Air Transport Services (US:ATSG)2022-11-08 16:00Revenue Growth - External customer revenues from continuing operations increased by $51.0 million, or 11%, to $516.9 million for the three months ended September 30, 2022, and by $260.5 million, or 21%, to $1,512.4 million for the nine months ended September 30, 2022 compared to the same periods in 2021 [101]. - Total revenues for the nine months ended September 30, 2022, were $1,679.9 million, an increase from $1,397.4 million in the same period of 2021 [104]. - CAM's revenues grew by $61.3 million for the nine months ended September 30, 2022, totaling $237.5 million compared to $198.5 million for the same period in 2021 [111]. - Revenues from ACMI Services increased to $357.4 million for the three months ended September 30, 2022, compared to $330.9 million for the same period in 2021 [104]. - ACMI Services revenues increased by $183.6 million for the nine months ended September 30, 2022, reflecting a 16% increase in block hours flown for DoD troop movements [114]. - External customer revenues from other activities increased by $38.1 million for the nine months ended September 30, 2022, compared to the same period in 2021 [117]. Earnings Performance - Consolidated net earnings from continuing operations were $50.2 million and $154.2 million for the three and nine month periods ended September 30, 2022, respectively, compared to $62.4 million and $184.5 million for the corresponding periods of 2021 [101]. - Adjusted pre-tax earnings from continuing operations were $67.3 million and $198.4 million for the three and nine month periods ended September 30, 2022, respectively, compared to $60.8 million and $117.9 million for the corresponding periods of 2021 [107]. - Pre-tax earnings from continuing operations for the nine months ended September 30, 2022, were $111.6 million, up from $72.5 million in the same period of 2021 [113]. Aircraft Fleet and Operations - The Company leased 42 Boeing 767 freighter aircraft to ASI, which comprised approximately 34% of consolidated revenues during the nine months ended September 30, 2022 [100]. - The Company owned 110 Boeing aircraft in revenue service as of September 30, 2022, with additional aircraft conversions planned to expand the fleet [97]. - The company added nine Boeing 767-300 freighter aircraft to its portfolio since October 1, 2021, increasing the total number of aircraft under lease to external customers to 89 as of September 30, 2022 [111]. - The DoD comprised 29% of consolidated revenues during the nine months ended September 30, 2022, derived primarily from operating passenger and combi charter flights [100]. - The company has agreements to purchase 17 more Boeing 767-300 aircraft and 6 Airbus A330 aircraft through 2024, indicating ongoing fleet expansion [113]. - As of September 30, 2022, the total in-service aircraft fleet consisted of 110 aircraft, an increase from 107 aircraft as of December 31, 2021 [110]. Expenses and Financial Management - Fuel expenses increased by $84.9 million during the nine months ended September 30, 2022, driven by a 58% increase in aviation fuel rates per gallon compared to the previous year [118]. - Salaries, wages, and benefits expenses increased by 15% for both the three and nine months ended September 30, 2022, compared to the corresponding periods in 2021 [118]. - Travel expenses rose by $20.7 million during the nine months ended September 30, 2022, compared to the same period in 2021, due to higher airfares and hotel rates [120]. - Interest expense decreased by $11.0 million for the nine months ended September 30, 2022, compared to the same period in 2021, primarily due to the adoption of ASU No. 2020-06 [121]. - Contracted ground and aviation services increased by $1.5 million for the nine months ended September 30, 2022, compared to the same period in 2021, driven by increased flying volume [120]. Cash Flow and Capital Expenditures - Net cash generated from operating activities totaled $398.1 million for the nine months ended September 30, 2022, down from $429.2 million in the same period of 2021 [125]. - Capital expenditures for the first nine months of 2022 were $448.4 million, compared to $428.1 million in the same period of 2021, with significant investments in aircraft acquisition and modification [125]. - The company expects total capital expenditures for 2022 to be approximately $625 million, primarily related to aircraft purchases and modifications [127]. - As of September 30, 2022, the company had $54.5 million in cash and $259.7 million available from its revolving credit facility [128]. Tax and Joint Ventures - The effective tax rate for the three and nine month periods ended September 30, 2022, was 23% [123]. - Gains from discontinued operations related to former sorting operations were $2.2 million for the first nine months of 2022, compared to $3.1 million in the same period of 2021 [124]. - The company contributed $16.5 million to joint ventures during the first nine months of 2022, compared to $2.5 million in the same period of 2021 [125].