Air Transport Services (US:ATSG)2022-08-08 16:00Revenue Performance - External customer revenues from continuing operations increased by $99.8 million, or 24%, to $509.7 million for the three months ended June 30, 2022, compared to the same period in 2021[99]. - Revenues from commercial arrangements with ASI comprised approximately 34% of consolidated revenues during the six months ended June 30, 2022[96]. - The DoD accounted for 29% of consolidated revenues during the six months ended June 30, 2022, up from 24% in the same period of 2021[98]. - CAM's total revenues increased to $109.7 million for the three months ended June 30, 2022, from $88.6 million in the same period of 2021[102]. - ACMI Services revenues rose to $347.5 million for the three months ended June 30, 2022, compared to $273.3 million for the same period in 2021[102]. - Revenues from external customers for the three and six months ended June 30, 2022, were $80.8 million and $157.5 million, respectively, compared to $66.7 million and $127.5 million in 2021[107]. - Total revenues from ACMI Services increased by $74.2 million and $157.2 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021[110]. Earnings and Profitability - Consolidated net earnings from continuing operations were $54.2 million for the three months ended June 30, 2022, compared to $79.9 million for the same period in 2021[99]. - Adjusted pre-tax earnings from continuing operations were $66.9 million for the three months ended June 30, 2022, compared to $37.1 million for the same period in 2021[101]. - Pre-tax earnings from continuing operations for the three and six months ended June 30, 2022, were $39.6 million and $74.6 million, respectively, compared to $22.6 million and $44.0 million in 2021[109]. - The company recognized net gains of $6.0 million for the three months ended June 30, 2022, related to the repurchase of debt and financial instrument valuations[99]. Expenses - Fuel expenses increased by $36.5 million and $66.4 million during the three and six months ended June 30, 2022, respectively, due to a 60% and 52% increase in aviation fuel rates per gallon[113]. - Salaries, wages, and benefits expense increased by $21.3 million (15%) and $41.0 million (14%) during the three and six months ended June 30, 2022, respectively[113]. - Landing and ramp expenses increased by $1.1 million and $2.5 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, due to increased flying volumes for express cargo networks[116]. - Other operating expenses rose by $5.6 million and $9.0 million during the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021[116]. - Interest expense decreased by $5.6 million and $8.7 million for the three and six months ended June 30, 2022, respectively, due to lower interest rates and average debt balances[117]. Cash Flow and Capital Expenditures - Net cash generated from operating activities totaled $250.2 million for the six months ended June 30, 2022, down from $307.2 million in the same period of 2021[120]. - Capital expenditures were $294.2 million for the first six months of 2022, compared to $300.2 million in the same period of 2021, with significant spending on aircraft acquisitions and modifications[120]. - The company expects total capital expenditures for 2022 to be approximately $625 million, primarily related to aircraft purchases and modifications[121]. - As of June 30, 2022, the company had $47.2 million in cash and $269.7 million available from its revolving credit facility[123]. Fleet and Operations - The company leased 42 Boeing 767 freighter aircraft to ASI, with lease expirations between 2023 and 2031[96]. - The company secured additional aircraft conversion slots during 2021 to expand and diversify its fleet[95]. - As of June 30, 2022, the total in-service fleet consisted of 110 aircraft, an increase from 107 aircraft as of December 31, 2021[106]. - CAM has agreements to purchase eleven more Boeing 767-300 aircraft, four more Airbus A321-200 aircraft, and six Airbus A330 aircraft through 2024[109]. - Future operating results will depend on the ability to convert passenger aircraft into freighters within planned costs and timeframes required by customers[109]. - Customer block hours increased by 9% and 15% for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021[110]. Tax and Discontinued Operations - The effective tax rate for the three months ended June 30, 2022, was 22.6%, with an estimated effective income tax rate of 23% for the current year[117]. - Gains from discontinued operations related to former sorting operations were $0.9 million for the first half of 2022, compared to less than $0.1 million in the same period of 2021[119].