Air Transport Services Group, Inc. (ATSG) has reported a 67.03 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $2.16 million, or $0.12 a share in the quarter, compared with $6.56 million, or $0.10 a share for the same period last year. On the other hand, adjusted net income from Continuing Operations for the quarter stood at $8.66 million, or $0.14 a share compared with $6.35 million or $0.10 a share, a year ago.
Revenue during the quarter surged 35.81 percent to $193.26 million from $142.30 million in the previous year period. Total expenses were 92.52 percent of quarterly revenues, up from 90.92 percent for the same period last year. That has resulted in a contraction of 160 basis points in operating margin to 7.48 percent.
Operating income for the quarter was $14.46 million, compared with $12.92 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $52.03 million compared with $43.41 million in the prior year period. At the same time, adjusted EBITDA margin contracted 358 basis points in the quarter to 26.92 percent from 30.51 percent in the last year period.
Joe Hete, president and chief executive officer of ATSG, said, "Our rapid growth remains strong across all of our businesses as our leased freighter fleet and logistics and maintenance operations continued to expand in the third quarter. In our airlines, costs associated with expansion of our operations continue to affect the profitability of those businesses. In particular, our third quarter results were adversely impacted by premium pay to ABX Air pilots, despite an aggressive crewmember recruiting program and rigorous training schedule. We estimate that this additional compensation, along with ongoing training, negatively impacted our pre-tax results by approximately $6.5 million for the third quarter."
Working capital turns positive
Working capital of Air Transport Services Group, Inc. has turned positive to $0.55 million on Sep. 30, 2016 from negative $27.49 million on Sep. 30, 2015. Current ratio was at 1 as on Sep. 30, 2016, up from 0.78 on Sep. 30, 2015.
Days sales outstanding were almost stable at 25 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 12 days for the quarter compared with 27 days for the previous year period.
Debt increases substantially
Air Transport Services Group, Inc. has witnessed an increase in total debt over the last one year. It stood at $449.13 million as on Sep. 30, 2016, up 45.19 percent or $139.79 million from $309.35 million on Sep. 30, 2015. Total debt was 36.96 percent of total assets as on Sep. 30, 2016, compared with 29.92 percent on Sep. 30, 2015. Debt to equity ratio was at 1.39 as on Sep. 30, 2016, up from 0.83 as on Sep. 30, 2015. Interest coverage ratio improved to 4.99 for the quarter from 4.81 for the same period last year.
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