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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Air T Inc | NASDAQ:AIRT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-1.90 | -7.27% | 24.22 | 8.50 | 28.75 | 26.20 | 24.89 | 26.20 | 21,592 | 05:00:02 |
x
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2019
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☐
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _____to _____
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Delaware
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52-1206400
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company ☐
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Common Stock
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Common Shares, par value of $.25 per share
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Outstanding Shares at August 2, 2019
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3,030,173
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Page
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Risk Factors
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Exhibit Index
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Certifications
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Interactive Data Files
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Item 1.
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Financial Statements
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Three Months Ended June 30,
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||||||
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2019
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2018
|
||||
Operating Revenues:
|
|
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|
||||
Overnight air cargo
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$
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18,319,682
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$
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17,640,658
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Ground equipment sales
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12,248,891
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6,384,781
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Ground support services
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8,516,800
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9,047,640
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Printing equipment and maintenance
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64,270
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298,823
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Commercial jet engines and parts
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16,326,905
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27,320,175
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Corporate and other
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227,987
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175,392
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55,704,535
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60,867,469
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Operating Expenses:
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Overnight air cargo
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16,518,823
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15,174,396
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Ground equipment sales
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9,730,856
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4,937,312
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Ground support services
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6,963,662
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7,805,209
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Printing equipment and maintenance
|
39,047
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145,528
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Commercial jet engines and parts
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8,285,769
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20,121,118
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General and administrative
|
10,919,320
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8,584,803
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Depreciation and amortization
|
2,026,600
|
|
|
1,485,055
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Impairment
|
6,686
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|
|
10,346
|
|
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Loss on sale of property and equipment
|
2,073
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|
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—
|
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||
|
54,492,836
|
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|
58,263,767
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|
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Operating Income
|
1,211,699
|
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|
2,603,702
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||
|
|
|
|
||||
Non-operating Income (Expense):
|
|
|
|
||||
Gain on sale of marketable securities
|
36,460
|
|
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—
|
|
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Foreign currency gain (loss), net
|
35,755
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|
|
(2,182
|
)
|
||
Other-than-temporary impairment loss on investments
|
(814,558
|
)
|
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—
|
|
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Other investment income (loss), net
|
162,957
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(315,507
|
)
|
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Interest expense
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(1,023,622
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)
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(707,199
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)
|
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Unrealized gain on interest rate swap
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—
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97,337
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|
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Gain on settlement of bankruptcy
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4,509,302
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|
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—
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Bargain purchase acquisition gain
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34,244
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1,983,777
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|
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Income (loss) from equity method investments
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(320,578
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)
|
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9,183
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2,619,960
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1,065,409
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Income Before Income Taxes
|
3,831,659
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3,669,111
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|
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|
|
||||
Income Tax Expense (Benefit)
|
(324,000
|
)
|
|
387,000
|
|
||
|
|
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|
||||
Net Income
|
4,155,659
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|
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3,282,111
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|
||||
Net (Income) Attributable to Non-controlling
|
|
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|
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Interests
|
$
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(2,373,307
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)
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$
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(453,417
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)
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||||
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|
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Net Income Attributable to Air T, Inc. Stockholders
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$
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1,782,352
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$
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2,828,694
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Income Per Share:
|
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Basic
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$
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0.79
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$
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0.92
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Diluted
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$
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0.79
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$
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0.92
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Weighted Average Shares Outstanding:
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Basic
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2,252,698
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3,065,411
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Diluted
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2,256,868
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3,074,547
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Three Months Ended June 30, 2019
|
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2019
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2018
|
||||
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|
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Net income
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$
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4,155,659
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$
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3,282,111
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|
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|
|
|
||||
Other comprehensive income (loss):
|
|
|
|
||||
|
|
|
|
||||
Foreign currency translation gain (loss)
|
(18,130
|
)
|
|
47,660
|
|
||
|
|
|
|
||||
Unrealized loss on interest rate swaps, net of tax of $52,316 and $0 respectively
|
(176,038
|
)
|
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—
|
|
||
|
|
|
|
||||
Total Other Comprehensive Income (Loss)
|
(194,168
|
)
|
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47,660
|
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|
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Total Comprehensive Income
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3,961,491
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3,329,771
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|
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Comprehensive Income Attributable to Non-controlling Interests
|
(2,385,532
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)
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(470,569
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)
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Comprehensive Income Attributable to Air T, Inc. Stockholders
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$
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1,575,959
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$
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2,859,202
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June 30, 2019
|
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March 31, 2019
|
||||
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(Unaudited)
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|
||||
ASSETS
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|
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Current Assets:
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|
||||
Cash and cash equivalents (Delphax $9,430 and $12,315)*
|
$
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16,196,626
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$
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12,524,321
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Marketable securities
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1,752,727
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1,760,052
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Restricted cash
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68,979
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123,409
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Restricted investments
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796,958
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830,925
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Accounts receivable, net of allowance for doubtful accounts of $574,086 and $754,108 (Delphax $291,337 and $294,296)*
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23,723,077
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19,077,248
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|
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Notes and other receivables-current
|
7,170,143
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5,026,549
|
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Income tax receivable
|
883,131
|
|
|
158,446
|
|
||
Inventories, net
|
36,528,777
|
|
|
29,967,037
|
|
||
Prepaid expenses and other (Delphax $9,672 and $58,164)*
|
1,795,614
|
|
|
1,880,126
|
|
||
Total Current Assets
|
88,916,032
|
|
|
71,348,113
|
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||
|
|
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|
||||
Assets on lease, net of accumulated depreciation of $6,397,157 and $6,688,630
|
17,982,582
|
|
|
25,164,497
|
|
||
Property and equipment, net of accumulated depreciation of $5,977,699 and $5,665,498
|
4,752,051
|
|
|
4,817,912
|
|
||
Right-of-use assets
|
10,071,405
|
|
|
—
|
|
||
Cash surrender value of life insurance policies, net of policy loans
|
101,259
|
|
|
122,062
|
|
||
Other tax receivables-long-term (Delphax $0 and $311,000)*
|
—
|
|
|
311,000
|
|
||
Deferred income taxes
|
600,303
|
|
|
547,987
|
|
||
Investments in funds
|
318,020
|
|
|
463,892
|
|
||
Investments in securities
|
557,329
|
|
|
621,610
|
|
||
Equity method investments
|
4,475,738
|
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|
5,610,874
|
|
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Other assets
|
297,507
|
|
|
491,328
|
|
||
Intangible assets, net of accumulated amortization of $2,207,571 and $2,156,192
|
1,161,111
|
|
|
1,225,257
|
|
||
Goodwill
|
4,417,605
|
|
|
4,417,605
|
|
||
Total Assets
|
$
|
133,650,942
|
|
|
$
|
115,142,137
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable (Delphax $96,109 and $2,134,053)*
|
$
|
13,296,498
|
|
|
$
|
12,552,724
|
|
Income tax payable
|
550,727
|
|
|
661,690
|
|
||
Accrued payroll and related items (Delphax $401,275 and $3,146,395 )*
|
2,729,056
|
|
|
8,910,245
|
|
||
Customer deposits
|
2,794,277
|
|
|
1,520,000
|
|
||
Accrued insurance liability
|
1,254,396
|
|
|
1,119,853
|
|
||
Other accrued expenses (Delphax $0 and $11,312)*
|
3,905,819
|
|
|
2,953,176
|
|
||
Deferred income
|
5,599,423
|
|
|
341,098
|
|
||
Current portion of long-term debt
|
27,774,151
|
|
|
24,735,224
|
|
||
Short-term lease liability
|
2,486,842
|
|
|
—
|
|
||
Total Current Liabilities
|
60,391,189
|
|
|
52,794,010
|
|
||
|
|
|
|
||||
Long-term debt
|
36,285,910
|
|
|
32,917,765
|
|
||
Long-term lease liability
|
8,071,541
|
|
|
—
|
|
||
Other non-current liabilities
|
1,229,495
|
|
|
596,598
|
|
||
Total Liabilities
|
105,978,135
|
|
|
86,308,373
|
|
||
|
|
|
|
||||
Redeemable non-controlling interest
|
6,685,000
|
|
|
5,476,000
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 17)
|
|
|
|
|
|
||
|
|
|
|
Equity:
|
|
|
|
||||
Air T, Inc. Stockholders' Equity:
|
|
|
|
||||
Preferred stock, $1.00 par value, 50,000 shares authorized
|
—
|
|
|
—
|
|
||
Common stock, $.25 par value; 4,000,000 shares authorized, 3,015,087 and 2,022,637 shares issued and outstanding
|
753,770
|
|
|
505,657
|
|
||
Additional paid-in capital
|
1,629,202
|
|
|
2,866,695
|
|
||
Retained earnings
|
17,970,387
|
|
|
21,191,126
|
|
||
Accumulated other comprehensive loss
|
(411,479
|
)
|
|
(205,086
|
)
|
||
Total Air T, Inc. Stockholders' Equity
|
19,941,880
|
|
|
24,358,392
|
|
||
Non-controlling Interests
|
1,045,927
|
|
|
(1,000,628
|
)
|
||
Total Equity
|
20,987,807
|
|
|
23,357,764
|
|
||
Total Liabilities and Equity
|
$
|
133,650,942
|
|
|
$
|
115,142,137
|
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
4,155,659
|
|
|
$
|
3,282,111
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
(Gain) Loss on sale of marketable securities
|
(36,460
|
)
|
|
10,828
|
|
||
Loss on sale of property and equipment
|
2,073
|
|
|
1,661
|
|
||
Change in inventory reserves
|
(4,087
|
)
|
|
91,547
|
|
||
Change in accounts receivable reserves
|
(180,022
|
)
|
|
(45,628
|
)
|
||
Depreciation and amortization
|
2,033,286
|
|
|
1,495,401
|
|
||
Amortization of debt issuance costs
|
73,467
|
|
|
—
|
|
||
Impairment of investment
|
814,558
|
|
|
—
|
|
||
Change in cash surrender value of life insurance
|
20,803
|
|
|
(15,782
|
)
|
||
Gain on settlement of bankruptcy
|
(4,509,302
|
)
|
|
—
|
|
||
Gain on bargain purchase
|
(34,244
|
)
|
|
(1,983,777
|
)
|
||
Change in warranty reserve
|
335,632
|
|
|
(980
|
)
|
||
Unrealized loss on marketable securities
|
6,105
|
|
|
322,477
|
|
||
Unrealized gain on interest rate swap
|
—
|
|
|
(97,337
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(4,254,064
|
)
|
|
29,564
|
|
||
Notes receivable and other non-trade receivables
|
(2,046,291
|
)
|
|
(2,221,930
|
)
|
||
Inventories
|
2,374,836
|
|
|
11,319,597
|
|
||
Prepaid expense and other assets
|
677,015
|
|
|
288,286
|
|
||
Accounts payable
|
2,801,237
|
|
|
3,942,185
|
|
||
Accrued expenses
|
3,898,519
|
|
|
(1,982,397
|
)
|
||
Income taxes payable/receivable
|
(835,646
|
)
|
|
205,583
|
|
||
Non-current liabilities
|
94,482
|
|
|
75,525
|
|
||
Total adjustments
|
1,231,897
|
|
|
11,434,823
|
|
||
Net cash provided by operating activities
|
5,387,556
|
|
|
14,716,934
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of marketable securities
|
(27,211
|
)
|
|
(784,443
|
)
|
||
Proceeds from sale of marketable securities
|
309,012
|
|
|
—
|
|
||
Acquisition of businesses, net of cash acquired
|
(500,000
|
)
|
|
(3,325,700
|
)
|
||
Cash used for equity method investments
|
—
|
|
|
(197,532
|
)
|
||
Investment in reinsurance entity
|
—
|
|
|
(2,000,000
|
)
|
||
Capital expenditures related to property & equipment
|
(297,967
|
)
|
|
(459,575
|
)
|
||
Capital expenditures related to assets on lease
|
(3,298,343
|
)
|
|
—
|
|
||
Proceeds from sale of property and equipment
|
33,995
|
|
|
50,602
|
|
||
Net cash used in investing activities
|
(3,780,514
|
)
|
|
(6,716,648
|
)
|
|
Equity
|
|||||||||||||||||||||||||
|
Air T, Inc. Stockholders' Equity
|
|
|
|
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
(Loss)
|
|
Non-controlling
Interests
|
|
Total
Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance, March 31, 2018
|
2,043,607
|
|
|
$
|
510,901
|
|
|
$
|
4,171,869
|
|
|
$
|
20,695,981
|
|
|
$
|
(260,900
|
)
|
|
$
|
(874,767
|
)
|
|
$
|
24,243,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income*
|
—
|
|
|
—
|
|
|
—
|
|
|
2,828,694
|
|
|
—
|
|
|
(46,259
|
)
|
|
2,782,435
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Reclassification of unrealized loss on marketable securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(106,341
|
)
|
|
106,341
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currency translation gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,508
|
|
|
17,152
|
|
|
47,660
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2018
|
2,043,607
|
|
|
$
|
510,901
|
|
|
$
|
4,171,869
|
|
|
$
|
23,418,334
|
|
|
$
|
(124,051
|
)
|
|
$
|
(903,874
|
)
|
|
$
|
27,073,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|||||||||||||||||||||||||
|
Air T, Inc. Stockholders' Equity
|
|
|
|
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Non-controlling
Interests
|
|
Total
Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance, March 31, 2019
|
2,022,637
|
|
|
$
|
505,657
|
|
|
$
|
2,866,695
|
|
|
$
|
21,191,126
|
|
|
$
|
(205,086
|
)
|
|
$
|
(1,000,628
|
)
|
|
$
|
23,357,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income*
|
—
|
|
|
—
|
|
|
—
|
|
|
1,782,352
|
|
|
—
|
|
|
2,034,330
|
|
|
3,816,682
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Repurchase of Common Stock
|
(17,424
|
)
|
|
(4,356
|
)
|
|
—
|
|
|
(121,961
|
)
|
|
—
|
|
|
—
|
|
|
(126,317
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Stock Split
|
1,009,874
|
|
|
252,469
|
|
|
(252,469
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuance of Debt - Trust Preferred Securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,000,000
|
)
|
|
—
|
|
|
—
|
|
|
(4,000,000
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuance of Warrants
|
|
|
|
|
|
|
(840,000
|
)
|
|
|
|
|
|
(840,000
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adoption of ASC 842 - Leasing
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,130
|
)
|
|
—
|
|
|
—
|
|
|
(41,130
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Unrealized loss on interest rate swaps, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(176,038
|
)
|
|
—
|
|
|
(176,038
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currency translation gain (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,355
|
)
|
|
12,225
|
|
|
(18,130
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjustment to fair value of redeemable non-controlling interest
|
—
|
|
|
—
|
|
|
(985,024
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(985,024
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, June 30, 2019
|
3,015,087
|
|
|
$
|
753,770
|
|
|
$
|
1,629,202
|
|
|
$
|
17,970,387
|
|
|
$
|
(411,479
|
)
|
|
$
|
1,045,927
|
|
|
$
|
20,987,807
|
|
1.
|
Financial Statement Presentation
|
2.
|
Revenue
Recognition
|
|
Three Months Ended
June 30, 2019 |
|
Three Months Ended
June 30, 2018 |
||||
Product Sales
|
|
|
|
||||
Air cargo
|
$
|
5,414,377
|
|
|
$
|
5,519,611
|
|
Ground equipment sales
|
12,002,366
|
|
|
6,169,103
|
|
||
Ground support services
|
2,266,859
|
|
|
2,422,581
|
|
||
Commercial jet engines and parts
|
11,170,632
|
|
|
25,029,114
|
|
||
Printing equipment and maintenance
|
48,440
|
|
|
286,642
|
|
||
Corporate and other
|
—
|
|
|
—
|
|
||
Support Services
|
|
|
|
||||
Air cargo
|
12,894,182
|
|
|
12,096,874
|
|
||
Ground equipment sales
|
104,545
|
|
|
100,592
|
|
||
Ground support services
|
6,213,354
|
|
|
6,605,265
|
|
||
Commercial jet engines and parts
|
1,410,027
|
|
|
965,826
|
|
||
Printing equipment and maintenance
|
10,745
|
|
|
7,658
|
|
||
Corporate and other
|
40,552
|
|
|
—
|
|
||
Leasing Revenue
|
|
|
|
||||
Air cargo
|
—
|
|
|
—
|
|
||
Ground equipment sales
|
20,357
|
|
|
31,002
|
|
||
Ground support services
|
—
|
|
|
—
|
|
||
Commercial jet engines and parts
|
3,714,048
|
|
|
1,201,510
|
|
||
Printing equipment and maintenance
|
—
|
|
|
—
|
|
||
Corporate and other
|
45,418
|
|
|
40,067
|
|
||
Other
|
|
|
|
||||
Air cargo
|
11,123
|
|
|
24,174
|
|
||
Ground equipment sales
|
121,623
|
|
|
84,084
|
|
||
Ground support services
|
36,588
|
|
|
19,795
|
|
||
Commercial jet engines and parts
|
32,197
|
|
|
123,724
|
|
||
Printing equipment and maintenance
|
5,085
|
|
|
4,523
|
|
||
Corporate and other
|
142,017
|
|
|
135,324
|
|
||
|
|
|
|
||||
Total
|
$
|
55,704,535
|
|
|
$
|
60,867,469
|
|
|
Three Months Ended
June 30, 2019 |
|
Three Months Ended
June 30, 2018 |
||||
Air cargo
|
$
|
18,319,682
|
|
|
$
|
17,640,658
|
|
Ground equipment sales
|
12,248,891
|
|
|
6,384,781
|
|
||
Ground support services
|
8,516,800
|
|
|
9,047,640
|
|
||
Commercial jet engines and parts
|
16,326,905
|
|
|
27,320,175
|
|
||
Printing equipment and maintenance
|
64,270
|
|
|
298,823
|
|
||
Corporate and other
|
227,987
|
|
|
175,392
|
|
||
|
|
|
|
||||
Total
|
$
|
55,704,535
|
|
|
$
|
60,867,469
|
|
|
|
Outstanding contract liabilities
|
|
Outstanding contract liabilities as of April 1, 2019
Recognized as Revenue
|
||||
As of June 30, 2019
|
|
$
|
8,393,700
|
|
|
|
||
As of April 1, 2019
|
|
$
|
1,866,843
|
|
|
|
||
For the quarter ended June 30, 2019
|
|
|
|
$
|
447,341
|
|
|
Contract assets
|
||
As of June 30, 2019
|
$
|
4,621,096
|
|
As of April 1, 2019
|
$
|
1,743,460
|
|
3.
|
Business
Combinations
|
Earnest money
|
$
|
50,000
|
|
Cash consideration
|
3,300,000
|
|
|
Cash acquired
|
(24,301
|
)
|
|
Total consideration
|
$
|
3,325,699
|
|
4.
|
Restricted Cash
|
|
June 30, 2019
|
|
March 31, 2019
|
||||
Cash and cash equivalents
|
$
|
16,196,626
|
|
|
$
|
12,524,321
|
|
Restricted cash
|
68,979
|
|
|
123,409
|
|
||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
|
$
|
16,265,605
|
|
|
$
|
12,647,730
|
|
5.
|
Cash Surrender Value of Life Insurance
|
7.
|
Net Earnings Per Share
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Net Income Attributable to Air T, Inc. Stockholders
|
$
|
1,782,352
|
|
|
$
|
2,828,694
|
|
Income Per Share:
|
|
|
|
||||
Basic
|
$
|
0.79
|
|
|
$
|
0.92
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.92
|
|
Weighted Average Shares Outstanding:
|
|
|
|
||||
Basic
|
2,252,698
|
|
|
3,065,411
|
|
||
Diluted
|
2,256,868
|
|
|
3,074,547
|
|
|
|
Fiscal year ended
|
||||||
|
|
2019
|
|
2018
|
||||
Net Income Attributable to Air T, Inc. Shareholders
|
|
1,339,995
|
|
|
2,277,109
|
|
||
|
|
|
|
|
||||
|
|
|
|
|
||||
Weighted-average common shares outstanding
|
|
|
|
|
||||
Basic
|
|
3,052,124
|
|
|
3,064,209
|
|
||
|
|
|
|
|
||||
Diluted
|
|
3,059,838
|
|
|
3,071,528
|
|
||
|
|
|
|
|
||||
Basic earnings per common share
|
|
$
|
0.44
|
|
|
$
|
0.74
|
|
|
|
|
|
|
||||
Diluted earnings per common share
|
|
$
|
0.44
|
|
|
$
|
0.74
|
|
8.
|
Investments in Securities
|
9
.
|
Equity Method Investments
|
|
Three
Months Ended March 31, 2019 |
|
Three
Months Ended March 31, 2018 |
||||
Revenue
|
$
|
5,140,000
|
|
|
$
|
7,419,000
|
|
Gross Profit
|
774,000
|
|
|
2,746,000
|
|
||
Operating income (loss)
|
(1,337,000
|
)
|
|
232,000
|
|
||
Net income (loss)
|
(1,096,000
|
)
|
|
164,000
|
|
||
Net income (loss) attributable to Air T, Inc. stockholders
|
$
|
(322,000
|
)
|
|
$
|
5,000
|
|
10.
|
Inventories
|
|
June 30,
2019 |
|
March 31,
2019 |
||||
Ground support service parts
|
$
|
2,580,196
|
|
|
$
|
2,553,949
|
|
Ground equipment manufacturing:
|
|
|
|
||||
Raw materials
|
3,017,469
|
|
|
2,497,876
|
|
||
Work in process
|
1,351,370
|
|
|
1,659,516
|
|
||
Finished goods
|
643,763
|
|
|
972,542
|
|
||
Printing equipment and maintenance
|
|
|
|
||||
Raw materials
|
—
|
|
|
401,103
|
|
||
Finished goods
|
1,438,161
|
|
|
1,047,893
|
|
||
Commercial jet engines and parts
|
27,691,133
|
|
|
21,031,558
|
|
||
Total inventories
|
$
|
36,722,092
|
|
|
$
|
30,164,437
|
|
Reserves
|
(193,315
|
)
|
|
(197,400
|
)
|
||
Total inventories, net of reserves
|
$
|
36,528,777
|
|
|
$
|
29,967,037
|
|
11.
|
Leases
|
|
|
Three
Months Ended June 30, 2019 |
||
Operating lease cost
|
|
$
|
819,854
|
|
Short-term lease cost
|
|
274,156
|
|
|
Variable lease cost
|
|
135,613
|
|
|
Sublease income
|
|
—
|
|
|
Total lease cost
|
|
$
|
1,229,623
|
|
|
|
June 30, 2019
|
||
Operating leases
|
|
|
||
Operating lease right-of-use assets
|
|
$
|
10,071,405
|
|
Operating lease liabilities
|
|
10,558,383
|
|
|
|
|
|
||
Weighted-average remaining lease term
|
|
12.08 years
|
|
|
Operating leases
|
|
|
||
|
|
|
||
Weighted-average discount rate
|
|
4.51
|
%
|
|
Operating leases
|
|
|
|
Operating Leases
|
|
2020 (excluding the three months ended June 30, 2019)
|
(2,267,538
|
)
|
2021
|
(2,122,870
|
)
|
2022
|
(1,621,902
|
)
|
2023
|
(1,268,783
|
)
|
2024
|
(691,886
|
)
|
2025
|
(457,798
|
)
|
Thereafter
|
(5,809,603
|
)
|
Total undiscounted lease payments
|
(14,240,380
|
)
|
Less: Interest
|
(3,023,181
|
)
|
Less: Discount
|
(658,816
|
)
|
Total lease liabilities
|
(10,558,383
|
)
|
Year ended March 31,
|
|
|
2020
|
3,133,000
|
|
2021
|
2,115,000
|
|
2022
|
1,625,000
|
|
2023
|
1,241,000
|
|
2024
|
692,000
|
|
Thereafter
|
6,267,000
|
|
Total minimum lease payments
|
15,073,000
|
|
|
June 30,
2019 |
|
March 31,
2019 |
|
Maturity Date
|
Interest Rate
|
|
Unused commitments
|
|||||
Revolver - MB&T
|
$
|
14,830,650
|
|
|
$
|
12,403,213
|
|
|
November 30, 2019
|
Prime - 1%
|
|
$2,169,351
|
|
Term Note A - MB&T
|
8,500,000
|
|
|
8,750,000
|
|
|
January 1, 2028
|
1-month LIBOR + 2%
|
|
|
|||
Term Note B - MB&T
|
4,250,000
|
|
|
4,375,000
|
|
|
January 1, 2028
|
4.5%
|
|
|
|||
Term Note D - MB&T
|
1,590,400
|
|
|
1,607,200
|
|
|
January 1, 2028
|
1-month LIBOR + 2%
|
|
|
|||
Debt - Trust Preferred Securities
|
6,102,310
|
|
|
—
|
|
|
June 7, 2049
|
8%
|
|
|
|||
Air T Debt
|
35,273,360
|
|
|
27,135,413
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
Revolver - MB&T
|
—
|
|
|
3,820,000
|
|
|
May 21, 2019
|
7.5%
|
|
5,000,000
|
|
||
Revolver - MB&T
|
4,876,259
|
|
|
—
|
|
|
November 30, 2019
|
greater of 6.50% or Prime + 2%
|
|
5,123,741
|
|
||
Term Loan - MB&T
|
—
|
|
|
450,000
|
|
|
December 17, 2019
|
7.50%
|
|
|
|||
Term Loan - MB&T
|
—
|
|
|
400,000
|
|
|
June 17, 2020
|
7.25%
|
|
|
|||
Term Loan - Park State
|
2,100,000
|
|
|
2,100,000
|
|
|
June 17, 2020
|
8.50%
|
|
|
|||
AirCo Debt
|
6,976,259
|
|
|
6,770,000
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
Revolver
|
—
|
|
|
—
|
|
|
May 5, 2019
|
1-month LIBOR + 3%
|
|
—
|
|
||
Term Loan
|
8,152,054
|
|
|
8,616,336
|
|
|
January 26, 2021
|
1-month LIBOR + 3.75%
|
|
|
|||
Term Loan
|
14,000,000
|
|
|
15,500,000
|
|
|
September 14, 2021
|
1-month LIBOR + 3.75%
|
|
|
|||
Contrail Debt - Old National
|
22,152,054
|
|
|
24,116,336
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
Total Debt
|
64,401,673
|
|
|
58,021,749
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||
Less: Unamortized Debt Issuance Costs
|
(341,612
|
)
|
|
(368,760
|
)
|
|
|
|
|
|
|||
Total Debt, net
|
$
|
64,060,061
|
|
|
$
|
57,652,989
|
|
|
|
|
|
|
Due by
|
|
Amount
|
||
June 30, 2020
|
|
$
|
27,774,151
|
|
June 30, 2021
|
|
17,319,212
|
|
|
June 30, 2022
|
|
3,567,200
|
|
|
June 30, 2023
|
|
1,567,200
|
|
|
June 30, 2024
|
|
1,567,200
|
|
|
Thereafter
|
|
12,606,710
|
|
|
|
|
64,401,673
|
|
|
Less: Unamortized Debt Issuance Costs
|
|
(341,612
|
)
|
|
|
|
$
|
64,060,061
|
|
•
|
A dividend of one additional share for every two shares already held (a
50%
stock dividend, or the equivalent of a 3-for-2 stock split). See Footnote 7 for discussion.
|
•
|
The Company issued and distributed to existing common shareholders an aggregate of
1,600,000
trust preferred capital security ("TruPs") shares (aggregate
$4,000,000
stated value) and an aggregate of
8,400,000
warrants ("Warrants") (representing warrants to purchase
$21,000,000
in stated value of TruPs). The Warrants are exercisable for
one year
from issuance.
|
•
|
The Company entered into an
8%
Junior Subordinated Debenture (“Debenture”) to pay to Air T Funding ("the Trust") a principal sum of
$4,000,000
on June 7, 2049, and to pay interest on said principal sum quarterly at the rate of
8.0%
per annum. The Company's Debenture and the Trust's associated note receivable (the "Note") are eliminated in the Company's consolidated financial statements, and Debt - Trust Preferred Securities is presented as a component of long-term debt on our consolidated balance sheets.
|
|
Fair Value Measurement
as of June 30, 2019
|
||
Warrant liability (Level 2)
|
$
|
755,907
|
|
13
.
|
Variable Interest Entities
|
•
|
the power to direct the activities that most significantly impact the economic performance of the VIE; and
|
•
|
the right to receive benefits from, or the obligation to absorb losses of, the VIE that could be potentially significant to the VIE.
|
|
June 30, 2019
|
|
March 31, 2019
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,430
|
|
|
$
|
12,315
|
|
Accounts receivable, net
|
49,844
|
|
|
46,844
|
|
||
Other current assets
|
9,672
|
|
|
58,441
|
|
||
Total current assets
|
68,946
|
|
|
117,600
|
|
||
Other tax receivables-long-term
|
|
|
|
311,000
|
|
||
Total assets
|
$
|
68,946
|
|
|
$
|
428,600
|
|
LIABILITIES
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
96,109
|
|
|
$
|
2,151,235
|
|
Accrued expenses
|
401,275
|
|
|
3,157,707
|
|
||
Short-term debt
|
—
|
|
|
1,749,779
|
|
||
Total current liabilities
|
497,384
|
|
|
7,058,721
|
|
||
Total liabilities
|
$
|
497,384
|
|
|
$
|
7,058,721
|
|
Net Liabilities
|
$
|
(428,438
|
)
|
|
$
|
(6,630,121
|
)
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Operating Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
||||
Cost of sales
|
—
|
|
|
—
|
|
||
General and administrative
|
72,748
|
|
|
52,260
|
|
||
|
72,748
|
|
|
52,260
|
|
||
|
|
|
|
||||
Operating Loss
|
(72,748
|
)
|
|
(52,260
|
)
|
||
|
|
|
|
||||
Non-operating Income (Expenses), net
|
6,237,385
|
|
|
(87,917
|
)
|
||
|
|
|
|
||||
Income (Loss) Before Income Taxes
|
6,164,637
|
|
|
(140,177
|
)
|
||
|
|
|
|
||||
Income Taxes
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Net Income (Loss)
|
$
|
6,164,637
|
|
|
$
|
(140,177
|
)
|
14
.
|
Share
Repurchase
|
15.
|
Geographical information
|
|
June 30, 2019
|
|
March 31, 2019
|
||||
United States
|
$
|
4,865,948
|
|
|
$
|
4,946,997
|
|
Foreign
|
17,868,685
|
|
|
25,035,412
|
|
||
Total property and equipment, net
|
$
|
22,734,633
|
|
|
$
|
29,982,409
|
|
|
June 30, 2019
|
|
March 31, 2019
|
||||
Australia
|
$
|
3,594
|
|
|
$
|
5,186
|
|
Mexico
|
2,262,967
|
|
|
2,680,825
|
|
||
Netherlands
|
5,350,275
|
|
|
5,541,072
|
|
||
China
|
10,251,849
|
|
|
16,808,329
|
|
||
Total property and equipment, net
|
$
|
17,868,685
|
|
|
$
|
25,035,412
|
|
|
June 30, 2019
|
|
June 30, 2018
|
||||
United States
|
$
|
46,127,349
|
|
|
$
|
54,662,311
|
|
Foreign
|
9,577,186
|
|
|
6,205,158
|
|
||
Total revenue
|
$
|
55,704,535
|
|
|
$
|
60,867,469
|
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Operating Revenues by Segment:
|
|
|
|
||||
Overnight Air Cargo
|
$
|
18,319,682
|
|
|
$
|
17,640,658
|
|
Ground Equipment Sales:
|
|
|
|
||||
Domestic
|
10,858,891
|
|
|
5,292,017
|
|
||
International
|
1,390,000
|
|
|
1,095,097
|
|
||
Total Ground Equipment Sales
|
12,248,891
|
|
|
6,387,114
|
|
||
Ground Support Services
|
8,516,800
|
|
|
9,047,640
|
|
||
Printing Equipment and Maintenance
|
|
|
|
||||
Domestic
|
21,684
|
|
|
194,792
|
|
||
International
|
46,186
|
|
|
107,921
|
|
||
Total Printing Equipment and Maintenance
|
67,870
|
|
|
302,713
|
|
||
Commercial Jet Engines and Parts:
|
|
|
|
||||
Domestic
|
8,938,715
|
|
|
23,154,535
|
|
||
International
|
8,141,000
|
|
|
5,002,140
|
|
||
Total Commercial Jet Engines and Parts
|
17,079,715
|
|
|
28,156,675
|
|
||
Corporate and other
|
598,988
|
|
|
474,205
|
|
||
Intercompany
|
(1,127,411
|
)
|
|
(1,141,536
|
)
|
||
Total
|
$
|
55,704,535
|
|
|
$
|
60,867,469
|
|
|
|
|
|
||||
Operating Income (Loss):
|
|
|
|
||||
Overnight Air Cargo
|
$
|
47,918
|
|
|
$
|
1,056,692
|
|
Ground Equipment Sales
|
1,347,378
|
|
|
393,500
|
|
||
Ground Support Services
|
213,081
|
|
|
(87,724
|
)
|
||
Printing Equipment and Maintenance
|
(456,199
|
)
|
|
(318,278
|
)
|
||
Commercial Jet Engines and Parts
|
1,909,029
|
|
|
3,282,908
|
|
||
Corporate and other
|
(1,869,296
|
)
|
|
(1,729,200
|
)
|
||
Intercompany
|
19,788
|
|
|
5,804
|
|
||
Total
|
$
|
1,211,699
|
|
|
$
|
2,603,702
|
|
|
|
|
|
||||
Capital Expenditures:
|
|
|
|
||||
Overnight Air Cargo
|
$
|
8,288
|
|
|
$
|
5,996
|
|
Ground Equipment Sales
|
10,402
|
|
|
140,090
|
|
||
Ground Support Services
|
47,608
|
|
|
52,438
|
|
||
Printing Equipment and Maintenance
|
—
|
|
|
—
|
|
||
Commercial Jet Engines and Parts
|
3,465,404
|
|
|
183,821
|
|
||
Corporate and other
|
60,224
|
|
|
77,230
|
|
||
Total
|
$
|
3,591,926
|
|
|
$
|
459,575
|
|
|
|
|
|
||||
Depreciation, Amortization and Impairment:
|
|
|
|
||||
Overnight Air Cargo
|
18,176
|
|
|
$
|
22,763
|
|
|
Ground Equipment Sales
|
52,380
|
|
|
91,349
|
|
||
Ground Support Services
|
86,252
|
|
|
125,055
|
|
||
Printing Equipment and Maintenance
|
2,225
|
|
|
14,331
|
|
||
Commercial Jet Engines and Parts
|
1,735,490
|
|
|
1,097,933
|
|
||
Corporate and other
|
140,088
|
|
|
145,295
|
|
||
Intercompany
|
(1,325
|
)
|
|
(1,325
|
)
|
||
Total
|
$
|
2,033,286
|
|
|
$
|
1,495,401
|
|
17
.
|
Commitments and Contingencies
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Overnight air cargo, which operates in the air express delivery services industry;
|
•
|
Ground equipment sales, which manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers;
|
•
|
Ground support services, which provides ground support equipment maintenance and facilities maintenance services to domestic airlines and aviation service providers across the United States;
|
•
|
Commercial aircraft, engines and parts, which manages and leases aviation assets; supplies surplus and aftermarket commercial jet engine components; provides commercial aircraft disassembly/part-out services; commercial aircraft parts sales; procurement services and overhaul and repair services to airlines;
|
•
|
Printing equipment and maintenance, which designs, manufactures and sells advanced digital print production equipment and provides maintenance services to commercial customers; and commercial aircraft companies and,
|
•
|
Corporate and other, which acts as the capital allocator and resource for other segments.
|
|
Three Months Ended June 30,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
|
|
|
|||||||
Overnight Air Cargo
|
$
|
18,319,682
|
|
|
$
|
17,640,658
|
|
|
$
|
679,024
|
|
|
4
|
%
|
Ground Equipment Sales
|
12,248,891
|
|
|
6,384,781
|
|
|
5,864,110
|
|
|
92
|
%
|
|||
Ground Support Services
|
8,516,800
|
|
|
9,047,640
|
|
|
(530,840
|
)
|
|
(6
|
)%
|
|||
Commercial Jet Engines and Parts
|
16,326,905
|
|
|
27,320,175
|
|
|
(10,993,270
|
)
|
|
(40
|
)%
|
|||
Printing Equipment and Maintenance
|
64,270
|
|
|
298,823
|
|
|
(234,553
|
)
|
|
(78
|
)%
|
|||
Corporate and other
|
227,987
|
|
|
175,392
|
|
|
52,595
|
|
|
30
|
%
|
|||
|
$
|
55,704,535
|
|
|
$
|
60,867,469
|
|
|
$
|
(5,162,934
|
)
|
|
(8
|
)%
|
|
Three Months Ended June 30,
|
|
Change
|
||||||||||
|
2019
|
|
2018
|
|
|||||||||
Gain on sale of marketable securities
|
$
|
36,460
|
|
|
$
|
—
|
|
|
$
|
36,460
|
|
100
|
%
|
Foreign currency gain (loss), net
|
35,755
|
|
|
(2,182
|
)
|
|
37,937
|
|
n/m
|
|
|||
Other-than-temporary impairment loss on investments
|
(814,558
|
)
|
|
—
|
|
|
(814,558
|
)
|
(100
|
)%
|
|||
Other investment income (loss), net
|
162,957
|
|
|
(315,507
|
)
|
|
478,464
|
|
n/m
|
|
|||
Interest expense and other
|
(1,023,622
|
)
|
|
(707,199
|
)
|
|
(316,423
|
)
|
(45
|
)%
|
|||
Unrealized gain on interest rate swap
|
—
|
|
|
97,337
|
|
|
(97,337
|
)
|
(100
|
)%
|
|||
Gain on settlement of bankruptcy
|
4,509,302
|
|
|
—
|
|
|
4,509,302
|
|
100
|
%
|
|||
Bargain purchase acquisition gain
|
34,244
|
|
|
1,983,777
|
|
|
(1,949,533
|
)
|
(98
|
)%
|
|||
Income (loss) from equity method investments
|
(320,578
|
)
|
|
9,183
|
|
|
(329,761
|
)
|
n/m
|
|
|||
|
$
|
2,619,960
|
|
|
$
|
1,065,409
|
|
|
$
|
1,554,551
|
|
146
|
%
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Net Cash Provided by Operating Activities
|
5,387,556
|
|
|
14,716,934
|
|
||
Net Cash Used in Investing Activities
|
(3,780,514
|
)
|
|
(6,716,648
|
)
|
||
Net Cash Provided by/ (Used in) Financing Activities
|
2,008,195
|
|
|
(7,309,902
|
)
|
||
Effect of foreign currency exchange rates on cash and cash equivalents
|
2,638
|
|
|
2,072
|
|
||
|
|
|
|
||||
Net Increase/ (Decrease) in Cash and Cash Equivalents and Restricted Cash
|
$
|
3,617,875
|
|
|
$
|
692,456
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures
|
(a)
|
None.
|
(b)
|
None.
|
(c)
|
On May 14, 2014, the Company announced that its Board of Directors had authorized a program to repurchase up to 750,000 shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions, in compliance with SEC Rule 10b-18, over an indefinite period.
|
Dates of
Shares Purchased
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of
Public Announced
Plans or Programs
|
|
Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs
|
|||||
April 1 - April 30, 2019
|
|
1,932
|
|
|
$
|
28.73
|
|
|
24,584
|
|
|
725,416
|
|
May 1 - May 30, 2019
|
|
913
|
|
|
$
|
27.13
|
|
|
25,497
|
|
|
724,503
|
|
June 1 - June 30, 2019
|
|
14,579
|
|
|
$
|
16.50
|
|
|
40,076
|
|
|
709,924
|
|
No.
|
Description
|
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
101
|
The following financial information from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Stockholders Equity, and (v) the Notes to the Condensed Consolidated Financial Statements.
|
|
AIR T, INC.
|
|
|
|
|
|
|
|
Date: August 14, 2019
|
|
|
|
/s/ Nick Swenson
|
|
|
Nick Swenson, Chief Executive Officer and Director
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Brian Ochocki
|
|
|
Brian Ochocki, Chief Financial Officer
|
|
|
|
|
|
|
|
1 Year Air T Chart |
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