Air T(US:AIRT)2025-06-27 21:03Revenue 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].