WILMINGTON, OH – Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading provider of medium widebody freighter aircraft leasing, contracted air transportation, and related services, today reported consolidated financial results for the fourth quarter and full year ended December 31, 2024. Those results, as compared with the same period in 2023, were as follows:
Fourth Quarter Results
- Revenues of $517 million, consistent with $517 million in prior year period
- GAAP Earnings per Share (diluted) from Continuing Operations of $0.21, versus a Loss per Share of ($0.24)
- GAAP Pretax Earnings from Continuing Operations of $24.3 million, versus a Pretax Loss of ($15.6) million • Adjusted Pretax* Earnings of $39.8 million, versus $19.8 million
- Adjusted EPS* of $0.40, versus $0.18
- Adjusted EBITDA* of $162.2 million, versus $129.9 million
- Free Cash Flow* was $34.7 million, versus negative ($65.5) million
Full Year 2024 Results
- Revenues of $2.0 billion, versus $2.1 billion
- GAAP Earnings per Share (diluted) from Continuing Operations of $0.40, versus $0.82 per share
- GAAP Pretax Earnings from Continuing Operations of $42.3 million, versus $84.2 million
- Adjusted Pretax* Earnings of $83.0 million, versus $146.7 million
- Adjusted EPS* of $0.87, versus $1.46
- Adjusted EBITDA* of $549.4 million, versus $561.6 million
- Free Cash Flow* was $228.1 million, versus negative ($111.8) million
As previously announced, on November 3, 2024, ATSG entered into a definitive agreement to be acquired by Stonepeak, a leading alternative investment firm specializing in infrastructure and real assets. In light of the pending transaction, ATSG will not hold an earnings conference call or provide forward-looking guidance this quarter. The company is working to complete the transaction in the first half of 2025 and continues to make progress toward completing all conditions to closing. On February 10, 2025, ATSG received stockholder approval to be acquired by Stonepeak. At this time, ATSG is working to obtain approval from the U.S. Department of Transportation.
Mike Berger, chief executive officer of ATSG, said, “I’m proud of the entire ATSG team for their focus and dedication as we delivered strong fourth quarter results, as well as safe and reliable service. We saw continued momentum in our CAM leasing business, placing our ninth converted 767-300 freighter this year with an external customer in November. In ACMI Services, we saw improved profitability in the quarter, operating all ten of the additional aircraft recently provided by Amazon with sequential quarter improvements in both passenger and freighter hours flown. We once again generated significant free cash flow, with a total of $228 million for the year. We remain excited about our future with Stonepeak, and we are on track for closing in the first half of this year. We are enthusiastic about the opportunities we see ahead of us in 2025, including the delivery of our first four converted A330 freighters.”
2024 Operating Highlights
- CAM added nine Boeing 767-300 freighter aircraft and placed all nine of these aircraft with external customers under long-term leases.
- Eleven more customer-provided 767-300 freighters were subleased to and operated by an ATSG cargo airline during 2024, for a total of 27 such aircraft in the fleet at the end of the year.
* Adjusted EPS (Earnings per Share), Adjusted Pretax Earnings, Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Free Cash Flow, and Adjusted Free Cash Flow are non-GAAP financial measures used in this release, which are defined and reconciled to the most directly comparable financial measures calculated and presented in accordance with GAAP at the end of this release.
Segment Results
Cargo Aircraft Management (CAM)
- Aircraft leasing and related revenues decreased 12% for the fourth quarter and 6% for the year. While revenue benefited from nine additional 767-300 freighter leases since the end of December 2023, these lease revenues were more than offset by the scheduled return of nine 767-200 and four 767-300 aircraft and lower lease-related maintenance revenue over that same period.
- CAM’s fourth quarter pretax earnings decreased $9 million, or 44%, to $12 million versus $21 million for the prior-year quarter, and decreased by $51 million, or 46% to $59 million for the full year. Segment depreciation expense increased by $34 million and interest expense by $12 million versus the prior year.
- At the end of the fourth quarter, 91 CAM-owned aircraft were leased to external customers, one more than a year ago. During 2024, five 767-200 freighters were removed from service. Six 767-200s and three 767-300s were sold during the year.
- Fourteen CAM-owned aircraft were in or awaiting conversion to freighters at the end of the fourth quarter, nine fewer than at the end of the prior-year quarter. This included seven 767s, one A321, and six A330s.
ACMI Services
- Pretax earnings were $26 million in the fourth quarter, versus a pretax loss of $2 million in the fourth quarter of 2023. Fourth
quarter results benefited from eleven customer-provided Boeing 767-300 aircraft that were added to our flight operations, as well as revenue rate increases since the prior year. Full year pretax earnings were $1 million in 2024, versus $32 million in 2023, down due to reduced flying in both our customers’ delivery networks and passenger operations, as well as increased costs for depreciation and amortization, employee compensation and customer incentives compared to 2023.
- Revenue block hours for ATSG’s airlines increased 1% for the fourth quarter but declined 6% for 2024 over 2023. Cargo block hours increased 3% for the fourth quarter, driven by the eleven incremental customer-provided aircraft, but declined 5% for the year when compared to 2023. Passenger block hours decreased 9% in the quarter and 14% for the year compared to 2023.
Non-GAAP Financial Measures
This release, including the attached tables, contains financial measures that are calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States, and financial measures that are not calculated and presented in accordance with GAAP (“non-GAAP financial measures”). Management uses these non-GAAP financial measures to evaluate historical results and project future results. Management believes that these non-GAAP financial measures assist in highlighting operational trends, facilitating period-over-period comparisons, and providing additional clarity about events and trends affecting core operating performance. Disclosing these non-GAAP financial measures provides insight to investors about additional metrics that management uses to evaluate past performance and prospects for future performance. Non-GAAP financial measures should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP and may be calculated differently by other companies. The historical non-GAAP financial measures included in this release are reconciled to the most directly comparable financial measure calculated and presented in accordance with GAAP in the non-GAAP reconciliation tables included later in this release.
About ATSG
Air Transport Services Group (ATSG) is a premier provider of aircraft leasing and cargo and passenger air transportation solutions for both domestic and international air carriers, as well as companies seeking outsourced airlift services. ATSG is the global leader in freighter aircraft leasing with a fleet that includes Boeing 767, Airbus A321, and soon, Airbus A330 converted freighters. ATSG’s unique Lease+Plus aircraft leasing opportunity draws upon a diverse portfolio of subsidiaries including three airlines holding separate and distinct U.S. FAA Part 121 Air Carrier certificates to provide air cargo lift, and passenger ACMI and charter services.
Complementary services from ATSG’s other subsidiaries allow the integration of aircraft maintenance, airport ground services, and material handling equipment engineering and service. ATSG subsidiaries comprise ABX Air, Inc.; Airborne Global Solutions, Inc.; Airborne Maintenance and Engineering Services, Inc., including its subsidiary, Pemco World Air Services, Inc.; Air Transport International, Inc.; Cargo Aircraft Management, Inc.; LGSTX Services, Inc.; and Omni Air International, LLC. For further details, please visit www.atsginc.com.
Cautionary Note Regarding Forward-Looking Statements
Throughout this release, Air Transport Services Group, Inc. (“ATSG”) makes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, as amended (the “Act”). Except for historical information contained herein, the matters discussed in this release contain forward-looking statements that involve inherent risks and uncertainties. Such statements are provided under the “safe harbor” protection of the Act. Forward-looking statements include, but are not limited to, statements regarding anticipated operating results, prospects and aircraft in service, technological developments, economic trends, expected transactions and similar matters. The words “may,”“believe,”“expect,”“anticipate,”“target,”“goal,”“project,”“estimate,”“guidance,”“forecast,”“outlook,”“will,”“continue,”“likely,”“should,”“hope,”“seek,”“plan,”“intend” and variations of such words and similar expressions identify forward-looking statements. Similarly, descriptions of ATSG’s objectives, strategies, plans, goals or targets are also forward-looking statements. Forward-looking statements are susceptible to a number of risks, uncertainties and other factors. While ATSG believes that the assumptions underlying its forward-looking statements are reasonable, investors are cautioned that any of the assumptions could prove to be inaccurate and, accordingly, ATSG’s actual results and experiences could differ materially from the anticipated results or other expectations expressed in its forward-looking statements. A number of important factors could cause ATSG’s actual results to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to: (i) changes in the market demand for ATSG’s assets and services, including the loss of customers or a reduction in the level of services it performs for customers; (ii) its operating airlines’ ability to maintain on-time service and control costs; (iii) the cost and timing with respect to which it is able to purchase and modify aircraft to a cargo configuration; (iv) fluctuations in ATSG’s traded share price and in interest rates, which may result in mark-to-market charges on certain financial instruments; (v) the number, timing, and scheduled routes of its aircraft deployments to customers; (vi) ATSG’s ability to remain in compliance with key agreements with customers, lenders and government agencies; (vii) the impact of current supply chain constraints, which may be more severe or persist longer than it currently expects; (viii) the impact of the current competitive labor market; (ix) changes in general economic and/or industry-specific conditions, including inflation and regulatory changes; and (x) the impact of geopolitical tensions or conflicts and human health crises, and other factors that could cause ATSG’s actual results to differ materially from those indicated by such forward-looking statements, which are discussed in Item 1A of ATSG’s 2024 Form 10-K and may be contained from time to time in its other filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 10-K.
On November 3, 2024, ATSG entered into an Agreement and Plan of Merger with Stonepeak Nile Parent LLC and Stonepeak Nile MergerCo Inc. (the “Merger”). Statements regarding the Merger, including the expected time period to consummate the Merger, the anticipated benefits (including synergies) of the Merger and integration and transition plans, opportunities, anticipated future performance, expected share buyback programs and expected dividends, are also provided under the “safe harbor” protection in the Act. Key factors that could cause actual results to differ materially include, but are not limited to, the expected timing and likelihood of completion of the Merger, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the Merger; the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement; the risk that the anticipated tax treatment of the transactions contemplated by the Agreement and Plan of Merger (the “Transaction”) is not obtained; the risk that the parties may not be able to satisfy the conditions to the Merger in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the Merger; the risk that any announcements relating to the Merger could have adverse effects on the market price of ATSG’s common stock; the risk that the Merger and its announcement could have an adverse effect on the parties’ business relationships and business generally, including the ability of ATSG to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers, and on their operating results and businesses generally; the risk of unforeseen or unknown liabilities; customer, shareholder, regulatory and other stakeholder approvals and support; the risk of unexpected future capital expenditures; the impact of litigation relating to the Transaction instituted against ATSG and its directors and/or officers; the risk associated with third party contracts containing material consent, anti-assignment, transfer or other provisions that may be related to the Merger which are not waived or otherwise satisfactorily resolved; the risk of rating agency actions and ATSG’s ability to access short- and long-term debt markets on a timely and affordable basis; and the risks resulting from other effects of industry, market, economic, legal or legislative, political or regulatory conditions outside of ATSG’s control.
Readers should carefully review this release and should not place undue reliance on ATSG’s forward-looking statements. These forward-looking statements were based only on information, plans and estimates as of the date of this release. New risks and uncertainties arise from time to time, and factors that ATSG currently deems immaterial may become material, and it is impossible for ATSG to predict these events or how they may affect it. Except as may be required by applicable law, ATSG undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes. ATSG does not endorse any projections regarding future performance that may be made by third parties.
