ATSG'S adjusted pre-tax earnings up 34%

Air Transport Services Group reported sharply improved third quarter financial results after excluding non-cash impairment charges. Pre-tax losses from continuing operations were $6.7m while net losses from continuing operations totaled $4.8m. Third-quarter 2011 earnings included $27.1m in impairment charges related to reductions in business with DB Schenker that began in September, and $1.9m in unrealized losses on derivative instruments related to the company’s new credit facilities adopted in May. Excluding impairment and derivative charges, pre-tax and net earnings from continuing operations increased by 34% and 22%, respectively, versus the third quarter 2010 results. Adjusted pre-tax earnings were $22.4m excluding the impairment and derivative charges, up from $16.7m in the third quarter of 2010, principally because of increased earnings from ATSG’s freighter leasing business. Net earnings from continuing operations excluding those charges and their related tax effects were $13.9m, up from $11.4m in the third quarter of 2010. Net interest expense under the new credit agreement reached in May 2011 decreased $1.3m for the third quarter compared to a year ago. Pre-tax losses for the quarter generated an income tax benefit of $1.8m. Third-quarter EBITDA, adjusted for non-cash impairment and derivative losses, totaled $48.3m, up 10% from $44.0m in the third quarter of 2010. Revenues increased 17% to $195.5m, including customer-reimbursed costs, with increases evident from each of the company’s reported segments and other business units. Excluding reimbursements, ATSG’s revenues increased 19% to $151.4m.