Projects sharply lower 2024 capital
expenditures, improving cash flow
Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading
provider of medium wide-body freighter aircraft leasing, contracted
air transportation, and related services, today reported
consolidated financial results for the quarter and year ended
December 31, 2023. Those results, as compared with the same periods
in 2022, were as follows:
Fourth Quarter Results
- Revenues $517 million, down 3%
- GAAP Loss per Share (basic) from Continuing Operations $0.24,
down $0.82
- GAAP Pretax Loss from Continuing Operations $15.6 million,
including $24.4 million non-cash settlement expense associated with
the partial termination of a pension plan
- Adjusted Pretax* Earnings $19.8 million, down 69%
- Adjusted EPS* $0.18, down $0.35
- Adjusted EBITDA* $129.9 million, down 20%
Full Year 2023 Results
- Revenues $2.1 billion, up 1%
- GAAP EPS (basic) from Continuing Operations $0.87, down
$1.80
- GAAP Pretax Earnings from Continuing Operations $84.2 million,
including $24.4 million non-cash pension settlement expense
- Adjusted Pretax Earnings* $146.7 million, down 44%
- Adjusted EPS* $1.46, down $0.82 or 36%
- Adjusted EBITDA* $562 million, down 12%
- GAAP Operating Cash Flows $654 million, up 39% and Adjusted
Free Cash Flow* $435 million, up 52%
Joe Hete, chairman and chief executive officer of ATSG, said,
"As expected, the fourth quarter saw lower demand in our leasing
segment and reduced demand in our passenger airline operations.
Flying for the U.S. military decreased throughout the quarter, and
fewer leased Boeing 767-200 freighters in service continued to
affect results at our leasing segment. Despite challenges in the
second half of 2023, we converted and leased thirteen aircraft,
including our first three Airbus A321-200 freighters. We have
substantially reduced our capital spending plans, and now expect to
generate positive cash flow in 2024."
2023 Operating
Highlights
- Ten more dry leases of newly converted Boeing 767-300
freighters, plus dry leases of three newly converted A321-200
freighters. One of those newly converted 767-300 freighters is
operated by an ATSG cargo airline under a Crew, Maintenance and
Insurance (CMI) agreement.
- Three more customer-provided 767-300 freighters were
subleased to and operated by an ATSG cargo airline during 2023, for
a total of sixteen such aircraft in the fleet at the end of the
year.
2023 Financial
Highlights
- Revenue of $2.1 billion in 2023, an increase of $25
million from 2022, due primarily to a full year of contributions
from six new leases of 767-300s made in 2022, as well as
partial-year contributions from 2023 leases of the ten newly
converted 767-300 freighters and three newly converted A321-200
freighters.
- $562 million in Adjusted EBITDA for 2023, down $79
million. Weaker performance in our airline operations and lower
leasing segment results attributable to the 767-200 freighter fleet
more than offset the benefits of newly converted 767-300 freighter
leases. The decline in Adjusted EBITDA from the 767-200 freighter
aircraft leases and related engines was approximately $33
million.
- Growth investments of $574 million. These investments
supported leased freighter deployments in 2023, and those we aim to
deploy in 2024 and 2025.
- Repurchases of 7.4 million ATSG common shares in 2023.
Shares repurchased since October 2022 represent 13% of the 74
million shares outstanding at the beginning of 2022.
- Secured $400 million of additional debt capital via a
new six-year convertible bond offering; proceeds were used
primarily to retire other existing debt and repurchase shares.
* Adjusted EPS (Earnings per Share), Adjusted Pretax Earnings,
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) and Adjusted Free Cash Flow are non-GAAP financial
measures and are defined and reconciled to the most directly
comparable financial measures calculated and presented in
accordance with GAAP at the end of this release.
Segment Results
Cargo Aircraft Management (CAM)
- Aircraft leasing and related revenues increased 15% for the
fourth quarter and 5% for the year, reflecting the 2023 benefit of
a full year of revenues from six 767-300 freighters leased during
2022, plus partial-year revenues from ten additional 767-300s and
three A321-200s leased in 2023. CAM's revenues versus the prior
year were negatively impacted by fewer 767-200s in service.
- CAM’s fourth-quarter pretax earnings decreased $11 million, or
34%, to $21 million versus the prior-year quarter, and decreased by
$34 million, or 23% to $109 million for the full year. More than
90% of the year-over-year reduction in CAM's pretax earnings
stemmed from lower 767-200 freighter and engine lease results. For
the fourth quarter and full year, interest expense increased by $6
million and $17 million, respectively. For the full year,
depreciation increased by $12 million.
- At the end of 2023, ninety CAM-owned freighter aircraft were
leased to external customers, one fewer than a year ago. Ten
767-200 freighters were removed from service during the year. Five
767-200s and three 767-300s were sold during the year.
- Twenty-three CAM-owned aircraft were in or awaiting conversion
to freighters at the end of 2023, one more than at the end of 2022.
This included fourteen 767s, six A321s, and three A330s. Four
CAM-owned freighter aircraft were staging for future lease.
ACMI Services
- Pretax losses were $2 million in the fourth quarter, versus
gains of $26 million in 2022. Full-year pretax earnings were $32
million for 2023 and $95 million in 2022. The reductions stemmed
from fewer block hours flown for the U.S. military, and lower
overall margins on our cargo revenues. For the quarter and the full
year, interest expense increased by $2 million and $7.5 million,
respectively.
- Revenue block hours for ATSG's airlines decreased 4% for the
fourth quarter and 1% for 2023 over 2022. The decrease for 2023
included one fewer aircraft in service than a year ago. Cargo block
hours decreased 2% for the fourth quarter and were flat for the
year. Passenger block hours were down 12% for the quarter and down
4% for the year, driven primarily by the conflicts in the Middle
East.
2024 Outlook ATSG expects
Adjusted EBITDA of approximately $506 million in 2024, down $56
million from 2023. Those forecasts exclude any contribution from
additional aircraft leases or flying opportunities not currently
under contractual commitment, which could generate additional
Adjusted EBITDA above $506 million. Capital spending in 2024 is
projected at $410 million, down $380 million from 2023.
Key factors in our 2024 Adjusted EBITDA forecast are:
- $55 million decline in earnings related to our 767-200
freighters versus 2023, due to fewer leased freighters and lower
engine utilization.
- Four additional external dry leases of 767-300 freighters, two
of which have already been delivered.
- Three 767-300 freighters returned upon lease expiration,
including two late in the second half.
- Lower block hours at our airline operations.
The factors outlined below could, if achieved, yield $30 million
more Adjusted EBITDA than our projection:
- New lease commitments for available aircraft.
- Opportunities for additional ACMI flying.
The projection for Adjusted EPS is 55 cents to 80 cents diluted
for 2024. The estimate reflects higher depreciation, interest
expense, and income taxes. That range matches the range implied by
our base $506 million and the potential upside we provided. It also
assumes a stable share count at current levels.
ATSG's total projected capital spend of $410 million for 2024
includes growth capital of $245 million, versus $574 million in
2023, and reflects fewer aircraft conversions and feedstock
purchases. The expected $50 million reduction in sustaining capital
expenditures to $165 million is driven by fewer expected engine
overhauls.
Hete continued, “Our reduced spending outlook for 2024 greatly
improves our cash generation expectations this year, even with
lower expected earnings, leading to our goal of positive free cash
flow for the year. Our growth investments have positioned us to
deploy more freighters rapidly as market conditions improve. Our
outlook for 2025 is for continued improvement in our cash flow
based on an increase in Adjusted EBITDA and an even lower capex
spend."
ATSG’s financial statements on Form 10-K are expected to be
filed by February 29, 2024, and will be made available on the
company’s website (www.atsginc.com).
Non-GAAP Financial Measures This release, including the
attached tables reconciling results to Generally Accepted
Accounting Principles ("GAAP") in the United States, contains
financial measures that are not calculated and presented in
accordance with GAAP ("non-GAAP financial measures"), as further
described in such tables. Management uses these non-GAAP financial
measures to evaluate historical results and project future results.
Management believes that these non-GAAP financial measures assist
in highlighting operational trends, facilitating period-over-period
comparisons, and providing additional clarity about events and
trends affecting core operating performance. Disclosing these
non-GAAP financial measures provides insight to investors about
additional metrics that management uses to evaluate past
performance and prospects for future performance. Non-GAAP
financial measures should not be considered in isolation or as a
substitute for analysis of the Company's results as reported under
GAAP and may be calculated differently by other companies.
The historical non-GAAP financial measures included in this
release are reconciled to the most directly comparable financial
measure calculated and presented in accordance with GAAP in the
non-GAAP reconciliation tables included later in this release. The
Company does not provide a reconciliation of projected Adjusted
EBITDA or Adjusted EPS, as permitted by Item 10(e)(1)(i)(B) of
Regulation S-K, because it is unable to predict with reasonable
accuracy the value of certain adjustments and as a result, the
comparable GAAP measures are unavailable without unreasonable
efforts. For example, certain adjustments can be significantly
impacted by the re-measurements of financial instruments including
stock warrants issued to a customer. The Company’s earnings on a
GAAP basis, including its earnings per share on a GAAP basis, and
the non-GAAP adjustments for gains and losses resulting from the
re-measurement of stock warrants, will depend on, among other
things, the future prices of ATSG stock, interest rates, and other
assumptions which are highly uncertain. As a result, the Company
believes such reconciliations of forward-looking information would
imply a degree of precision and certainty that could be confusing
to investors.
Conference Call ATSG will host an investor conference
call on Tuesday, February 27, 2023, at 10 a.m. Eastern Time to
review its financial results for fourth quarter and full year 2023,
and its outlook for 2024. Live call participants must register via
this link, which is also available at ATSG’s website,
www.atsginc.com under “Investors” and “Presentations.” Once
registered, call participants will receive dial-in numbers and a
unique Personal Identification Number (PIN) that must be entered to
join the live call. Listen-only access to live and replay versions
of the call, including slides, will be available via a webcast link
at the same ATSG website location. Slides that accompany
management’s discussion of fourth-quarter results may be downloaded
from there starting shortly before the start of the call at 10
a.m.
About ATSG ATSG is a leading provider of aircraft leasing
and air cargo transportation and related services to domestic and
foreign air carriers and other companies that outsource their air
cargo lift requirements. ATSG, through its leasing and airline
subsidiaries, is the world's largest owner and operator of
converted Boeing 767 freighter aircraft. Through its principal
subsidiaries, including three airlines with separate and distinct
U.S. FAA Part 121 Air Carrier certificates, ATSG provides aircraft
leasing, air cargo lift, passenger ACMI and charter services,
aircraft maintenance services and airport ground services. ATSG's
subsidiaries include ABX Air, Inc.; Airborne Global Solutions,
Inc.; Airborne Maintenance and Engineering Services, Inc.,
including its subsidiary, Pemco World Air Services, Inc.; Air
Transport International, Inc.; Cargo Aircraft Management, Inc.; and
Omni Air International, LLC. For more information, please see
www.atsginc.com.
Cautionary Note on Forward-Looking Statements
Throughout this release, Air Transport Services Group, Inc.
(“ATSG") makes “forward-looking statements” within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995, as
amended (the “Act”). Except for historical information contained
herein, the matters discussed in this release contain
forward-looking statements that involve inherent risks and
uncertainties. Such statements are provided under the “safe harbor”
protection of the Act. Forward-looking statements include, but are
not limited to, statements regarding anticipated operating results,
prospects and levels of assets under management, technological
developments, economic trends, expected transactions and similar
matters. The words “may,” “believe,” “expect,” “anticipate,”
“target,” “goal,” “project,” “estimate,” “guidance,” “forecast,”
“outlook,” “will,” “continue,” “likely,” “should,” “hope,” “seek,”
“plan,” “intend” and variations of such words and similar
expressions identify forward-looking statements. Similarly,
descriptions of ATSG’s objectives, strategies, plans, goals or
targets are also forward-looking statements. Forward-looking
statements are susceptible to a number of risks, uncertainties and
other factors. While ATSG believes that the assumptions underlying
its forward-looking statements are reasonable, investors are
cautioned that any of the assumptions could prove to be inaccurate
and, accordingly, ATSG’s actual results and experiences could
differ materially from the anticipated results or other
expectations expressed in its forward-looking statements. A number
of important factors could cause ATSG's actual results to differ
materially from those indicated by such forward-looking statements.
These factors include, but are not limited to: (i) unplanned
changes in the market demand for our assets and services, including
the loss of customers or a reduction in the level of services we
perform for customers; (ii) our operating airlines' ability to
maintain on-time service and control costs; (iii) the cost and
timing with respect to which we are able to purchase and modify
aircraft to a cargo configuration; (iv) fluctuations in ATSG's
traded share price and in interest rates, which may result in
mark-to-market charges on certain financial instruments; (v) the
number, timing, and scheduled routes of our aircraft deployments to
customers; (vi) our ability to remain in compliance with key
agreements with customers, lenders and government agencies; (vii)
the impact of current supply chain constraints both within and
outside the United States, which may be more severe or persist
longer than we currently expect; (viii) the impact of the current
competitive labor market, which could restrict our ability to fill
key positions; (ix) changes in general economic and/or
industry-specific conditions, including inflation and regulatory
changes; and (x) other uncontrollable factors such as geopolitical
tensions or conflicts and human health crises. Other factors that
could cause ATSG’s actual results to differ materially from those
indicated by such forward-looking statements are discussed in “Risk
Factors” in Item 1A of ATSG's Form 10-K and are contained from time
to time in its other filings with the U.S. Securities and Exchange
Commission, including its annual reports on Form 10-K and quarterly
reports on Form 10-Q. Readers should carefully review this release
and should not place undue reliance on ATSG's forward-looking
statements. New risks and uncertainties arise from time to time,
and factors that ATSG currently deems immaterial may become
material, and it is impossible for ATSG to predict these events or
how they may affect it. These forward-looking statements were based
only on information, plans and estimates as of the date of this
release. Except as may be required by applicable law, ATSG
undertakes no obligation to update any forward-looking statements
to reflect changes in underlying assumptions or factors, new
information, future events or other changes. ATSG does not endorse
any projections regarding future performance that may be made by
third parties.
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF EARNINGS (UNAUDITED)
(In thousands, except per share
data)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
REVENUES
$
517,040
$
533,025
$
2,070,611
$
2,045,469
OPERATING EXPENSES
Salaries, wages and benefits
173,657
172,424
685,940
666,950
Depreciation and amortization
89,314
84,338
342,985
331,064
Maintenance, materials and repairs
63,929
45,465
212,767
162,122
Fuel
65,482
73,432
278,528
275,512
Contracted ground and aviation
services
18,450
20,264
74,273
77,026
Travel
31,586
29,445
128,584
111,989
Landing and ramp
4,347
3,710
17,486
16,583
Rent
7,506
8,323
31,703
30,437
Insurance
1,503
2,442
9,790
9,666
Other operating expenses
24,628
20,669
88,723
78,637
480,402
460,512
1,870,779
1,759,986
OPERATING INCOME
36,638
72,513
199,832
285,483
OTHER INCOME (EXPENSE)
Interest income
181
335
766
415
Settlement and non-service component of
retiree benefit (loss) gains
(27,363
)
4,635
(37,017
)
20,046
Debt issuance costs
—
—
(936
)
—
Net gain (loss) on financial
instruments
(3,754
)
(380
)
(962
)
9,022
Losses from non-consolidated
affiliates
(342
)
(2,030
)
(4,740
)
(7,607
)
Interest expense
(20,951
)
(13,834
)
(72,704
)
(46,861
)
(52,229
)
(11,274
)
(115,593
)
(24,985
)
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
(15,591
)
61,239
84,239
260,498
INCOME TAX EXPENSE
4
(18,995
)
(24,491
)
(64,060
)
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS
(15,587
)
42,244
59,748
196,438
EARNINGS FROM DISCONTINUED OPERATIONS, NET
OF TAX
579
407
579
2,143
NET EARNINGS (LOSS)
$
(15,008
)
$
42,651
$
60,327
$
198,581
EARNINGS (LOSS) PER SHARE - CONTINUING
OPERATIONS
Basic
$
(0.24
)
$
0.58
$
0.87
$
2.67
Diluted
$
(0.24
)
$
0.50
$
0.82
$
2.26
WEIGHTED AVERAGE SHARES - CONTINUING
OPERATIONS
Basic
64,876
72,590
68,641
73,611
Diluted
64,876
86,380
75,561
88,324
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(In thousands, except share
data)
December 31, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
53,555
$
27,134
Accounts receivable, net of allowance of
$1,066 in 2023 and $939 in 2022
215,581
301,622
Inventory
49,939
57,764
Prepaid supplies and other
26,626
31,956
TOTAL CURRENT ASSETS
345,701
418,476
Property and equipment, net
2,820,769
2,402,408
Customer incentive
60,961
79,650
Goodwill and acquired intangibles
482,427
492,642
Operating lease assets
54,060
74,070
Other assets
118,172
122,647
TOTAL ASSETS
$
3,882,090
$
3,589,893
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
227,652
$
192,992
Accrued salaries, wages and benefits
56,650
56,498
Accrued expenses
10,784
12,466
Current portion of debt obligations
54,710
639
Current portion of lease obligations
20,167
23,316
Unearned revenue and grants
30,226
21,546
TOTAL CURRENT LIABILITIES
400,189
307,457
Long term debt
1,707,572
1,464,285
Stock warrant obligations
1,729
695
Post-retirement obligations
19,368
35,334
Long term lease obligations
34,990
51,575
Other liabilities
64,292
62,861
Deferred income taxes
285,248
255,180
STOCKHOLDERS’ EQUITY:
Preferred stock, 20,000,000 shares
authorized, including 75,000 Series A Junior Participating
Preferred Stock
—
—
Common stock, par value $0.01 per share;
150,000,000 shares authorized; 65,240,961 and 72,327,758 shares
issued and outstanding in 2023 and 2022, respectively
652
723
Additional paid-in capital
836,270
986,303
Retained earnings
589,209
528,882
Accumulated other comprehensive loss
(57,429
)
(103,402
)
TOTAL STOCKHOLDERS’ EQUITY
1,368,702
1,412,506
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
3,882,090
$
3,589,893
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SUMMARY OF
CASH FLOWS (UNAUDITED)
(In thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
OPERATING CASH FLOWS
$
127,988
$
74,050
$
654,081
$
472,120
INVESTING ACTIVITIES:
Aircraft acquisitions and freighter
conversions
(151,103
)
(109,636
)
(573,976
)
(412,595
)
Planned aircraft maintenance, engine
overhauls and other non-aircraft additions to property and
equipment
(61,004
)
(41,437
)
(219,471
)
(186,836
)
Proceeds from property and equipment
18,602
12,154
29,118
15,913
Acquisitions and investments in
businesses
—
(312
)
(1,600
)
(16,545
)
TOTAL INVESTING CASH FLOWS
(193,505
)
(139,231
)
(765,929
)
(600,063
)
FINANCING ACTIVITIES:
Principal payments on secured debt
(45,105
)
(20,103
)
(225,639
)
(365,628
)
Proceeds from revolver borrowings
115,000
115,000
335,000
625,000
Proceeds from convertible note
issuance
—
—
400,000
—
Payments for financing costs
—
(1,803
)
(10,779
)
(1,803
)
Repurchase of convertible notes
—
—
(203,247
)
—
Repurchase of senior unsecured notes
—
—
—
(115,204
)
Purchase of common stock
—
(53,868
)
(155,349
)
(53,868
)
Taxes paid for conversion of employee
awards
(1,408
)
(1,397
)
(2,986
)
(2,916
)
Other financing related proceeds
—
—
1,269
—
TOTAL FINANCING CASH FLOWS
68,487
37,829
138,269
85,581
NET INCREASE (DECREASE) IN CASH
$
2,970
$
(27,352
)
$
26,421
$
(42,362
)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD
$
50,585
$
54,486
$
27,134
$
69,496
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
53,555
$
27,134
$
53,555
$
27,134
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES
PRETAX EARNINGS FROM CONTINUING
OPERATIONS AND ADJUSTED PRETAX EARNINGS SUMMARY
NON-GAAP RECONCILIATION
(In thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Revenues
CAM
Aircraft leasing and related revenues
$
130,987
$
113,640
$
476,487
$
454,804
Lease incentive amortization
(3,096
)
(5,029
)
(15,449
)
(20,118
)
Total CAM
127,891
108,611
461,038
434,686
ACMI Services
334,202
369,385
1,399,764
1,404,348
Other Activities
112,288
111,489
446,506
430,326
Total Revenues
574,381
589,485
2,307,308
2,269,360
Eliminate internal revenues
(57,341
)
(56,460
)
(236,697
)
(223,891
)
Customer Revenues
$
517,040
$
533,025
$
2,070,611
$
2,045,469
Pretax Earnings (Loss) from Continuing
Operations
CAM, inclusive of interest
expense
20,889
31,421
109,415
143,008
ACMI Services, inclusive of government
grants and interest expense
(2,051
)
25,931
32,006
95,198
Other Activities
(2,552
)
2,019
(11,165
)
2,579
Net, unallocated interest
expense
(418
)
(357
)
(2,362
)
(1,748
)
Settlement and non-service components
of retiree benefit credit
(27,363
)
4,635
(37,017
)
20,046
Debt issuance costs
—
—
(936
)
—
Net gain (loss) on financial
instruments
(3,754
)
(380
)
(962
)
9,022
Loss from non-consolidated
affiliates
(342
)
(2,030
)
(4,740
)
(7,607
)
Earnings (Loss) from Continuing
Operations before Income Taxes (GAAP)
$
(15,591
)
$
61,239
$
84,239
$
260,498
Adjustments to Pretax Earnings from
Continuing Operations
Add customer incentive amortization
3,912
5,821
18,689
23,263
Add loss from non-consolidated
affiliates
342
2,030
4,740
7,607
Less debt issuance costs
—
—
936
—
Less net (gain) loss on financial
instruments
3,754
380
962
(9,022
)
Less settlement and non-service components
of retiree benefit credit
27,363
(4,635
)
37,017
(20,046
)
Add net charges for hangar foam
incident
26
18
97
978
Adjusted Pretax Earnings
(non-GAAP)
$
19,806
$
64,853
$
146,680
$
263,278
Adjusted Pretax Earnings (non-GAAP) excludes certain items
included in GAAP-based Pretax Earnings (Loss) from Continuing
Operations before Income Taxes because these items are distinctly
different in their predictability among periods, or not closely
related to our operations. Presenting this measure provides
investors with a comparative metric of fundamental operations,
while highlighting changes to certain items among periods. Adjusted
Pretax Earnings should not be considered an alternative to Earnings
from Continuing Operations Before Income Taxes or any other
performance measure derived in accordance with GAAP.
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES
ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION
NON-GAAP RECONCILIATION
(In thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Earnings (Loss) from Continuing
Operations Before Income Taxes
$
(15,591
)
$
61,239
$
84,239
$
260,498
Interest Income
(181
)
(335
)
(766
)
(415
)
Interest Expense
20,951
13,834
72,704
46,861
Depreciation and Amortization
89,314
84,338
342,985
331,064
EBITDA from Continuing Operations
(non-GAAP)
$
94,493
$
159,076
$
499,162
$
638,008
Add customer incentive amortization
3,912
5,821
18,689
23,263
Add start-up loss from non-consolidated
affiliates
342
2,030
4,740
7,607
Less debt issuance cost
—
—
936
—
Less net (gain) loss on financial
instruments
3,754
380
962
(9,022
)
Add non-service components of retiree
benefit credits and the impact of settlements
27,363
(4,635
)
37,017
(20,046
)
Add net charges for hangar foam fire
suppression system discharge
26
18
97
978
Adjusted EBITDA (non-GAAP)
$
129,890
$
162,690
$
561,603
$
640,788
Management uses Adjusted EBITDA (non-GAAP, defined below) to
assess the performance of the Company's operating results among
periods. It is a metric that facilitates the comparison of
financial results of underlying operations. Additionally, these
non-GAAP adjustments are similar to the adjustments used by lenders
in the Company’s senior secured credit facility to assess financial
performance and determine the cost of borrowed funds. The
adjustments also remove the non-service cost components and the
impact of settlements related to frozen retiree benefit plans
because they are not closely related to ongoing operating
activities. To improve comparability between periods, the
adjustments also exclude from EBITDA from Continuing Operations the
recognition of charges related to the discharge of a foam fire
suppression system in a Company aircraft hangar, net of related
insurance recoveries. Management presents EBITDA from Continuing
Operations (defined below), a commonly referenced metric, as a
subtotal toward calculating Adjusted EBITDA.
EBITDA from Continuing Operations (non-GAAP) is defined as
Earnings (Loss) from Continuing Operations Before Income Taxes plus
net interest expense, depreciation, and amortization expense.
Adjusted EBITDA is defined as EBITDA from Continuing Operations
less financial instrument revaluation gains or losses, non-service
components of retiree benefit costs, pension plan settlement
charges, amortization of warrant-based customer incentive costs
recorded in revenue, charge off of debt issuance costs upon
refinancing, costs from non-consolidated affiliates and charges
related to the discharge of a foam fire suppression system, net of
insurance recoveries.
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES
ADJUSTED FREE CASH FLOW
NON-GAAP RECONCILIATION
(In thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
OPERATING CASH FLOWS (GAAP)
$
127,988
$
74,050
$
654,081
$
472,120
Sustaining capital expenditures
(61,004
)
(41,437
)
(219,471
)
(186,836
)
ADJUSTED FREE CASH FLOW
(non-GAAP)
$
66,984
$
32,613
$
434,610
$
285,284
Sustaining capital expenditures includes cash outflows for
planned aircraft maintenance, engine overhauls, information systems
and other non-aircraft additions to property and equipment. It does
not include expenditures for aircraft acquisitions and related
passenger-to-freighter conversion costs.
Adjusted Free Cash Flow (non-GAAP) includes cash flow from
operations net of expenditures for planned aircraft maintenance,
engine overhauls and other non-aircraft additions to property and
equipment. Management believes that adjusting GAAP operating cash
flows is useful for investors to evaluate the company's ability to
generate adjusted free cash flow for growth initiatives, debt
service, stock buy-backs or other discretionary allocations of
capital.
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIES ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE
NON-GAAP RECONCILIATION (In thousands)
Management presents Adjusted Earnings and Adjusted Earnings Per
Share, both non-GAAP financial measures, to provide additional
information regarding earnings per share without the volatility
otherwise caused by the items below among periods.
Three Months Ended
Year Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
$
$ Per Share
$
$ Per Share
$
$ Per Share
$
$ Per Share
Earnings (Loss) from Continuing
Operations - basic (GAAP)
$
(15,587
)
$
42,244
$
59,748
$
196,438
Gain from warrant revaluation, net
tax1
(68
)
(15
)
(174
)
(170
)
Convertible notes interest charges, net of
tax 2
—
766
2,160
3,051
Earnings (Loss) from Continuing
Operations - diluted (GAAP)
(15,655
)
$
(0.24
)
42,995
$
0.50
61,734
$
0.82
199,319
$
2.26
Adjustments, net of tax
Convertible notes interest charges, net of
tax 2
161
—
—
—
—
—
—
—
Customer incentive amortization3
3,038
0.05
4,492
0.05
14,539
0.19
17,953
0.20
Settlement and non-service component of
retiree benefits4
21,250
0.33
(3,577
)
(0.04
)
28,761
0.38
(15,470
)
(0.18
)
Derivative and warrant revaluation5
2,984
0.04
309
—
1,657
0.02
(6,793
)
(0.08
)
Loss from affiliates6
266
—
1,567
0.02
3,683
0.05
5,871
0.07
Hangar foam incident7
20
—
14
—
75
—
755
0.01
Adjusted Earnings and Adjusted Earnings
Per Share (non-GAAP)
$
12,064
$
0.18
$
45,800
$
0.53
$
110,449
$
1.46
$
201,635
$
2.28
Shares
Shares
Shares
Shares
Weighted Average Shares -
diluted1
64,876
86,380
75,561
88,324
Additional shares - stock-based
compensation awards 2
481
—
—
—
Additional shares - convertible notes
2
1,700
—
—
—
Adjusted Shares (non-GAAP)
67,057
86,380
75,561
88,324
Adjusted Earnings and Adjusted Earnings Per Share should not be
considered as alternatives to Earnings (Loss) from Continuing
Operations, Weighted Average Shares - diluted or Earnings (Loss)
Per Share from Continuing Operations or any other performance
measure derived in accordance with GAAP. Adjusted Earnings and
Adjusted Earnings Per Share should not be considered in isolation
or as a substitute for analysis of the Company's results as
reported under GAAP.
- Under U.S. GAAP, certain warrants are reflected as a liability
and unrealized warrant gains are typically removed from diluted
earnings per share (“EPS”) calculations, while unrealized warrant
losses are not removed because they are dilutive to EPS. For each
quarter, additional shares assumes that Amazon net settled its
remaining warrants that were above the strike price. Each year
reflects an average of the quarterly shares.
- Under U.S. GAAP, certain types of convertible debt are treated
under the "if-convert method" if dilutive for EPS. Stock-based
compensation awards are treated under the "treasury stock method"
if dilutive for EPS. The non-GAAP presentation adds the dilutive
effects that were excluded under GAAP.
- Removes the amortization of the warrant-based customer
incentives which are recorded against revenue over the term of the
related aircraft leases and customer contracts.
- Removes the non-service component and settlement effects of
employee post-retirement plans.
- Removes gains and losses from financial instruments, including
derivative interest rate instruments and warrant revaluations.
- Removes losses for the Company's non-consolidated
affiliates.
- Removes charges related to the discharge of a foam fire
suppression system in a Company aircraft hangar, net of related
insurance recoveries.
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES
AIRCRAFT FLEET
Aircraft Types
December 31, 2022
December 31, 2023
December 31, 2024
Projected1
Freighter
Passenger
Freighter
Passenger
Freighter
Passenger
B767-2002
32
3
22
3
14
3
B767-300
78
8
87
8
90
8
B777-200
—
3
—
3
—
3
B757-200
—
—
—
—
—
—
B757 Combi
—
4
—
4
—
4
A321-200
—
—
3
—
3
—
Total Aircraft in Service
110
18
112
18
107
18
Aircraft available for lease
B767-200
—
—
1
—
—
—
B767-300
—
—
3
—
10
—
A321
—
—
—
—
6
—
A330
—
—
—
—
2
—
Total Aircraft Available for
Lease
0
0
4
0
18
0
Aircraft in Cargo Modification
B767-300
9
—
9
—
—
—
A321
3
—
6
—
—
—
A330
—
—
2
—
5
—
Feedstock
B767
6
—
5
—
9
—
A321
4
—
—
—
—
—
A330
—
—
1
1
—
Total Aircraft
132
18
139
18
140
18
Aircraft in Service Deployments
December 31,
December 31,
December 31,
2022
2023
2024 Projected
Dry leased without CMI
39
42
43
Dry leased with CMI
52
48
40
Customer provided for CMI
13
16
17
ACMI/Charter3
24
24
25
- Projected aircraft levels for December 31, 2024 include
customer commitments for new leases, management's estimates of
existing lease renewals, aircraft expected to complete the
freighter modification process and scheduled aircraft acquisitions
during 2024.
- As Boeing 767-200 aircraft are retired from service, management
plans to use the engines and related parts to support the remaining
Boeing 767 fleet and part sales.
- ACMI/Charter includes four Boeing 767 passenger aircraft leased
from external companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240226870623/en/
Quint Turner, ATSG Inc. Chief Financial Officer 937-366-2303
Air Transport Services (NASDAQ:ATSG)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Air Transport Services (NASDAQ:ATSG)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024