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What changed in AIR T INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AIR T INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+194 added−162 removedSource: 10-K (2025-06-27) vs 10-K (2024-06-26)

Top changes in AIR T INC's 2025 10-K

194 paragraphs added · 162 removed · 123 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeRevenues from MAC and CSA’s contracts with FedEx accounted for approximately 36% of the Company’s consolidated revenue for the fiscal years ended March 31, 2024 and 2023. The loss of FedEx as a customer would have a material adverse effect on the Company. FedEx has been a customer of the Company since 1980.
Biggest changeHard-parked aircraft are covered under the agreements with FedEx, do not receive an administrative fee, and do not operate scheduled routes but do receive a nominal storage fee. Revenues from MAC and CSA’s contracts with FedEx accounted for approximately 39% and 36% of the Company’s consolidated revenue for the fiscal years ended March 31, 2025 and 2024, respectively.
Our executive team is responsible for periodically reviewing team member programs and initiatives, including healthcare and other benefits, as well as 8 our management development and succession planning practices. Management periodically reports to the Board regarding our human capital measures and results that guide how we attract, retain and develop a workforce to enable our business strategies.
Our executive team is responsible for periodically reviewing team member programs and initiatives, including healthcare and other benefits, as well as our management development and succession planning practices. Management periodically reports to the Board regarding our human capital measures and results that guide how we attract, retain and develop a workforce to enable our business strategies.
GGS also manufactures five models of scissor-lift equipment, for catering, cabin service and maintenance service of aircraft, and has developed a line of decontamination equipment, flight-line tow tractors, glycol recovery vehicles and other special purpose mobile equipment. GGS competes primarily on the basis of the quality and reliability of its products, prompt delivery, service and price.
GGS also manufactures five models of scissor-lift equipment, for catering, cabin service and maintenance service of aircraft, and has developed a line of decontamination equipment, flight-line tow tractors, glycol recovery vehicles, glycol transfer vehicles, and other special purpose mobile equipment. GGS competes primarily on the basis of the quality and reliability of its products, prompt delivery, service and price.
The DOT has authority to investigate and institute proceedings to enforce its economic regulations, and may, in certain circumstances, assess civil penalties, revoke operating authority and seek criminal sanctions. 7 Under the Aviation and Transportation Security Act of 2001, as amended, the Transportation Security Administration (“TSA”), an agency within the Department of Homeland Security, has responsibility for aviation security.
The DOT has authority to investigate and institute proceedings to enforce its economic regulations, and may, in certain circumstances, assess civil penalties, revoke operating authority and seek criminal sanctions. Under the Aviation and Transportation Security Act of 2001, as amended, the Transportation Security Administration (“TSA”), an agency within the Department of Homeland Security, has responsibility for aviation security.
The dry-lease agreements may be terminated by FedEx or MAC and 4 CSA, respectively, at any time upon 90 days’ written notice and FedEx may at any time terminate the lease of any particular aircraft thereunder upon 10 days’ written notice.
The dry-lease agreements may be terminated by FedEx or MAC and CSA, respectively, at any time upon 90 days’ written notice and FedEx may at any time terminate the lease of any particular aircraft thereunder upon 10 days’ written notice.
Jet Yard was organized in 2014, entered into the lease in June 2016 and had maintained de minimus operations from formation through the date it was acquired by the Company. Effective January 1, 2021, Jet Yard subleased the aforementioned lease with Pinal County to Jet Yard Solutions.
Jet Yard was organized in 2014, entered into the lease in June 2016 and has maintained de minimus operations from formation through the date it was acquired by the Company. Effective January 1, 2021, Jet Yard subleased the aforementioned lease with Pinal County to Jet Yard Solutions.
These dry-lease agreements provide for the lease of specified aircraft by MAC and CSA in return for the payment of monthly rent with respect to each aircraft leased, which monthly rent reflected an estimate of a fair market rental rate.
These dry-lease agreements provide for the lease of specified aircraft by MAC and CSA in return for the payment of monthly rent with respect to each aircraft leased, for which monthly rent reflects an estimate of a fair market rental rate.
Services of WASI include inspections, contract maintenance, refurbishment, structural repairs and modifications, avionics, engine service refurbishment and upgrades. The Company’s overnight air cargo operations are not materially seasonal. Ground Equipment Sales.
Services of WASI include inspections, contract maintenance, refurbishment, structural repairs and modifications, avionics, engine service refurbishment and upgrades. The Company’s overnight air cargo operations are not materially seasonal. Ground Support Equipment.
MAC and CSA operate and maintain Cessna Caravan, Sky Courier, ATR-42 and ATR-72 aircraft that fly daily small-package cargo routes throughout the eastern United States and upper Midwest, and in the Caribbean. MAC and CSA’s revenues are derived principally pursuant to “dry-lease” service contracts with FedEx.
MAC and CSA operate and maintain Cessna Caravan, SkyCourier, ATR-42 and ATR-72 aircraft that fly daily small-package cargo routes throughout the eastern United States and upper Midwest, and in the Caribbean. MAC and CSA’s revenues are derived principally pursuant to “dry-lease” service contracts with FedEx.
MAC and CSA are two of nine carriers that operate within the United States as FedEx feeder carriers. MAC and CSA are benchmarked against the other nine FedEx feeders based on safety, reliability, compliance with federal, state and applicable foreign regulations, price and other service-related measurements.
MAC and CSA are two of eight carriers that operate within the United States as FedEx feeder carriers. MAC and CSA are benchmarked against the other six FedEx feeders based on safety, reliability, compliance with federal, state and applicable foreign regulations, price and other service-related measurements.
GGS’s product line includes aircraft deicers, scissor-type lifts, military and civilian decontamination units, flight-line tow tractors, glycol recovery vehicles and other specialized equipment. In the fiscal year ended March 31, 2024, sales of deicing equipment accounted for approximately 74% of GGS’s revenues, compared to 85% in the prior fiscal year. GGS designs and engineers its products.
GGS’s product line includes aircraft deicers, scissor-type lifts, military and civilian decontamination units, flight-line tow tractors, glycol recovery vehicles and other specialized equipment. In the fiscal year ended March 31, 2025, sales of deicing equipment accounted for approximately 72% of GGS’s revenues, compared to 74% in the fiscal year ended March 31, 2024. GGS designs and engineers its products.
Worthington offers a globally networked infrastructure and 24/7 support, ensuring fast delivery of spare parts and service, with four locations strategically located in the United States, United Kingdom & Australia. In addition, Worthington operates two FAA and EASA Certificated repair stations. The Tulsa maintenance, repair and overhaul ("MRO") facility provides composite aircraft structures, repair and support services.
Worthington offers a globally networked infrastructure and 24/7 support, ensuring fast delivery of spare parts and service, with operational presence in four strategic locations in the United States, United Kingdom & Australia. In addition, Worthington operates two FAA and EASA Certificated repair stations. The Tulsa maintenance, repair and overhaul ("MRO") facility provides composite aircraft structures, repair and support services.
As of December 26, 2023, SAIC was considered a dormant captive insurance company with the State of Utah, in which it was registered. SAIC is included within the Company's Corporate and other segment. Employees and Human Capital Resources. As of March 31, 2024, the Company and its subsidiaries had 624 full-time and full-time-equivalent employees.
As of December 26, 2023, SAIC was considered a dormant captive insurance company with the State of Utah, in which it was registered. SAIC is included within Corporate and other. Employees and Human Capital Resources. As of March 31, 2025, the Company and its subsidiaries had 646 full-time and full-time-equivalent employees.
See Note 22 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. The Company also has ownership interests in Lendway Inc. - NASDAQ: LDWY ("Lendway"), formerly known as Insignia Systems, Inc. ("Insignia"), and Cadillac Casting, Inc. ("CCI"). The operations of these companies are not consolidated into the operations of the Company.
The operations of CAM are not consolidated into the operations of the Company. See Note 9 and Note 2 1 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. The Company also has ownership interests in Lendway Inc. - NASDAQ: LDWY ("Lendway"), formerly known as Insignia Systems, Inc. ("Insignia"), and Cadillac Casting, Inc. ("CCI").
Contrail is a commercial aircraft trading, leasing and parts solutions provider. Its primary focus revolves around the CFM International CFM56-3/-5/-7 engines and the International Aero Engines V2500A5 engine, which power the two most prevalent narrow body, single aisle aircraft that are currently flown commercially—the Boeing 737 Classic / 737 NG and the Airbus A320 family.
Its primary focus revolves around the CFM International CFM56-3/-5/-7 engines and the International Aero Engines V2500A5 engine, which power the two most prevalent narrow body, single aisle aircraft that are currently flown commercially—the Boeing 737 Classic / 737 NG and the Airbus A320 family.
MAC and CSA, together, operated the following FedEx-owned cargo aircraft as of March 31, 2024: Type of Aircraft Model Year Form of Ownership Number of Aircraft Cessna Caravan 208B (single turbo prop) 1985-1996 Dry lease 71 Cessna SkyCourier 408 (twin turbo prop) 2022-2023 Dry lease 11 ATR-42 (twin turbo prop) 1992 Dry lease 9 ATR-72 (twin turbo prop) 1992 Dry lease 10 ATR-72-600 (twin turbo prop) 2022-2023 Dry lease 4 105 The Cessna Caravan 208B aircraft are maintained under an FAA Approved Aircraft Inspection Program (“AAIP”).
MAC and CSA, together, operated the following FedEx-owned cargo aircraft, exclusively through dry leases for the last five years: Number of Aircraft as of March 31, Type of Aircraft Model Year Form of Ownership 2025 2024 2023 2022 2021 Cessna Caravan 208B (single turbo prop) 1985-1996 Dry lease 68 71 61 54 49 Cessna SkyCourier 408 (twin turbo prop) 1 2022-2023 Dry lease 12 11 4 0 0 ATR-42 (twin turbo prop) 1992 Dry lease 9 9 9 9 8 ATR-72 (twin turbo prop) 1992 Dry lease 10 10 10 9 9 ATR-72-600 (twin turbo prop) 2022-2023 Dry lease 4 4 1 0 0 103 105 85 72 66 The Cessna Caravan 208B aircraft are maintained under an FAA Approved Aircraft Inspection Program (“AAIP”).
Commercial Jet Engines and Parts. 6 Contrail and Jet Yard (acquired during fiscal year 2017), AirCo (formed in May 2017), Worthington (acquired in May 2018), Jet Yard Solutions (formed in January 2021), Air'Zona (acquired in March 2021), LGSS (formed March 2022), and Crestone Air Partners ("Crestone", formed April 2022) comprise the commercial jet engines and parts segment of the Company’s operations.
Contrail and Jet Yard (acquired during fiscal year 2017), AirCo (formed in May 2017), Worthington (acquired in May 2018), Jet Yard Solutions (formed in January 2021), Air'Zona (acquired in March 2021), and LGSS (formed March 2022) comprise the commercial aircraft, engines and parts segment of the Company’s operations. Contrail is a commercial aircraft trading, leasing and parts solutions provider.
MAC and CSA have a relationship with FedEx spanning over 40 years and represent two of nine companies in the U.S. that have North American feeder airlines under contract with FedEx.
The Company’s Overnight Air Cargo segment comprises the operations of MAC, CSA and WASI. MAC and CSA have a relationship with FedEx spanning over 40 years and represent two of eight companies in the U.S. that have North American feeder airlines under contract with FedEx.
These certifications must be renewed annually, or in certain circumstances within 24 months. Certified repair stations are subject to periodic FAA inspection and audit. The repair station may not be relocated without written approval from the FAA.
These certifications must be renewed annually, or in certain circumstances within 24 months. Certified repair stations are subject to periodic FAA inspection and audit.
We currently operate in four industry segments: • 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; • Commercial jet 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 and; • Corporate and other, which acts as the capital allocator and resource for other consolidated businesses.
We currently operate in four core industry segments: • Overnight air cargo, which operates in the air express delivery services industry; • Ground support equipment (formerly known as 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; • Commercial aircraft, engines and parts (formerly known as Commercial jet 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 and; • Digital solutions, which develops and provides digital aviation and other business services to customers within the aviation industry to generate recurring subscription revenues.
GGS has already received confirmed orders of 14 deicers for fiscal 2025’s delivery order and currently expects the delivery of both GL 1800 and ER 2875 models in the first quarter of fiscal year 2025.
GGS has already received confirmed orders of 16 deicers for fiscal 2026’s delivery order and currently expects the delivery of both GL 1800 and ER 2875 models in the first quarter of fiscal year 2026. Commercial Aircraft, Engines and Parts.
The Company and its subsidiaries are subject to regulation by various governmental agencies. The Department of Transportation (“DOT”) has the authority to regulate air service.
Backlog is not meaningful for the Company’s other reportable segments. Governmental Regulation. The Company and its subsidiaries are subject to regulation by various governmental agencies. The Department of Transportation (“DOT”) has the authority to regulate air service.
Air'Zona is a full service Fixed Base Operator, located on field at Kingman Airport (IGM) in Kingman, Arizona that provides aircraft service and maintenance. LGSS delivers landing gear focused asset management and technical and commercial services worldwide. Crestone invests in commercial jet aircraft and engines on behalf of capital partners and provides full-service aviation asset management.
Air'Zona is a full service Fixed Base Operator, located on field at Kingman Airport (IGM) in Kingman. Arizona provides Jet A and 100LL fuel to customers along with supporting aircraft service and maintenance. LGSS delivers landing gear focused asset management and technical and commercial services worldwide.
GGS sold a total of 9 and 14 deicers under the current contract with the USAF including both GL 1800 and ER 2875 models during fiscal years ended March 31, 2024 and March 31, 2023, respectively and all the units were accepted by the USAF.
With all option years expected to be executed by the government, this contract would expire on October 21, 2027. 7 GGS sold a total of 15 and 9 deicers under the current contract with the USAF, including both GL 1800 and ER 2875 models, during fiscal years ended March 31, 2025 and March 31, 2024, respectively and all the units were accepted by the USAF.
As of March 31, 2024, MAC and CSA had an aggregate of 105 aircraft under its dry-lease agreements with FedEx. Included within the 105 aircraft, 6 Cessna Caravan and 7 Sky Courier aircraft are considered soft-parked. Soft-parked aircraft remain covered under our agreements with FedEx although at a reduced administrative fee compared to aircraft that are in operation.
Included within the 103 aircraft, 6 Cessna Caravan, 4 Sky Courier, and 2 ATR aircraft are considered soft-parked. Soft-parked aircraft remain covered under our agreements with FedEx although at a reduced administrative fee compared to aircraft that are in operation.
The principal place of business of AirCo, LLC, AirCo 1, LLC, AirCo 2, LLC and AirCo Services, LLC (collectively, "AirCo”) and Worthington Aviation, LLC (“Worthington”) is Eagan, Minnesota. The principal place of business of Jet Yard, LLC (“Jet Yard”) and Jet Yard Solutions, LLC ("Jet Yard Solutions") is Marana, Arizona. The principal place of business of Air'Zona Aircraft Services, Inc.
(“DSI”) Mississauga, Canada Contrail Aviation Support, LLC (“Contrail”) Verona, Wisconsin AirCo, LLC, AirCo 1, LLC, AirCo 2, LLC and AirCo Services, LLC (collectively, "AirCo”) Eagan, Minnesota Worthington Aviation, LLC (“Worthington”) Eagan, Minnesota Jet Yard, LLC (“Jet Yard”) Marana, Arizona Jet Yard Solutions, LLC ("Jet Yard Solutions") Marana, Arizona Air'Zona Aircraft Services, Inc.
MAC and CSA continue to perform maintenance on soft-parked aircraft, but they are not crewed and do not operate on scheduled routes. In addition, 3 Cessna Caravan were considered hard-parked. Hard-parked aircraft are covered under the agreements with FedEx, do not receive an administrative fee, and do not operate scheduled routes but do receive a nominal storage fee.
MAC and CSA continue to perform maintenance on soft-parked aircraft, but they are not crewed and do not operate on scheduled routes. In addition, 2 Cessna Caravan and 1 Sky Courier aircraft were considered hard-parked.
As of the date of this report, FedEx would be permitted to terminate each of the dry-lease agreements under this provision. The Company believes that the short-term nature of its agreements with FedEx is standard within the airfreight contract delivery service industry, where performance is measured on a daily basis.
The Company believes that the short-term nature of its agreements with FedEx is standard within the airfreight contract delivery service industry, where performance is measured on a daily basis. 5 As of March 31, 2025, MAC and CSA had an aggregate of 103 aircraft under its dry-lease agreements with FedEx.
Further, based upon volume of commercial items purchased during that year, there may be discounts calculated into the pricing and are reflective of the submitted pricing. With all option years expected to be executed by the government, this contract would expire on October 21, 2027.
Further, based upon volume of commercial items purchased during that year, there may be discounts calculated into the pricing and are reflective of the submitted pricing.
Because of the extensive use of radio and other communication facilities in its aircraft operations, the Company is also subject to the Federal Communications Act of 1934, as amended. Maintenance and Insurance. The Company, through its subsidiaries, is required to maintain the aircraft it operates under the appropriate FAA and manufacturer standards and regulations.
The repair station may not be relocated without written approval from the FAA. 9 Because of the extensive use of radio and other communication facilities in its aircraft operations, the Company is also subject to the Federal Communications Act of 1934, as amended. Maintenance and Insurance.
Certain financial data with respect to the Company’s geographic areas and segments is set forth in Notes 19 and 20 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. Air T was incorporated under the laws of the State of Delaware in 1980.
We evaluate the performance of our reportable segments based on operating income (loss) and Adjusted EBITDA. Certain financial data with respect to the Company’s geographic areas and segments is set forth in Note 1 8 and Note 19 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
MAC and CSA are not contractually precluded from providing services to other parties and MAC occasionally provides third-party maintenance services to other airline customers. MAC and CSA operate under separate aviation certifications. MAC is certified to operate under Part 121, Part 135 and Part 145 of the regulations of the FAA.
The loss of FedEx as a customer would have a material adverse effect on the Company. FedEx has been a customer of the Company since 1980. MAC and CSA are not contractually precluded from providing services to other parties and MAC occasionally provides third-party maintenance services to other airline customers. MAC and CSA operate under separate aviation certifications.
In addition, the Company maintains product liability insurance with respect to injuries and loss arising from use of products sold and services provided. In March 2014, the Company formed Space Age Insurance Company ("SAIC") , a captive insurance company licensed in Utah.
The Company maintains cargo liability insurance, workers’ compensation insurance and fire and extended coverage insurance for owned and leased facilities and equipment. In addition, the Company maintains product liability insurance with respect to injuries and loss arising from use of products sold and services provided.
At March 31, 2024, GGS’s backlog of orders was $12.6 million, all of which GGS expects to be filled in the fiscal year ending March 31, 2025. At March 31, 2023, GGS’s backlog of orders was $13.6 million. Backlog is not meaningful for the Company’s other business segments. Governmental Regulation.
GGS’s backlog consists of “firm” orders supported by customer purchase orders for the equipment sold by GGS. As of March 31, 2025, GGS’s backlog of orders was $14.3 million, all of which GGS expects to be filled in the fiscal year ending March 31, 2026. As of March 31, 2024, GGS’s backlog of orders was $12.6 million.
The scope of these audits typically extends 5 beyond simple validation of invoice data against the third-party supporting documentation. The audit teams generally investigate the operator’s processes and internal control procedures. The Company believes satisfactory audit results are critical to maintaining its relationship with FedEx.
The scope of these audits typically extends 1 MAC was specifically chosen to operate the first commercial revenue-service flight for the Cessna 408 SkyCourier in 2023. 6 beyond simple validation of invoice data against the third-party supporting documentation. The audit teams generally investigate the operator’s processes and internal control procedures.
We plan to invest in recruiting diverse talent. Workplace Safety and Health A vital part of our business is providing our workforce with a safe, healthy and sustainable working environment. We focus on implementing change through workforce observation and feedback channels to recognize risk and continuously improve our processes.
We continue to monitor and improve the application of our hiring, retention, compensation and advancement processes for our wide array of talent. Workplace Safety and Health A vital part of our business is providing our workforce with a safe, healthy and sustainable working environment.
The information on our website is available for information purposes only and is not incorporated by reference in this Annual Report on Form 10-K. Overnight Air Cargo. The Company’s Overnight Air Cargo segment comprises the operations of MAC, CSA and WASI.
("WASI") Springfield, Missouri Ambry Hills Technology, LLC ("AHT") Cambridge, Minnesota We maintain an Internet website at http://www.airt.net and our SEC filings may be accessed through links on our website. The information on our website is available for information purposes only and is not incorporated by reference in this Annual Report on Form 10-K. Overnight Air Cargo.
The Company has secured public liability and property damage insurance in excess of minimum amounts required by the United States Department of Transportation. The Company maintains cargo liability insurance, workers’ compensation insurance and fire and extended coverage insurance for owned and leased facilities and equipment.
The Company, through its subsidiaries, is required to maintain the aircraft it operates under the appropriate FAA and manufacturer standards and regulations. The Company has secured public liability and property damage insurance in excess of minimum amounts required by the United States Department of Transportation.
See Note 10 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. Backlog. GGS’s backlog consists of “firm” orders supported by customer purchase orders for the equipment sold by GGS.
The operations of these companies are not consolidated into the operations of the Company. See Note 9 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
The principal place of business for Global Ground Support, LLC (“GGS”) is Olathe, Kansas. The principal place of business of Delphax Technologies, Inc (“Delphax”) is Minneapolis, Minnesota. The principal place of business for Delphax Solutions, Inc. (“DSI”) is Mississauga, Canada. The principal place of business of Contrail Aviation Support, LLC (“Contrail”) is Verona, Wisconsin.
(“CSA”) Iron Mountain, Michigan Global Ground Support, LLC (“GGS”) Olathe, Kansas Delphax Technologies, Inc (“Delphax”) Minneapolis, Minnesota Delphax Solutions, Inc.
The revenues of Air'Zona, LGSS, and Crestone are not material to the Company's consolidated financial statements. The Company’s commercial jet engines and parts operations are not materially seasonal. Unconsolidated Investments The Company has ownership interest in Contrail Asset Management, LLC (“CAM”). The operations of CAM are not consolidated into the operations of the Company.
The revenues of Air'Zona and LGSS are not material to the Company's consolidated financial statements. The Company’s commercial aircraft, engines and parts operations are not materially seasonal. Digital Solutions. WACD (acquired during fiscal year 2022) and AHT (acquired during fiscal 2019) comprise the digital solutions segment of the Company's Operations.
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Further, Corporate and other also comprises insignificant businesses and business interests. Each business segment has separate management teams and infrastructures that offer different products and services. We evaluate the performance of our business segments based on operating income (loss) and Adjusted EBITDA.
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The Company additionally has a central corporate function that acts as the capital allocator and resource for other consolidated businesses, referred to as Corporate and other. Further, Corporate and other also comprises insignificant businesses and business interests.
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The principal place of business of Air T is 11020 David Taylor Drive, Suite 305, Charlotte NC, 28262. The principal place of business of Mountain Air Cargo, Inc. (“MAC”) is Denver, North Carolina. The principal place of business of CSA Air, Inc. (“CSA”) is Iron Mountain, Michigan.
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Effective as of the fourth quarter of fiscal year 2025, we renamed our ground equipment sales segment to ground support equipment and renamed our commercial jet engines and parts segment to commercial aircraft, engines and parts to better align the descriptions of the segments with their activities.
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("Air'Zona") is Kingman, Arizona. The principal place of business of Wolfe Lake is Minneapolis, Minnesota. The principal place of business of GdW Beheer B.V. ("GdW") is Amsterdam, the Netherlands. GdW was administratively dissolved on June 24, 2022 with Shanwick B.V. ("Shanwick") as the surviving entity and Shanwick's principal place of business is Amsterdam, the Netherlands.
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Additionally, we have elected to separately disclose the digital solutions segment to better align our financial statement presentation with a key long-term growth area for the Company. Digital solutions was previously classified as part of insignificant business activities.
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The principal place of business of Landing Gear Support Services, Inc. and Landing Gear Support Services PTE Limited (collectively, "LGSS") is Singapore, Singapore. The principal place of business of Worldwide Aircraft Services, Inc. ("WASI") is Springfield, Missouri. We maintain an Internet website at http://www.airt.net and our SEC filings may be accessed through links on our website.
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As a result of this change, prior period segment information has been recast to conform to our current presentation in our financial statements and related notes included Item 8 of this report. Each reportable segment has separate management teams and infrastructures that offer different products and services.
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Diversity, Equity and Inclusion We believe that a diverse workforce is critical to our success, and we continue to monitor and improve the application of our hiring, retention, compensation and advancement processes for women and underrepresented populations across our workforce, including persons of color, veterans and LGBTQ to enhance our inclusive and diverse culture.
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Air T was incorporated under the laws of the State of Delaware in 1980. The businesses and their principal legal entities that comprise of the activities of Air T are as follows: 4 Legal Entity Principal Place of Business Air T, Inc. Charlotte, North Carolina Mountain Air Cargo, Inc. (“MAC”) Denver, North Carolina CSA Air, Inc.
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("Air'Zona") Kingman, Arizona Wolfe Lake HQ, LLC ("Wolfe Lake") Minneapolis, Minnesota Shanwick B.V. ("Shanwick") Amsterdam, the Netherlands WorldACD Market Data B.V. ("WACD") Amsterdam, the Netherlands Landing Gear Support Services, Inc. ("LGSS") Eagan, Minnesota Worldwide Aircraft Services, Inc.
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As of the date of this report, FedEx would be permitted to terminate each of the dry-lease agreements under this provision.
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MAC is certified to operate under Part 121, Part 135 and Part 145 of the regulations of the FAA.
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The Company believes satisfactory audit results are critical to maintaining its relationship with FedEx.
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WACD is a data aggregator that collects global air cargo shipping data. It partners with customers to collect and verify their data as part of a data partnership. Customers receive access to the fully aggregated data in WACD's cloud-native platform to enable strategic decisions about their operations in real time.
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AHT is a software company that specializes in cloud-based software solutions targeting aviation aftermarket businesses. AHT has two offerings through its Vista-Suite and Vista-Quote products. Vista-Suite is an ERP/MRO software solution designed to address the particular needs of aviation businesses.
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Vista-Quote is a software solution specifically designed to automate the request for quotation ("RFQ") process for aftermarket products. 8 Unconsolidated Investments The Company has ownership interest in Crestone Asset Management, LLC (“CAM”), formerly known as Contrail Asset Management LLC, and an aircraft capital joint venture called Crestone JV II LLC ("CJVII"), formerly known as Contrail JV II LLC.
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The Company additionally has ownership interests in other smaller entities that are not consolidated into the operations of the Company and included in the disclosure in Note 9 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. Backlog.
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In March 2014, the Company formed Space Age Insurance Company ("SAIC"), a captive insurance company licensed in Utah.
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Diversity, Equity and Inclusion We believe that a diverse workforce is critical to our success. We strive for an environment where all employees feel that they belong, are accepted, included, respected and supported because of whom they are individually.
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We focus on implementing change through workforce observation and feedback channels to recognize risk and continuously improve our processes.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have taken actions to improve our existing systems such as adding multi-factor authentication and to improve employee training and security competency. We have not identified any other cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
Biggest changeWe have not identified any cybersecurity threats during the last two fiscal years that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. Please refer to our Risk Factors in Item 1A for more information on the risks associated with cybersecurity attacks.
The VP of Tech in conjunction with professionals throughout the organization, including information technology specialists, accountants, and lawyers, determine severity and response, then manage it to conclusion in accordance with our cybersecurity incident response processes. We may engage third party advisors as part of our incident response processes to assist with digital forensics among other efforts.
The Sr Director of Tech in conjunction with professionals throughout the organization, including information technology specialists, accountants, and lawyers, determine severity and response, then manage it to conclusion in accordance with our cybersecurity incident response processes. We may engage third party advisors as part of our incident response processes to assist with digital forensics among other efforts.
These annual updates include topics related to our cybersecurity programs and mitigation strategies, trends in cybersecurity, and other cybersecurity-related developments. We may engage third-party advisors to monitor threats and to scan for vulnerabilities. When a cybersecurity threat or incident is identified by our third-party advisor, it is reported directly to our VP of Tech.
These annual updates include topics related to our cybersecurity programs and mitigation strategies, trends in cybersecurity, and other cybersecurity-related developments. We may engage third-party advisors to monitor threats and to scan for vulnerabilities. When a cybersecurity threat or incident is identified by our third-party advisor, it is reported directly to our Sr Director of Tech.
The VP of Tech, together with the cross-functional team, report material or potentially material incidents to our executive leadership and the Audit Committee. The VP of Tech provides further updates regarding root causes and remediation efforts. In the event the Company determines it has experienced a material cybersecurity incident the Board of Directors is notified.
The Sr Director of Tech, together with the cross-functional team, report material or potentially material incidents to our executive leadership and the Audit Committee. The Sr Director of Tech provides further updates regarding root causes and remediation efforts. In the event the Company determines it has experienced a material cybersecurity incident the Board of Directors is notified.
In addition, the assessments also provide the executive leadership and the Board of Directors an understanding of the Company’s security landscape and allows it to prepare to respond to threats. Cybersecurity threats continue to be identified as one of the Company’s significant risks, with our VP of Tech assigned as the risk owner.
In addition, the assessments also provide the executive leadership and the Board of Directors an understanding of the Company’s security landscape and allows it to prepare to respond to threats. Cybersecurity threats continue to be identified as one of the Company’s significant risks, with our Sr Director of Tech assigned as the risk owner.
The Audit Committee receives periodic updates from the VP of Tech on the Company’s policies, processes, procedures, and any significant development related to the identification, mitigation and remediation of cybersecurity risks.The Audit Committee ensures that the VP of Tech provides to the Board of Directors annual updates on our cybersecurity and information technology risk.
The Audit Committee receives periodic updates from the Sr Director of Tech on the Company’s policies, processes, procedures, and any significant development related to the identification, mitigation and remediation of cybersecurity risks. The Audit Committee ensures that the Sr Director of Tech provides to the Board of Directors annual updates on our cybersecurity 28 and information technology risk.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy To effectively prevent, detect, and respond to cybersecurity threats, the Company employs a multi-faceted cybersecurity risk management program supervised by our Vice President of Technology (VP of Tech), who reports directly to our CEO. The VP of Tech is responsible for leading our enterprise cybersecurity strategy.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy To effectively prevent, detect, and respond to cybersecurity threats, the Company employs a multi-faceted cybersecurity risk management program supervised by our Senior Director of Technology Infrastructure and Operations ("Sr Director of Tech"), who reports directly to our CEO. The Sr Director of Tech is responsible for leading our enterprise cybersecurity strategy.
The Audit Committee serves and functions as the Board of Directors primary oversight body to monitor the Company’s cybersecurity and related information technology risks.
Governance The Board of Directors has delegated primary responsibility for the oversight of cybersecurity and information technology risks, and the Company’s preparedness for these risks, to the Audit Committee. The Audit Committee serves and functions as the Board of Directors primary oversight body to monitor the Company’s cybersecurity and related information technology risks.
The Company reviews all SOC1 audit reports to ensure our third-party service providers are maintaining adequate IT security and business process controls.
The Company reviews all SOC1 audit reports to ensure our third-party service providers are maintaining adequate IT security and business process controls. This review process is part of our commitment to confirming that these third-party service providers are safeguarding our operations and data integrity.
Our VP of Tech has developed expertise in cybersecurity and compliance, enterprise architecture and road mapping, data analytics and customer service through his eighteen years of experience in the information technology space including over thirteen years in senior leadership roles.
Our Sr Director of Tech has developed expertise in cybersecurity and compliance, enterprise architecture and road mapping, data analytics and customer service through his twenty years of experience in the information technology space. He holds a Bachelor's degree from the University of North Carolina, Charlotte.
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He is currently a Certified Information Systems Security Professional (CISSP) and he holds a Master's degree in Software from the University of St. Thomas. Governance The Board of Directors has delegated primary responsibility for the oversight of cybersecurity and information technology risks, and the Company’s preparedness for these risks, to the Audit Committee.
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This review process is part of our commitment to confirming that these third-party service providers are safeguarding our operations and data integrity. 25 We sustained a cybersecurity attack in May 2022 involving ransomware that caused a network disruption and impacted certain of our systems.
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Upon detection, we undertook steps to address the incident, including engaging a team of third-party forensic experts and notifying law enforcement. We restored network systems and resumed normal operations. The Company did not pay any ransomware and the attack did not materially affect the Company's business strategy, results of operations, or financial condition.
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Please refer to our R isk F actors in Item 1 A for more information on the risks associated with cybersecurity attacks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWASI subleases approximately 53,500 square feet of land and facilities located at Branson National Airport, Springfield, Missouri. The lease expires on January 30, 2028 with an option to renew for two additional and consecutive five year terms plus an additional and consecutive term ending on May 5, 2039.
Biggest changeThe lease expires on January 30, 2028 with an option to renew for two additional and consecutive five year terms plus an additional and consecutive term ending on May 5, 2039. WASI also leased an additional 2,000 square feet of hangar space that expired on January 30, 2025 with no option to renew.
Starting in fiscal 2021, Jet Yard subleased the aforementioned lease along with the ground hardening improvements to Jet Yard Solutions. DSI leases 12,206 square feet of space in a building located in Mississauga, Canada. The lease expires on July 31, 2028. Worthington and AirCo lease a 41,280 square foot facility in Eagan, Minnesota.
Starting in fiscal 2021, Jet Yard subleased the aforementioned lease along with the ground hardening improvements to Jet Yard Solutions. DSI leases 12,206 square feet of space in a building located in Mississauga, Canada. The lease expires on July 31, 2028. Worthington and AirCo lease a 41,280 square-feet facility in Eagan, Minnesota.
See Note 1 4 “Related Party Matters” of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. This lease expires on July 17, 2026. Contrail also leases a 1,453 square foot office space in Denver, Colorado. The lease was a 60 month lease that extended through June 2026.
See Note 1 3 “Related Party Matters” of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. This lease expires on July 17, 2026. Contrail also leases a 1,453 square foot office space in Denver, Colorado. The lease was a 60 month lease that extended through June 2026.
Item 2. Properties. The Company owns approximately 4.626 acres and a 13,000 square foot office building in Denver, North Carolina, which houses the operations of Air T and MAC and a 55,000 square foot office building in St. Louis Park, Minnesota that is partially leased to tenants and is the location of the Company's Minnesota executive office.
Item 2. Properties. The Company owns approximately 4.626 acres and a 13,000 square foot office building in Denver, North Carolina, which houses the operations of MAC, and a 55,000 square foot office building in St. Louis Park, Minnesota that is partially leased to tenants and is the location of the Company's Minnesota executive office.
GGS leases a 112,500 square foot production facility in Olathe, Kansas. The facility is leased from a third party under a lease agreement, which expires in August 2024. On June 6th, 2024, GGS entered into an agreement to extend the current lease for an additional five years through August 31, 2029.
GGS leases a 112,500 square foot production facility in Olathe, Kansas. The facility is leased from a third party under a lease agreement, which expired in August 2024. On June 6th, 2024, GGS entered into an agreement to extend the current lease for an additional five years through August 31, 2029.
As of March 31, 2024, the Company leased hangar, maintenance and office space from third parties at a variety of other locations, at prevailing market terms. Contrail leases a 21,000 square foot facility in Verona, Wisconsin. This is a lease from a related party.
As of March 31, 2025, the Company leased hangar, maintenance and office space from third parties at a variety of other locations, at prevailing market terms. Contrail leases a 21,000 square foot facility in Verona, Wisconsin. This is a lease from a related party.
The lease for this facility expires in April 2027. Worthington has a lease in Tulsa, Oklahoma, which is 22,582 square feet and expires in January 2027. Additionally, Worthington also has two facility leases in Australia: Unit E3 is 1,195 square feet and Unit B5 is 1,442 square feet, both of which expire in January 2025.
The lease for this facility expires in April 2027. Worthington has a lease in Tulsa, Oklahoma, which is 22,582 square feet and expires in January 2027. Additionally, Worthington also has two facility leases in Australia: Unit E3 is 1,195 square feet and Unit B5 is 1,442 square feet.
On April 13, 2023, the Company signed a lease agreement to move the operations of Air T to Charlotte, North Carolina. The lease is for 4,900 square feet of office space that commenced on July 1, 2023 and will expire on November 30, 2028 with the option to extend the lease for one additional three year term.
The Company leases approximately 4,900 square feet of office space in Charlotte, North Carolina to accommodate Air T's operations. The lease commenced on July 1, 2023 and will expire on November 30, 2028 with the option to extend the lease for one additional three year term.
On January 1, 2024, Crestone entered into an amended lease agreement which terminated the 1,663 square foot office space and leased new premises of 3,698 square feet of office space located in Glendale, Colorado. The amended lease expires in August 2027. Jet Yard leases approximately 48.5 acres of land from Pinal County at the Pinal Air Park in Marana, Arizona.
On January 1, 2024, Crestone entered into an amended lease 29 agreement which terminated the 1,663 square foot office space and leased new premises of 3,698 square feet of office space located in Glendale, Colorado. The amended lease expires in August 2027.
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WASI also leases an additional 2,000 square feet of hangar space that expires on January 30, 2025 with no option to renew.
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Jet Yard leases approximately 48.5 acres of land from Pinal County at the Pinal Air Park in Marana, Arizona.
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The lease for Unit E3's lease expired in April 2025 and was not renewed. The lease for Unit B5A's lease was renewed and extended until April 2029. WASI subleases approximately 53,500 square feet of land and facilities located at Branson National Airport, Springfield, Missouri.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe record a liability when a loss is considered probable, and the amount can be reasonably estimated. 26 Item 4. Mine Safety Disclosures. Not applicable. PART II
Biggest changeWe record a liability when a loss is considered probable, and the amount can be reasonably estimated. Item 4. Mine Safety Disclosures. Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of shares of common stock during the fourth quarter are described below: Dates of Shares Purchased Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs Jan 1 - Jan 31, 2024 9,063 $ 15.87 9,063 862,030 Feb 1 - Feb 29, 2024 15,783 $ 17.03 15,783 846,247 Mar 1 - Mar 31, 2024 23,263 $ 18.90 23,263 822,984 As of March 31, 2024, the Company did not sell any securities within the past three years that were not registered under the Securities Act.
Biggest changePurchases of shares of Common Stock during the fourth quarter are described below: 30 Dates of Shares Purchased Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs Jan 1 - Jan 31, 2025 16,343 $ 19.99 16,343 775,505 Feb 1 - Feb 28, 2025 12,065 $ 20.16 12,065 763,440 Mar 1 - Mar 31, 2025 11,212 $ 18.09 11,212 752,228 As of March 31, 2025, the Company did not sell any equity securities within the past three years that were not registered under the Securities Act.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s common stock is publicly traded on the NASDAQ Capital Market under the symbol “AIRT.” As of March 31, 2024, the approximate number of holders of record of the Company’s Common Stock was 153.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s common stock is publicly traded on the NASDAQ Capital Market under the symbol “AIRT.” As of March 31, 2025, the approximate number of holders of record of the Company’s Common Stock was 149.
The Company purchased 48,729 shares pursuant to this authorization during the fiscal year ended March 31, 2024.
The Company purchased 70,756 shares pursuant to this authorization during the fiscal year ended March 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe table below provides a reconciliation of operating income (loss) from continuing operations to Adjusted EBITDA for the fiscal years ended March 31, 2024 and 2023 (in thousands): Twelve Months Ended March 31, 2024 March 31, 2023 Operating income (loss) from continuing operations $ 1,264 $ (4,407) Depreciation and amortization (excluding leased engines depreciation) 2,798 2,525 Asset impairment, restructuring or impairment charges 1 1,195 7,840 Loss on sale of property and equipment 18 8 TruPs issuance expenses 347 63 Adjusted EBITDA $ 5,622 $ 6,029 The table below provides Adjusted EBITDA by segment for the fiscal years ended March 31, 2024 and 2023 (in thousands): Twelve Months Ended March 31, 2024 March 31, 2023 Overnight Air Cargo $ 7,142 $ 4,505 Ground Equipment Sales (1,409) 3,314 Commercial Jet Engines and Parts 6,119 7,105 Corporate and Other (6,230) (8,895) Adjusted EBITDA $ 5,622 $ 6,029 1 Included in the asset impairment, restructuring or impairment charges for the fiscal year ended March 31, 2024 was a write-down of $1.2 million on the commercial jet engines and parts segment's inventory attributable to our evaluation of the carrying value of inventory as of March 31, 2024, where we compared its cost to its net realizable value and considered factors such as physical condition, sales patterns and expected future demand to estimate the amount necessary to write down any slow moving, obsolete or damaged inventory. 35 Issuer and guarantor subsidiary summarized information Air T Funding is a statutory business trust formed under Delaware law in September 2018.
Biggest changeThe table below provides a reconciliation of operating income (loss) from continuing operations to Adjusted EBITDA for the fiscal years ended March 31, 2025 and 2024 (in thousands): Twelve Months Ended March 31, 2025 March 31, 2024 Operating income (loss) from continuing operations $ 1,908 $ 1,264 Depreciation and amortization (excluding leased assets depreciation) 2,998 2,798 Asset impairment, restructuring or impairment charges 1,463 1,195 Loss on sale of property and equipment 15 18 TruPs issuance expenses 212 347 Share-based compensation 88 106 Severance expenses 244 462 Earnout remeasurement $ 435 $ — Adjusted EBITDA $ 7,363 $ 6,190 The table below provides Adjusted EBITDA for the Company's four segments and Corporate and other for the fiscal years ended March 31, 2025 and 2024 (in thousands): 39 Twelve Months Ended March 31, 2025 March 31, 2024 Overnight Air Cargo $ 6,808 $ 7,144 Ground Support Equipment (773) (949) Commercial Aircraft, Engines and Parts 9,832 6,119 Digital Solutions (272) 149 Segments total 15,595 12,463 Corporate and Other (8,232) (6,273) Adjusted EBITDA $ 7,363 $ 6,190 Issuer and guarantor subsidiary summarized information Air T Funding is a statutory business trust formed under Delaware law in September 2018.
These disruptions were driven by supply chain market constraints and macroeconomic conditions, including inflation and labor market shortages. High inflation increased material and component prices, labor rates and supplier costs, and put pressure on our margins.
These disruptions were driven by supply chain market constraints and macroeconomic 38 conditions, including inflation and labor market shortages. High inflation increased material and component prices, labor rates and supplier costs, and put pressure on our margins.
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 or issuance of debt or equity securities; • Economic and industry conditions in the Company’s markets; • The risk that contracts with FedEx Corporation (“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 or armed conflict 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 relatively new 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.
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 or issuance of debt or equity securities; • Economic and industry conditions in the Company’s markets; • The risk that contracts with FedEx Corporation (“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 or armed conflict on United States soil or abroad; • Changes in U.S. and foreign trade regulations and tariffs; • 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 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.
Air T guarantees the payment of distributions by Air T Funding and payments on liquidation or redemption of the Trust Preferred Securities (subordinate to the right to payment of senior and subordinated debt of Air T, as defined in Note 13 of Notes to Consolidated Financial Statements included under Part I, Item 1 of this report).
Air T guarantees the payment of distributions by Air T Funding and payments on liquidation or redemption of the Trust Preferred Securities (subordinate to the right to payment of senior and subordinated debt of Air T, as defined in Note 1 2 of Notes to Consolidated Financial Statements included under Part I, Item 1 of this report).
The Contrail Credit Agreement also contains quarterly financial covenants applicable to Contrail and its subsidiaries, including a minimum debt service coverage ratio of 1.25 to 1.0 and a minimum tangible net worth ("TNW") of $15.0 million. As of March 31, 2024, AirCo 1, Air T Acquisition 22.1 and Contrail were all in compliance with their respective covenants.
The Contrail Credit Agreement also contains quarterly financial covenants applicable to Contrail and its subsidiaries, including a minimum debt service coverage ratio of 1.25 to 1.0 and a minimum tangible net worth ("TNW") of $15.0 million. As of March 31, 2025, Air T, Air T Acquisition 22.1 and Contrail were all in compliance with their respective covenants.
Within the Company’s commercial jet engines and parts segment, there are various estimates and judgments made in relief of inventory as parts are sold from established groups of parts from one engine or airframe purchase.
Within the Company’s commercial aircraft, engines and parts segment, there are various estimates and judgments made in relief of inventory as parts are sold from established groups of parts from one engine or airframe purchase.
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 in the current fiscal year, whereas there was $1.6 million in the prior fiscal year.
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 $1.4 million depreciation expense for leased assets in the current fiscal year, whereas there was no depreciation expense in the prior fiscal year.
The Air T Acquisition 22.1's term loans with ING (the Air T Acquisition 22.1 debt in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report) include several covenants that are measured once a year at December 31, including but not limited to, a negative covenant requiring a debt service coverage ratio of 1.10 and a senior net leverage ratio of 2.10 at December 31, 2022 and 1.50 at subsequent years.
Air T Acquisition 22.1's term loans with ING Bank (the Air T Acquisition 22.1 debt in Note 1 2 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report) include several covenants that are measured once a year at December 31, including but not limited to, a negative covenant requiring a debt service coverage ratio of 1.10 and a senior net leverage ratio of 1.50.
Changes in economic and operating conditions could impact the assumptions and result in future losses to our inventory. The Company periodically evaluates the carrying value of inventory. In these evaluations, the Company is required to make estimates regarding the net realizable value, which includes the consideration of sales patterns and expected future demand.
Changes in economic and operating conditions could impact the assumptions and result in future losses to our inventory. The Company periodically evaluates the carrying value of inventory. In these evaluations, the Company is required to make estimates regarding the net realizable value, which includes the consideration of sales patterns, expected future demand, and costs to refurbish aircraft parts.
The Contrail Credit Agreement (the Contrail debt in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report) contains affirmative and negative covenants, including covenants that restrict the ability of Contrail and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments, make changes in the nature of its business, and engage in transactions with affiliates.
The Contrail Credit Agreement with Old National Bank ("ONB") (the Contrail debt in Note 1 2 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report) contains affirmative and negative covenants, including covenants that restrict the ability of Contrail and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments, make changes in the nature of its business, and engage in transactions with affiliates.
Any slow moving, obsolete or damaged inventory and inventory with costs exceeding net realizable value are evaluated for write-downs. These estimates could vary significantly from actual amounts based upon future economic conditions, customer inventory levels, or competitive factors that were not foreseen or did not exist when the estimated write-downs were made. Accounting for Redeemable Non-Controlling Interest .
Any slow moving, obsolete or damaged inventory and inventory with costs exceeding net realizable value are evaluated for write-downs. These estimates could vary significantly from actual amounts based upon future 41 economic conditions, customer inventory levels, or competitive factors that were not foreseen or did not exist when the estimated write-downs were made.
The operations of CAM are not consolidated into the operations of the Company. See Note 22 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. The Company also has ownership interests in Lendway and CCI. The operations of these companies are not consolidated into the operations of the Company.
See Note 9 and Note 2 1 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. 31 The Company also has ownership interests in Lendway and CCI. The operations of these companies are not consolidated into the operations of the Company.
Cybersecurity breaches would not only harm our reputation and business, but also could materially decrease our revenue and net income. Supply Chain and Inflation In fiscal 2024, we continued to experience supply chain disruptions that impacted our ability to procure raw materials and certain commodities, which resulted in delays and increased costs.
Cybersecurity breaches would not only harm our reputation and business, but also could materially decrease our revenue and net income. Supply Chain and Inflation In fiscal 2025, we faced sourcing challenges that impacted our ability to procure raw materials and certain commodities, which resulted in delays and increased costs.
The Trust Agreement was most recently amended on March 3, 2021 and on January 28, 2022 and currently allows for the issuance of up to $100.0 million of Trust Preferred Securities. As of March 31, 2024, there are $43.2 million in Trust Preferred Securities outstanding ($9.0 million held by wholly-owned subsidiaries of the Company).
The Trust Agreement was most recently amended on March 3, 2021 and on January 28, 2022 and currently allows for the issuance of up to $100.0 million of Trust Preferred Securities. As of March 31, 2025, there are $48.3 million in Trust Preferred Securities outstanding (which includes $13.0 million held by wholly-owned subsidiaries of the Company).
Seasonality The ground equipment sales segment business has historically been seasonal, with the revenues and operating income typically being higher in the second and third fiscal quarters as commercial deicers are typically delivered prior to the winter season.
Seasonality The ground support equipment segment business has historically been seasonal, with the revenues and operating income typically being higher in the second and third fiscal quarters as commercial deicers are typically delivered prior to the winter season. Other segments are typically not susceptible to material seasonal trends.
Pass-through costs under the dry-lease agreements with FedEx totaled $36.4 million and $29.2 million for the years ended March 31, 2024 and 2023, respectively.
Pass-through costs under the dry-lease agreements with FedEx totaled $39.9 million and $36.4 million for the years ended March 31, 2025 and 2024, respectively.
Adjusted EBITDA for the overnight air cargo segment increased by $2.6 million in the current fiscal year, due primarily to higher segment operating income as described above. Adjusted EBITDA for the ground equipment sales segment decreased by $4.7 million in the current fiscal year, primarily due to lower sales as described above.
Adjusted EBITDA for the overnight air cargo segment decreased by $0.3 million in the current fiscal year, due primarily to lower segment operating income as described above. Adjusted EBITDA loss for the ground support equipment segment decreased by $0.2 million in the current fiscal year, primarily due to higher sales as described above.
We currently operate in four industry segments: • 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; • 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 and; • Corporate and other, which acts as the capital allocator and resource for other consolidated businesses.
We currently operate in four industry segments: • Overnight air cargo, which operates in the air express delivery services industry; • Ground support equipment, which manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers; • 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 and; • Digital solutions, which develops and provides digital aviation and other business services to customers within the aviation industry to generate recurring subscription revenues; The Company additionally has a central corporate function that acts as the capital allocator and resource for other consolidated businesses, referred to as Corporate and other.
See Note 10 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report. 28 Forward Looking Statements Certain statements in this Report, 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 Certain statements in this Report, 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.
Other segments are typically not susceptible to material seasonal trends. 37 Critical Accounting Policies and Estimates The Company’s significant accounting policies are described in Note 1 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
Critical Accounting Policies and Estimates The Company’s significant accounting policies are described in Note 1 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
Following is a table detailing consolidated non-operating income (expense), net of intercompany during fiscal 2024 and fiscal 2023 (in thousands): Year Ended March 31, Change 2024 2023 Interest expense, net $ (6,916) $ (7,935) $ 1,019 Income from equity method investments 1,689 1,460 229 Other 8 (471) 479 Total $ (5,219) $ (6,946) $ 1,727 The Company had a net non-operating loss of $5.2 million for the fiscal year ended March 31, 2024 compared to a net non-operating loss of $6.9 million in the prior fiscal year.
Following is a table detailing consolidated non-operating income (expense), net of intercompany during fiscal 2025 and fiscal 2024 (in thousands): Year Ended March 31, Change 2025 2024 Interest expense, net (8,387) (6,916) (1,471) Income from equity method investments 1,700 1,689 11 Other (209) 8 (217) Total $ (6,896) $ (5,219) $ (1,677) The Company had a net non-operating loss of $6.9 million for the fiscal year ended March 31, 2025 compared to a net non-operating loss of $5.2 million in the prior fiscal year.
If less than all of the Junior Subordinated Debentures are to be repaid or redeemed on a redemption date, then the proceeds from such repayment or redemption would be allocated to the redemption of the Trust Preferred Securities pro rata. 36 So long as no Debenture event of default has occurred and is continuing, at any time on or after June 7, 2024, the Company has the right under the indenture to defer the payment of interest on the Junior Subordinated Debentures at any time or from time to time for a period not exceeding 20 consecutive quarters with respect to each such period (each, an “Extension Period”), provided that no Extension Period may extend beyond the stated maturity of the Junior Subordinated Debentures on June 7, 2049.
So long as no Debenture event of default has occurred and is continuing, at any time on or after June 7, 2024, the Company has the right under the indenture to defer the payment of interest on the Junior Subordinated Debentures at any time or from time to 40 time for a period not exceeding 20 consecutive quarters with respect to each such period (each, an “Extension Period”), provided that no Extension Period may extend beyond the stated maturity of the Junior Subordinated Debentures on June 7, 2049.
The net change in the valuation allowance was $3.1 million for the year ended March 31, 2023. In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and past financial performance.
In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including scheduled reversals of deferred tax 34 liabilities, projected future taxable income, tax planning strategies, and past financial performance.
During the fiscal year ended March 31, 2023, the Company recorded $0.4 million of income tax expense at an effective tax rate of -3.8%.
During the year ended March 31, 2025, the Company recorded $0.4 million of income tax expense, which yielded an effective rate of -8.5%.
This was primarily due to decreased net proceeds from lines of credit of $15.0 million and increased payments to lines of credit of $9.0 million, offset by proceeds from term loans of $14.2 million in addition to the issuance of TruPs of $8.8 million in the current fiscal year. 33 Off-Balance Sheet Arrangements The Company defines an off-balance sheet arrangement as any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a Company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity, or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company, or that engages in leasing, hedging, or research and development arrangements with the Company.
Off-Balance Sheet Arrangements The Company defines an off-balance sheet arrangement as any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a Company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity, or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company, or that engages in leasing, hedging, or research and development arrangements with the Company.
As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, on March 28, 2024, Contrail entered into Supplement #10 to the Master Loan Agreement with Old National Bank dated June 24, 2019 and Term Loan I.
As mentioned in Note 12 of Notes to Consolidated Financial Statements included under Part II, Item 8 , on September 12, 2024, Contrail entered into the Fifth Amendment to the Master Loan Agreement dated June 24, 2019 and Supplement #11 to the Master Loan Agreement, and Term Note J with ONB.
The ground equipment sales segment contributed approximately $37.2 million and $48.5 million to the Company’s revenues for the fiscal years ended March 31, 2024 and 2023, respectively, representing a $11.3 million (23%) decrease in the current fiscal year.
The ground support equipment segment contributed approximately $38.9 million and $37.2 million to the Company’s revenues for the fiscal years ended March 31, 2025 and 2024, respectively, representing a $1.7 million (5%) increase in the current fiscal year.
The notes bear an annual interest rate of 8.5% which is computed on the basis of a 30/360-day year and actual days elapsed and is payable semi-annually in arrears. The maturity date of the notes is February 22, 2031.
The Third NPA bears annual interest at a rate of 8.5% which is computed on the basis of a 30/360-day year and actual days elapsed and is payable semi-annually in arrears. The maturity of the Third NPA is May 31, 2035.
The change in the Company’s valuation allowance is primarily due to the realizability of the domestic deferred tax assets, the unrealized losses on investments, the foreign tax credits generated by the operations in the Company’s Puerto Rico branch that is expected to expire before being fully utilized, and the change in full valuation allowances associated with the Delphax entities. 30 Market Outlook Future economic developments such as inflation and increased interest rates as well as further business issues such as supply chain issues present uncertainty and risk with respect to our financial condition and results of operations.
The change in the Company’s valuation allowance is primarily due to the realizability of the domestic deferred tax assets, the unrealized losses on investments, the foreign tax credits generated by the operations in the Company’s Puerto Rico branch that is expected to expire before being fully utilized, and the change in full valuation allowances associated with the Delphax entities.
The commercial jet engines and parts segment contributed $125.5 million of revenues in fiscal year ended March 31, 2024 compared to $101.7 million in the prior fiscal year which is an increase of $23.8 million (23%).
The commercial aircraft, engines and parts segment contributed $118.2 million of revenues in fiscal year ended March 31, 2025 compared to $125.5 million in the prior fiscal year which is a decrease of $7.3 million (6%).
The fluidity of this situation precludes any prediction as to the ultimate adverse impact of these issues on economic and market conditions and our businesses in particular, and, as a result, presents material uncertainty and risk with respect to us and our results of operations. 34 Non-GAAP Financial 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.
The fluidity of this situation precludes any prediction as to the ultimate adverse impact of these issues on economic and market conditions and our businesses in particular, and, as a result, presents material uncertainty and risk with respect to us and our results of operations.
As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, on February 22, 2024 the Company, along with its wholly owned subsidiary AAM 24-1, LLC, a Minnesota limited liability company ("AAM 24-1"), entered into a Note Purchase Agreement with Honeywell Common Investment Fund and Honeywell International Inc.
As mentioned in Note 1 2 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, on October 16, 2024, the Company and AAM 24-1, LLC, a wholly-owned subsidiary of the Company ("AAM 24-1") entered into 36 a Second Note Purchase Agreement (the “Second NPA”) with two institutional investors (the "Institutional Investors").
As mentioned in Note 22 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, the Company has ownership interest in Contrail Asset Management, LLC (“CAM”). The operations of CAM are not consolidated into the operations of the Company.
The Company additionally has ownership interests in other smaller entities that are not consolidated into the operations of the Company and included in the disclosure in Note 9 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
Adjusted EBITDA of the commercial jet engines and parts segment was $6.1 million, a decrease of $1.0 million from the prior fiscal year. The decrease was primarily driven by lower profit margins on sales as described above. The corporate and other segment Adjusted EBITDA loss decreased by $2.7 million from fiscal 2023 to fiscal 2024.
Adjusted EBITDA of the commercial aircraft, engines and parts segment was $9.8 million, an increase of $3.7 million from the prior fiscal year. The increase was primarily driven by higher profit margins on sales as described above.
The Company’s Credit Agreement with Minnesota Bank & Trust, a Minnesota state banking corporation (“MBT”) (the Air T debt in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report) includes several covenants that are measured twice a year at September 30 and March 31, including but not limited to, a negative covenant requiring a debt service coverage ratio of 1.25.
The Company’s Credit Agreement with Alerus Financial, National Association (“Alerus”) (the debt obtained by the Company, as the Loan Party Agent, and AirCo, LLC, AirCo 2, LLC, AirCo Services, LLC, Air'Zona, CSA, GGS, MAC, Stratus Aero Partners LLC, WASI, Worthington, Jet Yard and Jet Yard Solutions (the "Original Alerus Loan Parties") in Note 1 2 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report) includes several covenants that are measured twice a year (at September 30 and March 31), including but not limited to, a negative covenant requiring a debt service coverage ratio of 1.25 and a leverage ratio greater than 3.00.
As a result, management believes it is probable that the cash on hand and current financings, net cash provided by operations from its remaining operating segments, together with amounts available under our current revolving lines of credit, as amended, will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date these financial statements are issued. 32 Cash Flows Following is a table of changes in cash flow from continuing operations for the respective years ended March 31, 2024 and 2023 (in thousands): Year Ended March 31, Change 2024 2023 Net Cash Provided by Operating Activities $ 17,178 $ 16,909 $ 269 Net Cash Used in Investing Activities (2,499) (6,168) 3,669 Net Cash Used in Financing Activities (13,910) (12,380) (1,530) Effect of foreign currency exchange rates (16) 361 (377) Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash $ 753 $ (1,278) $ 2,031 Cash provided by operating activities in fiscal year 2024 was relatively flat compared to fiscal year 2023.
As a result, management believes it is probable that the cash on hand and current financings, net cash provided by operations from its remaining operating segments, together with amounts available under our current revolving lines of credit, as amended, will be sufficient to meet obligations as they become due in the ordinary course of business for at least 12 months following the date these financial statements are issued.
Following is a table detailing operating income (loss) by segment, net of intercompany during Fiscal 2024 and Fiscal 2023 (in thousands): Year Ended March 31, Change 2024 2023 Overnight Air Cargo $ 6,765 $ 4,047 $ 2,718 Ground Equipment Sales (1,553) 3,141 (4,694) Commercial Jet Engines and Parts 4,169 (957) 5,126 Corporate and Other (8,117) (10,638) 2,521 Total $ 1,264 $ (4,407) $ 5,671 Consolidated operating income for the fiscal year ended March 31, 2024 was $1.3 million compared to consolidated operating loss of $4.4 million in the prior fiscal year.
Following is a table detailing operating income (loss) for the Company's four segments and Corporate and other, net of intercompany during Fiscal 2025 and Fiscal 2024 (in thousands): Year Ended March 31, Change 2025 2024 Overnight Air Cargo $ 6,251 $ 6,765 $ (514) Commercial Aircraft, Engines and Parts 7,116 4,169 2,947 Ground Support Equipment (1,210) (1,553) 343 Digital Solutions (1,064) (661) (403) Segments total 11,093 8,720 2,373 Corporate and Other (9,185) (7,456) (1,729) Total $ 1,908 $ 1,264 $ 644 Consolidated operating income for the fiscal year ended March 31, 2025 was $1.9 million compared to consolidated operating income of $1.3 million in the prior fiscal year.
Cash used in financing activities for fiscal year 2024 was $13.9 million compared to cash used by financing activities for the prior fiscal year of $12.4 million.
Net cash used in investing activities for fiscal year 2025 was $20.2 million compared to net cash used in investing activities for the prior fiscal year of $2.5 million.
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.
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.
The primary factors contributing to the difference between the federal statutory rate of 21% and the Company’s effective tax rate for the fiscal year ended March 31, 2023 were the estimated benefit for the exclusion of income for the Company’s captive insurance company subsidiary under §831(b), the exclusion of the minority owned portion of pretax income of Contrail, state income tax expense, and changes in the valuation allowance.
The primary factors contributing to the difference between the federal statutory rate of 21% and the Company’s effective tax rate for the fiscal year ended March 31, 2025 were the foreign rate differentials and changes in valuation allowance. The net change in the valuation allowance was $1.1 million for the year ended March 31, 2025.
As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, on June 23, 2023, the Company and MBT entered into amendments to the Credit Agreement with MBT and related promissory note.
As mentioned in Note 12 of Notes to Consolidated Financial Statements included under Part II, Item 8 , on August 29, 2024, the Original Alerus Loan Parties entered into a credit agreement with Alerus (the “New Credit Agreement”).
The fluidity of this situation precludes any prediction as to the ultimate adverse impact these issues on economic and market conditions and our businesses in particular, and, as a result, present material uncertainty and risk with respect to us and our results of operations. 31 Liquidity and Capital Resources As of March 31, 2024, the Company held approximately $7.8 million in total cash, cash equivalents and restricted cash, of which, $0.4 million related to cash reserved for payments of SAIC's insurance claims.
We expect that issues caused by economic and business issues will continue to some extent. The fluidity of this situation precludes any prediction as to the ultimate adverse impact of these issues on economic and market conditions and our businesses in particular, and, as a result, present material uncertainty and risk with respect to us and our results of operations.
The decrease in non-operating loss was primarily driven by a $1.0 million decrease in interest expense and a $0.4 million fluctuation in foreign currency exchange rates. During the year ended March 31, 2024, the Company recorded $0.7 million of income tax expense, which yielded an effective rate of -18.5%.
During the fiscal year ended March 31, 2024, the Company recorded $0.7 million of income tax expense at an effective tax rate of -18.5%.
Further, Corporate and other also comprises insignificant businesses and business interests. Each business segment has separate management teams and infrastructures that offer different products and services. We evaluate the performance of our business segments based on operating income (loss) and Adjusted EBITDA. Unconsolidated Investments The Company has an ownership interest in Contrail Asset Management, LLC (“CAM”).
We evaluate the performance of our reportable segments based on operating income (loss) and Adjusted EBITDA. Unconsolidated Investments The Company has an ownership interest in Crestone Asset Management, LLC. The operations of CAM are not consolidated into the operations of the Company.
Operating loss for the ground equipment sales segment was $1.6 million compared to operating income of $3.1 million in the prior fiscal year, a decrease of $4.7 million attributable to lower sales as described above. Operating income of the commercial jet engines and parts segment was $4.2 million compared to operating loss of $1.0 million in the prior year.
The decrease in operating loss was primarily attributable to reduced headcount, partially offset by increased warranty expense in the current year. 33 Operating income of the commercial aircraft, engines and parts segment was $7.1 million compared to operating income of $4.2 million in the prior year.
Following is a table detailing revenue by segment (after elimination of intercompany transactions), in thousands: Year Ended March 31, Change 2024 2023 Overnight Air Cargo $ 115,546 $ 90,543 $ 25,003 28 % Ground Equipment Sales 37,168 48,485 (11,317) (23) % Commercial Jet Engines and Parts 125,535 101,737 23,798 23 % Corporate and Other 8,585 6,558 2,027 31 % Total $ 286,834 $ 247,323 $ 39,511 16 % Revenues from the overnight air cargo segment increased by $25.0 million (28%) compared to the prior fiscal year, principally attributable to higher labor revenues, higher admin fees and higher FedEx pass through revenues due to increased fleet (85 aircraft in the prior year compared to 105 in the current fiscal year), and the WASI acquisition mentioned in Note 2 of the Notes to Consolidated Financial Statements of this report, contributed a full year's revenues of $7.5 million in the current fiscal year compared to $0.9 million in the prior fiscal year.
Following is a table detailing revenue for the Company's four segments and Corporate and other (after elimination of intercompany transactions), in thousands: 32 Year Ended March 31, Change 2025 2024 Overnight Air Cargo $ 124,031 $ 115,546 $ 8,485 7 % Ground Support Equipment 38,940 37,168 1,772 5 % Commercial Aircraft, Engines and Parts 118,215 125,535 (7,320) (6) % Digital Solutions 7,268 5,783 1,485 26 % Segments total 288,454 284,032 4,422 2 % Corporate and Other 3,396 2,802 594 21 % Total $ 291,850 $ 286,834 $ 5,016 2 % Revenues from the overnight air cargo segment increased by $8.5 million (7%) compared to the prior fiscal year, principally attributable to higher labor revenues, increase in admin fees and higher FedEx pass through revenues due to higher billable hours for maintenance.
The loan bears a monthly variable interest rate at the 30 Day Term SOFR + 3.1148%. The loan requires 18 monthly payments of interest until the loan maturity date of September 20, 2025.
Term Note J is a term loan in the principal amount of $10.0 million. The loan bears a variable monthly interest rate at the 1-month SOFR Rate plus 3.86% and requires equal monthly payments of principal and interest until the loan maturity date of September 12, 2028.
As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, on September 5, 2023, Contrail entered into the Sixth Amendment to Supplement #2 to Master Loan Agreement and the Fifth Amended and Restated Promissory Note with ONB.
As mentioned in Note 12 of Notes to Consolidated Financial Statements included under Part II, Item 8 , on March 31, 2025, the Alerus Loan Parties under the Credit Agreement with Alerus entered into Amendment No. 3 to Credit Agreement ("Amendment No. 3") with Alerus as well as a $3.0 million secured Overline Note and an Amended and Restated Revolving Credit Note in the amount of $14.0 million.
The table below provides Adjusted EBITDA by segment for the fiscal year ended March 31, 2024 and 2023 (in thousands): Twelve Months Ended Change March 31, 2024 March 31, 2023 Overnight Air Cargo $ 7,142 $ 4,505 $ 2,637 Ground Equipment Sales (1,409) 3,314 (4,723) Commercial Jet Engines and Parts 6,119 7,105 (986) Corporate and Other (6,230) (8,895) 2,665 Total $ 5,622 $ 6,029 $ (407) Consolidated Adjusted EBITDA for the fiscal year ended March 31, 2024 was $5.6 million, a decrease of $0.4 million compared to the prior fiscal year.
The table below provides Adjusted EBITDA for the Company's four segments and Corporate and other for the fiscal year ended March 31, 2025 and 2024 (in thousands): Twelve Months Ended Change March 31, 2025 March 31, 2024 Overnight Air Cargo $ 6,808 $ 7,144 (336) Ground Support Equipment (773) (949) 176 Commercial Aircraft, Engines and Parts 9,832 6,119 3,713 Digital Solutions (272) 149 (421) Segments total 15,595 12,463 3,132 Corporate and Other (8,232) (6,273) (1,959) Adjusted EBITDA $ 7,363 $ 6,190 1,173 Consolidated Adjusted EBITDA for the fiscal year ended March 31, 2025 was $7.4 million, an increase of $1.2 million compared to the prior fiscal year.
Operating income for the overnight air cargo segment increased by $2.7 million in the current fiscal year, due primarily to higher segment revenues as described above.
Adjusted EBITDA of the digital solutions segment decreased by $0.4 million in the current fiscal year, due primarily to higher personnel costs as described above.
The decrease was primarily driven by the lower number of deicing trucks sold in the current fiscal year compared to the prior fiscal year. At March 31, 2024, the ground equipment sales segment’s order backlog was $12.6 million compared to $13.6 million at March 31, 2023.
The increase was primarily driven by an increase in spare part sales and support services provided to customers while deicer sales increased slightly. At March 31, 2025, the ground support equipment segment’s order backlog was $14.3 million compared to $12.6 million at March 31, 2024.
The AirCo 1 Credit Agreement (the AirCo 1 debt in Note 13 of Notes to Consol idated Financial Statements included under Part II, Item 8 of this report) contains an affirmative covenant relating to collateral valuation.
See Note 9 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report.
Cash used in investing activities for fiscal year 2024 was $2.5 million compared to cash used in investing activities for the prior fiscal year of $6.2 million. The current fiscal year's cash usage was primarily driven by investment in unconsolidated entities of $4.6 million offset by distributions from unconsolidated entities of $3.2 million.
Net cash used in financing activities for fiscal year 2025 was $4.8 million compared to net cash used in financing activities for the prior fiscal year of $13.9 million. The cash used in financing activities in the current year period was primarily driven by $12.3 million more proceeds and $10.6 million less payments on the Company's revolving lines of credit.
The loan was fully drawn at closing and the funds were used to prepay the principal balance on Contrail’s existing Main Street Loan (Term Loan G) by $10.0 million. As mentioned in Note 22 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, Contrail entered into an Operating Agreement with OCAS, Inc.
As mentioned in Note 12 of Notes to Consolidated Financial Statements included under Part II, Item 8 , on May 30, 2024, Contrail, a majority-owned subsidiary of the Company, entered into a Membership Interest Redemption and Earnout Agreement (the "Redemption Agreement") with OCAS, Inc. (the "Seller").
The Company also held $1.4 million in restricted investments held as statutory reserve of SAIC. As of March 31, 2024, the Company’s working capital amounted to $56.0 million, an increase of $3.8 million compared to March 31, 2023.
As of March 31, 2025, the Company’s working capital amounted to $30.8 million, a decrease of $25.2 million compared to March 31, 2024.
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. 29 Results of Operations Fiscal 2024 vs. 2023 Consolidated revenue increased by $39.5 million (16%) to $286.8 million for the fiscal year ended March 31, 2024 compared to the prior fiscal year.
Results of Operations Fiscal 2025 vs. 2024 Consolidated revenue increased by $5.0 million (2%) to $291.9 million for the fiscal year ended March 31, 2025 compared to the prior fiscal year.
As of March 31, 2023, the Company fulfilled its capital commitments to CAM. As mentioned in Note 13 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, the Revolver - MBT has no outstanding balance as of March 31, 2024 and matures on August 31, 2024.
The term loan is secured by the terms of Security Agreement dated as of August 29, 2024. As mentioned in Note 24 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this report, on May 30, 2025 the Company and AAM 24-1 entered into a Third Note Purchase Agreement (the "Third NPA") with the Institutional Investors.
Operating loss of the corporate and other segment decreased by $2.5 million in the current fiscal year, primarily driven by higher corporate allocations to other segments related to executive salaries, bonuses and audit fees compared to the prior fiscal year and increased revenue as described above.
Operating income for the overnight air cargo segment decreased by $0.5 million in the current fiscal year, due primarily to increased loss provisioning for bad debt and additional taxes related to conducting business in Puerto Rico. Operating loss for the ground support equipment segment was $1.2 million compared to operating loss of $1.6 million in the prior fiscal year.
Removed
The increase was primarily driven by Contrail's higher component part sales and higher pass-through revenue at Worthington in transactions that Worthington acted as the principal of the consignment agreements in the current fiscal year compared to the prior fiscal year.
Added
Further, Corporate and other also comprises insignificant businesses and business interests. Effective as of the fourth quarter of fiscal year 2025, we renamed our ground equipment sales segment to ground support equipment and renamed our commercial jet engines and parts segment to commercial aircraft, engines and parts to better align the descriptions of the segments with their activities.
Removed
In addition, Contrail also sold three engines at zero profit margin in the current year as they had previously written these assets down to the sales price in the prior year. Revenues from the corporate and other segment increased by $2.0 million (31%) compared to the prior fiscal year, principally attributed to $1.2 million of increased software subscriptions at Shanwick.
Added
Additionally, we have elected to separately disclose the digital solutions segment to better align our financial statement presentation with a key long-term growth area for the Company. Digital solutions was previously classified as part of insignificant business activities.
Removed
The increase was primarily attributable to lower inventory write-down of $1.2 million in the current fiscal year compared to $7.3 million in the prior fiscal year, offset by a lower profit margin on component sales in the current year compared to the prior fiscal year.
Added
As a result of this change, prior period segment information has been recast to conform to our current presentation in our financial statements and related notes included Item 8 of this report. Each reportable segment has separate management teams and infrastructures that offer different products and services.
Removed
The decrease was primarily driven by $2.4 million higher corporate allocations to other segments related to executive salaries, bonuses and audit fees compared to the prior fiscal year.
Added
The decrease was primarily driven by a lower supply of whole assets available to purchase for tear-down or resale in an increasingly competitive market, further exacerbated by aircraft operators keeping older aircraft in operation for longer than they have in the past.
Removed
Although we have largely emerged from the COVID-19 pandemic, our results of operations in fiscal 2024 reflected some of the COVID-19 pandemic's lingering impact. Despite the aforementioned, we experienced improved demand for commercial aircraft, jet engines and parts compared to historical periods.
Added
The digital solutions segment contributed $7.3 million of revenues in the fiscal year ended March 31, 2025 compared to $5.8 million in the prior fiscal year which is an increase of $1.5 million (26%). The increase is primarily due to increased software subscriptions driven by continued acquisition of new and recurring customers.
Removed
We expect that issues caused by the pandemic and other economic and business issues will continue to some extent.
Added
The increase was primarily attributable to increased sales of component packages with a higher gross profit, which offset the decrease in revenue noted above. Operating loss for the digital solutions segment increased by $0.4 million year over year, attributable to increased personnel needed to continue to scale operations.
Removed
On June 24, 2024, we obtained a waiver letter from MBT ("Letter") that waives two outstanding events of default.
Added
The increase in non-operating loss was primarily driven by a $1.5 million increase in interest expense, and $1.2 million related to the recognition of gains and losses from the change in fair value for interest rate swap contracts that were not classified as an effective hedge where hedge accounting was not applied.
Removed
This Letter provides a one-time waiver for defaults resulting from our inability to meet the debt service coverage ratio as of March 31, 2024 and our failure to submit unaudited financial statements within 45 days following the quarter ending on that date. Based on the Letter, we are no longer in default of the Company's Credit Agreement with MBT.
Added
Market Outlook Future economic developments such as inflation, along with evolving trade policies and the potential for new or increased tariffs present uncertainty and risk with respect to our financial condition and results of operations. Despite the aforementioned, we experienced improved demand for commercial aircraft, jet engines and parts in the fiscal year ended March 31, 2025.
Removed
On March 22, 2023, Contrail entered into the First Amendment to Second Amendment to Master Loan Agreement and Third Amendment to Master Loan Agreement ("the Amendment") with ONB whereby, among other things, in exchange for a $20 million principal prepayment of Term Note G, Contrail obtained a waiver of the debt service coverage ratio covenant. $6.7 million of the $20.0 million prepayment was paid on March 30, 2023 and the remaining $13.3 million payment was paid in September 2023.
Added
Liquidity and Capital Resources As of March 31, 2025, the Company held approximately $6.5 million in total cash, cash equivalents and restricted cash, of which, $0.5 million related to cash reserved for payments of SAIC's insurance claims. The Company also held $0.7 million in restricted investments held as statutory reserve of SAIC.
Removed
The amendments extended the maturity date of the credit facility to August 31, 2024 and included the following changes: 1. A $2.0 million seasonal increase in the maximum amount available under the facility.
Added
The decrease in working capital was primarily driven by a $22.2 million decrease in inventory driven by timing of sales and acquisition of inventory in addition to increased competition for acquiring aircraft and engines for tear-down and conversion of $2.5 million of receivables for expense reimbursements from CAM to a long-term note receivable.
Removed
The maximum amount of the facility will now increase to $19.0 million between May 1 and November 30 of each year and will decrease to $17.0 million between December 1 and April 30 of each year; 2. The reference rate for the interest rate payable on the revolving facility will change from Prime to SOFR, plus a spread.
Added
Pursuant to the Redemption Agreement, Contrail agreed to purchase and redeem from the Seller, 16% of its 21% interest in Contrail, effective as of April 1, 2024. The purchase 35 price for the redeemed interest is $4.6 million, plus an earnout amount.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” and the Notes to Consolidated Financial Statements for a description of our accounting policies and other information related to these financial instruments. 39
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” and the Notes to Consolidated Financial Statements for a description of our accounting policies and other information related to these financial instruments. 42

Other AIRTP 10-K year-over-year comparisons