WILMINGTON — Air Transport Services Group, Inc., a leading provider of medium wide-body aircraft leasing, air cargo transportation and related services, reported Monday consolidated financial results for the quarter and full year ended Dec. 31, 2016.
Compared with prior-year amounts:
Revenues increased 24 percent to $768.9 million for the year, and were up 22 percent to $221.7 million for the quarter. Excluding revenues from reimbursable airline expenses, revenues increased 18 percent for the year and 17 percent for the quarter. Principal contributors were ATSG’s aircraft leasing, maintenance, and logistics businesses.
Earnings from Continuing Operations were $21.1 million, or $0.33 per share diluted, for 2016 and a $755 thousand loss, or a negative $0.01 per share diluted, for the fourth quarter. These results include the non-cash effects of warrants issued in March 2016 to Amazon Fulfillment Services, Inc. in connection with operating and lease agreements.
Fourth quarter and full year earnings were also impacted by a $7.0 million reduction in revenue and pre-tax earnings from continuing operations, equating to $0.07 per share, resulting from a work stoppage by Teamsters-represented ABX Air pilots in November.
Operating cash flow increased 10 percent in 2016 to $193.1 million. 2016 capital expenditures were $264.5 million. Share repurchases were $63.6 million, or 4.8 million ATSG shares.
“In 2016, we completed a major set of long-term agreements with Amazon in support of its new dedicated air network, and by year-end began leasing 14 of the contracted 20 Boeing 767s for that network,” stated Joe Hete, President and Chief Executive Officer of ATSG, in a press release. “A 15th Boeing 767 was leased to Amazon in early January 2017. Our aircraft leasing, maintenance, and logistics businesses met aggressive targets from Amazon and other customers while generating good margins.
“However, our airline operations, particularly those at ABX Air, incurred significant pilot training and premium pay related to expanded CMI operations, along with lower revenues due to a November ABX pilot work stoppage,” Hete added. “Taken together, these factors reduced our second-half 2016 pre-tax earnings by approximately $20 million.
“After first quarter 2017, we anticipate costs at our airlines to be normalized. That, along with minimal non-cash pension expense in 2017, is projected to result in a profitable year for our ACMI Services segment.”