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Our core segments are overnight air cargo; aviation ground equipment manufacturing and sales; commercial jet engines and parts; and corporate and other.

Today the Company is announcing results for the fiscal third quarter ended December 31, 2023:

*Adjusted EBITDA is a non-GAAP financial measure; see below for further explanation and reconciliation to GAAP measure.

"Management believes the people of Air T are building value for stakeholders over time, inclusive of the December 2023 quarter. During the quarter, both our balance sheet and income statements were impacted by the unexpected revenue decrease of 48% in our Ground Equipment Sales segment. The decline was caused by the weather and some unusual circumstances that we expect to resolve themselves. Before the current year, Ground Equipment Sales was a steady and reliable contributor to Air T. This segment's operating income over the previous nine (9) years ranged from a MIN of $2.4 million to a MAX of $9.0 million. We expect the segment to maintain its just-in-time manufacturing disciplines and efficient capital utilization."

*Adjusted EBITDA is a non-GAAP financial measure; see below for further explanation and reconciliation to GAAP measures.

The Company uses adjusted earnings before taxes, interest, and depreciation and amortization ("Adjusted EBITDA"), a non-GAAP financial measure as defined by the SEC, to evaluate the Company's financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.

Adjusted EBITDA is defined as earnings before taxes, interest, and depreciation and amortization, adjusted for specified items. The Company calculates Adjusted EBITDA by removing the impact of specific items and adding back the amounts of interest expense and depreciation and amortization to earnings before income taxes. When calculating Adjusted EBITDA, the Company does not add back depreciation expense for aircraft engines that are on lease, as the Company believes this expense matches with the corresponding revenue earned on engine leases. There was no depreciation expense for leased engines for the three months ended December 31, 2023 and $0.5 million for the three months ended December 31, 2022.

Management believes that Adjusted EBITDA is a useful measure of the Company's performance because it provides investors additional information about the Company's operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted EBITDA is not intended to replace or be an alternative to operating income, the most directly comparable amounts reported under GAAP.

The table below provides a reconciliation of operating income to Adjusted EBITDA for the periods ended December 31, 2023, and 2022 (in thousands):

	Three months ended					Nine months ended
	12/31/2023			12/31/2022		12/31/2023			12/31/2022
Operating (loss) income	$	(1,608	)	$	135	$	(189	)	$	1,147
Depreciation and amortization (excluding leased engines depreciation)		699			560		2,088			1,810
Asset impairment, restructuring or impairment charges		321			638		326			2,174
Loss (gain) on sale of property and equipment		1			-		(7	)		(2	)
Trust Preferred Securities issuance expenses		185			4		277			38
Adjusted EBITDA	$	(402	)	$	1,337	$	2,495		$	5,167

The following table shows the Company's Adjusted EBITDA by segment for the periods ended December 31, 2023, and 2022 (in thousands):

	Three months ended						Nine months ended
	12/31/2023			12/31/2022			12/31/2023			12/31/2022
Overnight Air Cargo	$	1,690		$	1,031		$	5,830		$	3,331
Ground Equipment Sales		(485	)		1,128			(512	)		3,252
Commercial Jet Engines and Parts		(121	)		1,555			2,888			5,802
Corporate and Other		(1,486	)		(2,377	)		(5,711	)		(7,218	)
Adjusted EBITDA	$	(402	)	$	1,337		$	2,495		$	5,167

NOTE REGARDING STAKEHOLDER QUESTIONS

If you have questions related to this release or other Air T matters, please use our interactive Q&A capability, through Slido.com, accessible from our website, to submit your questions. We intend to keep that link open and available for shareholder questions. Questions submitted through Slido will be answered "live" and in writing at our Annual Meeting, and via a written response on a quarterly basis. Note that legal and pragmatic requirements restrict us from answering every question posted, yet we intend to address all reasonable and relevant questions with a written answer.

ABOUT AIR T, INC.

Established in 1980, Air T Inc. is a portfolio of powerful businesses and financial assets, each of which is independent yet interrelated. Its core segments are overnight air cargo, aviation ground support equipment manufacturing and sales, commercial jet engines and parts, and corporate and other. We seek to expand, strengthen and diversify Air T's after-tax cash flow per share. Our goal is to build Air T's core businesses, and when appropriate, to expand into adjacent and other industries. We seek to activate growth and overcome challenges while delivering meaningful value for all stakeholders. For more information, visit www.airt.net. The information on our website is available for information purposes only and is not incorporated by reference into this press release.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release, including those contained in "Overview," are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Company's financial condition, results of operations, plans, objectives, future performance and business. Forward-looking statements include those preceded by, followed by or that include the words "believes", "pending", "future", "expects," "anticipates," "estimates," "depends" or similar expressions. These forward-looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements, because of, among other things, potential risks and uncertainties, such as:

An inability to finance our operations through bank or other financing or through the sale of issuance of debt or equity securities;
Economic and industry conditions in the Company's markets;
The risk that contracts with FedEx could be terminated or adversely modified;
The risk that the number of aircraft operated for FedEx will be reduced;
The risk that GGS customers will defer or reduce significant orders for deicing equipment;
The impact of any terrorist activities on United States soil or abroad;
The Company's ability to manage its cost structure for operating expenses, or unanticipated capital requirements, and match them to shifting customer service requirements and production volume levels;
The Company's ability to meet debt service covenants and to refinance existing debt obligations;
The risk of injury or other damage arising from accidents involving the Company's overnight air cargo operations, equipment or parts sold and/or services provided;
Market acceptance of the Company's commercial and military equipment and services;
Competition from other providers of similar equipment and services;
Changes in government regulation and technology;
Changes in the value of marketable securities held as investments;
Mild winter weather conditions reducing the demand for deicing equipment;
Market acceptance and operational success of the Company's commercial jet engines and parts segment or its aircraft asset management business and related aircraft capital joint venture; and
Despite our current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt, which could further exacerbate the risks associated with our substantial leverage.

A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. We are under no obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT

Air T, Inc. Brian Ochocki, CFO
bochocki@airt.net
612-843-4302

SOURCE: Air T, Inc.

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