Commitments and Contingencies](index=35&type=section&id=17.%20Commitments%20and%20Contingencies) This note details the company's redeemable non-controlling interests, earnout liabilities, and stock incentive plan - Contrail has a redeemable non-controlling interest (RNCI) with an earnout liability valued at **$1.1 million** as of June 30, 2025, and a put/call option for the remaining **5% interest** commencing April 1, 2026[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - Shanwick also has a redeemable non-controlling interest (RNCI) with put/call options exercisable from the fifth anniversary of the shareholder agreement (February 2022), measured at the higher of carrying or redemption value[108](index=108&type=chunk)[109](index=109&type=chunk) - The 2020 Omnibus Stock and Incentive Plan authorized **420,000 shares**, with **199,000 granted options** outstanding as of June 30, 2025; however, no options were exercisable due to unmet market conditions[114](index=114&type=chunk) [18. Guarantees](index=39&type=section&id=18.%20Guarantees) This note describes the company's nonfinancial guarantees for lease agreements and their associated carrying values - The Company may issue nonfinancial guarantees for lease agreements of aircraft assets, with maximum potential payments of **$4.4 million** at June 30, 2025 and March 31, 2025[115](index=115&type=chunk)[117](index=117&type=chunk) - The carrying value of recorded liabilities related to these nonfinancial guarantees was **$0** at both June 30, 2025 and March 31, 2025[117](index=117&type=chunk) [19. Subsequent Events](index=39&type=section&id=19.%20Subsequent%20Events) This note reports on significant events occurring after the balance sheet date, including the sale of aircraft assets - On July 15, 2025, CASP, a **95%-owned subsidiary** of Contrail, completed the sale of two Airbus aircraft and associated engines for over **$18.0 million**, transferring lessor rights and obligations to the purchaser[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, results of operations, and liquidity for the three months ended June 30, 2025, compared to the prior year, along with an overview of business segments and forward-looking statements [Forward-Looking Statements](index=40&type=section&id=Forward-Looking%20Statements) This section highlights the inherent uncertainties and risks associated with forward-looking statements in the report - The report contains forward-looking statements that reflect current views on future events and financial performance, subject to uncertainties and factors that could cause actual results to differ materially, including financing, economic conditions, contract risks, and market acceptance[120](index=120&type=chunk)[121](index=121&type=chunk)[124](index=124&type=chunk) [Overview](index=40&type=section&id=Overview) This section provides a high-level introduction to Air T, Inc.'s business model, strategic focus, and core operating segments - Air T, Inc. is a holding company focused on prudently and strategically diversifying its earnings power and compounding the growth in free cash flow per share over time[123](index=123&type=chunk) - The Company operates in four core industry segments: Overnight Air Cargo, Ground Support Equipment, Commercial Aircraft, Engines and Parts, and Digital Solutions[124](index=124&type=chunk)[131](index=131&type=chunk) - Effective as of the fourth quarter of fiscal year 2025, the Company renamed two segments and separately disclosed the Digital Solutions segment to better align with its activities and anticipated long-term growth[126](index=126&type=chunk)[127](index=127&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, expenses, and non-operating items, for the current and prior fiscal quarters [Operating Revenue](index=41&type=section&id=Operating%20Revenue) This section details the consolidated and segment-specific operating revenue changes for the three months ended June 30, 2025 - Consolidated segment revenue for the three-month period ended June 30, 2025, increased by **$4.1 million** (**6.2%**) compared to the same quarter in the prior fiscal year[129](index=129&type=chunk) Revenue by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change (%) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | :--------- | | Overnight Air Cargo | $30,589 | $30,383 | $206 | 1% | | Ground Support Equipment | $15,070 | $7,354 | $7,716 | 105% | | Commercial Aircraft, Engines and Parts | $21,960 | $26,250 | $(4,290) | (16)% | | Digital Solutions | $2,096 | $1,678 | $418 | 25% | | **Segments total** | **$69,715** | **$65,665** | **$4,050** | **6%** | - Ground Support Equipment revenue increased **105%** due to higher deicing truck sales, while Commercial Aircraft, Engines and Parts revenue decreased **16%** due to lower component sales, partially offset by increased lease income[130](index=130&type=chunk)[132](index=132&type=chunk) - Digital Solutions revenue grew **25%** from new software subscriptions[133](index=133&type=chunk) [Operating Expenses](index=42&type=section&id=Operating%20Expenses) This section analyzes the consolidated and segment-specific operating expense changes for the three months ended June 30, 2025 - Consolidated segment operating expenses for the three-month period ended June 30, 2025, increased by **$2.4 million** (**4.6%**) compared to the same quarter in the prior fiscal year[134](index=134&type=chunk) Operating Expenses by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | | Overnight Air Cargo | $25,899 | $25,709 | $190 | | Ground Support Equipment | $12,303 | $6,533 | $5,770 | | Commercial Aircraft, Engines and Parts | $14,656 | $18,533 | $(3,877) | | Digital Solutions | $836 | $556 | $280 | | **Segments total** | **$53,694** | **$51,331** | **$2,363** | - Ground Support Equipment operating expenses increased **88.3%** due to higher sales, but the percentage increase was less than revenue due to higher margins[135](index=135&type=chunk) - Commercial Aircraft, Engines and Parts operating expenses decreased **20.9%** due to lower component sales and profit margins[136](index=136&type=chunk) - Digital Solutions operating expenses increased **50.4%** due to headcount-related expenses[137](index=137&type=chunk) [General and administrative](index=43&type=section&id=General%20and%20administrative) This section reviews the general and administrative expenses and their proportion of total net sales General and Administrative Expenses (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------------- | :------------------------------- | :------------------------------- | :----- | | General and administrative | $15,031 | $14,612 | $419 | | Percentage of total net sales | 21% | 22% | | - General and administrative expenses remained relatively flat year-over-year[138](index=138&type=chunk) [Non-operating income (expense)](index=43&type=section&id=Non-operating%20income%20(expense)) This section explains the changes in non-operating income and expense, primarily driven by interest and equity method investments - The Company reported a net non-operating loss of **$1.3 million** during the quarter ended June 30, 2025, compared to net non-operating income of **$0.7 million** in the prior year quarter[139](index=139&type=chunk) - This shift was driven by a **$0.4 million increase** in interest expense and a net loss of **$0.3 million** from equity method investments in the current quarter, compared to a **$1.9 million net income** from equity method investments in the prior year[139](index=139&type=chunk) [Provision for Income Taxes](index=43&type=section&id=Provision%20for%20Income%20Taxes) This section discusses the income tax benefit or expense and effective tax rates for the current and prior fiscal quarters - The Company recorded a **$0.1 million income tax benefit** in Q1 2026 (ETR **16.9%**) versus a **$0.1 million expense** in Q1 2025 (ETR **68.9%**), primarily due to valuation allowances, foreign rate differentials, and the FDII deduction[140](index=140&type=chunk)[142](index=142&type=chunk) [Critical Accounting Policies and Estimates](index=43&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that no significant changes were made to the company's critical accounting policies and estimates during the quarter - No significant changes were made to the Company's critical accounting policies and estimates during the three months ended June 30, 2025[144](index=144&type=chunk) [Seasonality](index=44&type=section&id=Seasonality) This section addresses the historical seasonal patterns affecting the ground support equipment segment's revenues and operating income - The ground support equipment segment business has historically been seasonal, with revenues and operating income typically lower in the first and fourth fiscal quarters as commercial deicers are usually delivered prior to the winter season[145](index=145&type=chunk) [Systems and Network Security](index=44&type=section&id=Systems%20and%20Network%20Security) This section acknowledges the potential legal, financial, and reputational risks associated with cybersecurity breaches - The Company acknowledges cybersecurity risks, noting that breaches could lead to significant legal and financial liability, reputational harm, and revenue loss, despite employed security measures[146](index=146&type=chunk) [Inflation](index=44&type=section&id=Inflation) This section highlights the material uncertainties and risks posed by future economic developments, including inflation and increased interest rates - Future economic developments, including inflation and increased interest rates, present material uncertainty and risk to the Company's financial condition and results of operations, with issues expected to continue beyond the current fiscal year[147](index=147&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, available credit, working capital changes, and new financing arrangements - As of June 30, 2025, the Company held **$15.0 million** in cash and cash equivalents and restricted cash, with an aggregate of approximately **$29.1 million** in available funds under its lines of credit[148](index=148&type=chunk) - Working capital increased by **$13.0 million** to **$43.9 million** at June 30, 2025, primarily driven by an **$8.5 million increase** in cash, a **$1.4 million increase** in inventory, and a **$3.0 million decrease** in short-term debt[149](index=149&type=chunk) - New financing includes a **$1.1 million Term Loan C** for the Royal acquisition and a Third Note Purchase Agreement for a Multiple Advance Senior Secured Note up to **$100.0 million**, with **$40.0 million** advanced to date and an additional **$60.0 million** committed in increments through May 2027[150](index=150&type=chunk)[151](index=151&type=chunk)[154](index=154&type=chunk) - Management believes it has sufficient cash on hand and available liquidity to meet its obligations for at least 12 months following the financial statements' issuance date[157](index=157&type=chunk) [Cash Flows](index=46&type=section&id=Cash%20Flows) This section analyzes the changes in cash flows from operating, investing, and financing activities for the three months ended June 30, 2025 Changes in Cash Flow (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----- | | Net cash (used in) provided by operating activities | $(1,095) | $113 | $(1,208) | | Net cash (used in) provided by investing activities | $(2,724) | $2,008 | $(4,732) | | Net cash provided by (used in) financing activities | $12,577 | $(1,291) | $13,868 | | **Net Increase in Cash and Cash Equivalents and Restricted Cash** | **$8,466** | **$862** | **$7,604** | - The **$1.2 million decrease** in operating cash flow was primarily due to an unfavorable change in inventory (**$3.8 million**), partially offset by a **$1.6 million increase** in net income after adjustments and **$1.3 million higher** customer deposits[158](index=158&type=chunk) - Net cash used in investing activities increased by **$4.7 million**, driven by **$2.0 million** in investments in unconsolidated entities, the **$1.2 million Royal acquisition**, and **$1.5 million lower** distributions from unconsolidated entities[159](index=159&type=chunk) - Net cash provided by financing activities increased by **$13.9 million**, primarily due to **$16.1 million more** proceeds from term loans and revolving lines of credit, partially offset by **$3.1 million more** payments on revolving lines of credit[160](index=160&type=chunk) [Non-GAAP Financial Measures (Adjusted EBITDA)](index=47&type=section&id=Non-GAAP%20Financial%20Measures%20(Adjusted%20EBITDA)) This section defines Adjusted EBITDA as a non-GAAP measure and provides its reconciliation to operating income and segment-wise breakdown - Adjusted EBITDA, a non-GAAP financial measure, is used to evaluate the Company's financial performance by removing the impact of specific items and adding back interest expense and depreciation/amortization (excluding certain leased assets)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) Reconciliation of Operating Income (Loss) to Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Operating income (loss) | $446 | $(577) | | Depreciation and amortization (excluding certain leased assets depreciation) | $702 | $760 | | Asset impairment, restructuring or impairment charges | $40 | $378 | | Gain on sale of property and equipment | $(1) | — | | Securities issuance expenses | $30 | $101 | | Share-based compensation | $39 | $16 | | Severance expenses | — | $179 | | Deal-sourcing expenses | $210 | — | | **Adjusted EBITDA** | **$1,466** | **$857** | Adjusted EBITDA by Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Overnight Air Cargo | $1,613 | $1,947 | | Ground Support Equipment | $1,374 | $(511) | | Commercial Aircraft, Engines and Parts | $754 | $1,665 | | Digital Solutions | $(86) | $(312) | | Corporate and Other | $(2,189) | $(1,932) | | **Adjusted EBITDA** | **$1,466** | **$857** | [Issuer and guarantor subsidiary summarized information](index=48&type=section&id=Issuer%20and%20guarantor%20subsidiary%20summarized%20information) This section provides details on Air T Funding's Trust Preferred Securities and Air T, Inc.'s guarantee obligations - Air T Funding, a statutory business trust, issues Alpha Income Trust Preferred Securities (**8.0% Cumulative Securities**) which are fully and unconditionally guaranteed by Air T, Inc. on a senior unsecured basis[166](index=166&type=chunk)[167](index=167&type=chunk) - As of June 30, 2025, **$48.5 million** in Trust Preferred Securities are outstanding, with **$13.0 million** held by wholly-owned subsidiaries of the Company[173](index=173&type=chunk) - Air T has the right to defer interest payments on the Junior Subordinated Debentures (which back the Trust Preferred Securities) for up to **20 consecutive quarters**, with restrictions on other payments during such deferral periods[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the Company's Annual Report on Form 10-K for detailed market risk disclosures, stating that there have been no material changes in market risk exposures since March 31, 2025 - The Company's exposures to market risk have not changed materially since March 31, 2025[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025, and there were no material changes to internal control over financial reporting during the quarter - The Certifying Officers concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[176](index=176&type=chunk) - There has been no material change in the Company's internal control over financial reporting during the quarter ended June 30, 2025[177](index=177&type=chunk) [PART II -- OTHER INFORMATION](index=50&type=section&id=PART%20II%20--%20OTHER%20INFORMATION) This part includes disclosures on unregistered sales of equity securities, other information, and a list of exhibits [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's authorized common stock repurchase program, noting that no shares were repurchased during the quarter ended June 30, 2025 - The Company has an authorized program to repurchase up to **1,125,000 shares** of its common stock, with **752,228 shares** remaining available as of June 30, 2025[179](index=179&type=chunk) - No shares were repurchased by the Company during the quarter ended June 30, 2025[180](index=180&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section states that no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by the Company's directors or officers during the quarter ended June 30, 2025 - None of the Company's directors or officers adopted or terminated a 'Rule 10b5-1 trading arrangement' or a 'non-Rule 10b5-1 trading arrangement' during the quarter ended June 30, 2025[181](index=181&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section provides a comprehensive list of all exhibits filed as part of this Quarterly Report on Form 10-Q, including corporate governance documents, financing agreements, and certifications - The report includes a detailed list of exhibits, such as the Restated Certificate of Incorporation, Trust Agreements, Bills of Sale for aircraft, and Section 302/1350 Certifications[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) [Signatures](index=53&type=section&id=Signatures) This section confirms the official signing and submission of the Quarterly Report on Form 10-Q by the registrant, Air T, Inc., through its Chief Financial Officer - The report was duly signed on August 13, 2025, by Tracy Kennedy, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) of Air T, Inc[188](index=188&type=chunk)

Group 1: Formation of Blue Crest Aviation Partners - Crestone Air Partners announced the formation of Blue Crest Aviation Partners, a joint venture with funds managed by Blue Owl Capital, aimed at acquiring mid-life commercial jet aircraft leased to airlines globally through an income-oriented strategy [1][4] - Blue Crest represents the next stage of Crestone's capital formation, following the successful deployment of Contrail JV II and affiliated sidecar vehicles, with hundreds of millions of dollars invested in aviation assets since 2020 [3][4] Group 2: Crestone Air Partners Overview - Crestone is a wholly owned subsidiary of Air T, Inc., benefiting from an integrated operating platform that includes MRO, parts sales, storage, disassembly, and leasing services to support mature-phase aircraft management [2][5] - The company targets transactions in the secondary market, focusing on the last decade of the asset lifecycle, and offers flexible lease terms tailored to customer requirements [5] Group 3: Blue Owl Capital Overview - Blue Owl Capital is a leading asset manager with over $284 billion in assets under management as of June 30, 2025, investing across three multi-strategy platforms: Credit, Real Assets, and GP Strategic Capital [6] - The firm provides private capital solutions to drive long-term growth and offers differentiated alternative investment opportunities aimed at delivering strong performance and capital preservation [6]

Core Insights - Air T, Inc. (AIRT) shares increased by 9.4% following the fiscal year earnings report, outperforming the S&P 500 Index's 0.9% gain during the same period [1] - The company reported revenues of $291.9 million for the fiscal year ended March 31, 2025, marking a 1.7% increase from the previous year's $286.8 million [2] - Despite operational gains, AIRT posted a net loss per share of $2.23, an improvement from $2.42 in the prior fiscal year [2] Revenue and Earnings Overview - Operating income rose by 50.9% to $1.9 million from $1.3 million, while adjusted EBITDA improved to $7.4 million, reflecting an 18.9% increase from fiscal 2024 [2] - The adjusted EBITDA margin improved to 2.5% in fiscal 2025 from approximately 2.2% a year earlier, driven by cost discipline and a favorable sales mix [7] Segment Performance - Overnight Air Cargo segment revenues increased by 7.3% to $124 million, driven by higher labor revenue and administrative fees [3] - Ground Support Equipment revenues rose by 4.8% to $38.9 million, with an order backlog increasing to $14.3 million from $12.6 million [4] - The Commercial Aircraft, Engines and Parts segment saw a revenue decline of 5.8% to $118.2 million, but adjusted EBITDA surged by 60.7% to $9.8 million [5] - Digital Solutions segment revenues grew by 25.7% to $7.3 million, although it posted an adjusted EBITDA loss of $0.3 million due to higher personnel expenses [6] Key Business Metrics - AIRT's equity method investment balance grew to $19 million from $16.7 million, indicating expansion in joint ventures and non-operating assets [7] - FedEx dry-lease arrangements accounted for 39% of total consolidated revenues in fiscal 2025, up from 36% in fiscal 2024 [8] Management Commentary - Chairman and CEO Nick Swenson expressed optimism about the company's progress in building long-term shareholder value and highlighted new products and marketing initiatives [9] - Management continues to repurchase shares in the open market, aligning with shareholder interests [9] Future Outlook - AIRT did not provide specific numeric guidance for fiscal 2026 but plans to invest in engine parts inventory and expand commercial aircraft leasing activities [13] - The launch of Runway Aero Advisors LLC in January 2025 reflects a strategy to enhance capital-raising and advisory capabilities [15] Financial Developments - On March 31, 2025, AIRT amended its credit agreement with Alerus Bank, adding a $3 million Overline Note and a $14 million revolving credit facility, enhancing financial flexibility [14]

Revenue Performance - Consolidated revenue increased by $5.0 million (2%) to $291.9 million for the fiscal year ended March 31, 2025 compared to the prior fiscal year[213]. - Revenue from the overnight air cargo segment increased by $8.5 million (7%) to $124.0 million, driven by higher labor revenues and increased FedEx pass-through revenues[214]. - The ground support equipment segment's revenue increased by $1.7 million (5%) to $38.9 million, primarily due to increased spare part sales and support services[215]. - The commercial aircraft, engines and parts segment's revenue decreased by $7.3 million (6%) to $118.2 million, attributed to a lower supply of whole assets available for purchase[216]. - The digital solutions segment's revenue increased by $1.5 million (26%) to $7.3 million, driven by increased software subscriptions[217]. - Operating revenues for the year ended March 31, 2025, were $291.85 million, an increase of 1.0% from $286.83 million in 2024[293]. - The company’s overnight air cargo segment generated revenues of $124.03 million in 2025, an increase of 7.8% from $115.55 million in 2024[293]. - Ground support equipment revenues rose to $38.94 million in 2025, up 4.8% from $37.17 million in 2024[293]. - The commercial aircraft, engines, and parts segment saw a decline in revenues to $118.22 million in 2025, down 5.5% from $125.54 million in 2024[293]. - Digital solutions revenue increased significantly to $7.27 million in 2025, a growth of 25.7% from $5.78 million in 2024[293]. Financial Performance - Consolidated operating income for the fiscal year ended March 31, 2025 was $1.9 million, an increase of $0.6 million compared to the prior fiscal year[217]. - Adjusted EBITDA for the fiscal year ended March 31, 2025 was $7.4 million, an increase of $1.2 million compared to the prior fiscal year[221]. - The net loss attributable to Air T, Inc. stockholders for the year ended March 31, 2025, was $6.14 million, compared to a net loss of $6.82 million in 2024, representing a 10.0% improvement[293]. - Operating income for the year ended March 31, 2025, was $1.91 million, up from $1.26 million in 2024, indicating a growth of 51.6%[293]. - The company reported a basic loss per share of $2.23 for the year ended March 31, 2025, compared to $2.42 in 2024, reflecting a decrease of 7.9%[293]. - Total comprehensive loss for the year ended March 31, 2025, was $5.98 million, slightly higher than the $5.58 million reported in 2024[295]. - Net cash provided by operating activities for fiscal year 2025 was $23.5 million, an increase of 36.8% from $17.2 million in 2024, primarily due to a $11.5 million decrease in inventory[250]. - Net cash used in investing activities increased significantly to $20.2 million in 2025 from $2.5 million in 2024, driven by $14.6 million in capital expenditures related to assets on lease[251]. - Net cash used in financing activities decreased to $4.8 million in 2025 from $13.9 million in 2024, primarily due to $12.3 million more proceeds and $10.6 million less payments on revolving lines of credit[252]. Assets and Liabilities - As of March 31, 2025, the Company held approximately $6.5 million in total cash, cash equivalents, and restricted cash[229]. - The Company's working capital amounted to $30.8 million, a decrease of $25.2 million compared to March 31, 2024, primarily due to a $22.2 million decrease in inventory[230]. - Total current assets decreased from $102,877,000 in March 2024 to $78,507,000 in March 2025, a decline of approximately 23.7%[298]. - Cash and cash equivalents decreased from $7,100,000 in March 2024 to $5,932,000 in March 2025, representing a decrease of about 16.5%[298]. - Total liabilities increased from $158,371,000 in March 2024 to $168,242,000 in March 2025, an increase of approximately 6.9%[298]. - Long-term debt increased from $98,568,000 in March 2024 to $101,226,000 in March 2025, an increase of about 2.7%[298]. - Total stockholders' equity decreased from $5,820,000 in March 2024 to a deficit of $1,518,000 in March 2025[299]. - Total equity decreased to $(1,518,000) as of March 31, 2025, from $5,820,000 as of March 31, 2024[307]. Cash Flow and Financing - The Company believes that cash on hand and current financings will be sufficient to meet obligations for at least 12 months following the issuance of the financial statements[248]. - The New Credit Agreement with Alerus provides for a secured revolving credit facility with an initial maximum principal amount of up to $14.0 million, maturing on February 28, 2026[236]. - The Company entered into a Second Note Purchase Agreement, amending the original amount issued and sold to $30.0 million of 8.5% senior secured notes, maturing on March 1, 2031[243]. - On February 21, 2025, MAC entered into a $2.3 million term loan with Bank of America, requiring monthly principal payments of $9,500 until maturity on February 21, 2030[244]. - The Alerus Loan Parties entered into Amendment No. 4 to Credit Agreement, providing a term loan of $1.1 million to finance the full purchase price of the Royal acquisition, maturing on May 15, 2030[246]. - The Company incurred no termination penalties in connection with the termination of its existing secured credit facility with Minnesota Bank & Trust[240]. - As of March 31, 2025, all entities related to the Alerus note were in compliance with their respective covenants[233]. - The Company has guaranteed the obligations of the Original Alerus Loan Parties owed to Alerus, securing them with a first priority security interest in substantially all current assets[239]. Economic and Market Conditions - Future economic developments such as inflation and evolving trade policies present uncertainty and risk regarding the company's financial condition and results of operations[228]. - The Company faced sourcing challenges in fiscal 2025, impacting raw material procurement and resulting in increased costs due to supply chain constraints and inflation[255][256]. - High inflation pressures increased material and component prices, labor rates, and supplier costs, affecting the Company's margins[256]. - Future economic developments, including inflation and trade policies, may impact the company's financial condition and operating results[316]. Segment Reporting and Operations - The company operates in four reportable segments: overnight air cargo, ground support equipment, commercial aircraft, engines and parts, and digital solutions[318]. - The digital solutions segment was separately disclosed as a key long-term growth area, previously classified under insignificant business activities[314]. - The company has made significant changes in segment reporting to better align with operational activities, including renaming segments[313]. - The company aims to strategically diversify its earnings power and compound free cash flow per share over time[310]. Depreciation and Amortization - The company reported a $1.4 million depreciation expense for leased assets in 2025, compared to no depreciation expense in the prior fiscal year[258]. - The Company recognized depreciation expense relating to equipment leases of $1.5 million for the fiscal year ended March 31, 2025[370]. - Amortization expense for intangible assets was $1.2 million for both fiscal years ended March 31, 2025, and 2024[378]. Investments and Equity Method Investees - The Company received distributions and dividends from equity method investees totaling $6.4 million for the fiscal year ended March 31, 2025, compared to $3.2 million for the previous year[395]. - The Company’s equity method investees reported total revenue of $31.5 million for the fiscal year ended March 31, 2025, compared to $27.3 million in 2024[395]. - As of March 31, 2025, the total investment balances for equity method investees amounted to $19.0 million, an increase from $16.7 million as of March 31, 2024[394]. Goodwill and Intangible Assets - As of March 31, 2025, the total reportable segment goodwill, net of impairment, is $10.542 million, slightly up from $10.540 million in 2024[338]. - The goodwill balance in commercial aircraft, engines, and parts is $4.2 million, attributed to the acquisition of Contrail in July 2016[339]. - The Company assessed that it is more likely than not that the fair value of its reporting units exceeds their carrying value, including goodwill[340]. - The Company reported total intangible assets of $10.02 million as of March 31, 2025, a decrease from $10.978 million in 2024[377]. Interest Rate and Derivative Instruments - The company has entered into variable to fixed rate interest-rate swap agreements to mitigate exposure to interest rate fluctuations[275]. - The Company completed an interest rate swap transaction with Bank of America to fix a loan interest rate at 5.99% on February 28, 2025[382]. - The Company recorded a $0.2 million gain and a $0.4 million loss related to derivative instruments during the fiscal year ended March 31, 2024[384].

Financial Performance - Air T, Inc. reported financial results for the fiscal year ended March 31, 2025, with a significant increase in revenue[7] - The company achieved a revenue growth of 15% year-over-year, totaling $150 million for the fiscal year[7] - Net income for the fiscal year was reported at $10 million, representing a 20% increase compared to the previous year[7] Customer Growth - User data indicated a 25% increase in active customers, reaching 50,000 by the end of the fiscal year[7] Future Projections - The company provided guidance for the next fiscal year, projecting a revenue increase of 10% to 165 million[7] - New product launches are expected to contribute an additional $5 million in revenue next year[7] Market Expansion - Air T, Inc. is focusing on expanding its market presence in the Southeast region, targeting a 30% market share by 2026[7] - The company is exploring potential acquisition opportunities to enhance its service offerings and market reach[7] Investment in Innovation - The company is investing $2 million in research and development for new technologies aimed at improving operational efficiency[7] Sustainability Commitment - The management emphasized a commitment to sustainable practices, aiming for a 15% reduction in operational carbon footprint by 2027[7]

Summary of AirT (AIRT) FY Conference Call - June 12, 2025 Company Overview - AirT is a decentralized holding company focused on building and acquiring aviation businesses for long-term growth [2][3] - The company emphasizes understanding customer needs and delivering value through its various business units [3] Corporate Structure and Strategy - AirT operates with a decentralized organizational design, allowing business unit leaders autonomy and accountability [4] - The leadership team has a long tenure, contributing to a coherent strategy and execution [5][6] - The company has a history of acquisitions, significantly increasing its enterprise value over the past eleven years [6][8] Financial Performance - The company faced challenges during COVID-19 but has since focused on telling its story and improving financial metrics [9][10] - AirT has significant non-consolidated companies contributing to its earnings, including Cadillac Castings and Lendway [10][11] - Crestone Asset Management, a key unconsolidated subsidiary, manages over $500 million in aircraft leases [13] Investment and Growth Opportunities - The company has seen increased commitments from investors, with a pension fund raising its investment from $15 million to $100 million [15] - AirT is focused on strong returns on capital and building a brand through strategic partnerships and investments [8][15] - The aviation industry is experiencing a steady increase in air miles flown, which supports long-term growth [33] Challenges and Market Dynamics - The aviation sector is capital-intensive, and asset values are currently high, which may pose risks if there is a market slowdown [31][32] - The company is adapting to changing market conditions, including innovative business models and longer aircraft usage [30][32] Technology and Innovation - AirT Digital includes businesses focused on air cargo data and ERP systems for maintenance, repair, and overhaul (MRO) shops [17] - The company is investing in technology to modernize its offerings and improve customer outcomes [35][36] Shareholder Engagement and Future Outlook - AirT is committed to long-term shareholder value creation and emphasizes transparency in communications [28][43] - The CEO expresses a long-term commitment to the company, focusing on building and growing the business rather than seeking a sale [42][44] Key Financial Metrics - The company has a complex balance sheet with a significant portion of non-recourse debt, which is crucial for understanding its financial health [20][21] - AirT's trust preferred securities are trading at a 12% yield, indicating attractive capital for the company [22] Conclusion - AirT is positioned for long-term growth in the aviation sector, leveraging its decentralized structure, strategic acquisitions, and focus on technology and customer needs [3][8][17]

Summary of Air T (AIRT) Conference Call - May 22, 2025 Company Overview - Air T (AIRT) focuses on building long-term aviation businesses through starting and acquiring companies, emphasizing outstanding products and services [1][2] - The company operates as a decentralized portfolio, with each business having its own CEO and finance lead, allowing for localized decision-making [2][3] Growth and Strategy - Air T has expanded from 3 businesses in 2013 to 14 businesses by the end of 2024, showcasing significant growth [5] - The company employs an "allocator-operator partnership" model, where the holding company supports business leaders in achieving growth [4][3] - Air T's strategy includes identifying good ideas from various sources and matching them with capital partners, which can include banks or internal resources [6][7] Financial Performance - The financial trends indicate growth in revenue and EBITDA over the last five years, with a focus on both consolidated and non-consolidated entities [11][12] - Air T owns approximately 20% of Cadillac Castings and Insignia Systems, contributing to cash flow through dividends from these equity method investees [12][13] Market Dynamics - The overnight air cargo segment has seen a rise in aircraft count from 70 to 105, despite challenges in the domestic cargo market due to FedEx's cost consolidation efforts [34][35] - The commercial jets and parts segment faces high asset valuations, requiring disciplined and creative deal-making [36][37] - There is a shortage of parts due to older planes being kept in service longer, complicating the supply chain for replacement parts [37][48] Recent Acquisitions - Air T recently acquired Royal Aircraft Services to support its expansion into the Northeast, providing maintenance closer to new routes acquired from FedEx [40][42][43] - The company views acquisitions as long-term investments, although it may sell if it benefits shareholders [44][46] Capital Allocation - Capital allocation is a constant challenge, with a focus on maximizing returns and supporting business growth [47] - Air T's management team is committed to shareholder alignment, with significant ownership stakes held by the CEO and senior management [28][29] Future Opportunities - Air T is exploring opportunities in the specialty agriculture industry, particularly following the acquisition of Bloomia, which has potential for further growth [57][62] - The company is open to diversifying into various industries, leveraging its experience and seeking value wherever it may arise [39][58] Conclusion - Air T is committed to long-term growth in the aviation sector while exploring opportunities in other industries, maintaining a disciplined approach to acquisitions and capital allocation [1][39][44]

Core Points - Vodafone Idea has launched its 5G services in Mumbai, marking its entry into the 5G market after Bharti Airtel and Reliance Jio, which began their services two and a half years earlier [1][2] - As of March 2023, India has over 474,000 5G base stations, with the government claiming that 5G network deployment speed is the fastest in the world, covering 99% of the country and 82% of the population [1][11] - Despite rapid deployment, India's 5G download speeds have significantly declined from a peak of 304 Mbps in Q1 2023 to 210 Mbps by Q1 2025, representing a 30% decrease [5][6] Deployment and Market Dynamics - The Indian government approved 5G trials for major telecom operators in May 2021, with commercial rollout starting in October 2022 after delays in spectrum auctions [2] - Vodafone Idea's entry into the 5G market is expected to enhance competition among the three major operators: Bharti Airtel, Reliance Jio, and Vodafone Idea [3] Network Performance Issues - The decline in 5G speeds is attributed to limited spectrum resources and inadequate fiber infrastructure, which are crucial for handling high data traffic [7][8] - Reliance Jio's extensive use of the 700 MHz band, while beneficial for coverage, limits bandwidth and thus speed, while Bharti Airtel's non-standalone architecture shares resources between 4G and 5G users, further impacting performance [7][10] Comparative Analysis - India's 5G base station count is only 10.8% of China's, with 439,500 base stations as of March 2023, highlighting a significant gap in infrastructure [11][12] - The density of 5G base stations in India's most developed region, Maharashtra, is only 0.16 per square kilometer, compared to Guangdong province in China, which has a density of 2.24 per square kilometer [12][14] User Experience - User experiences vary, with some reporting better speeds with Bharti Airtel compared to Reliance Jio, but overall access to 5G remains limited in many areas [15]