Core Viewpoint - Air T, Inc. reported a decline in revenues and increased net losses for the third quarter of fiscal 2026, despite a recent acquisition aimed at expanding its market presence in the Australian regional airline sector [2][8]. Financial Performance - For the third quarter ended Dec. 31, 2025, Air T reported revenues of $71.1 million, down 8.7% from $77.9 million in the prior-year quarter [2]. - The company experienced an operating loss of $3.8 million compared to an operating income of $1.4 million a year earlier [2]. - Net loss attributable to Air T stockholders widened to $2.5 million, or $(0.91) per share, from a loss of $1.3 million, or $(0.47) per share, in the prior-year period [2]. Year-to-Date Performance - On a nine-month basis, revenue declined 8.6% to $206.2 million from $225.5 million [3]. - Net income attributable to Air T stockholders fell 69.8% to $0.3 million, or $0.10 per share, from $0.9 million, or $0.32 per share, a year earlier [3]. Segment Performance - Overnight air cargo revenue was flat at $30.6 million [4]. - Ground support equipment sales rose 7.9% to $12.8 million from $11.8 million [4]. - Commercial aircraft, engines, and parts revenue fell 42.4% to $18.8 million from $32.7 million [4]. - Digital solutions revenue increased 24.9% to $2.5 million from $1.9 million [4]. - The newly added regional airline segment contributed $5.2 million for the partial quarter following the Rex acquisition [4]. Key Business Metrics - Adjusted EBITDA for the quarter was $0.2 million, down from $2.7 million in the prior-year period [5]. - Ground support equipment generated $1.7 million in adjusted EBITDA, up from $0.2 million a year earlier [5]. - Overnight air cargo produced $1 million, down 48.6% from $1.9 million [5]. - The commercial aircraft, engines, and parts segment posted an adjusted EBITDA loss of $0.2 million against a $2.9 million profit last year [6]. - The regional airline segment reported a $0.5 million adjusted EBITDA loss for its initial 13 days of operations under Air T ownership [6]. - Order backlog in the ground support equipment segment nearly doubled to $12.9 million as of Dec. 31, 2025, from $6.2 million a year earlier [6]. Investments and Acquisitions - The equity method investments balance increased to $33.6 million as of Dec. 31, 2025, from $19 million as of March 31, 2025 [7]. - The acquisition of Rex Regional Airlines was described as a strategic entry into the Australian regional airline market, with a preliminary bargain purchase gain of $95.8 million recorded as a deferred credit on the balance sheet [8][10]. - The preliminary fair value of assets acquired from Rex totaled $164.8 million against liabilities of $57.9 million, resulting in net assets of $106.9 million [12]. Management Commentary - Management did not provide formal financial guidance for upcoming quarters, focusing instead on operational integration of Rex and execution priorities [11].

Core Insights - Air T, Inc. (AIRT) shares increased by 9.4% following the fiscal year earnings report, outperforming the S&P 500 Index's 0.9% gain during the same period [1] - The company reported revenues of $291.9 million for the fiscal year ended March 31, 2025, marking a 1.7% increase from the previous year's $286.8 million [2] - Despite operational gains, AIRT posted a net loss per share of $2.23, an improvement from $2.42 in the prior fiscal year [2] Revenue and Earnings Overview - Operating income rose by 50.9% to $1.9 million from $1.3 million, while adjusted EBITDA improved to $7.4 million, reflecting an 18.9% increase from fiscal 2024 [2] - The adjusted EBITDA margin improved to 2.5% in fiscal 2025 from approximately 2.2% a year earlier, driven by cost discipline and a favorable sales mix [7] Segment Performance - Overnight Air Cargo segment revenues increased by 7.3% to $124 million, driven by higher labor revenue and administrative fees [3] - Ground Support Equipment revenues rose by 4.8% to $38.9 million, with an order backlog increasing to $14.3 million from $12.6 million [4] - The Commercial Aircraft, Engines and Parts segment saw a revenue decline of 5.8% to $118.2 million, but adjusted EBITDA surged by 60.7% to $9.8 million [5] - Digital Solutions segment revenues grew by 25.7% to $7.3 million, although it posted an adjusted EBITDA loss of $0.3 million due to higher personnel expenses [6] Key Business Metrics - AIRT's equity method investment balance grew to $19 million from $16.7 million, indicating expansion in joint ventures and non-operating assets [7] - FedEx dry-lease arrangements accounted for 39% of total consolidated revenues in fiscal 2025, up from 36% in fiscal 2024 [8] Management Commentary - Chairman and CEO Nick Swenson expressed optimism about the company's progress in building long-term shareholder value and highlighted new products and marketing initiatives [9] - Management continues to repurchase shares in the open market, aligning with shareholder interests [9] Future Outlook - AIRT did not provide specific numeric guidance for fiscal 2026 but plans to invest in engine parts inventory and expand commercial aircraft leasing activities [13] - The launch of Runway Aero Advisors LLC in January 2025 reflects a strategy to enhance capital-raising and advisory capabilities [15] Financial Developments - On March 31, 2025, AIRT amended its credit agreement with Alerus Bank, adding a $3 million Overline Note and a $14 million revolving credit facility, enhancing financial flexibility [14]