Core Insights - Air Transport Services Group, Inc. (ATSG) announced the appointment of Greg Mays as President and CEO, effective January 1, 2026, succeeding Mike Berger, who is retiring but will remain in an advisory role for part of 2026 [1][3] Group 1: Leadership Transition - Greg Mays, previously appointed President of ATSG in September 2025, is recognized as a seasoned aviation executive with a track record of delivering growth and operational excellence [2] - Mike Berger, who has been with ATSG since 2018 and held multiple leadership roles, expressed confidence in Mays' ability to lead the company into the future [3] Group 2: Company Overview - ATSG is a leading provider of aircraft leasing and air cargo transportation solutions for both domestic and international air carriers, as well as companies seeking outsourced air cargo services [4] - The company is the global leader in freighter aircraft leasing, with a fleet that includes Boeing 767, Airbus A321, and Airbus A330 aircraft [4] - ATSG's diverse portfolio includes subsidiaries that provide air cargo lift, passenger ACMI and charter services, aircraft maintenance, airport ground services, and material handling equipment engineering and service [4]

Core Insights - Frontier and ATSG have launched a temperature-controlled air corridor aimed at enhancing life science logistics, emphasizing the importance of precise temperature management in saving lives [1] Company Overview - The collaboration between Frontier and ATSG focuses on revolutionizing logistics for the life sciences sector, indicating a strategic move to improve service delivery in this critical industry [1] Industry Impact - The introduction of this air corridor is expected to significantly impact the logistics of life sciences, ensuring that temperature-sensitive products are delivered safely and efficiently, which is crucial for patient care and medical advancements [1]

Group 1 - ATSG hosted its third annual Girls in Aviation Day, welcoming over 70 students, educators, and community members [1]

Core Viewpoint - ATSG has appointed Greg Mays as President, who will lead the company's Commercial and Operations teams [1] Company Summary - The appointment of Greg Mays is aimed at strengthening leadership within ATSG [1] - Greg Mays will be responsible for overseeing the Commercial and Operations divisions, indicating a focus on enhancing operational efficiency and commercial strategy [1]

Group 1: Zacks Style Scores Overview - Zacks Style Scores are indicators that help investors select stocks likely to outperform the market in the next 30 days, rated from A to F based on value, growth, and momentum characteristics [2][6] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Group 2: Value Score - The Value Score identifies stocks trading below their true value by analyzing ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Group 3: Growth Score - The Growth Score evaluates stocks based on projected and historical earnings, sales, and cash flow to find those with sustainable growth potential [4] Group 4: Momentum Score - The Momentum Score assesses stocks based on price trends and earnings outlook changes to identify favorable buying opportunities [5] Group 5: VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth forecasts, and promising momentum [6] Group 6: Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to help investors build successful portfolios, with 1 (Strong Buy) stocks yielding an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - There are over 800 stocks rated 1 or 2, making it essential for investors to utilize Style Scores to narrow down their choices [9][10] Group 7: Stock Example - Air Transport Services Group (ATSG) - Air Transport Services Group is a leading global provider of aircraft leasing and air cargo transportation, ranked 2 (Buy) on the Zacks Rank with a VGM Score of A [12] - ATSG is projected to have a year-over-year earnings growth of 31% for the current fiscal year, with an upward revision in earnings estimates and an average earnings surprise of 6.1% [13]

Core Insights - Air Transport Services (ATSG) has shown strong performance in the Transportation sector, gaining approximately 2.1% year-to-date, while the sector has declined by an average of -15.6% [4] - ATSG currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook and strong analyst sentiment [3][4] - The Zacks Consensus Estimate for ATSG's full-year earnings has increased by 0.4% over the past three months, reflecting improving earnings expectations [4] Company Performance - Air Transport Services is part of the Transportation - Air Freight and Cargo industry, which has seen a decline of about 12.4% year-to-date, indicating that ATSG is outperforming its industry peers [6] - The company is ranked 183 in the Zacks Industry Rank, suggesting a relatively better position compared to its industry [6] Sector Comparison - The Transportation sector includes 126 individual stocks and currently holds a Zacks Sector Rank of 15, indicating a weaker overall performance compared to other sectors [2] - Another notable performer in the Transportation sector is Expeditors International (EXPD), which has returned 10% year-to-date and also holds a Zacks Rank of 2 (Buy) [5][7]

Core Viewpoint - Air Transport Services (ATSG) has seen a slight increase in share price of approximately 0.7% since the last earnings report, outperforming the S&P 500 index [1] Group 1: Earnings Report and Market Reaction - The last earnings report for ATSG was about a month ago, and there is speculation on whether the positive trend in share price will continue or if a pullback is imminent [1] - Analysts have not made any earnings estimate revisions in the past two months, indicating a period of stability in expectations [2] Group 2: Performance Metrics - ATSG has a Growth Score of B, a Momentum Score of D, and an impressive Value Score of A, placing it in the top 20% for value investment strategy [3] - The aggregate VGM Score for ATSG is A, which is a key indicator for investors not focused on a single strategy [3] Group 3: Future Outlook - ATSG holds a Zacks Rank of 2 (Buy), suggesting an expectation of above-average returns in the upcoming months [4]

Core Insights - Air Transport Services Group, Inc. (ATSG) reported strong fourth-quarter 2024 results, with earnings per share (EPS) of 40 cents exceeding the Zacks Consensus Estimate of 35 cents, marking over 100% year-over-year growth [1] - Customer revenues reached $516.8 million, surpassing the Zacks Consensus Estimate of $512.8 million, although total revenues saw a slight decline of 0.1% year over year [2] Business Developments - ATSG has entered into an all-cash acquisition agreement with Stonepeak, valued at $3.1 billion, expected to close in the first half of 2025, pending regulatory approvals [3] - The CEO highlighted the company's strong performance in the CAM leasing business, with the placement of the ninth converted 767-300 freighter in November [4] Financial Performance - ATSG's revenues from Cargo Aircraft Management (CAM) operations fell by 12.7% year over year to $111.56 million, while ACMI Services revenues decreased by 11.3% to $372.06 million [6] - Total operating expenses decreased by 1.1% year over year to $474.99 million, and adjusted EBITDA grew by 24.9% year over year to $162.23 million [7] - The company ended the quarter with cash and equivalents of $60.57 million, up from $44.87 million in the previous quarter, and generated $133.73 million in cash from operating activities [8] Market Position - ATSG holds a Zacks Rank 3 (Hold) and has seen its stock price increase by 40.7% over the past six months, outperforming the industry, which experienced a loss of 7.8% [9]

Group 1 - Air Transport Services (ATSG) reported quarterly earnings of $0.40 per share, exceeding the Zacks Consensus Estimate of $0.35 per share, and showing an increase from $0.18 per share a year ago, representing an earnings surprise of 14.29% [1] - The company posted revenues of $516.79 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.78%, although this is a slight decrease from year-ago revenues of $517.04 million [2] - Over the last four quarters, ATSG has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - ATSG shares have increased by approximately 1.6% since the beginning of the year, compared to a 1.2% gain in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $503.11 million, and for the current fiscal year, it is $1.14 on revenues of $2.08 billion [7] Group 3 - The Zacks Industry Rank indicates that the Transportation - Air Freight and Cargo sector is currently in the bottom 11% of over 250 Zacks industries, which may impact ATSG's stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6] - The current estimate revisions trend for ATSG is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]

Debt and Interest Rates - As of December 31, 2024, the Company had $971.1 million of fixed interest rate debt and $569.0 million of variable interest rate debt outstanding[325]. - A hypothetical 50% increase in interest rates would have resulted in a change in interest expense of approximately $20.6 million for 2024[325]. - A 50% increase in market interest rates would have decreased the book value of the Company's fixed interest rate convertible debt and Senior Notes by approximately $67.6 million[326]. - The Company has entered into interest rate swap instruments with combined notional values of $200.0 million as of December 31, 2024[324]. - The total debt obligations as of December 31, 2024, amount to $1,548.7 million, down from $1,762.3 million in 2023, representing a 12.1% reduction[433]. Financial Performance - Total revenues for 2024 were $1,961,971, a decrease of 5.2% compared to $2,070,611 in 2023[346]. - Operating income for 2024 was $127,803, down 36.0% from $199,832 in 2023[346]. - Net earnings for 2024 were $27,434, a decline of 54.5% compared to $60,327 in 2023[349]. - Basic earnings per share for continuing operations decreased to $0.42 in 2024 from $0.87 in 2023[346]. - The company reported a comprehensive income of $35,583 in 2024, down from $106,300 in 2023[349]. Assets and Equity - Total current assets increased to $351,582 in 2024 from $345,701 in 2023, reflecting a growth of 1.1%[344]. - Long-term debt decreased to $1,548,080 in 2024 from $1,707,572 in 2023, a reduction of 9.3%[344]. - Total stockholders' equity increased to $1,484,012 in 2024 from $1,368,702 in 2023, representing a growth of 8.5%[344]. - Cash and cash equivalents at the end of 2024 increased to $60,576 million from $53,555 million at the end of 2023, representing an increase of 5.7%[352]. - The total stockholders' equity at the end of 2024 was $1,484,012 million, an increase from $1,368,702 million at the end of 2023, reflecting a growth of 8.4%[354]. Expenditures and Cash Flow - Expenditures for property and equipment in 2024 were $331,006 million, significantly lower than $793,447 million in 2023, a decrease of 58.3%[352]. - Net cash provided by operating activities in 2024 was $532,815 million, down from $654,081 million in 2023, reflecting a decrease of 18.5%[352]. - The company reported a net cash used in investing activities of $304,705 million in 2024, compared to $765,929 million in 2023, a decrease of 60.2%[352]. - Principal payments on long-term obligations rose to $795,866 million in 2024 from $225,639 million in 2023, an increase of 252.5%[352]. - Proceeds from revolving credit facilities increased to $580,000 million in 2024, up from $335,000 million in 2023, a growth of 73.5%[352]. Mergers and Acquisitions - The Company entered into an Agreement and Plan of Merger with Stonepeak Nile Parent LLC on November 3, 2024, with anticipated benefits including synergies[12]. - The merger agreement with Stonepeak Nile Parent LLC was entered into on November 3, 2024, with a cash consideration of $22.50 per share for ATSG's common stock[495][496]. - The total funds required to consummate the Merger are expected to include equity financing from Parent and MergerCo and debt financing from multiple sources[504]. - Parent closed a private offering of $500 million of senior secured notes with a term of seven years at an interest rate of 7.25% on February 3, 2025[504]. - The Company recognized $8.3 million in transaction-related expenses during the year ended December 31, 2024[505]. Customer and Revenue Concentration - The Company’s three largest customers accounted for 76% of total revenues in 2024, with Amazon at 33%, DoD at 29%, and DHL at 14%[408]. - Accounts receivable from Amazon increased to $83,894,000 in 2024 from $74,509,000 in 2023, while DoD's accounts receivable decreased to $45,685,000[409]. - The Company expects to record customer incentive amortization of $31.9 million in 2025, decreasing to $8.6 million by 2029[404]. - The Company recorded a revenue adjustment of $258,750,000 due to the adoption of ASU 2020-06, impacting the convertible debt and additional paid-in capital[397]. - The company had revenues of approximately $784.9 million in 2024 from international operations, compared to $725.6 million in 2023, marking an increase of about 8.5%[493]. Pension and Benefits - The funded status of the Company's defined benefit pension plans was $508.4 million in total investment assets as of December 31, 2024[329]. - The accumulated benefit obligation for pension plans as of December 31, 2024, was $499.7 million, down from $522.0 million in 2023[459]. - The net periodic benefit cost for pension plans in 2024 was $4.3 million, compared to $36.9 million in 2023[460]. - The discount rate for crewmembers' pension plans increased to 5.70% in 2024 from 5.25% in 2023[462]. - The Company contributed $1.3 million to its defined benefit plans in both 2024 and 2023, with estimated contributions of approximately $1.9 million for pension plans and $0.3 million for healthcare plans in 2025[466]. Stock and Warrants - The fair value of stock warrants issued to Amazon was re-measured at $17.8 million as of December 31, 2024[340]. - The 2024 Subsequent Warrant issued on May 6, 2024, allows Amazon to purchase up to 2.9 million common shares at an exercise price of $12.9658 per share, vesting in four equal tranches[417]. - The expiration dates for 21.8 million existing vested warrants were extended from December 2025 to December 2029, resulting in a value re-measurement of $66.8 million[419]. - The total number of vested warrants increased from 21.8 million on December 31, 2023, to 22.5 million on December 31, 2024, while non-vested warrants increased from 2.9 million to 8.0 million[423]. - The fair value of stock warrant obligations was determined using a Black-Scholes pricing model, considering various assumptions including ATSG's common stock price and volatility[428]. Taxation - The company reported deferred tax assets of $119.5 million and deferred tax liabilities of $416.3 million as of December 31, 2024, resulting in a net deferred tax liability of $296.8 million[477]. - The total income tax expense from continuing operations for 2024 is $14.9 million, down from $24.5 million in 2023[478]. - The effective income tax rate for 2024 is 35.2%, an increase from 29.1% in 2023[478]. - The company has cumulative net operating loss carryforwards of approximately $93.8 million for federal income tax purposes as of December 31, 2024[476]. - Defined contribution plan expenses were $21.5 million in 2024, slightly down from $21.6 million in 2023[474].