WILMINGTON — Air Transport Services Group reported its financial results for the first quarter of the year showing gains in revenue and earnings as well as diversification of its customer base.
The report, released Tuesday ahead of an annual shareholders meeting Thursday, showed the company grew its revenue 21 percent to $177.4 million.
Adjusted pre-tax earnings also increased 13 percent to $16.1 million, and the company set a record for its adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $51.3 million.
“Under its key multi-year agreements with global leaders DHL and Amazon, and with an increasing number of our freighters deployed under long-term dry leases, ATSG is on a sustainable, diversified growth trajectory, reflected in a 21 percent increase in revenue and our highest Adjusted EBITDA for a first quarter,” said Joe Hete, President and Chief Executive Officer of ATSG, in the report. “Margins were affected in part by revenue/expense timing factors, including those associated with scheduled maintenance services, fleet transition and costs to spool up resources to serve Amazon. We project margins to improve in the second half as we complete more dry leases and deploy additional freighters into the Amazon network.”
ATSG extended arrangements with DHL for four years effective in April 2015, and executed long-term agreements with Amazon Fulfillment Services in March 2016. Those agreements cover aircraft leases and air network services provided by ATSG’s businesses.
Additionally, an investment agreement with Amazon signed in March grants them warrants over a five-year period to acquire up to 19.9 percent of ATSG’s common shares.
In the first quarter of 2016, DHL accounted for 36 percent, Amazon 19 percent, and the U.S. Military 15 percent of ATSG’s revenues. In the first quarter of 2015, DHL accounted for 52 percent, and the U.S. Military 16 percent of revenues.
Looking ahead, the company continues to estimate that EBITDA from continuing operations will be $208 million in 2016.
“Our position as the leading source of dedicated Boeing 767 freighters that we own and can deploy worldwide is generating strong cash returns for our shareholders, especially as e-commerce customers drive demand for express networks,” Hete said. “We intend to invest to maintain that global lead, and project that we will remain fully deployed, with more than 80 percent of our available 767 freighters leased to third parties by the end of the year. We will also surround that fleet with the most complete set of maintenance, logistics and other air network support services in the industry.”