Oct 22, 2025 4:16 PM Eastern Daylight Time Sky Harbour Announces New Long Beach, California (LGB) Hangar Campus Development Share WEST HARRISON, N.Y.--(BUSINESS WIRE)--Sky Harbour Group Corporation (NYSE: SKYH, SKYH WS), an airport infrastructure company building the first nationwide network of Home Base Operator (HBO) campuses for business aircraft, announced the execution of a ground lease agreement with the City of Long Beach, California, for the development of a Sky Harbour HBO campus at Long Beach Airp ...

Summary of Sky Harbour Conference Call Company Overview - **Company**: Sky Harbour - **Industry**: Aviation Real Estate - **Business Model**: Develops private hangar campuses at major U.S. airfields, leasing to high-net-worth individuals and corporations [4][5] Key Points Business Strategy - Sky Harbour aims to secure land at key airfields, develop hangar campuses of approximately 200,000 square feet, and lease them to private jet owners [4][5] - The company targets a goal of 50 airfields, with potential to exceed this as operations become more efficient [5] - Sky Harbour is positioned as the largest hangar developer in the U.S. [5] Market Dynamics - The U.S. business aviation fleet has significantly increased over the past 15 years, with a notable rise in larger jets that require specialized hangar space [6][28] - Legacy hangar supply is becoming obsolete as newer, larger jets cannot fit into older hangars [6] - The constrained supply of hangar space in major metropolitan areas creates a favorable market for Sky Harbour [9] Competitive Landscape - Sky Harbour differentiates itself from Fixed-Base Operators (FBOs) by focusing on long-term leases and private hangar solutions rather than transient traffic [15][16] - FBOs primarily generate revenue from fuel sales, while Sky Harbour's revenue model is heavily based on rental income [23] Financial Metrics - Sky Harbour targets stabilized yield on cost in the mid-teens and aims for a return on equity close to 30% [4][18] - Construction costs are approximately $300 per square foot, with expected rental revenue around $39 per square foot and additional fuel sales [17] - The company has secured financing through tax-exempt municipal bonds, pricing debt roughly 200 basis points below market rates [18][21] Growth Projections - The company anticipates a year-over-year growth rate of approximately 7-8% in the business aviation market [28] - Sky Harbour's operational footprint includes 18 ground leases signed, with nine operational and nine in development [10] Recent Developments - In August, Sky Harbour secured a $200 million drawdown facility with JPMorgan to fund construction and stabilization of projects [21] - The company is transitioning to fixed-rate swaps to manage interest rate exposure [22] Customer Base - Approximately 60% of Sky Harbour's customers are high-net-worth individuals, 30% are charter operators, and 10% are government tenants [25] Lease Management - Ground leases with airports average around 50 years, with options to extend [25][26] - Tenant leases are staggered from one to ten years to capitalize on potential land value appreciation [25] Additional Insights - The aviation real estate market is characterized by limited new airport construction, particularly in high-demand areas like New York and Los Angeles [9] - Sky Harbour's unique positioning allows it to capture a niche market that is underserved by traditional FBOs [15][16]

Core Viewpoint - Sky Harbour Group Corporation has announced a floating-to-fixed interest rate swap with JPMorgan Chase Bank, resulting in a fixed interest rate of 4.73% on its $200 million tax-exempt warehouse facility [1] Group 1 - The company is focused on building the first nationwide Home Base Operator (HBO) network for business aircraft [1] - The interest rate swap is for a duration of 5 years [1] - The tax-exempt warehouse facility is associated with Sky Harbour Capital II LLC [1]

Core Insights - Sky Harbour Group Corporation will present at the LD Micro Main Event XIX on October 21st at 9:00 am PT [2] - The event will feature around 120 companies presenting and conducting one-on-one investor meetings [6] Company Overview - Sky Harbour Group Corporation is focused on developing a nationwide network of Home-Basing campuses for business aircraft, providing infrastructure and dedicated services for general aviation [7] Event Details - The LD Micro Main Event XIX will take place from October 19th to 21st at the Hotel del Coronado in San Diego, California, including keynote speakers and a closing reception [5] - The first day will involve registration and keynote speakers, followed by two days of company presentations [5]

Summary of Sky Harbour Conference Call Company Overview - **Company**: Sky Harbour - **Industry**: Business Aviation Real Estate - **Business Model**: Secures land at airports, develops private hangar campuses, leases them out long-term, and manages operations [3][4] Key Points Business Strategy and Growth - **Expansion Plans**: Aiming to grow from 18 announced airports to 50, with guidance for an additional five by the end of the year [4] - **Current Operations**: Nine of the 18 airports are operational and cash flowing, while the other nine are in development [4] - **Market Position**: Currently the only player in the business aviation real estate space, with significant first-mover advantages [4][5] Market Dynamics - **Demand Growth**: The U.S. Business Aviation Fleet's total square footage is increasing by approximately 3 million square feet annually, indicating strong demand for hangar space [5][6] - **Supply Constraints**: There is a significant supply-demand mismatch, particularly for hangars accommodating aircraft with tail heights over 24 feet [6][7] - **Airport Limitations**: New airports cannot be created, leading to a constrained supply of available land at existing airports [9] Financial Performance and Projections - **Yield on Cost**: Targeting a yield on cost in the mid-teens, translating to returns on equity in the thirties after leverage [4][17] - **Break-even Point**: Expected to achieve cash flow break-even on an operating basis by December, driven by new campuses in Denver, Phoenix, and Dallas [14][21] - **Capital Formation**: Raised approximately $250 million in equity and $166 million in long-term, tax-exempt debt, with plans for further growth equity [16][18] Construction and Cost Management - **In-house Construction**: Recently integrated general contracting and manufacturing of steel components to control costs and timelines [24][25] - **Cost Structure**: Total project cost estimated at $300 per square foot, with a focus on maintaining a 13% to 15% yield on cost [25][26] Financing Strategy - **Warehouse Facility**: Secured a $200 million warehouse facility to minimize interest expenses during construction, with plans to convert to fixed rates [19][27] - **Future Equity Needs**: Anticipates needing additional equity in the next year, with options for upfront payments from tenants to address these needs [35] Risk Management - **Economic Resilience**: The cost of storage is a minor percentage of overall aircraft ownership costs, making the tenant base relatively inelastic during economic downturns [39][40] Additional Insights - **Pre-leasing Strategy**: Engaging in pre-leasing for upcoming campuses to secure tenants ahead of construction [21][22] - **Market Awareness**: As the portfolio grows, increased visibility and interest from potential tenants are expected [22] - **Investment Grade Rating**: Aiming for an investment-grade rating to enhance future financing options [28][29] This summary encapsulates the key aspects of Sky Harbour's business model, market dynamics, financial performance, construction strategies, and risk management as discussed in the conference call.

Group 1 - Sky Harbour Group (NYSE: SKYH) is identified as a speculative buy, indicating potential investment opportunities despite possible short-term downward trends [1] - The Aerospace Forum focuses on discovering investment opportunities within the aerospace, defense, and airline sectors, leveraging data analytics for informed analysis [1] - The analyst has a background in aerospace engineering, which aids in providing context to industry developments and their impact on investment theses [1] Group 2 - The investing group offers direct access to data analytics monitors, enhancing the research capabilities for investors in the aerospace sector [1]

Core Insights - Sky Harbour Group Corp. (NYSE: SKYH) demonstrated strong operational momentum in Q2 2025, driven by campus openings, leasing activity, and construction progress across its expanding network [1][6] - The company commenced operations at new locations in Dallas and Seattle, with plans for Denver to start resident flight operations in early Q3 2025 [1] - Significant construction developments include the groundbreaking of Miami Opa-Locka Phase 2, with completion expected in Q2 2026, and pre-development activities at multiple Tier 1 airport sites [1][6] Financial Performance - Revenue for Q2 2025 increased by 82% year-over-year and 18% sequentially, with net operating cash use improving to $0.9 million from $5 million in Q1 [6] - The company reported robust liquidity of approximately $75 million, supporting its operational activities [6] - Sky Harbour is pursuing a $200 million five-year tax-exempt bank construction facility to fund 5-6 new airport projects, aiming for breakeven run-rate operating cash flow by year-end [6] Operational Developments - The company has executed its first leases at new campuses in Denver, Dallas, and Phoenix, with pre-leasing activities underway at Bradley International and Dulles airports, achieving above-target rates [6] - As of the end of the quarter, Sky Harbour's portfolio included nine operational campuses, one nearing completion, and thirteen in various pre-development stages [1][6]

Core Insights - Sky Harbour Group Corporation (SKYH) reported a quarterly loss of $0.1 per share, which was better than the Zacks Consensus Estimate of a loss of $0.12, representing an earnings surprise of +16.67% [1] - The company posted revenues of $6.59 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.68%, but showing an increase from $3.62 million year-over-year [2] - Sky Harbour Group shares have underperformed the market, losing about 8.2% since the beginning of the year compared to the S&P 500's gain of 8.4% [3] Financial Performance - Over the last four quarters, Sky Harbour Group has surpassed consensus EPS estimates three times [2] - The current consensus EPS estimate for the coming quarter is -$0.09 on revenues of $8.6 million, and for the current fiscal year, it is -$0.42 on revenues of $31.06 million [7] Market Outlook - The earnings outlook for Sky Harbour Group is crucial for investors, as it includes current consensus earnings expectations and any recent changes [4] - The estimate revisions trend for Sky Harbour Group was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The Aerospace - Defense Equipment industry, to which Sky Harbour Group belongs, is currently in the bottom 38% of the Zacks industry rankings, which may impact stock performance [8]

Financial Data and Key Metrics Changes - Consolidated revenues increased by 82% year-over-year and 18% sequentially, reaching $6,600,000 for the quarter, driven by the acquisition of Camarillo and higher revenues from existing campuses [5][6] - Cash flow used in operating activities improved significantly to less than $1,000,000 for the quarter, compared to $5,000,000 used in Q1 [6] - The company expects to reach cash flow breakeven on a consolidated basis by the end of the year [6] Business Line Data and Key Metrics Changes - Revenues from wholly owned subsidiaries increased by 20% sequentially from the first quarter, with expectations for a significant increase in Q3 and Q4 as new campuses are leased [7] - Operating expenses increased due to onboarding personnel in anticipation of campus openings, but cash flow from operations generated a positive $2,200,000 in the quarter [8] Market Data and Key Metrics Changes - The revenue capture potential is currently at about $140,000,000, with expectations to approach $200,000,000 by the end of the year [9] - Miami has proven to be a strong market, with lease rates increasing from $32 per square foot to around $46 [44][46] Company Strategy and Development Direction - The company is focusing on Tier one airports for site acquisitions, aiming to maximize revenue capture [27] - A pilot project for preleasing hangars at campuses not yet under construction has been initiated, showing promising initial results [14][29] - The company is vertically integrating construction efforts to improve quality, accelerate construction pace, and lower costs [16][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability expectations in the near term due to projected revenues from new campuses [6][57] - The company is optimistic about the impact of preleasing on credit profiles and future debt offerings [93] Other Important Information - The company is pursuing a $200,000,000 warehouse bank debt facility to finance upcoming capital developments, which is expected to close soon [22][24] - The SH-37 hangar prototype is now fully standardized, aiming to increase speed, decrease costs, and improve quality [95][96] Q&A Session Summary Question: Can you provide details on actual revenues as compared to forecasted revenues? - The company is tracking to exceed projections for various campuses, with Miami showing strong market performance [41][43] Question: Can you provide details on the preleasing hangar space at Bradley and Dallas Airports? - Initial results from preleasing are positive, with advantageous introductory pricing for first residents [47][48] Question: Do you feel like you are seeing scale gains in line with expectations? - The company expects to see operating leverage as new campuses start cash flowing, with fixed SG&A expenses benefiting from increased revenues [50][51] Question: What are the drivers for higher than forecasted revenue at campuses? - Key drivers include higher rents due to scarcity, fuel margin revenues, and the ability to achieve occupancy levels above 100% [56][58] Question: Are you seeing any changes to the electric aviation industry? - The company is prewiring campuses for electric aviation and believes regulatory hurdles have been reduced [66][67] Question: What aspects differentiate Sky Harbor from FBOs? - The company emphasizes its service offerings and training programs that enhance safety and efficiency, differentiating it from traditional FBOs [73][78]

Financial Performance & Construction - Sky Harbour's construction is accelerating, leading to increasing revenues[20] - Sky Harbour Capital is experiencing a step up in 2025 with three new campus openings[32] - A drawdown "warehouse" bank facility is expected to provide $200 million for construction[59] - The warehouse facility is projected to fund construction of ADS2, BDL, POU1, SLC, and TTN[61] Leasing & Revenue - Stabilized campuses are enjoying higher-than-forecast revenue[70] - Potential revenue opportunity at SHER stabilization shows a 23% premium with an average expected revenue of $35.75 per rentable square foot compared to the 2022 CBRE projected $29.08, and a 38% premium with the highest expected revenue of $40.06 per rentable square foot[44] - Q2 Revenue Run Rate for SGR is $1.4 million, $5.0 million for BNA, $6.3 million for OPF, $4.0 million for SJC, and $2.9 million for DVT[48] Site Acquisition & Development - Sky Harbour reaffirms guidance of 5 new ground lease announcements by year-end[42] - The company has secured 18 airport ground leases and is targeting Tier-1 SHER locations[70] - Construction has commenced in OPF2, with completion expected by Q2 2026[70] Operational Strategy - Sky Harbour is transitioning to a centralized operating model[70] - The company is focused on maximizing revenue capture and is on course to meet its 2025 acquisitions target[74]