ATSG: Work stoppage hurt results


News Journal



WILMINGTON – Air Transport Services Group, Inc. announced Friday that its Adjusted EBITDA from Continuing Operations is expected to be approximately $7 million lower than indicated in its prior guidance for the fourth quarter and full year 2016. This reduction in guidance is due to the revenue loss resulting from a brief work stoppage in mid-November 2016 by pilots of its subsidiary ABX Air.

ATSG now expects 2016 Adjusted EBITDA from Continuing Operations for the fourth quarter and full year 2016 to be approximately $56 million and $211 million, respectively.

“Overall, we achieved significant gains across our businesses in 2016, including strong revenue growth and cash flow from additional 767 freighter deployments to external lease customers as well as other support services,” said Joe Hete, President and CEO of ATSG. “The decision of the Teamster-represented pilots at ABX Air to resort to a work stoppage stemmed from a dispute over scheduling assignments and interrupted ABX Air’s operations for a short time prior to being enjoined by the U.S. District Court.”

Hete added that ATSG will report its full fourth quarter and year-end 2016 financial results and hold its earnings conference call in early March 2017. At that time, ATSG will also provide its outlook for 2017, which will benefit from the significant growth in ATSG’s externally leased fleet of 767 freighter aircraft during 2016, as well as those additions planned during 2017.

Adjusted EBITDA from Continuing Operations is defined as earnings from continuing operations before income taxes plus depreciation and amortization expenses, net interest expense, non-service components of retiree benefit costs, amortization of lease incentive costs recorded in revenue and the write-off of debt issuance costs from a non-consolidating affiliate, less financial instrument gains and losses.

Management uses Adjusted EBITDA from Continuing Operations to assess the performance of its operating results among periods. Adjusted EBITDA from Continuing Operations should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP, or as an alternative measure of liquidity.

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