Air Transport Services (ATSG) - 2024 Q4 - Annual Results

Financial Performance - Revenues for Q4 2024 were $517 million, consistent with the same period in 2023[4] - GAAP Earnings per Share (diluted) from Continuing Operations for Q4 2024 were $0.21, compared to a loss of ($0.24) in Q4 2023[4] - Free Cash Flow for the full year 2024 was $228.1 million, a significant improvement from negative ($111.8) million in 2023[4] - Adjusted EBITDA for the full year 2024 was $549.4 million, down from $561.6 million in 2023[4] - Operating income increased to $41.797 million in Q4 2024, up 14.8% from $36.638 million in Q4 2023[15] - Net earnings for the year ended December 31, 2024, were $27.434 million, down 54.5% from $60.327 million in 2023[15] - Basic earnings per share for continuing operations were $0.23 in Q4 2024, compared to a loss of $0.24 in Q4 2023[15] - Adjusted pretax earnings (non-GAAP) for the three months ended December 31, 2024, were $39.811 million, compared to $19.806 million in the same period of 2023, reflecting a significant increase of 100.5%[21] - EBITDA from continuing operations (non-GAAP) for the year ended December 31, 2024, was $508.704 million, up from $499.162 million in 2023, indicating a growth of 1.1%[23] - Adjusted Earnings for Q4 2024 were $26,450,000, or $0.40 per share, up from $12,064,000, or $0.18 per share in Q4 2023[29] Cash Flow and Assets - Operating cash flows for Q4 2024 were $133.739 million, an increase of 4.4% from $127.988 million in Q4 2023[19] - Cash and cash equivalents at the end of Q4 2024 were $60.576 million, up from $53.555 million at the end of Q4 2023[19] - Net cash flows from operating activities for the year ended December 31, 2024, were $532.815 million, down from $654.081 million in 2023, a decrease of 18.5%[26] - Total assets as of December 31, 2024, were $3.894 billion, a slight increase from $3.882 billion in 2023[17] - Long-term debt decreased to $1.548 billion in 2024 from $1.708 billion in 2023, reflecting a reduction of 9.4%[17] - Total current liabilities decreased to $359.220 million in 2024 from $400.189 million in 2023, a reduction of 10.2%[17] Aircraft Operations and Leasing - The company added nine Boeing 767-300 freighter aircraft, all placed with external customers under long-term leases[5] - Aircraft leasing and related revenues decreased by 12% in Q4 2024, despite the addition of nine new freighter leases[7] - Revenue block hours for ATSG's airlines increased by 1% in Q4 2024 but declined by 6% for the full year compared to 2023[7] - Total aircraft leasing and related revenues for the three months ended December 31, 2024, were $114.657 million, down from $130.987 million in the same period of 2023, a decline of 12.4%[21] - ACMI services revenue for the three months ended December 31, 2024, increased to $377.761 million from $335.018 million in the same period of 2023, a growth of 12.7%[21] - The total number of Aircraft in Service increased from 130 (112 freighters and 18 passengers) as of December 31, 2023 to 148 (128 freighters and 20 passengers) as of December 31, 2024[33] - The company plans to increase the number of dry leased aircraft without Crew Management Integration (CMI) from 42 to 51 by December 31, 2024[34] - The number of aircraft available for lease rose from 4 as of December 31, 2023 to 5 as of December 31, 2024[33] - The total aircraft fleet increased from 139 to 147 from December 31, 2023 to December 31, 2024[34] - The company experienced a decrease in dry leased aircraft with CMI from 48 to 40 by December 31, 2024[34] Mergers and Acquisitions - ATSG is on track to close its acquisition by Stonepeak in the first half of 2025, with stockholder approval received on February 10, 2025[2] - The company incurred merger transaction fees of $8.284 million in Q4 2024, with no such fees reported in Q4 2023[15] - The company incurred transaction fees of $8.284 million related to the pending merger, which are not closely related to ongoing operating activities[23] Customer Incentives and Other - Customer incentives for Q4 2024 amounted to $6,660,000, up from $3,038,000 in Q4 2023, indicating a 119% increase[29] - The company reported a gain from warrant revaluation of $(695,000) in Q4 2024, compared to $(68,000) in Q4 2023[29] - Sustaining capital expenditures for the year ended December 31, 2024, were $112.946 million, down from $219.471 million in 2023, a reduction of 48.6%[26] - CAM's fourth quarter pretax earnings decreased by 44% to $12 million compared to $21 million in the prior-year quarter[7] - Earnings from Continuing Operations for Q4 2024 were $14,714,000, compared to a loss of $15,587,000 in Q4 2023, representing a significant turnaround[29]