Air T(US:AIRT)2025-11-12 22:12Revenue Performance - Consolidated revenue for the three-month period ended September 30, 2025 decreased by $17.1 million (21.0%) compared to the same quarter in the prior fiscal year[140]. - The ground support equipment segment's revenue decreased by $4.8 million (33%) to approximately $9.6 million for the quarter ended September 30, 2025[141]. - The commercial aircraft, engines, and parts segment's revenue decreased by $12.0 million (37%) to $20.9 million for the quarter ended September 30, 2025[143]. - Digital solutions segment revenue increased by $0.4 million (20%) to $2.2 million for the quarter ended September 30, 2025[144]. - Consolidated segment revenue for the first six months of fiscal 2026 decreased by $12.6 million (9%) compared to the same period in fiscal 2025[153]. - Overnight air cargo segment revenue decreased by $1.1 million (2%) to $60.5 million, primarily due to lower flight admin fees[154][155]. - Ground support equipment segment revenue increased by $2.9 million (13%) to $24.7 million, driven by higher deicer shipments and spare parts sales[155]. - Commercial aircraft, engines, and parts segment revenue decreased by $16.3 million (28%) to $42.8 million, attributed to lower component sales[156]. - Digital solutions segment revenue increased by $0.8 million (22%) to $4.3 million, mainly due to increased software subscriptions[157]. Operating Expenses - Consolidated segment operating expenses decreased by $15.2 million (24%) for the three-month period ended September 30, 2025[145]. - Consolidated operating expenses decreased by $13.1 million (11%) to $100.3 million, with significant reductions in the commercial aircraft segment[158]. - General and administrative expenses increased by $3.9 million (27%) to $14.2 million for the quarter ended September 30, 2025[149]. - General and administrative expenses increased by $4.7 million (17%) to $33.1 million, primarily due to acquisition-related costs and higher payroll[162]. Non-Operating Income and Tax - The company recorded net non-operating income of $1.7 million for the quarter ended September 30, 2025, compared to a net non-operating loss of $0.3 million in the prior year quarter[150]. - The effective tax rate for the three-month period ended September 30, 2025 was 30.4%, with a recorded income tax expense of $2.2 million[151]. - The company recorded a net non-operating income of $0.1 million for the first six months of fiscal 2026, down from $0.3 million in the prior year[163]. Cash and Liquidity - As of September 30, 2025, the company held approximately $17.5 million in cash and cash equivalents, with working capital increasing by $18.5 million to $49.4 million[171][172]. - The company entered into a new term loan of $1.1 million to finance the acquisition of Royal, maturing on May 15, 2030[173]. - The Multiple Advance Note has an annual interest rate of 8.5%, maturing on May 31, 2035[175]. - Net cash used in operating activities for the six months ended September 30, 2025 was $6.5 million, a decrease of $9.5 million compared to the prior year[181]. - Net cash provided by investing activities for the same period was $13.9 million, primarily from the sale of two Airbus Model A321-111 aircraft[182]. - Net cash provided by financing activities was $3.7 million, a decrease from $12.5 million in the prior year, due to increased payments on revolving lines of credit and term loans[183]. - The Company has sufficient cash and liquidity to meet obligations for at least 12 months following the issuance of financial statements[179]. - The revolving credit commitment was increased to an aggregate principal amount not to exceed $20.0 million, with a reduced interest rate of 5.00% or 1-month SOFR plus 1.90%[178]. Adjusted EBITDA and Segment Performance - Adjusted EBITDA for the six months ended September 30, 2025 was $9.3 million, compared to $5.9 million in the prior year[188]. - The Company’s Adjusted EBITDA by segment for the three months ended September 30, 2025 was highest in Commercial Aircraft, Engines and Parts at $6.9 million[188]. Trust Preferred Securities - The Trust Preferred Securities have an annual distribution rate of 8% on a liquidation amount of $25.00, payable quarterly[189]. - As of September 30, 2025, there are $48.5 million in Trust Preferred Securities outstanding, with $13.0 million held by the Company's wholly-owned subsidiaries[195]. - The Trust Agreement allows for the issuance of up to $100.0 million of Trust Preferred Securities[195]. - The Company has the right to defer interest payments on Junior Subordinated Debentures for up to 20 consecutive quarters, with a maturity date of June 7, 2049[194]. - The Company does not currently intend to exercise its right to defer interest payments on the Junior Subordinated Debentures[194]. - The Trust is classified as a "finance subsidiary" and does not file periodic reports with the SEC[196]. Market Risk - Market risk exposures have not changed materially since March 31, 2025[197].