10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2019
☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _____to _____

Commission File Number 001-35476

Air T, Inc.

(Exact name of registrant as specified in its charter)

Delaware	52-1206400
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5930 Balsom Ridge Road, Denver, North Carolina 28037

(Address of principal executive offices, including zip code)

(828) 464 – 8741

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AIRT	NASDAQ Global Market
Alpha Income Preferred Securities (also referred to as 8% Cumulative Capital Securities) (“AIP”)	AIRTP	NASDAQ Global Market
Warrant to purchase AIP	AIRTW	NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x                    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x                    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer x	Smaller reporting company x
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐                    No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock	Common Shares, par value of $.25 per share
Outstanding Shares at November 6, 2019	3,023,805

AIR T, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Financial Statements
	Condensed Consolidated Statements of Income (Loss) (Unaudited) Three and Six Months Ended September 30, 2019 and 2018	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) Three and Six Months Ended September 30, 2019 and 2018	6
	Condensed Consolidated Balance Sheets September 30, 2019 (Unaudited) and March 31, 2019	7
	Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended September 30, 2019 and 2018	9
	Condensed Consolidated Statements of Equity (Unaudited) Six Months Ended September 30, 2019 and 2018	11
	Notes to Condensed Consolidated Financial Statements (Unaudited)	13
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37
	PART II
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 5.	Other information	38
Item 6.	Exhibits	39
	Signatures	41
	Exhibit Index
	Certifications
	Interactive Data Files

3

Item 1. Financial Statements

AIR T, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(UNAUDITED)

(In Thousands)	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Operating Revenues:
Overnight air cargo	$	19,745	$	17,064	$	38,064	$	34,705
Ground equipment sales	12,741		12,838		24,991		19,224
Printing equipment and maintenance	249		139		313		439
Commercial jet engines and parts	17,801		10,643		34,128		37,963
Corporate and other	157		183		385		356
	50,693		40,867		97,881		92,687
Operating Expenses:
Overnight air cargo	17,707		15,350		34,226		30,524
Ground equipment sales	10,358		10,980		20,089		15,917
Printing equipment and maintenance	121		49		160		194
Commercial jet engines and parts	11,050		5,663		19,336		25,784
General and administrative	9,288		7,997		18,960		15,378
Depreciation and amortization	1,695		1,697		3,635		3,057
Impairment	7		10		14		21
Loss on sale of property and equipment	1		—		(4)		—
	50,227		41,746		96,416		90,875
Operating Income (Loss)	466		(879)		1,465		1,812
Non-operating Income (Expense):
Other-than-temporary impairment loss on investments	(395)		—		(1,210)		—
Interest expense	(2,047)		(714)		(3,071)		(1,421)
Gain on settlement of bankruptcy	18		—		4,527		—
Bargain purchase acquisition gain	14		—		49		1,984
Income (loss) from equity method investments	(34)		160		(355)		170
Other	(440)		354		(205)		133
	(2,884)		(200)		(265)		866
Income (Loss) from continuing operations before income taxes	(2,418)		(1,079)		1,200		2,678
Income Taxes (Benefit)	(296)		(300)		(668)		117
Net income (Loss) from continuing operations	(2,122)		(779)		1,868		2,561
Loss from discontinued operations, net of tax	(235)		(648)		(70)		(705)
Gain on sale of discontinued operations, net of tax	8,359		—		8,359		—
Net income (loss)	6,002		(1,427)		10,157		1,856
Net (Income) Loss Attributable to Non-controlling Interests	(287)		106		(2,660)		(348)
Net Income (Loss) Attributable to Air T, Inc. Stockholders	$	5,715	$	(1,321)	$	7,497	$	1,508

4

Income (Loss) from continuing operations per share (Note 6)
Basic	$	(0.80)	$	(0.22)	$	(0.30)	$	0.72
Diluted	$	(0.80)	$	(0.22)	$	(0.30)	$	0.72
Income (Loss) from discontinued operations per share (Note 6)
Basic	$	2.69	$	(0.21)	$	3.14	$	(0.23)
Diluted	$	2.68	$	(0.21)	$	3.13	$	(0.23)
Weighted Average Shares Outstanding:
Basic	3,025		3,066		2,641		3,066
Diluted	3,029		3,066		2,645		3,074

See notes to condensed consolidated financial statements.

5

AIR T, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended September 30,				Six Months Ended September 30,
(In Thousands)	2019		2018		2019		2018
Net income (loss)	$	6,002	$	(1,427)	$	10,157	$	1,856
Other comprehensive income (loss):
Foreign currency translation gain	41		32		23		79
Unrealized gain (loss) on interest rate swaps, net of tax	(88)		29		(264)		29
Total Other Comprehensive Income (loss)	(47)		61		(241)		108
Total Comprehensive Income (Loss)	5,955		(1,366)		9,916		1,964
Comprehensive (Income) Loss Attributable to Non-controlling Interests	(290)		98		(2,675)		(373)
Comprehensive Income (Loss) Attributable to Air T, Inc. Stockholders	$	5,665	$	(1,268)	$	7,241	$	1,591

See notes to condensed consolidated financial statements.

6

AIR T, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share amounts)	September 30, 2019		March 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents	$	27,434	$	12,417
Marketable securities	1,423		1,760
Restricted cash	102		123
Restricted investments	1,018		831
Accounts receivable, net of allowance for doubtful accounts of $382 and $408	18,464		10,881
Income tax receivable	1,030		142
Inventories, net	40,370		27,455
Other current assets	9,232		6,138
Current assets of discontinued operations	—		11,601
	99,073		71,348
Assets on lease, net of accumulated depreciation of $6,007 and $6,689	21,019		25,164
Property and equipment, net of accumulated depreciation of $3,935 and $3,470	4,310		4,264
Right-of-use assets	7,154		—
Cash surrender value of life insurance policies, net of policy loans	80		122
Other tax receivables-long-term	—		311
Deferred income taxes	781		548
Investments in securities	785		1,086
Equity method investments	4,046		5,611
Other assets	284		200
Intangible assets, net of accumulated amortization of $2,229 and $2,097	898		998
Goodwill	4,227		4,227
Non-current assets of discontinued operations	—		1,264
Total Assets	142,657		115,143
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	12,540		11,409
Income tax payable	940		888
Advanced customer deposits	9,996		1,520
Accrued expenses and other	1,380		12,314
Deferred income	295		341
Current portion of long-term debt	29,836		24,735
Short-term lease liability	1,131		—
Current liabilities of discontinued operations	—		1,587
	56,118		52,794
Long-term debt	45,544		32,918
Long-term lease liability	6,446		—
Other non-current liabilities	1,202		597
Total Liabilities	109,310		86,309
Redeemable non-controlling interest	6,000		5,476
Commitments and contingencies (Note 16)

7

Equity:
Air T, Inc. Stockholders' Equity:
Preferred stock, $1.00 par value, 50,000 shares authorized	—		—
Common stock, $.25 par value; 4,000,000 shares authorized, 3,022,745 and 2,022,637 shares issued and outstanding	756		506
Additional paid-in capital	2,410		2,866
Retained earnings	23,610		21,191
Accumulated other comprehensive loss	(461)		(205)
Total Air T, Inc. Stockholders' Equity	26,315		24,358
Non-controlling Interests	1,032		(1,000)
Total Equity	27,347		23,358
Total Liabilities and Equity	$	142,657	$	115,143

See notes to condensed consolidated financial statements.

8

AIR T, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In Thousands)	Six Months Ended September 30,
	2019		2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	10,157	$	1,856
Loss from discontinued operations, net of income tax	70		705
Gain on sale of discontinued operations, net of income tax	(8,359)		—
Net income (loss) from continuing operations	1,868		2,561
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and  amortization	3,648		3,077
Bargain purchase acquisition gain	(49)		(1,984)
Impairment of investment	1,210		—
Gain on settlement of bankruptcy	(4,527)		—
Other	(1,785)		(464)
Change in operating assets and liabilities:
Accounts receivable	(7,331)		(1,853)
Costs and estimated earnings in excess of billings and uncompleted projects	—		2,012
Notes receivable and other non-trade receivables	(2,984)		(3,126)
Inventories	5,891		10,123
Accounts payable	3,188		3,124
Accrued expenses	739		2,233
Other	(359)		(300)
Total adjustments	(856)		12,213
Net cash provided by (used in) operating activities - continuing operations	(491)		15,403
Net cash provided by (used in) operating activities - discontinued operations	1,094		(532)
Net cash provided by operating activities	603		14,871
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(187)		(2,014)
Acquisition of businesses, net of cash acquired	(500)		(3,376)
Investment in reinsurance entity	—		(2,000)
Capital expenditures related to property & equipment	(575)		(763)
Capital expenditures related to assets on lease	(17,614)		(19,149)
Other	346		(213)
Net cash used in investing activities - continuing operations	(18,530)		(27,515)
Net cash provided by (used in) investing activities - discontinued operations	20,463		(61)
Net cash provided by (used in) investing activities	1,933		(27,576)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from lines of credit	48,267		51,151
Payments on lines of credit	(35,324)		(58,355)
Proceeds from term loan	13,001		21,714
Payments on term loan	(17,900)		(3,190)
Proceeds received from exercise of warrants	5,407		—
Proceeds from life insurance policy loan	—		1,897
Other	(1,124)		41
Net cash provided by financing activities - continuing operations	12,327		13,258
Effect of foreign currency exchange rates on cash and cash equivalents	26		5

9

NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	14,889		558
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD	12,647		5,073
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	27,536	$	5,631
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Equipment leased to customers transferred to inventory	18,710		234
Issuance of Debt - Trust Preferred Securities	4,000		—
Issuance of warrant liability	840		—

See notes to condensed consolidated financial statements.

10

AIR T, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

	Equity
	Air T, Inc. Stockholders' Equity
(In Thousands)	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests		Total Equity
	Shares	Amount
Balance, March 31, 2018	2,044	$	511	$	4,172	$	20,696	$	(261)	$	(875)	$	24,243
Net income (loss)*	—	—		—		2,829		—		(46)		2,782
Reclassification of unrealized loss on marketable securities, net of tax	—	—		—		(106)		106		—		—
Foreign currency translation gain	—	—		—		—		31		17		48
Balance, June 30, 2018	2,044	$	511	$	4,172	$	23,418	$	(124)	$	(904)	$	27,073
Net loss*	—	—		—		(1,321)		—		(42)		(1,363)
Exercise of stock options	2	—		18		—		—		—		18
Repurchase of common stock	(1)	—		(2)		(21)		—		—		(23)
Foreign currency translation gain	—	—		—		—		24		8		32
Unrealized gain on interest rate swaps, net of tax	—	—		—		—		29		—		29
Balance, September 30, 2018	2,045	$	511	$	4,188	$	22,076	$	(71)	$	(938)	$	25,766

*Excludes amount attributable to redeemable non-controlling interest in Contrail Aviation.

11

	Equity
	Air T, Inc. Stockholders' Equity
(In Thousands)	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests		Total Equity
	Shares	Amount
Balance, March 31, 2019	2,022	$	506	$	2,866	$	21,191	$	(205)	$	(1,000)	$	23,358
Net income*	—	—		—		1,782		—		2,034		3,816
Repurchase of Common Stock	(17)	(4)		—		(122)		—		—		(126)
Stock Split	1,010	252		(252)		—		—		—		—
Issuance of Debt - Trust Preferred Securities	—	—		—		(4,000)		—		—		(4,000)
Issuance of Warrants	—	—		—		(840)		—		—		(840)
Adoption of ASC 842 - Leasing	—	—		—		(41)		—		—		(41)
Unrealized loss on interest rate swaps, net of tax	—	—		—		—		(176)		—		(176)
Foreign currency translation gain (loss)	—	—		—		—		(30)		12		(18)
Adjustment to fair value of redeemable non-controlling interest	—	—		(985)		—		—		—		(985)
Balance, June 30, 2019	3,015	$	754	$	1,629	$	17,970	$	(411)	$	1,046	$	20,988
Net income (loss)*	—	—		—		5,715		—		(17)		5,698
Repurchase of common stock	8	2		—		(75)		—		—		(73)
Foreign currency translation gain	—	—		—		—		38		3		41
Adjustment to fair value of redeemable non-controlling interest	—	—		781		—		—		—		781
Unrealized gain (loss) on interest rate swaps, net of tax	—	—		—		—		(88)		—		(88)
Balance, September 30, 2019	3,023	$	756	$	2,410	$	23,610	$	(461)	$	1,032	$	27,347

*Excludes amount attributable to redeemable non-controlling interest in Contrail Aviation.

See notes to condensed consolidated financial statements.

12

AIR T, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Financial Statement Presentation

The condensed consolidated financial statements of Air T, Inc. (“Air T”, the “Company”, “we”, “us” or “our”) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the results for the periods presented have been made.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended March 31, 2019. The results of operations for the period ended September 30, 2019 are not necessarily indicative of the operating results for the full year.

Certain reclassifications have been made to the prior period amounts to conform to the current presentation.

Discontinued Operations

On September 30, 2019, the Company completed the sale of Global Aviation Services, LLC ("GAS"). The results of operations of GAS are reported as discontinued operations in the condensed consolidated statements of operations for the three and six months ended September 30, 2019 and 2018. Refer to Footnote 4 - "Discontinued Operations" for additional information. Unless otherwise indicated, the disclosures accompanying the condensed consolidated financial statements reflect the Company's continuing operations.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) as amended by multiple standards updates. The new standard provides that a lessee should recognize the assets and the liabilities that arise from leases, including operating leases. Under the new requirements, a lessee will recognize in the statement of financial position a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal year, with early adoption permitted. Topic 842 permits two transition methods: (1) a modified retrospective transition method requiring retrospective adjustment of each comparative presented with an adjusting entry at the beginning of the earliest comparative period presented and (2) a modified retrospective approach with no restatement of prior periods and an adjusting entry as of the effective date. Under both transition methods, entities may elect certain transition practical expedients that would be required to be applied to all leases.

The Company adopted the standard in the fiscal year beginning April 1, 2019 using the modified retrospective transition method that does not require retrospective adjustment of the comparative periods. The Company reviewed existing leases to determine the impact of the adoption of the standard on its consolidated financial statements. Implementation had an immaterial cumulative effect on retained earnings. Adoption resulted in the recognition of right-of-use assets of approximately $10.7 million, and lease liabilities of approximately $11.2 million.

Upon adoption, the Company elected practical expedients related to a) short term lease exemption b) not separate lease and non-lease components c) not reassess whether expired or existing contracts contain leases, d) not reassess lease classification for existing or expired leases and e) not consider whether previously capitalized initial direct costs would be appropriate under the new standard.

Recently Issued Accounting Pronouncements

In October 2018, the FASB updated the Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities of the Accounting Standards Codification. The amendments in this update affect reporting entities that are required to

determine whether they should consolidate a legal entity under the guidance within the Variable Interest Entities Subsections of Subtopic 810-10, Consolidation—Overall. Indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.

13

The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of this amendment on its consolidated financial statements and disclosures.

2. Revenue Recognition

Substantially all of the Company’s revenue is derived from contracts with an initial expected duration of one year or less, as a result, the Company has applied the practical expedient to exclude consideration of significant financing components from the determination of transaction price, to expense costs incurred to obtain a contract, and to not disclose the value of unsatisfied performance obligations.

The following is a description of the Company’s performance obligations:

Type of Revenue	Nature, Timing of Satisfaction of Performance Obligations, and Significant Payment Terms
Product Sales	The Company generates revenue from sales of various distinct products such as parts, aircraft equipment, printing equipment, jet engines, airframes, and scrap metal to its customers. A performance obligation is created when the Company accepts an order from a customer to provide a specified product. Each product ordered by a customer represents a performance obligation. The Company recognizes revenue when obligations under the terms of the contract are satisfied; generally, this occurs at a point-in-time upon shipment or when control is transferred to the customer. Transaction prices are based on contracted terms, which are at fixed amounts based on standalone selling prices. While the majority of the Company's contracts do not have variable consideration, for the limited number of contracts that do, the Company records revenue based on the standalone selling price less an estimate of variable consideration (such as rebates, discounts or prompt payment discounts). The Company estimates these amounts based on the expected incentive amount to be provided to customers and reduces revenue accordingly. Performance obligations are short-term in nature and customers are typically billed upon transfer of control. The Company records all shipping and handling fees billed to customers as revenue. The terms and conditions of the customer purchase orders or contracts are dictated by either the Company’s standard terms and conditions or by a master service agreement or by the contract.
Support Services	The Company provides a variety of support services such as aircraft maintenance, printer maintenance, and short-term repair services to its customers. Additionally, the Company operates certain aircraft routes on behalf of FedEx. A performance obligation is created when the Company agrees to provide a particular service to a customer. For each service, the Company recognizes revenues over time as the customer simultaneously receives the benefits provided by the Company's performance. This revenue recognition can vary from when the Company has a right to invoice to the output or input method depending on the structure of the contract and management’s analysis. For repair-type services, the Company records revenue over-time based on an input method of costs incurred to total estimated costs. The Company believes this is appropriate as the Company is enhancing an asset that the customer controls as repair work, such as labor hours are incurred, and parts installed, is being performed. The vast majority of repair-services are short term in nature and are typically billed upon completion of the service. Some of the Company’s contracts contain a promise to stand ready as the Company is obligated to perform certain maintenance or administrative services. For most of these contracts, the Company applies the 'as invoiced' practical expedient as the Company has a right to consideration from the customer in an amount that corresponds directly with the value of the entity's performance completed to date. A small number of contracts are accounted for as a series and recognized equal to the amount of consideration the Company is entitled to less an estimate of variable consideration (typically rebates). These services are typically ongoing and are generally billed on a monthly basis.

In addition to the above type of revenues, the Company also has Leasing Revenue, which is in scope under Topic 842 (Leases) and out of scope under Topic 606 and Other Revenues (Freight, Management Fees, etc.) which are immaterial for disclosure under Topic 606.

14

The following table summarizes disaggregated revenues by type (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Product Sales
Air Cargo	$	6,680	$	5,003	$	12,094	$	10,523
Ground equipment sales	12,489		12,447		24,492		18,617
Commercial jet engines and parts	13,218		7,380		24,388		32,409
Printing equipment and maintenance	20		122		68		409
Corporate and other	—		—		—		—
Support Services
Air Cargo	13,033		11,985		25,927		24,082
Ground equipment sales	105		148		210		249
Commercial jet engines and parts	1,597		1,327		3,007		2,293
Printing equipment and maintenance	225		12		236		20
Corporate and other	(8)		16		33		16
Leasing Revenue
Air Cargo	—		—		—		—
Ground equipment sales	33		15		53		46
Commercial jet engines and parts	2,941		1,826		6,655		3,027
Printing equipment and maintenance	—		—		—		—
Corporate and other	36		32		81		72
Other
Air Cargo	32		76		43		100
Ground equipment sales	114		228		236		312
Commercial jet engines and parts	45		110		78		234
Printing equipment and maintenance	4		5		9		10
Corporate and other	129		135		271		268
Total	$	50,693	$	40,867	$	97,881	$	92,687

The following table summarizes total revenues by segment (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Air cargo	$	19,745	$	17,064	$	38,064	$	34,705
Ground equipment sales	12,741		12,838		24,991		19,224
Commercial jet engines and parts	17,801		10,643		34,128		37,963
Printing equipment and maintenance	249		139		313		439
Corporate and other	157		183		385		356
Total	$	50,693	$	40,867	$	97,881	$	92,687

See Note 14 for the Company's disaggregated revenues by geographic region and Note 15 for the Company’s disaggregated revenues by segment. These notes disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

15

Contract Balances and Costs

Contract liabilities relate to deferred income and advanced customer deposits with respect to product sales. The following table presents outstanding contract liabilities as of April 1, 2019 and September 30, 2019 and the amount of contract liabilities that were recognized as revenue during the six-month period ended September 30, 2019 (in thousands):

	Outstanding contract liabilities		Outstanding contract liabilities as of April 1, 2019 Recognized as Revenue
As of September 30, 2019	$	10,291
As of April 1, 2019	1,867
For the six months ended September 30, 2019			1,781

Contract assets primarily relate to deposits paid to vendors. The following table presents the amount of contract assets as of April 1, 2019 and September 30, 2019 (in thousands):

	Contract assets
As of September 30, 2019	$5,174
As of April 1, 2019	1,743

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3. Business Combinations

Acquisition of Worthington Aviation Parts, Inc.

On May 4, 2018, Air T, Inc. completed the acquisition (the “Transaction”) of substantially all of the assets and assumed certain liabilities of Worthington Aviation Parts, Inc. (“Worthington”), pursuant to the Asset Purchase Agreement (the “Purchase Agreement”), dated as of April 6, 2018, by and among the Company, Worthington, and Churchill Industries, Inc., as guarantor of Worthington’s obligations as disclosed in the Purchase Agreement.

Worthington is primarily engaged in the business of operating, distributing and selling airplane and aviation parts along with repair services. The Company agreed to acquire the assets and liabilities in exchange for payment to Worthington of $50,000 as earnest money upon execution of the Agreement and a cash payment of $3,300,000 upon closing. Total consideration is summarized in the table below (in thousands):

Earnest money	$	50
Cash consideration	3,300
Cash acquired	(24)
Total consideration	$	3,326

The Transaction was accounted for as a business combination in accordance with ASC Topic 805 "Business Combinations." Assets acquired and liabilities assumed were recorded in the accompanying consolidated balance sheet at their estimated fair values as of May 4, 2018, with the excess of fair value of net assets acquired recorded as a bargain purchase gain. The most significant asset acquired was Worthington’s inventory. The following table outlines the consideration transferred and purchase price allocation at the respective estimated fair values as of May 4, 2018 (in thousands):

	May 4, 2018
ASSETS
Accounts receivable	$	1,929
Inventories	4,564
Other current assets	150
Property and equipment	392
Other assets	189
Intangible assets - tradename	138
Total assets	7,362
LIABILITIES
Accounts payable	1,289
Accrued expenses	175
Deferred tax liability	589
Total liabilities	2,053
Net assets acquired	5,309
Consideration paid	3,350
Less: Cash acquired	(24)
Bargain purchase gain	$	1,983

The transaction resulted in a bargain purchase gain because Worthington was a non-marketed transaction and in financial distress at the time of the acquisition. The seller engaged in a formal bidding process and determined Air T was the best option for Worthington. The tax impact related to the bargain purchase gain was to record a deferred tax liability and record tax expense against the bargain purchase gain of approximately $589,000.  The resulting net bargain purchase gain after taxes was approximately $1,983,000. Total transaction costs incurred in connection with this acquisition were approximately $83,000.

Pro forma financial information is not presented as the results are not material to the Company’s consolidated financial statements.

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4. Discontinued Operations

On September 30, 2019, the Company completed the sale of 100% of the equity ownership in the Company’s wholly-owned subsidiary, Global Aviation Services, LLC ("GAS") to PrimeFlight Aviation Services, Inc., a Delaware corporation. The agreement includes a purchase price of $21 million as well as an earn-out provision of $4 million if certain performance metrics are achieved by March 31, 2020. The Company received approximately $20.5 million of total proceeds at closing after the initial net working capital adjustment. The Company recognized a pre-tax gain on the sale of GAS of approximately $10.8 million with tax impact of $2.4 million for a net of tax gain of $8.4 million in the second quarter of 2019. The gain is subject to change pending final settlement statement, final transaction costs and net working capital adjustments.

Summarized results of operations of GAS for the three and six months ended September 30, 2019 and 2018 through the date of disposition are as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Net sales	$	8,120	$	8,474	$	16,637	$	17,522
Operating Expense	(9,015)		(9,215)		(17,319)		(18,350)
Loss from discontinued operations before income taxes	(895)		(741)		(682)		(828)
Income tax benefit	(660)		(93)		(612)		(123)
Loss from discontinued operations, net of tax	$	(235)	$	(648)	$	(70)	$	(705)

The following table presents summary balance sheet information of GAS that is presented as discontinued operations as of March 31, 2019 (in thousands):

Assets:	March 31, 2019
Cash and cash equivalents	$	107
Accounts receivable, net	8,197
Income tax receivable	17
Inventories, net	2,512
Other current assets	769
Current assets of discontinued operations	11,601
Property and equipment, net	554
Intangible assets, net	228
Goodwill	190
Other non-current assets	292
Non-current assets of discontinued operations	1,264
Liabilities:
Accounts payable	1,144
Income tax payable	(226)
Accrued expenses	669
Current liabilities of discontinued operations	$	1,587

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5. Income Taxes

During the three-month period ended September 30, 2019, the Company recorded $296,000 in income tax benefit from continuing operations at an effective rate ("ETR") of 12.2%. The Company records income taxes using a discrete, year-to-date tax expense calculation for interim reporting. The primary factors contributing to the difference between the federal statutory rate of 21.0% and the Company's effective tax rate for the three-month period ended September 30, 2019 were the change in valuation allowance related to Delphax, the estimated expense for the exclusion of loss for the Company's captive insurance company subsidiary under Section 831(b), the estimated deduction for Foreign-Derived Intangible Income, and the exclusion from the tax provision of the minority owned portion of the pretax income of Contrail Aviation Support, LLC. During the three month period ended September 30, 2018, the Company recorded $300,000 in income tax benefit from continuing operations at an ETR of 27.8%. The primary factors contributing to the difference between the federal statutory rate and the Company's effective tax rate for the three-month period ended September 30, 2018 were the estimated benefit for the exclusion of income for the Company's captive insurance company subsidiary under Section 831(b), the presentation of the tax impact of the bargain purchase gain and state income tax expense.

During the six-month period ended September 30, 2019, the Company recorded $668,000 in income tax benefit from continuing operations at an ETR of (55.6)%. The Company records income taxes using a discrete, year-to-date tax expense calculation for interim reporting. The primary factors contributing to the difference between the federal statutory rate of 21.0% and the Company's effective tax rate for the six-month period ended September 30, 2019 were the change in valuation allowance related to Delphax, the estimated expense for the exclusion of loss for the Company's captive insurance company subsidiary under Section 831(b), the estimated deduction for Foreign-Derived Intangible Income, and the exclusion from the tax provision of the minority owned portion of the pretax income of Contrail Aviation Support, LLC. During the six-month period ended September 30, 2018, the Company recorded $117,000 in income tax expense from continuing operations at an ETR of 4.4%. The primary factors contributing to the difference between the federal statutory rate and the Company's effective tax rate for the six-month period ended September 30, 2018 were related to the estimated benefit for the exclusion of income for the Company's captive insurance company subsidiary afforded under Section 831(b), the change in valuation allowance and the presentation of the tax impact of the bargain purchase gain.

For the three and six months ended September 30, 2019, the ETR in discontinued operations is 73.7% and 89.7%, respectively. The ETR is impacted by the effect of the release of the valuation allowance recorded in fiscal year 2019 against the $2 million impaired reinsurance contracts. For the three and six months ended September 30, 2018, the ETR in discontinued operations is 12.6% and 14.8%, respectively. The ETR is impacted by permanent, non-deductible items for tax.

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6. Net Earnings Per Share

Basic earnings per share has been calculated by dividing net income (loss) attributable to Air T, Inc. stockholders by the weighted average number of common shares outstanding during each period. For purposes of calculating diluted earnings per share, shares issuable under stock options were considered potential common shares and were included in the weighted average common shares unless they were anti-dilutive. There were 3,151 anti-dilutive securities as of September 30, 2019. The computation of basic and diluted earnings per common share is as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Net income (loss) from continuing operations	$	(2,122)	$	(779)	$	1,868	$	2,561
Net (income) loss from continuing operations attributable to non-controlling interests	(287)		106		(2,660)		(348)
Net income (loss) from continuing operations attributable to Air T, Inc. stockholders	(2,409)		(673)		(792)		2,213
Income (loss) from continuing operations per share:
Basic	$	(0.80)	$	(0.22)	$	(0.30)	$	0.72
Diluted	$	(0.80)	$	(0.22)	$	(0.30)	$	0.72
Loss from discontinued operations, net of tax	$	(235)	$	(648)	$	(70)	$	(705)
Gain on sale of discontinued operations, net of tax	8,359		—		8,359		—
Gain (loss) from discontinued operations attributable to Air T, Inc. stockholders	8,124		(648)		8,289		(705)
Income (loss) from discontinued operations per share:
Basic	$	2.69	$	(0.21)	$	3.14	$	(0.23)
Diluted	$	2.68	$	(0.21)	$	3.13	$	(0.23)
Weighted Average Shares Outstanding:
Basic	3,025		3,066		2,641		3,066
Diluted	3,029		3,066		2,645		3,074

On June 10, 2019, the Company effected a three-for-two stock split of its common stock in the form of a 50% stock dividend to shareholders of record as of June 4, 2019. All share and earnings per share information have been retroactively adjusted to reflect the stock split and the incremental par value of the newly-issued shares was recorded with the offset to additional paid-in capital.

With respect to our September 30, 2019 Quarterly Report on Form 10-Q, the effect of the stock split was recognized retroactively in the stockholders’ equity accounts in the Condensed Consolidated Balance Sheets, and in all share data in the Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

7. Investments in Securities

As of September 30, 2019, the Company had a gross unrealized gain aggregating to $2,273 and gross unrealized losses aggregating to $420,208, which are included in the Consolidated Statement of Income.

All investments in marketable securities are priced using publicly quoted market prices and are considered Level 1 fair value measurements.

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8. Equity Method Investments

The Company’s investment in Insignia Systems, Inc. (“Insignia”) is accounted for under the equity method of accounting. The Company has elected a three-month lag upon adoption of the equity method. At September 30, 2019, the Company held approximately 3.5 million shares of Insignia’s common stock representing approximately 29% of the outstanding shares. For the quarter ended September 30, 2019, the Company recorded approximately $142,196 as its share of Insignia’s net loss for the three months ended June 30, 2019 along with a basis difference adjustment of approximately $24,032. In addition, due to the adverse financial results as reported in Insignia's Form 10-Q for the quarter ended June 30, 2019 in addition to consideration of analyst reports and other qualitative factors, the Company determined that it has suffered from an other-than-temporary impairment in its investment in Insignia . As such, the Company recorded an impairment charge of $395,031 during the quarter ended September 30, 2019. After the impairment, the Company's net investment basis in Insignia is $3,439,547 as of September 30, 2019.

Summarized unaudited financial information for Insignia for the three months ended June 30, 2019 and 2018 is as follows (in thousands):

	Three Months Ended June 30, 2019		Three Months Ended June 30, 2018
Revenue	$	5,842	$	8,245
Gross Profit	1,465		3,005
Operating income (loss)	(683)		253
Net income (loss)	(488)		184
Net income attributable to Air T, Inc. stockholders	$	(166)	$	31

9. Inventories

Inventories consisted of the following (in thousands):

	September 30, 2019		March 31, 2019
Ground equipment manufacturing:
Raw materials	$	4,191	$	2,498
Work in process	910		1,660
Finished goods	1,922		973
Printing equipment and maintenance
Raw materials	476		401
Finished goods	912		1,048
Commercial jet engines and parts	32,133		21,032
Total inventories	40,544		$	27,612
Reserves	(174)		(157)
Total inventories, net of reserves	$	40,370	$	27,455

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10.  Leases

The Company has operating leases for the use of real estate, machinery, and office equipment. The majority of our leases have a lease term of 2 to 5 years; however, we have certain leases with longer terms of up to 30 years. Many of our leases include options to extend the lease for an additional period.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease, plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor that is considered likely to be exercised.

Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. Variable payments are typically operating costs associated with the underlying asset and are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Our leases do not contain residual value guarantees.

The Company has elected to combine lease and non-lease components as a single component and not to recognize leases on the balance sheet with an initial term of one year or less.

The interest rate implicit in lease contracts is typically not readily determinable, and as such the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The components of lease cost for the three and six months ended September 30, 2019 are as follows (in thousands):

	Three Months Ended September 30, 2019		Six Months Ended September 30, 2019
Operating lease cost	$	514	$	920
Short-term lease cost	50		255
Variable lease cost	71		207
Sublease income	—		—
Total lease cost	$	635	$	1,382

22

Amounts reported in the consolidated balance sheets for leases where we are the lessee as of the quarter ended September 30, 2019 were as follows (in thousands):

	September 30, 2019
Operating leases
Operating lease right-of-use assets	$	7,154
Operating lease liabilities	$	7,577
Weighted-average remaining lease term	15.50 years
Operating leases
Weighted-average discount rate	4.51		%
Operating leases

Maturities of lease liabilities under non-cancellable leases where we are the lessee as of the quarter ended September 30, 2019 are as follows (in thousands):

	Operating Leases
2020 (excluding the six months ended September 30, 2019)	$	786
2021	1,311
2022	1,131
2023	938
2024	637
2025	402
Thereafter	5,757
Total undiscounted lease payments	$	10,962
Less: Interest	2,890
Less: Discount	495
Total lease liabilities	$	7,577

At March 31, 2019, future minimum annual lease payments (foreign currency amounts translated using applicable March 31, 2019 exchange rates) are as follows (in thousands):

Year ended March 31,
2020	$	3,133
2021	2,115
2022	1,625
2023	1,241
2024	692
Thereafter	6,267
Total minimum lease payments	$	15,073

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11. Financing Arrangements

Borrowings of the Company and its subsidiaries are summarized below (in thousands) at September 30, 2019 and March 31, 2019, respectively. AirCo and Contrail Aviation (“Contrail”) are subsidiaries of the Company in the commercial jet engines and parts segment.

(In Thousands)	September 30, 2019		March 31, 2019		Maturity Date	Interest Rate	Unused commitments as of September 30, 2019
Revolver - MB&T	$	18,424	$	12,403	November 30, 2019	Prime - 1%	$	1,576
Term Note A - MB&T	8,250		8,750		January 1, 2028	1-month LIBOR + 2%
Term Note B - MB&T	4,125		4,375		January 1, 2028	4.5%
Term Note D - MB&T	1,574		1,607		January 1, 2028	1-month LIBOR + 2%
Debt - Trust Preferred Securities	9,632		—		June 7, 2049	8%
Air T Debt	42,005		27,135
Revolver - MB&T	—		3,820		May 21, 2019	7.5%
Revolver - MB&T	6,921		—		November 30, 2019	greater of 6.50% or Prime + 2%	3,078
Term Loan - MB&T	—		450		December 17, 2019	7.50%
Term Loan - MB&T	—		400		June 17, 2020	7.25%
Term Loan - Park State	—		2,100		June 17, 2020	8.50%
AirCo Debt	6,921		6,770
Revolver	—		—		September 5, 2021	1-month LIBOR + 3%	20,000
Term Loan A	7,466		8,617		January 26, 2021	1-month LIBOR + 3.75%
Term Loan B	6,500		15,500		September 14, 2021	1-month LIBOR + 3.75%
Term Loan C	12,805		—		August 1, 2024	1-month LIBOR + 3.75%
Contrail Debt - Old National	26,771		24,117
Total Debt	75,697		58,022
Less: Unamortized Debt Issuance Costs	(317)		(369)
Total Debt, net	$	75,380	$	57,653

At September 30, 2019, our contractual financing obligations, including payments due by period, are as follows (in thousands):

Due by	Amount
September 30, 2020	$	29,836
September 30, 2021	17,535
September 30, 2022	4,172
September 30, 2023	4,271
September 30, 2024	4,138
Thereafter	15,745
	75,697
Less: Unamortized Debt Issuance Costs	(317)
	$	75,380

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On June 10, 2019, the Company completed a transaction with all holders of the Company’s Common Stock to receive a special, pro-rata distribution of three securities as enumerated below:

•A dividend of one additional share for every two shares already held (a 50% stock dividend, or the equivalent of a 3-for-2 stock split). See Footnote 6 for discussion.

•The Company issued and distributed to existing common shareholders an aggregate of 1.6 million trust preferred capital security ("TruPs") shares (aggregate $4.0 million stated value) and an aggregate of 8.4 million warrants ("Warrants") (representing warrants to purchase $21.0 million in stated value of TruPs). The Warrants are exercisable for one year from issuance.

The issuance of the TruPs and Warrants on June 10, 2019 is disclosed on our consolidated statements of equity as well as within the supplemental non-cash disclosure of the Company's consolidated statements of cash flows. As of September 30, 2019, 2,252,797 Warrants have been exercised. As a result, the amount outstanding on the Company's Debt - Trust Preferred Securities is $9,632,243 as of September 30, 2019.

At September 30, 2019, the Company had Warrants outstanding and exercisable to purchase 6,147,203 shares of its TruPs at an exercise price of $2.40 per share, which represents a discount to the $2.50 face value of each Trust Preferred Security. The Warrants will expire on June 7, 2020 or earlier upon redemption or liquidation.

	Fair Value Measurement as of September 30, 2019
Warrant liability (Level 2)	$	614,720

As of September 30, 2019, the Warrants are recorded within "Other non-current liabilities" on our consolidated balance sheets. Fair value measurement was based on market activity and trading volume as observed on the NASDAQ Global Market. The liability is classified as Level 2 in the hierarchy (Level 2 is defined as quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability).

On August 16, 2019, Contrail entered into a term loan agreement with to borrow $13 million at the interest rate of LIBOR plus 3.75% per annum. The maturity date of the term loan is August 1, 2024.

On September 24, 2019, Air T amended the MBT revolver ("Air T Revolver") to temporarily increase the borrowing commitment from $17 million to $20 million. All other terms of the credit agreement remain unchanged. As noted in Footnote 17 - Subsequent Events, on November 8, 2019, Air T extended the maturity date of the Air T Revolver to February 28, 2020. The principal amount reverted back to $17 million. Concurrently, the Company also extended the maturity date of the AirCo MBT revolver ("AirCo Revolver") to February 28, 2020. Principal amount and terms of the AirCo Revolver remained unchanged.

The Company assumes various financial obligations and commitments in the normal course of its operations and financing activities. Financial obligations are considered to represent known future cash payments that the Company is required to make under existing contractual arrangements such as debt and lease agreements.

As part of the Company’s interest rate risk management strategy, the Company, from time to time, uses derivative instruments to minimize significant unanticipated earnings fluctuations that may arise from rising variable interest rate costs associated with existing borrowings (Air T Term Note A and Term Note D). To meet these objectives, the Company entered into interest rate swaps with notional amounts consistent with the outstanding debt to provide a fixed rate of 4.56% and 5.09%, respectively, on Term Notes A and D. The swaps mature in January 2028.

As of August 1, 2018, these swap contracts were designated as cash flow hedging instruments and qualified as effective hedges in accordance with ASC 815-30. The effective portion of changes in the fair value on these instruments is recorded in other comprehensive income and is reclassified into the consolidated statement of income as interest expense in the same period in which the underlying hedge transaction affects earnings. As of September 30, 2019 and March 31, 2019, the fair value of the interest-rate swap contracts was a liability of $570,069 and $227,000, respectively, which is included within other non-current liabilities in the consolidated balance sheets. During the three months ended September 30, 2019, the Company recorded a loss of approximately $88,000, net of tax, in the consolidated statement of comprehensive income (loss) for changes in the fair value of the instruments.

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12. Variable Interest Entities

A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. Under ASC 810 - Consolidation, an entity that holds a variable interest in a VIE and meets certain requirements would be considered to be the primary beneficiary of the VIE and required to consolidate the VIE in its consolidated financial statements. In order to be considered the primary beneficiary of a VIE, an entity must hold a variable interest in the VIE and have both:

•the power to direct the activities that most significantly impact the economic performance of the VIE; and

•the right to receive benefits from, or the obligation to absorb losses of, the VIE that could be potentially significant to the VIE.

The Company concluded that its investments in Delphax’s equity and debt, and its investment in the Delphax warrant, each constituted a variable interest. In addition, the Company concluded that it became the primary beneficiary of Delphax on November 24, 2015. The Company consolidated Delphax in its consolidated financial statements beginning on that date.

The following table sets forth the carrying values of Delphax’s assets and liabilities as of September 30, 2019 and March 31, 2019 (in thousands):

	September 30, 2019		March 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	13	$	12
Accounts receivable, net	50		47
Other current assets	9		59
Total current assets	72		118
Other tax receivables-long-term	—		311
Total assets	72		429
LIABILITIES
Current liabilities:
Accounts payable	96		2,151
Accrued expenses	392		3,158
Short-term debt	—		1,750
Total current liabilities	488		7,059
Total liabilities	488		7,059
Net Liabilities	$	(416)	$	(6,630)

Upon petition by the Company, on August 8, 2017 the Ontario Superior Court of Justice in Bankruptcy and Insolvency adjudged Delphax Canada to be bankrupt. As a result, Delphax Canada ceased to have capacity to deal with its property, which then vested in the trustee in bankruptcy of Delphax Canada subject to the rights of secured creditors. As of June 30, 2019, the bankruptcy proceedings were finalized in accordance with Canadian law and, therefore, Delphax Canada was legally discharged of its liabilities. The conclusion of the bankruptcy proceedings also resulted in the dissolution of Delphax Canada. In addition, on June 11, 2019, the Company has also fully dissolved Delphax UK. As such, the only Delphax entity that remains in existence as of September 30, 2019 is Delphax France. The Company extinguished the assets and liabilities of Delphax Canada and Delphax UK during the quarter ended June 30, 2019 and recognized a gain on dissolution of entities of $4,509,302.

Delphax’s revenues and expenses are included in our consolidated financial statements beginning November 24, 2015 through September 30, 2019. Revenues and expenses prior to the date of initial consolidation were excluded. We have determined that the attribution of Delphax net income or loss should be based on consideration of all of Air T’s investments in Delphax and Delphax Canada. The Delphax warrant ("Delphax warrant") provides that in the event that dividends are paid on the common stock of Delphax, the holder of the Delphax warrant is entitled to participate in such dividends on a ratable basis as if the Delphax warrant had been fully exercised and the shares of Series B Preferred Stock acquired upon such exercise had been converted into shares of Delphax common

26

stock. This provision would have entitled Air T, Inc. to approximately 67% of any Delphax dividends paid, with the remaining 33% paid to the non-controlling interests. We concluded that this was a substantive distribution right which should be considered in the attribution of Delphax net income or loss to non-controlling interests. We furthermore concluded that our investment in the debt of Delphax should be considered in attribution. Specifically, Delphax’s net losses are attributed first to our Series B Preferred Stock and Delphax warrant investments and to the non-controlling interest (67%/33%) until such amounts are reduced to zero. Additional losses are then fully attributed to our debt investments until they too are reduced to zero. This sequencing reflects the relative priority of debt to equity. Any further losses are then attributed to Air T and the non-controlling interests based on the initial 67%/33% share. Delphax net income is attributed using a backwards-tracing approach with respect to previous losses.

As a result of the application of the above-described attribution methodology, for the quarters ended September 30, 2019 and September 30, 2018 the attribution of Delphax losses to non-controlling interests was 33% and 33%, respectively.

The following table sets forth the revenue and expenses of Delphax prior to intercompany eliminations that are included in the Company’s condensed consolidated statement of income for the three months ended September 30, 2019 and 2018 (in thousands):

	Six Months Ended September 30,
	2019		2018
Operating Revenues	$	—	$	—
Operating Expenses:
Cost of sales	—		—
General and administrative	125		222
	125		222
Operating Loss	(125)		(222)
Non-operating Income (Expenses), net	6,237		(46)
Income (Loss) Before Income Taxes	6,112		(268)
Income Taxes	—		—
Net Income (Loss)	$	6,112	$	(268)

13. Share Repurchase

On May 14, 2014, the Company announced that its Board of Directors had authorized a program to repurchase up to 750,000 shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions, in compliance with SEC Rule 10b-18, over an indefinite period.

During the three months ended September 30, 2019, the Company repurchased 5,883 shares at an aggregate cost of $101,039. These shares are reflected as retired as of September 30, 2019 in accordance with the intent of the authorized share repurchase program. The Company has reduced common stock and retained earnings to reflect the retirement of those shares.

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14. Geographical information

Total property and equipment, including assets on lease, net of accumulated depreciation, located in the United States, the Company's country of domicile, and held outside the United States are summarized in the following table as of September 30, 2019 and March 31, 2019, in thousands:

	September 30, 2019		March 31, 2019
United States	$	18,321	$	4,393
Foreign	7,008		25,035
Total property and equipment, net	$	25,329	$	29,428

The Company's tangible long-lived assets, net of accumulated depreciation, held outside of the United States represent engines and aircraft on lease at September 30, 2019. The net book value located within each individual country at September 30, 2019 and March 31, 2019 is listed below, in thousands:

	September 30, 2019		March 31, 2019
Australia	$	3	$	5
Mexico	1,845		2,681
Netherlands	5,160		5,541
China	—		16,808
Total property and equipment, net	$	7,008	$	25,035

Total revenue from continuing operations, in and outside the United States is summarized in the following table for the six months ended September 30, 2019 and September 30, 2018, in thousands:

	September 30, 2019		September 30, 2018
United States	$	75,891	$	79,267
Foreign	21,990		13,420
Total revenue from continuing operations	$	97,881	$	92,687

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15. Segment Information

The Company has five business segments: overnight air cargo, ground equipment sales, commercial jet engine and parts segment, printing equipment and maintenance and corporate and other. Segment data is summarized as follows (in thousands):

(In Thousands)	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Operating Revenues by Segment:
Overnight Air Cargo	$	19,745	$	17,064	$	38,065	$	34,705
Ground Equipment Sales:
Domestic	12,102		11,070		22,960		16,362
International	639		1,776		2,030		2,871
Total Ground Equipment Sales	12,741		12,846		24,990		19,233
Printing Equipment and Maintenance:
Domestic	175		3		197		194
International	74		137		120		245
Total Printing Equipment and Maintenance	249		140		317		439
Commercial Jet Engines and Parts:
Domestic	6,203		5,341		14,631		27,659
International	11,699		5,302		19,840		10,304
Total Commercial Jet Engines and Parts	17,902		10,643		34,471		37,963
Corporate and other	542		189		1,141		365
Intercompany	(486)		(15)		(1,103)		(18)
Total	50,693		40,867		97,881		92,687
Operating Income (Loss):
Overnight Air Cargo	216		197		264		1,253
Ground Equipment Sales	1,221		697		2,568		1,091
Printing Equipment and Maintenance	(381)		(413)		(837)		(654)
Commercial Jet Engines and Parts	1,193		575		3,191		3,788
Corporate and other	(1,902)		(1,935)		(3,860)		(3,666)
Intercompany	119		—		139		—
Total	466		(879)		1,465		1,812
Capital Expenditures:
Overnight Air Cargo	26		29		56		34
Ground Equipment Sales	286		156		10		296
Printing Equipment and Maintenance	—		—		—		—
Commercial Jet Engines and Parts	16,005		19,287		17,656		19,471
Corporate and other	51		34		72		111
Total	16,368		19,506		17,794		19,912
Depreciation, Amortization and Impairment:
Overnight Air Cargo	19		21		37		44
Ground Equipment Sales	63		65		116		157
Printing Equipment and Maintenance	27		15		30		30
Commercial Jet Engines and Parts	1,456		1,456		3,192		2,554
Corporate and other	137		151		277		296
Intercompany	—		(1)		(3)		(3)
Total	$	1,702	$	1,707	$	3,649	$	3,078

16. Commitments and Contingencies

Contrail Aviation Support, LLC (“Contrail Aviation”), a subsidiary of the Company, completed the purchase of all of the assets owned by Contrail Aviation Support, Inc. (the “Seller”) in July 2016. As part of this purchase, Contrail Aviation agreed to pay contingent additional deferred consideration of up to a maximum of $1,500,000 per year and $3,000,000 in the aggregate. The Company has paid

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in full the contingent consideration as of September 30, 2019 and there is no remaining liability as of September 30, 2019.

Contrail Aviation entered into an Operating Agreement (the “Operating Agreement”) with the Seller providing for the governance of and the terms of membership interests in Contrail Aviation and including put and call options (“Put/Call Option”). The Put/Call Option permits the Seller to require Contrail Aviation to purchase all of the Seller’s equity membership interests in Contrail Aviation commencing on the fifth anniversary of the acquisition, which is on July 18, 2021. The Company has presented this redeemable non-controlling interest in Contrail Aviation between the liabilities and equity sections of the accompanying consolidated balance sheets. In addition, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The fair value of the redeemable non-controlling interest is $6,000,000. The net change in the redemption value compared to March 31, 2019 is an increase of $524,000, of which $203,858 was related to the net change in fair value during the six months ended September 30, 2019, which is reflected on our consolidated statements of equity.

17.  Subsequent Events

Management performs an evaluation of events that occur after the balance sheet date but before consolidated financial statements are issued for potential recognition or disclosure of such events in its consolidated financial statements.

On November 8, 2019, we extended the maturity date of the Air T Revolver to February 28, 2020. The borrowing capacity returned to $17 million from a temporary increase to $20 million on September 24, as mentioned in Footnote 12, Financing Arrangements. Concurrently, the Company also extended the maturity date of the AirCo Revolver to February 28, 2020. Principal amount remained at $10 million. All other terms for both agreements remained unchanged.

On November 8, 2019, the Company purchased a 19.90% interest in Cadillac Castings, Inc, a Michigan corporation (“Cadillac”). The purchase price for the interest acquired approximated $3,000,000. Cadillac is a full-service ductile iron foundry located in Cadillac, Michigan. Cadillac operates a 275,000 square-foot facility located on 43 acres and is a major supplier of engineered ductile iron, including high silicon molybdenum cast components.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Overview

Air T, Inc. (the “Company,” “Air T,” “we” or “us”) is a holding company with a portfolio of operating businesses and financial assets. Our goal is to prudently and strategically diversify Air T’s earnings power and compound the growth in its free cash flow per share over time.

We currently operate in five 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;

•Printing equipment and maintenance, which designs, manufactures and sells advanced digital print production equipment and provides maintenance services to commercial customers; and commercial aircraft companies and,

•Corporate and other, which acts as the capital allocator and resource for other segments.

On September 30, 2019, we completed the sale of 100% of the equity ownership in the Company's wholly-owned subsidiary, Global Aviation Services, LLC.

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. 

All discussions and disclosures below are in thousands, unless stated otherwise.

Second Quarter Fiscal 2020 Compared to Second Quarter Fiscal 2019

Consolidated revenue increased by $9,826 or 24% to $50,693 for the three-month period ended September 30, 2019 compared to the same quarter in the prior fiscal year.

Following is a table detailing revenue by segment, net of intercompany during the three months ended September 30, 2019 compared to the same quarter in the prior fiscal year (in thousands):

	Three Months Ended September 30,				Change
	2019		2018
Overnight Air Cargo	$	19,745	$	17,064	$	2,681	16	%
Ground Equipment Sales	12,741		12,838		(97)		(1)	%
Commercial Jet Engines and Parts	17,801		10,643		7,158		67	%
Printing Equipment and Maintenance	249		139		110		79	%
Corporate and other	157		183		(26)		(14)	%
	$	50,693	$	40,867	$	9,826	24	%

Revenues from the air cargo segment increased by $2,681 (16%) compared to the second quarter of the prior fiscal year. The increase was principally attributable to higher administrative fees and pass-through revenues to FedEx and higher sales to maintenance customers outside of FedEx.

The ground equipment sales segment contributed approximately $12,741 and $12,838 to the Company’s revenues for the three-month periods ended September 30, 2019 and 2018 respectively, representing a $97 (1)% decrease in the current quarter. At September 30, 2019, the ground equipment sales segment’s order backlog was $36.2 million compared to $30.6 million at September 30, 2018.

The commercial jet engines and parts segment contributed $17,801 of revenues in the quarter ended September 30, 2019 compared to $10,643 in the comparable prior year quarter which is an increase of $7,158 or 67%. The increase was primarily driven by Contrail's higher aircraft and component sales as well as higher lease revenue in the current quarter.

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Following is a table detailing operating income (loss) by segment during the three months ended September 30, 2019 compared to the same quarter in the prior fiscal year (in thousands):

	Three Months Ended September 30, 2019				Change
	2019		2018
Overnight Air Cargo	$	254	$	198	$	56	28	%
Ground Equipment Sales	1,221		696		525		75	%
Commercial Jet Engines and Parts	1,083		575		508		88	%
Printing Equipment and Maintenance	(300)		(413)		113		(27)	%
Corporate and other	(1,791)		(1,935)		144		(7)	%
	$	467	$	(879)	$	1,346	n/m

Consolidated operating income for the quarter ended September 30, 2019 was $467, an increase of $1,346 from the operating loss of $879 in the comparable quarter of the prior year.

The ground equipment sales segment operating income increased by $525 (75%) to $1,221. This increase was primarily attributable to the fact that sales in the current quarter contained higher margin orders when compared to prior quarter sales that included broader product mix with lower margin orders.

The commercial jet engines and parts segment generated an operating income of $1,083 in the current-year quarter compared to an operating income of $575 in the prior-year quarter. The change was due to Contrail's higher margin aircraft and component sales, offset by higher medical claims costs at other companies in the same segment.

Consolidated operating expenses increased by $8,482 or 20% to $50,227 in the current year quarter. The increase in operating expenses was primarily driven by the commercial jet engines and parts segment and the ground equipment sales segment. The higher operating expenses was a direct result of increased sales in these two segments.

Following is a table detailing non-operating income (loss) during the three months ended September 30, 2019 compared to the same quarter in the prior fiscal year (in thousands):

	Three Months Ended September 30,				Change
	2019		2018
Other-than-temporary impairment loss on investments	$	(395)	$	—	$	(395)
Interest expense	(2,047)		(714)		(1,333)
Gain on settlement of bankruptcy	18		—		18
Bargain purchase acquisition gain	14		—		14
Income (Loss) from equity method investments	(34)		160		(194)
Other	(440)		354		(794)
	$	(2,884)	$	(200)	$	(2,684)

The Company had net non-operating loss of $(2,884) for the quarter ended September 30, 2019, an increase of $(2,684) from $(200) in the prior-year quarter, principally due to an impairment loss in the investment of Insignia of $(395) and an increase in interest expense of $(1,333) generated by increased debt activities as detailed in Footnote 11.

Pretax loss from continuing operations for the three-month period ended September 30, 2019 was $(2,418) compared to $(1,079) in the prior year comparable period, which was primarily attributable to the increase in non-operating loss of $(2,684), offset by increase in operating income of $1,346 as explained above.

During the three-month period ended September 30, 2019, the Company recorded $296 in income tax benefit at an effective rate of 12.24%. The Company records income taxes using a discrete, year-to-date tax expense calculation for interim reporting. The primary factors contributing to the difference between the federal statutory rate of 21% and the Company's effective tax rate for the three-month period ended September 30, 2019 were the change in valuation allowance related to Delphax, the estimated expense for the exclusion of loss for the Company's captive insurance company subsidiary under Section 831(b), the estimated deduction for Foreign-Derived Intangible Income, and the exclusion from the tax provision of the minority owned portion of the pretax income of Contrail Aviation Support, LLC. During the three month period ended September 30, 2018, the Company recorded $300 in income tax benefit

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which resulted in an effective tax rate of 27.80%. The primary factors contributing to the difference between the federal statutory rate and the Company's effective tax rate for the three-month period ended September 30, 2018 were the estimated benefit for the exclusion of income for the Company's captive insurance company subsidiary under Section 831(b), the presentation of the tax impact of the bargain purchase gain and state income tax expense.

First Six Months of Fiscal 2019 Compared to First Six Months of Fiscal 2018

Following is a table detailing revenue by segment (in thousands):

	Six Months Ended September 30,				Change
	2019		2018		6 mos
Overnight Air Cargo	$	38,064	$	34,705	$	3,359	10	%
Ground Equipment Sales	24,991		19,224		5,767		30	%
Printing Equipment and Maintenance	313		439		(126)		(29)	%
Commercial Jet Engines and Parts	34,128		37,963		(3,835)		(10)	%
Corporate	385		356		29		8	%
	$	97,881	$	92,687	$	5,194	6	%

Revenues from the air cargo segment increased by $3,359 or 10% compared to the six months ended September 30, 2018. The increase was principally attributable to higher administrative fees and pass-through revenues to FedEx and higher sales to maintenance customers outside of FedEx.

The ground equipment sales segment contributed approximately $24,991 and $19,224 to the Company’s revenues for the six-month periods ended September 30, 2019 and 2018 respectively, representing a $5,767 or 30% increase in the current six-month period. The increase was due to increased orders of commercial and military deicers in addition to new customers.

The commercial jet engines and parts segment contributed $34,128 of revenues in the six months ended September 30, 2019 compared to $37,963 in the comparable prior year six months. The decrease was primarily driven by the fact that Contrail sold four whole engines in May 2018 totaling $17.4 million, which did not recur in 2019. This decrease was slightly offset by higher component and lease revenues in the three months ended September 30, 2019 compared to the three months ended September 30, 2018.

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Following is a table detailing operating income (loss) by segment during the six months ended September 30, 2019 compared to the same six months in the prior fiscal year (in thousands):

	Six Months Ended September 30,				Change
	2019		2018		6 mos
Overnight Air Cargo	$	271	$	1,255	$	(984)	(78)	%
Ground Equipment Sales	2,568		1,089		1,479		136	%
Printing Equipment and Maintenance	(682)		(654)		(28)		(4)	%
Commercial Jet Engines and Parts	2,971		3,788		(817)		(22)	%
Corporate	(3,663)		(3,666)		3		—	%
	$	1,465	$	1,812	$	(347)	(19)	%

Consolidated operating income for the six months ended September 30, 2019 was $1,465, a decrease of $347 from operating income of $1,812 for the comparable six months of prior year.

Operating income for the air cargo segment decreased by $984 (78)% due primarily to higher pilot salaries and increased pilot headcount.

The ground equipment sales segment operating income increased by $1,479 (136%) to $2,568 in the six-month period ended September 30, 2019. This increase was primarily attributable to increased sales volume as well as higher margin product mix.

The commercial jet engines and parts segment generated an operating income of $2,971 in the current-year six months compared to an operating income of $3,788 in the prior-year six months. The decrease corresponded to the decrease in sales in this segment in addition to higher medical claim costs when compared to prior year six months.

Consolidated operating expenses increased by $5,541 or 6% to $96,416 in the six months ended September 30, 2019. The increase in operating expenses was primarily driven by the increases in the overnight air cargo segment due to higher pilot salaries and the ground equipment sales segment (higher operating expenses as a result of increased sales), offset by the decrease in the commercial jet engines and parts segment as a result of decreased sales at Contrail and higher medical claims costs at other companies in the same segment.

Following is a table detailing non-operating income (loss) during the six months ended September 30, 2019 compared to the same six months in the prior fiscal year (in thousands):

	Six Months Ended September 30,				Change
	2019		2018		6 months
Other-than-temporary impairment loss on investments	$	(1,210)	$	—	$	(1,210)
Interest expense	(3,071)		(1,421)		(1,650)
Gain on settlement of bankruptcy	4,527		—		4,527
Bargain purchase acquisition gain	49		1,984		(1,935)
Income (Loss) from equity method investments	(355)		170		(525)
Other	(205)		133		(338)
	$	(265)	$	866	$	(1,131)

The Company had net non-operating loss of $(265) for the six months ended September 30, 2019, a decrease of $(1,131) from net non-operating income of $866 in the prior-year six-month period, principally due to an impairment loss in the investment of Insignia of $(1,210), an increase in interest expense of $(1,650) generated by increased debt activities as detailed in Footnote 11, a decrease in bargain purchase acquisition gain of $(1,935) offset by the $4,527 gain on settlement of bankruptcy related to Dephax Canada and UK.

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Pretax income from continuing operations for the six-month period ended September 30, 2019 was $1,200 compared to $2,678 in the prior year comparable period, which was primarily attributable to the decrease in non-operating loss of $(1,131) in addition to decrease in operating income of $(347) as explained above.

During the six-month period ended September 30, 2019, the Company recorded $668 in income tax expense at an effective rate of 55.65%. The Company records income taxes using a discrete, year-to-date tax expense calculation for interim reporting. The primary factors contributing to the difference between the federal statutory rate of 21% and the Company's effective tax rate for the six-month period ended September 30, 2019 were the change in valuation allowance related to Delphax, the estimated expense for the exclusion of loss for the Company's captive insurance company subsidiary under Section 831(b), the estimated deduction for Foreign-Derived Intangible Income, and the exclusion from the tax provision of the minority owned portion of the pretax income of Contrail Aviation Support, LLC. During the six-month period ended September 30, 2018, the Company recorded $117 in income tax benefit which resulted in an effective tax rate of 4.37%. The primary factors contributing to the difference between the federal statutory rate and the Company's effective tax rate for the six-month period ended September 30, 2018 were related to the estimated benefit for the exclusion of income for the Company's captive insurance company subsidiary afforded under Section 831(b), the change in valuation allowance and the presentation of the tax impact of the bargain purchase gain.

Critical Accounting Policies and Estimates

The Company’s significant accounting policies are fully described in Note 1 to the consolidated financial statements and in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2019. The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the use of estimates and assumptions to determine certain assets, liabilities, revenues and expenses. Management bases these estimates and assumptions upon the best information available at the time of the estimates or assumptions. The Company’s estimates and assumptions could change materially as conditions within and beyond our control change. Accordingly, actual results could differ materially from estimates. There were no significant changes to the Company’s critical accounting policies and estimates during the three-months ended September 30, 2019.

Seasonality

The ground equipment sales segment business has historically been seasonal, with the revenues and operating income typically being lower in the first and fourth fiscal quarters as commercial deicers are typically delivered prior to the winter season. Other segments are not susceptible to material seasonal trends.

Liquidity and Capital Resources

As of September 30, 2019, the Company held approximately $27,536 in cash and cash equivalents and restricted cash. The Company also held $1,018 in restricted investments held as statutory reserve of SAIC and the remaining $102 of restricted investments pledged to secure SAIC’s participation in certain reinsurance pools. The Company has approximately $4,862 of marketable securities as of September 30, 2019.

As of September 30, 2019, the Company’s working capital amounted to $42,955, an increase of $24,401 compared to September 30, 2018. 

As of September 30, 2019, the exercise of Warrants to purchase TruPs issued on June 10, 2019 has generated cash proceeds of $5,407, which is disclosed in the financing section on our consolidated statements of cash flows.

On August 16, 2019, Contrail entered into a term loan agreement with Old National Bank to borrow $13 million at the interest rate of LIBOR plus 3.75% per annum. The maturity date of the term loan is August 1, 2024.

On September 24, 2019, Air T amended the MBT revolver to temporarily increase the borrowing commitment from $17 million to $20 million. All other terms of the credit agreement remain unchanged.

The revolving lines of credit at both Air T and AirCo have due dates or expire within the next twelve months, as does some term debts within various business units. On November 8, 2019, we entered into agreements with MBT ("extension agreements") to extend the maturity date of the Air T Revolver and AirCo Revolver to February 28, 2020. As part of the extension agreement, the Air T revolver's borrowing capacity was also returned to $17 million. We are currently seeking to refinance these obligations prior to February 28,

35

2020; however, there is no assurance that we will be able to execute this refinancing or, if we are able to refinance these obligations, that the terms of such refinancing would be as favorable as the terms of our existing credit facility.

As of September 30, 2019, the Company had sufficient capital resources to cover contractual financing obligations due by September 30, 2020. Cash flows from operations, cash and cash equivalents, and the other sources of liquidity described above are expected to be available and sufficient to meet foreseeable cash requirements. 

The Company’s Credit Agreement with MBT (the Air T debt in Footnote 11 to the financial statements) includes several covenants that are measured once a year as of March 31, including but not limited to a negative covenant requiring a debt service coverage ratio of 1.25. The Company is working with its operating subsidiaries to assure compliance with the MBT covenants at March 31, 2020. However, there is no assurance that the Company will meet each covenant at March 31, 2020 and in such event the Company will work with MBT to seek a waiver and/or undertake other actions to avoid an event of non-compliance.

Cash Flows

Following is a table of changes in cash flow for the six months ended September 30, 2019 and 2018 (in thousands):

	Six Months Ended September 30,
	2019	2018
Net Cash Provided by Operating Activities	603	14,871
Net Cash Provided by (Used in) Investing Activities	1,933	(27,576)
Net Cash Provided by Financing Activities	12,327	13,258
Effect of foreign currency exchange rates on cash and cash equivalents	26	5
Net Increase in Cash and Cash Equivalents and Restricted Cash	14,889	558

Net cash provided by operating activities was $603 for the six-month period ended September 30, 2019 compared to the net cash provided by operating activities of $14,871 in prior year period. The primary drivers in the decrease in cash provided by operating activities for the six months ended September 30, 2019 was the increase in accounts receivable at GGS due to significant increase in commercial deicer sales as well as increased inventory levels at Contrail due to two engines coming off lease into inventory and at GGS due to significant backlog and production requirements in the current quarter.

Net cash provided by investing activities for the six-month period ended September 30, 2019 was $1,933 compared to net cash used in investing activities of $(27,576) in prior year period. The primary driver in generating cash from investing activities was the lower cash used in business combinations, purchases of marketable securities as well as lower capital expenditures, and cash provided by the sale of GAS.

Net cash provided by financing activities for the six-month period ended September 30, 2019 was $12,327 compared to net cash provided by financing activities of $13,258 in the prior year period. The slight decrease was primarily driven by lower net cash proceeds from lines of credit and term loans, in addition to cash proceeds from exercise of Warrants to purchase TruPs.

Impact of Inflation

The Company believes that inflation has not had a material effect on its operations, because increased costs to date have generally been passed on to its customers. Under the terms of its overnight air cargo business contracts the major cost components of this business’ operations, consist principally of fuel, and certain other direct operating costs, and certain maintenance costs that are reimbursed by its customer. Significant increases in inflation rates could, however, have a material impact on future revenue and operating income.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company is exposed to various risks, including interest rate risk. As interest rates are projected to increase and can be volatile, the Company has designated a risk management policy which provides for the use of derivative instruments to provide protection against rising interest rates on variable rate debt.

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Item 4. Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, referred to collectively herein as the Certifying Officers, are responsible for establishing and maintaining our disclosure controls and procedures. The Certifying Officers have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) as of September 30, 2019. Based on that review and evaluation, which included inquiries made to certain other employees of the Company, the Certifying Officers have concluded that the Company’s current disclosure controls and procedures, as designed and implemented, are effective in ensuring that information relating to the Company required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving the stated goals under all potential future conditions, regardless of how remote.

There has not been any change in the Company’s internal control over financial reporting in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act that occurred during the quarter ended September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II -- OTHER INFORMATION

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

(a)None.

(a)None.

(b)On May 14, 2014, the Company announced that its Board of Directors had authorized a program to repurchase up to 750,000 shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions, in compliance with SEC Rule 10b-18, over an indefinite period.

Purchases during the quarter ended September 30, 2019 are described below:

Issuer Purchases of Equity Securities

Dates of Shares Purchased	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Public Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 - July 31, 2019	2,097	$	17.81	24,438	699,027
August 1 - August 31, 2019	2,674	$	17.87	21,764	677,263
September 1 - September 30, 2019	1,112	$	14.32	20,652	656,611
	5,883

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Item 5. Other information

(a) Other Information

On November 8, 2019, AirCo 1, LLC, a wholly-owned subsidiary of AirCo, LLC, a wholly-owned subsidiary of Stratus Aero Partners, LLC, a wholly-owned subsidiary of Air T, Inc., and MBT, entered into that certain Change in Terms Agreement (the “AirCo 1 Amendment”). The AirCo 1 Amendment amends the AirCo Revolving Credit Note in the original principal amount of $10,000,000 by extending the maturity date to February 28, 2020, and providing for a three-month interest only payment schedule with final payment of all principal and unpaid accrued interest due on the new maturity date.

On November 8, 2019, the Company and MBT entered into that certain Change in Terms Agreement (the “Company Amendment”). The Company Amendment amends the Company Revolving Credit Note to return the principal amount to $17,000,000, extend the maturity date to February 28, 2020 with final payment of all principal and unpaid accrued interest due on the maturity date.

The above discussion is qualified in its entirety by reference to the AirCo 1 Amendment and the Company Amendment filed as Exhibits 10.29 and 10.30 to this Report, which are incorporated herein by reference.

On November 8, 2019, the Company purchased a 19.90% interest in Cadillac Castings, Inc, a Michigan corporation (“Cadillac”). The purchase price for the interest acquired approximated $3,000,000. In connection with the transaction, investment entities controlled by Nick Swenson increased ownership interest in Cadillac from approximately 33% to approximately 61%. Gary Kohler, a director of the Company is an investor in the investment entity controlled by Mr. Swenson that purchased the additional shares.

Cadillac is a full-service ductile iron foundry located in Cadillac, Michigan (“Cadillac”). Cadillac operates a 275,000 square-foot facility located on 43 acres and is a major supplier of engineered ductile iron, including high silicon molybdenum cast components. Molds are made with a high-speed green sand horizontal Combustion Engineering (CE) SpoMatic process. Cadillac also uses a custom automated Resin Bonded Sand (RBS) process, for difficult and “rangy” products. Cadillac provides support from the design and prototype phases all the way through production of its products. Cadillac operates in the automotive, commercial vehicle, off highway, industrial and railroad industries. Cadillac’s annual revenues exceeded $100MM in each of the last two calendar years.

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Item 6. Exhibits

(a) Exhibits

No.	Description
10.1	Master Loan Agreement, dated June 24, 2019 by and between Contrail Aviation Support, LLC, Contrail Aviation Leasing, LLC and Old National Bank.
10.2	Air T, Inc. Continuing Guaranty in favor of Old National Bank, dated June 24, 2019.
10.3	Supplement #1 to Master Loan Agreement, dated June 24, 2019 by and between Contrail Aviation Support, LLC, Contrail Aviation Leasing, LLC and Old National Bank.
10.4	Contrail Aviation Support, LLC and Contrail Aviation Leasing, LLC First Amended and Restated Promissory Note Term Note A in the principal amount of $9,920,000.00 to Old National Bank.
10.5	Supplement #2 to Master Loan Agreement, dated June 24, 2019 by and between Contrail Aviation Support, LLC, and Old National Bank.
10.6	Contrail Aviation Leasing, LLC Continuing Guaranty in favor of Old National Bank, dated June 24, 2019.
10.7	Contrail Aviation Support, LLC First Amended and Restated Promissory Note Revolving Note in the principal amount of $20,000,000.00 to Old National Bank.
10.8	Supplement #3 to Master Loan Agreement, dated June 24, 2019 by and between Contrail Aviation Support, LLC, Contrail Aviation Leasing, LLC and Old National Bank.
10.9	Contrail Aviation Support, LLC and Contrail Aviation Leasing, LLC First Amended and Restated Promissory Note Term Note B in the principal amount of $18,000,000.00 to Old National Bank.
10.10	Supplement #4 to Master Loan Agreement, dated August 16, 2019 by and between Contrail Aviation Support, LLC, Contrail Aviation Leasing, LLC and Old National Bank.
10.11	Contrail Aviation Support, LLC and Contrail Aviation Leasing, LLC Term Note C in the principal amount of $13,000,594.00 to Old National Bank.
10.12	Trustee Aircraft Security Agreement, dated August 16, 2019 by and between Wells Fargo Trust Company, National Association, Contrail Aviation Support, LLC, Contrail Aviation Leasing, LLC, and Old National Bank.
10.13	Beneficial Interest Pledge Agreement, dated August 16, 2019 by and between Contrail Aviation Leasing, LLC, and Old National Bank.
10.14	Assignment of Beneficial Interest of Trust, dated August 16, 2019 by and between Contrail Aviation Leasing, LLC and Old National Bank.
10.15	Aircraft Asset Sale and Purchase Agreement, dated August 2, 2019 by and between Sapphire Leasing I (AOE 5) Limited, Sapphire Finance I Holding Designated Activity Company, Wilmington Trust SP Services (Dublin) Limited, and Contrail Aviation Support, LLC.*
10.16	Form of Third Aircraft Lease Amendment Agreement, dated August 2, 2019 by and between Sapphire Aviation Finance I (UK) Limited and MIAT Mongolian Airlines.*
10.17	Buyer Guarantee, dated August 2, 2019 by and between Contrail Aviation Support, LLC and Sapphire Leasing I (AOE 5) Limited.
10.18	Form of Declaration of Trust (MSN 29922), dated June 26, 2019 by and between Contrail Aviation Leasing, LLC, Wilmington Trust SP Services (Dublin) Limited, and Contrail Aviation Support, LLC.
10.19	Novation and Amendment Agreement, dated October 24, 2019 by and between Sapphire Aviation Finance I (UK) Limited, Wilmington Trust SP Services (Dublin) Limited, and MIAT Mongolian Airlines.*
10.20	Netting Letter, dated October 31, 2019 by and between Sapphire Leasing I (AOE 5) Limited and Wilmington Trust SP Services (Dublin) Limited.*
10.21	Supplement #5 to Master Loan Agreement, dated October 30, 2019 by and between Contrail Aviation Support, LLC, Contrail Aviation Leasing, LLC and Old National Bank.
10.22	Contrail Aviation Support, LLC and Contrail Aviation Leasing, LLC Term Note D in the principal amount of $7,553,165.00 to Old National Bank.

39

10.23	Trustee Aircraft Security Agreement, dated October 30, 2019 by and between Wilmington Trust SP Services (Dublin) Limited, Contrail Aviation Support, LLC, Contrail Aviation Leasing, LLC, and Old National Bank.
10.24	Beneficial Interest Pledge Agreement, dated October 30, 2019 by and between Contrail Aviation Leasing, LLC and Old National Bank.
10.25	Form of Assignment of Beneficial Interest of Trust, dated October 30, 2019 by and between Contrail Aviation Leasing, LLC and Old National Bank.
10.26	Aircraft Sale and Purchase Agreement, dated June 4, 2019 by and between Diamond Head 2 (Ireland) DAC, Diamond Head 3 (Ireland) DAC, and Contrail Aviation Support, LLC.*
10.27	Equity Purchase Agreement, dated September 30, 2019, by and among PrimeFlight Aviation Services, Inc., Global Aviation Services, LLC, and CSA Air, LLC.
10.28	Pro Forma Financial Information
10.29	Change in Terms Agreement, dated November 8, 2019, by and between AirCo 1, LLC and Minnesota Bank & Trust.
10.30	Change in Terms Agreement, dated November 8, 2019, by and between Air T, Inc. and Minnesota Bank & Trust.
10.31	Aircraft Asset Sale and Purchase Agreement, dated June 21, 2019 by and between Sapphire Finance I Holding Designated Activity Company, Contrail Aviation Leasing, LLC, and Contrail Aviation Support, LLC.*
10.32	Buyer Guarantee, dated June 25, 2019 by and between Contrail Aviation Support, LLC and Sapphire Finance I Holding Designated Activity Company.
10.33	Notice of Beneficial Interest Transfer, dated July 26, 2019 from Wells Fargo Trust Company, National Association, Sapphire Finance I Holding Designated Activity Company, and Contrail Aviation Leasing, LLC to Sun Country, Inc. d/b/a Sun Country Airlines.*
10.34	Guarantee, dated July 26, 2019 by and between Contrail Aviation Support, LLC and Sun Country, Inc. d/b/a Sun Country Airlines.*
10.35	Third Trust Assignment and Assumption Agreement, dated July 26, 2019 by and between Sapphire Finance I Holding Designated Activity Company and Contrail Aviation Leasing, LLC.
10.36	Netting Letter, dated July 26, 2019 by and between Sapphire Finance I Holding Designated Activity Company and Contrail Aviation Leasing, LLC.*
10.37	Amendment Number Five to Aircraft Lease Agreement, dated June 20, 2019 by and between Wells Fargo Trust Company, National Association and Sun Country, Inc. d/b/a Sun Country Airlines.*
10.38	Amendment No. 1 to Amended and Restated Credit Agreement, dated September 24, 2019 by and between Air T, Inc. and Minnesota Bank & Trust.
31.1	Section 302 Certification of Chief Executive Officer and President
31.2	Section 302 Certification of Chief Financial Officer
32.1	Section 1350 Certifications
99.1	Press Release dated September 30, 2019 regarding sale of Global Aviation Services, LLC
101	The following financial information from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Stockholders Equity, and (v) the Notes to the Condensed Consolidated Financial Statements.

* Portions of the transaction exhibits have been omitted for confidential treatment.

40

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AIR T, INC.
Date: November 12, 2019
	/s/ Nick Swenson
	Nick Swenson, Chief Executive Officer and Director
	/s/ Brian Ochocki
	Brian Ochocki, Chief Financial Officer

41

EX-10.29

EX-10.30

EX-10.38

AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 24, 2019 (the “Amendment”), between Air T, Inc., a Delaware corporation (the “Borrower”), and Minnesota Bank & Trust, a Minnesota state banking corporation (the “Lender”).

RECITALS:

A. The Borrower and the Lender are parties to that certain Amended and Restated Credit Agreement dated as of March 28, 2019 (the “Original Agreement”).

B. The Borrower has requested that the Lender amend the Original Agreement to termporarily increase the Revolving Credit Commitment defined therein by $3,000,000.

C. Subject to the terms and conditions of this Amendment, the Lender will agree to the foregoing request of the Borrower.

NOW, THEREFORE, the parties agree as follows:

1.Defined Terms. All capitalized terms used in this Amendment shall, except where the context otherwise requires, have the meanings set forth in the Original Agreement as amended hereby.

2.Amendments. The Original Agreement is hereby amended as follows:

(a)The definition of the term “Revolving Credit Commitment” defined in Section 1.01 of the Original Agreement is hereby amended in its entirety to read as follows:

“ ‘Revolving Credit Commitment’ means the obligation of the Lender to make Revolving Credit Loans in an aggregate principal amount not to exceed (a) $20,000,000 during the Temporary Revolving Credit Increase Period, and (b) $17,000,000 at all other times, in each case as the same may be changed from time to time pursuant to the terms hereof.”

(b)Section 1.01 of the Original Agreement is hereby amended by inserting the following new definitions of the terms “First Amendment”, “First Amendment Effective Date” and “Temporary Revolving Credit Commitment Increase Period” in the appropriate alphabetical order:

“ ‘First Amendment’ means that certain Amendment No. 1 to Amended and Restated Credit Agreement dated as of September 24, 2019.

5350431_1.docx 

‘First Amendment Effective Date’ means the ‘Effective Date’, as such term is defined in the First Amendment.

‘Temporary Revolving Credit Commitment Increase Period’ means the period commencing on the First Amendment Effective Date and ending on October 19, 2019.”

(c)The form of Borrowing Base Certificate attached as Exhibit C to the Original Agreement is hereby amended in its entirety to the form of Borrowing Base Certificate (Amended 9/2019) attached as Exhibit C to this Amendment.

3.Conditions to Effectiveness. This Amendment shall become effective on the date (the “Effective Date”) when, and only when, the Lender shall have received:

(a)this Amendment, duly executed by the Borrower;

(b)an Amended and Restated Revolving Credit Note (the “A&R Revolving Credit Note”), in the form provided by Lender, duly executed by Borrower;

(c)an Acknowledgment and Agreement, in the form provided by the Lender, duly executed by each Guarantor; and

(d)such other documents as the Lender may reasonably request.

4.Representations and Warranties. To induce the Lender to enter into this Amendment, the Borrower represents and warrants to the Lender as follows:

(a)The execution, delivery and performance by the Borrower of this Amendment, the A&R Revolving Credit Note, and any other Loan Document to which the Borrower is a party have been duly authorized by all necessary corporate action, do not require any approval or consent of, or any registration, qualification or filing with, any government agency or authority or any approval or consent of any other person (including, without limitation, any shareholder), do not and will not conflict with, result in any violation of or constitute any default under, any provision of the Borrower’s articles of incorporation or bylaws, any agreement binding on or applicable to the Borrower or any of its property, or any law or governmental regulation or court decree or order, binding upon or applicable to the Borrower or of any of its property and will not result in the creation or imposition of any security interest or other lien or encumbrance in or on any of its property pursuant to the provisions of any agreement applicable to the Borrower or any of its property;

(b)The representations and warranties contained in the Original Agreement are true and correct as of the date hereof as though made on that date

2

except: (i) to the extent that such representations and warranties relate solely to an earlier date; and (ii) that the representations and warranties set forth in Section 5.04 of the Original Agreement to the audited annual financial statements and internally-prepared interim financial statements of the Borrower shall be deemed to be a reference to the audited financial statements and interim financial statements, as the case may be, of the Borrower most recently delivered to the Lender pursuant to Section 6.01(a) or 6.01(b) of the Original Agreement;

(c)No events have taken place and no circumstances exist at the date hereof which would give the Borrower the right to assert a defense, offset or counterclaim to any claim by the Lender for payment of the Obligations;

(d)The Original Agreement, as amended by this Amendment, the A&R Revolving Credit Note, and each other Loan Document to which the Borrower is a party are the legal, valid and binding obligations of the Borrower and are enforceable in accordance with their respective terms, subject only to bankruptcy, insolvency, reorganization, moratorium or similar laws, rulings or decisions at the time in effect affecting the enforceability of rights of creditors generally and to general equitable principles which may limit the right to obtain equitable remedies; and

(e)Before and after giving effect to this Amendment, there does not exist any Default or Event of Default.

5.Release. The Borrower hereby releases and forever discharges the Lender and its successors, assigns, directors, officers, agents, employees and participants from any and all actions, causes of action, suits, proceedings, debts, sums of money, covenants, contracts, controversies, claims and demands, at law or in equity, which the Borrower ever had or now has against the Lender or its successors, assigns, directors, officers, agents, employees or participants by virtue of the Lender’s relationship to the Borrower in connection with the Loan Documents and the transactions related thereto

6.Reference to and Effect on the Loan Documents.

(a)From and after the date of this Amendment, each reference in:

(i)the Original Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Original Agreement, and each reference to the “Credit Agreement”, the “Credit Agreement”, “thereunder”, “thereof”, “therein” or words of like import referring to the Original Agreement in any other Loan Document shall mean and be a reference to the Original Agreement as amended hereby; and except as specifically set forth above, the Original Agreement remains in full force and effect and is hereby ratified and confirmed; and

3

(ii)any Loan Document to the “Revolving Credit Note”, “thereunder”, “thereof”, “therein” or words of like import referring to the Revolving Credit Note shall mean and be a reference to the A&R Revolving Credit Note executed and delivered pursuant to this letter amendment.

(b)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lender under the Agreement or any other Loan Document, nor constitute a waiver of any provision of the Agreement or any such other Loan Document.

7.Costs, Expenses and Taxes. The Borrower agrees to pay on demand all costs and expenses of the Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and the other documents to be delivered hereunder or thereunder, including their reasonable attorneys’ fees and legal expenses. In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery, filing or recording of this Amendment and the other instruments and documents to be delivered hereunder and agrees to save the Lender harmless from and against any and all liabilities with respect to, or resulting from, any delay in the Borrower’s paying or omission to pay, such taxes or fees.

8.Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.

9.Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

10.Counterparts. This Amendment may be executed in counterparts and by separate parties in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same document. Receipt by telecopy, pdf file or other electronic means of any executed signature page to this Amendment shall constitute effective delivery of such signature page.

11.Recitals. The Recitals hereto are incorporated herein by reference and constitute a part of this Amendment.

[SIGNATURE PAGE FOLLOWS]

4

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above.

AIR T, INC.

By:  /s/ Nick Swenson  

Name:  Nicholas Swenson  

Its:  CEO    

MINNESOTA BANK & TRUST

By /s/ Eric Gundersen  

Name: Eric P. Gundersen

Title:  Senior Vice President

[signature page Amendment No. 1 to Amended and Restated Credit Agreement]

EXHIBIT C

FORM OF BORROWING BASE CERTIFICATE

(Amended 9/2019)

[see attached]

Borrowing Base Certificate

Minnesota Bank & Trust

9800 Bren Road East, Suite 200

Minnetonka, MN 55343

Attention: Mr. Eric P. Gundersen, SVP

Computed as of: _______________________    Report Number: _______

The undersigned is the Borrower under that certain Amended and Restated Credit Agreement, dated as of March 28, 2019 (such Amended and Restated Credit Agreement, as amended to date and as it may be further amended, modified, supplemented or restated from time to time being the “Credit Agreement”; capitalized terms not otherwise defined herein being used as therein defined) between AIR T, INC. (the “Borrower”) and MINNESOTA BANK & TRUST (the “Lender”).

The Borrower hereby reaffirms all representations and warranties to the Credit Agreement and certifies and warrants that the Borrower and the other Loan Parties hold, subject to the security interest of the Lender under the Agreement, and the other Loan Documents, the following Collateral computed on a consolidated basis as of _____________ __, 201_.

A. ACCOUNTS RECEIVABLE

1. Accounts Receivable Balance as of period ending above		$__________
2. Less: Ineligible Accounts
a. Receivables over 120 days past invoice date	$___________
b. 10% redline rule	$
c. Insolvent	$
d. Foreign	$
e. Affiliated	$
f. Contras	$
g. U.S. Government	$
h. Bonded	$
i. State, county, municipality	$
j. Customer deposits	$_____________
k. Excess of concentration limit for account debtor	$_____________
l. Other miscellaneous	$____________
3. TOTAL Ineligibles		($__________)
4. Total Eligible Accounts (Line A.1 – Line A.3)		$___________
5. Eligible Accounts Loan Value at 75% of Line A.4.		$___________

B. INVENTORY

Report dated (see attached)

1. Raw Materials and Finished Goods Inventory		$
2. Less:
a. Discontinued	$_______________
b. Stored at a location w/out appropriate landlord/bailee/warehouseman’s waiver	$_______________
c. Consigned to a Loan Party
d. Inventory consigned by a Loan Party that does not comply with all Consigned Inventory Requirements	$_______________
3. Total Ineligibles		$_____________
4. Total Eligible Inventory    (Line B.1-Line B.3)		$______________
5. Eligible Inventory Loan Value @ 50% of Line B.4		$______________
C. Borrowing Base: 1. (Line A.4 + Line B.5)		$______________
D. Availability/Amount to be Repaid:
1. Total Usage (Outstanding principal balance of Revolving Loans + Letter of Credit Obligations)	$_______________
2. Revolving Credit Commitment ($17,000,000)	$_______________
3. Borrowing Base (Line C.1.)
4A. Availability (Amount by which the lesser of [Line D.1 and Line D.3] exceeds Line D.1)		$_______________
4B. Amount to be repaid (Amount by which Line D.1 exceeds the lesser of [Line D.1 and Line D.3] exceeds Line D.1)		$_______________

The Borrower further certifies and warrants that no Event of Default is existing as of the date hereof and, to the best knowledge and belief of the officer of the Borrower executing this Borrowing Base Certificate, there has not been (except as may otherwise indicated below) any change to the information set forth above since the computation date specified above which would materially reduce the amounts shown if such amounts were computed as of the date of this Borrowing Base Certificate and all of the information provided on: (a) the Inventory report attached as Schedule A to this

Borrowing Base Certificate and (b) the Other Investments report attached as Schedule B to this Borrower Base Certificate, is true and correct as of the date hereof.

AIR T, INC.

By /s/ Nick Swenson  Title:  CEO  Date:  9/24/2019 

Schedule A to Borrowing Base Certificate

Inventory Report as of _________________

[see attached]

Schedule B to Borrowing Base Certificate

Other Investments Report as of _________________

[see attached]

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Nick Swenson, certify that:

1.I have reviewed this Form 10-Q of Air T, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(a)Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2019
	/s/ Nick Swenson
	Nick Swenson Chief Executive Officer

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION

I, Brian Ochocki, certify that:

1.I have reviewed this Form 10-Q of Air T, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2019
	/s/ Brian Ochocki
	Brian Ochocki Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Air T, Inc. (the "Company") Quarterly Report on Form 10-Q for the period ended June 30, 2019 as filed with the United States Securities and Exchange Commission on the date hereof (the "Report"), I, Nick Swenson, Chief Executive Officer, and Brian Ochocki, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: November 12, 2019
	/s/ Nick Swenson
	Nick Swenson, Chief Executive Officer
	(Principal Executive Officer)
	/s/ Brian Ochocki
	Brian Ochocki, Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

XML

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Leases [Abstract]
2020 (excluding the six months ended September 30, 2019)	$ 786
2021	1,311
2022	1,131
2023	938
2024	637
2025	402
Thereafter	5,757
Total undiscounted lease payments	10,962
Less: Interest	2,890
Less: Discount	(495)
Total lease liabilities	$ 7,577

XML

Equity Method Investments - Summarized Unaudited Financial Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net income attributable to Air T, Inc. stockholders	$ (34,000)	$ 160,000	$ (355,000)	$ 170,000
Insignia
Revenue			5,842,000	8,245,000
Gross Profit			1,465,000	3,005,000
Operating income (loss)			(683,000)	253,000
Net income (loss)			(488,000)	184,000
Net income attributable to Air T, Inc. stockholders	$ (142,196)		$ (166,000)	$ 31,000

XML

Financing Arrangements (Details Textual)			3 Months Ended			6 Months Ended
	Jun. 10, 2019 USD ($) shares	Jun. 04, 2019	Sep. 30, 2019 USD ($) $ / shares shares	Jun. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Nov. 08, 2019 USD ($)	Sep. 24, 2019 USD ($)	Sep. 23, 2019 USD ($)	Aug. 16, 2019 USD ($)	Mar. 31, 2019 USD ($)
Debt Instrument [Line Items]
Common stock dividend rate percentage	50.00%
Stock split conversion ratio		1.5
Warrants exercised (in shares) | shares			2,252,797			2,252,797
Long-term debt, gross			$ 75,697,000			$ 75,697,000						$ 58,022,000
Warrants outstanding and exercisable (in shares) | shares			6,147,203			6,147,203
Exercise price of warrants (in USD per share) | $ / shares			$ 2.40			$ 2.40
Face value price of warrant (in USD per share) | $ / shares			$ 2.50			$ 2.50
Unrealized loss on interest rate swaps, net of tax			$ (88,000)	$ (176,000)	$ 29,000	$ (264,000)	$ 29,000
Interest Rate Swap
Debt Instrument [Line Items]
Fair value of interest-rate swap contracts			570,069			$ 570,069						227,000
Unrealized loss on interest rate swaps, net of tax			$ 88,000
Term Note A - MB&T | MBT Credit Agreement | Interest Rate Swap | MBT
Debt Instrument [Line Items]
Fixed interest rate, percentage			4.56%			4.56%
Term Note D - MB&T | MBT Credit Agreement | Interest Rate Swap | MBT
Debt Instrument [Line Items]
Fixed interest rate, percentage			5.09%			5.09%
Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity									$ 20,000,000	$ 17,000,000
Revolving Credit Facility | Line of Credit | Subsequent Event
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity								$ 17,000,000
Air T Funding
Debt Instrument [Line Items]
Warrant term			1 year			1 year
Air T Funding | Trust Preferred Capital Security
Debt Instrument [Line Items]
Shares issued during period | shares	1,600,000
Value of new issues	$ 4,000,000.0
Air T Funding | Warrant
Debt Instrument [Line Items]
Shares issued during period | shares	8,400,000
Value of new issues	$ 21,000,000.0
Contrail Aviation Inc.
Debt Instrument [Line Items]
Long-term debt, gross			$ 26,771,000			$ 26,771,000						24,117,000
Contrail Aviation Inc. | Term Loan C
Debt Instrument [Line Items]
Long-term debt, gross			$ 12,805,000			$ 12,805,000						$ 0
Principle sum face amount											$ 13,000,000

XML

Revenue Recognition - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Total	$ 50,693	$ 40,867	$ 97,881	$ 92,687
Air Cargo
Disaggregation of Revenue [Line Items]
Total	19,745	17,064	38,064	34,705
Air Cargo | Product Sales
Disaggregation of Revenue [Line Items]
Total	6,680	5,003	12,094	10,523
Air Cargo | Support Services
Disaggregation of Revenue [Line Items]
Total	13,033	11,985	25,927	24,082
Air Cargo | Leased Assets
Disaggregation of Revenue [Line Items]
Total	0	0	0	0
Air Cargo | Product and Service, Other
Disaggregation of Revenue [Line Items]
Total	32	76	43	100
Ground equipment sales
Disaggregation of Revenue [Line Items]
Total	12,741	12,838	24,991	19,224
Ground equipment sales | Product Sales
Disaggregation of Revenue [Line Items]
Total	12,489	12,447	24,492	18,617
Ground equipment sales | Support Services
Disaggregation of Revenue [Line Items]
Total	105	148	210	249
Ground equipment sales | Leased Assets
Disaggregation of Revenue [Line Items]
Total	33	15	53	46
Ground equipment sales | Product and Service, Other
Disaggregation of Revenue [Line Items]
Total	114	228	236	312
Commercial jet engines and parts
Disaggregation of Revenue [Line Items]
Total	17,801	10,643	34,128	37,963
Commercial jet engines and parts | Product Sales
Disaggregation of Revenue [Line Items]
Total	13,218	7,380	24,388	32,409
Commercial jet engines and parts | Support Services
Disaggregation of Revenue [Line Items]
Total	1,597	1,327	3,007	2,293
Commercial jet engines and parts | Leased Assets
Disaggregation of Revenue [Line Items]
Total	2,941	1,826	6,655	3,027
Commercial jet engines and parts | Product and Service, Other
Disaggregation of Revenue [Line Items]
Total	45	110	78	234
Printing equipment and maintenance
Disaggregation of Revenue [Line Items]
Total	249	139	313	439
Printing equipment and maintenance | Product Sales
Disaggregation of Revenue [Line Items]
Total	20	122	68	409
Printing equipment and maintenance | Support Services
Disaggregation of Revenue [Line Items]
Total	225	12	236	20
Printing equipment and maintenance | Leased Assets
Disaggregation of Revenue [Line Items]
Total	0	0	0	0
Printing equipment and maintenance | Product and Service, Other
Disaggregation of Revenue [Line Items]
Total	4	5	9	10
Corporate and other
Disaggregation of Revenue [Line Items]
Total	157	183	385	356
Corporate and other | Product Sales
Disaggregation of Revenue [Line Items]
Total	0	0	0	0
Corporate and other | Support Services
Disaggregation of Revenue [Line Items]
Total	(8)	16	33	16
Corporate and other | Leased Assets
Disaggregation of Revenue [Line Items]
Total	36	32	81	72
Corporate and other | Product and Service, Other
Disaggregation of Revenue [Line Items]
Total	$ 129	$ 135	$ 271	$ 268

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Equity Method Investments (Tables)

6 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Summarized Unaudited Financial Information

Summarized unaudited financial information for Insignia for the three months ended June 30, 2019 and 2018 is as follows (in thousands):

	Three Months Ended June 30, 2019		Three Months Ended June 30, 2018
Revenue	$	5,842	$	8,245
Gross Profit	1,465		3,005
Operating income (loss)	(683)		253
Net income (loss)	(488)		184
Net income attributable to Air T, Inc. stockholders	$	(166)	$	31

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Variable Interest Entities (Tables) - Delphax

6 Months Ended

Sep. 30, 2019

Variable Interest Entity [Line Items]

Condensed Balance Sheet

The following table sets forth the carrying values of Delphax’s assets and liabilities as of September 30, 2019 and March 31, 2019 (in thousands):

	September 30, 2019		March 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	13	$	12
Accounts receivable, net	50		47
Other current assets	9		59
Total current assets	72		118
Other tax receivables-long-term	—		311
Total assets	72		429
LIABILITIES
Current liabilities:
Accounts payable	96		2,151
Accrued expenses	392		3,158
Short-term debt	—		1,750
Total current liabilities	488		7,059
Total liabilities	488		7,059
Net Liabilities	$	(416)	$	(6,630)

Condensed Income Statement

The following table sets forth the revenue and expenses of Delphax prior to intercompany eliminations that are included in the Company’s condensed consolidated statement of income for the three months ended September 30, 2019 and 2018 (in thousands):

	Six Months Ended September 30,
	2019		2018
Operating Revenues	$	—	$	—
Operating Expenses:
Cost of sales	—		—
General and administrative	125		222
	125		222
Operating Loss	(125)		(222)
Non-operating Income (Expenses), net	6,237		(46)
Income (Loss) Before Income Taxes	6,112		(268)
Income Taxes	—		—
Net Income (Loss)	$	6,112	$	(268)

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Leases

6 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Leases

The Company has operating leases for the use of real estate, machinery, and office equipment. The majority of our leases have a lease term of 2 to 5 years; however, we have certain leases with longer terms of up to 30 years. Many of our leases include options to extend the lease for an additional period.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease, plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor that is considered likely to be exercised.

Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments. Variable payments are typically operating costs associated with the underlying asset and are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Our leases do not contain residual value guarantees.

The Company has elected to combine lease and non-lease components as a single component and not to recognize leases on the balance sheet with an initial term of one year or less.

The interest rate implicit in lease contracts is typically not readily determinable, and as such the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The components of lease cost for the three and six months ended September 30, 2019 are as follows (in thousands):

	Three Months Ended September 30, 2019		Six Months Ended September 30, 2019
Operating lease cost	$	514	$	920
Short-term lease cost	50		255
Variable lease cost	71		207
Sublease income	—		—
Total lease cost	$	635	$	1,382

Amounts reported in the consolidated balance sheets for leases where we are the lessee as of the quarter ended September 30, 2019 were as follows (in thousands):

	September 30, 2019
Operating leases
Operating lease right-of-use assets	$	7,154
Operating lease liabilities	$	7,577
Weighted-average remaining lease term	15.50 years
Operating leases
Weighted-average discount rate	4.51		%
Operating leases

Maturities of lease liabilities under non-cancellable leases where we are the lessee as of the quarter ended September 30, 2019 are as follows (in thousands):

	Operating Leases
2020 (excluding the six months ended September 30, 2019)	$	786
2021	1,311
2022	1,131
2023	938
2024	637
2025	402
Thereafter	5,757
Total undiscounted lease payments	$	10,962
Less: Interest	2,890
Less: Discount	495
Total lease liabilities	$	7,577

At March 31, 2019, future minimum annual lease payments (foreign currency amounts translated using applicable March 31, 2019 exchange rates) are as follows (in thousands):

Year ended March 31,
2020	$	3,133
2021	2,115
2022	1,625
2023	1,241
2024	692
Thereafter	6,267
Total minimum lease payments	$	15,073

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Net Earnings Per Share

6 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Net Earnings Per Share

Net Earnings Per Share

Basic earnings per share has been calculated by dividing net income (loss) attributable to Air T, Inc. stockholders by the weighted average number of common shares outstanding during each period. For purposes of calculating diluted earnings per share, shares issuable under stock options were considered potential common shares and were included in the weighted average common shares unless they were anti-dilutive. There were 3,151 anti-dilutive securities as of September 30, 2019. The computation of basic and diluted earnings per common share is as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Net income (loss) from continuing operations	$	(2,122)	$	(779)	$	1,868	$	2,561
Net (income) loss from continuing operations attributable to non-controlling interests	(287)		106		(2,660)		(348)
Net income (loss) from continuing operations attributable to Air T, Inc. stockholders	(2,409)		(673)		(792)		2,213
Income (loss) from continuing operations per share:
Basic	$	(0.80)	$	(0.22)	$	(0.30)	$	0.72
Diluted	$	(0.80)	$	(0.22)	$	(0.30)	$	0.72
Loss from discontinued operations, net of tax	$	(235)	$	(648)	$	(70)	$	(705)
Gain on sale of discontinued operations, net of tax	8,359		—		8,359		—
Gain (loss) from discontinued operations attributable to Air T, Inc. stockholders	8,124		(648)		8,289		(705)
Income (loss) from discontinued operations per share:
Basic	$	2.69	$	(0.21)	$	3.14	$	(0.23)
Diluted	$	2.68	$	(0.21)	$	3.13	$	(0.23)
Weighted Average Shares Outstanding:
Basic	3,025		3,066		2,641		3,066
Diluted	3,029		3,066		2,645		3,074

On June 10, 2019, the Company effected a three-for-two stock split of its common stock in the form of a 50% stock dividend to shareholders of record as of June 4, 2019. All share and earnings per share information have been retroactively adjusted to reflect the stock split and the incremental par value of the newly-issued shares was recorded with the offset to additional paid-in capital.

With respect to our September 30, 2019 Quarterly Report on Form 10-Q, the effect of the stock split was recognized retroactively in the stockholders’ equity accounts in the Condensed Consolidated Balance Sheets, and in all share data in the Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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Financial Statement Presentation (Policies)

6 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) as amended by multiple standards updates. The new standard provides that a lessee should recognize the assets and the liabilities that arise from leases, including operating leases. Under the new requirements, a lessee will recognize in the statement of financial position a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal year, with early adoption permitted. Topic 842 permits two transition methods: (1) a modified retrospective transition method requiring retrospective adjustment of each comparative presented with an adjusting entry at the beginning of the earliest comparative period presented and (2) a modified retrospective approach with no restatement of prior periods and an adjusting entry as of the effective date. Under both transition methods, entities may elect certain transition practical expedients that would be required to be applied to all leases.

The Company adopted the standard in the fiscal year beginning April 1, 2019 using the modified retrospective transition method that does not require retrospective adjustment of the comparative periods. The Company reviewed existing leases to determine the impact of the adoption of the standard on its consolidated financial statements. Implementation had an immaterial cumulative effect on retained earnings. Adoption resulted in the recognition of right-of-use assets of approximately $10.7 million, and lease liabilities of approximately $11.2 million.

Upon adoption, the Company elected practical expedients related to a) short term lease exemption b) not separate lease and non-lease components c) not reassess whether expired or existing contracts contain leases, d) not reassess lease classification for existing or expired leases and e) not consider whether previously capitalized initial direct costs would be appropriate under the new standard.

Recently Issued Accounting Pronouncements

In October 2018, the FASB updated the Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities of the Accounting Standards Codification. The amendments in this update affect reporting entities that are required to

determine whether they should consolidate a legal entity under the guidance within the Variable Interest Entities Subsections of Subtopic 810-10, Consolidation—Overall. Indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.

The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of this amendment on its consolidated financial statements and disclosures.

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Geographical Information

6 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Geographical information

Geographical information

Total property and equipment, including assets on lease, net of accumulated depreciation, located in the United States, the Company's country of domicile, and held outside the United States are summarized in the following table as of September 30, 2019 and March 31, 2019, in thousands:

	September 30, 2019		March 31, 2019
United States	$	18,321	$	4,393
Foreign	7,008		25,035
Total property and equipment, net	$	25,329	$	29,428

The Company's tangible long-lived assets, net of accumulated depreciation, held outside of the United States represent engines and aircraft on lease at September 30, 2019. The net book value located within each individual country at September 30, 2019 and March 31, 2019 is listed below, in thousands:

	September 30, 2019		March 31, 2019
Australia	$	3	$	5
Mexico	1,845		2,681
Netherlands	5,160		5,541
China	—		16,808
Total property and equipment, net	$	7,008	$	25,035

Total revenue from continuing operations, in and outside the United States is summarized in the following table for the six months ended September 30, 2019 and September 30, 2018, in thousands:

	September 30, 2019		September 30, 2018
United States	$	75,891	$	79,267
Foreign	21,990		13,420
Total revenue from continuing operations	$	97,881	$	92,687

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Net Earnings Per Share (Tables)

6 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The computation of basic and diluted earnings per common share is as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Net income (loss) from continuing operations	$	(2,122)	$	(779)	$	1,868	$	2,561
Net (income) loss from continuing operations attributable to non-controlling interests	(287)		106		(2,660)		(348)
Net income (loss) from continuing operations attributable to Air T, Inc. stockholders	(2,409)		(673)		(792)		2,213
Income (loss) from continuing operations per share:
Basic	$	(0.80)	$	(0.22)	$	(0.30)	$	0.72
Diluted	$	(0.80)	$	(0.22)	$	(0.30)	$	0.72
Loss from discontinued operations, net of tax	$	(235)	$	(648)	$	(70)	$	(705)
Gain on sale of discontinued operations, net of tax	8,359		—		8,359		—
Gain (loss) from discontinued operations attributable to Air T, Inc. stockholders	8,124		(648)		8,289		(705)
Income (loss) from discontinued operations per share:
Basic	$	2.69	$	(0.21)	$	3.14	$	(0.23)
Diluted	$	2.68	$	(0.21)	$	3.13	$	(0.23)
Weighted Average Shares Outstanding:
Basic	3,025		3,066		2,641		3,066
Diluted	3,029		3,066		2,645		3,074

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 6,002	$ (1,427)	$ 10,157	$ 1,856
Other comprehensive income (loss):
Foreign currency translation gain	41	32	23	79
Unrealized gain (loss) on interest rate swaps, net of tax	(88)	29	(264)	29
Total Other Comprehensive Income (loss)	(47)	61	(241)	108
Total Comprehensive Income (Loss)	5,955	(1,366)	9,916	1,964
Comprehensive (Income) Loss Attributable to Non-controlling Interests	(290)	98	(2,675)	(373)
Comprehensive Income (Loss) Attributable to Air T, Inc. Stockholders	$ 5,665	$ (1,268)	$ 7,241	$ 1,591

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Condensed Consolidated Statements of Equity (Unaudited) - USD ($)		Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-controlling Interests
Balance (in shares) at Mar. 31, 2018			2,044,000
Balance at Mar. 31, 2018		$ 24,243,000	$ 511,000	$ 4,172,000	$ 20,696,000	$ (261,000)	$ (875,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)*	[1]	2,782,000			2,829,000		(46,000)
Reclassification of unrealized loss on marketable securities, net of tax		0			(106,000)	106,000
Foreign currency translation gain		48,000				31,000	17,000
Balance (in shares) at Jun. 30, 2018			2,044,000
Balance at Jun. 30, 2018		27,073,000	$ 511,000	4,172,000	23,418,000	(124,000)	(904,000)
Balance (in shares) at Mar. 31, 2018			2,044,000
Balance at Mar. 31, 2018		24,243,000	$ 511,000	4,172,000	20,696,000	(261,000)	(875,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation gain		79,000
Issuance of Warrants		0
Unrealized loss on interest rate swaps, net of tax		29,000
Balance (in shares) at Sep. 30, 2018			2,045,000
Balance at Sep. 30, 2018		25,766,000	$ 511,000	4,188,000	22,076,000	(71,000)	(938,000)
Balance (in shares) at Jun. 30, 2018			2,044,000
Balance at Jun. 30, 2018		27,073,000	$ 511,000	4,172,000	23,418,000	(124,000)	(904,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)*	[1]	(1,363,000)			(1,321,000)		(42,000)
Foreign currency translation gain		32,000				24,000	8,000
Exercises of stock options (in shares)			2,000
Exercise of stock options		18,000		18,000
Repurchase of common stock (in shares)			(1,000)
Repurchase of common stock		(23,000)	$ 0	(2,000)	(21,000)	0
Unrealized loss on interest rate swaps, net of tax		29,000				29,000
Balance (in shares) at Sep. 30, 2018			2,045,000
Balance at Sep. 30, 2018		25,766,000	$ 511,000	4,188,000	22,076,000	(71,000)	(938,000)
Balance (in shares) at Mar. 31, 2019			2,022,000
Balance at Mar. 31, 2019		23,358,000	$ 506,000	2,866,000	21,191,000	(205,000)	(1,000,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)*	[1]	3,816,000			1,782,000		2,034,000
Foreign currency translation gain		(18,000)				(30,000)	12,000
Repurchase of common stock (in shares)			(17,000)
Repurchase of common stock		(126,000)	$ (4,000)		(122,000)	0
Stock Split (in shares)			1,010,000
Stock Split			$ 252,000	(252,000)
Issuance of Debt - Trust Preferred Securities		(4,000,000)			(4,000,000)
Issuance of Warrants		(840,000)			(840,000)
Unrealized loss on interest rate swaps, net of tax		(176,000)				(176,000)
Adjustment to fair value of redeemable non-controlling interest		(985,000)		(985,000)
Balance (in shares) at Jun. 30, 2019			3,015,000
Balance at Jun. 30, 2019		20,988,000	$ 754,000	1,629,000	17,970,000	(411,000)	1,046,000
Balance (in shares) at Mar. 31, 2019			2,022,000
Balance at Mar. 31, 2019		23,358,000	$ 506,000	2,866,000	21,191,000	(205,000)	(1,000,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Foreign currency translation gain		23,000
Issuance of Warrants		(840,000)
Unrealized loss on interest rate swaps, net of tax		(264,000)
Adjustment to fair value of redeemable non-controlling interest		203,858
Balance (in shares) at Sep. 30, 2019			3,023,000
Balance at Sep. 30, 2019		27,347,000	$ 756,000	2,410,000	23,610,000	(461,000)	1,032,000
Balance (in shares) at Jun. 30, 2019			3,015,000
Balance at Jun. 30, 2019		20,988,000	$ 754,000	1,629,000	17,970,000	(411,000)	1,046,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)*	[1]	5,698,000			5,715,000		(17,000)
Foreign currency translation gain		41,000				38,000	3,000
Repurchase of common stock (in shares)			8,000
Repurchase of common stock		(73,000)	$ 2,000		(75,000)	0
Unrealized loss on interest rate swaps, net of tax		(88,000)				(88,000)
Adjustment to fair value of redeemable non-controlling interest		781,000		781,000
Balance (in shares) at Sep. 30, 2019			3,023,000
Balance at Sep. 30, 2019		$ 27,347,000	$ 756,000	$ 2,410,000	$ 23,610,000	$ (461,000)	$ 1,032,000

[1] Excludes amount attributable to redeemable non-controlling interest in Contrail Aviation.

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Segment Information (Details Textual)	6 Months Ended
	Sep. 30, 2019 segment
Segment Reporting [Abstract]
Number of operating segments	5

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Variable Interest Entities - Revenue and Expenses of Delphax Included in the Company's Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Variable Interest Entity [Line Items]
Total			$ 97,881	$ 92,687
General and administrative	$ 9,288	$ 7,997	18,960	15,378
Operating Expenses	50,227	41,746	96,416	90,875
Operating Income (Loss)	466	(879)	1,465	1,812
Non-operating Income (Expenses), net	(2,884)	(200)	(265)	866
Income (Loss) Before Income Taxes	(2,418)	(1,079)	1,200	2,678
Net income (loss)	$ 6,002	$ (1,427)	10,157	1,856
Delphax
Variable Interest Entity [Line Items]
Total			0	0
Cost of sales			0	0
General and administrative			125	222
Operating Expenses			125	222
Operating Income (Loss)			(125)	(222)
Non-operating Income (Expenses), net			6,237	(46)
Income (Loss) Before Income Taxes			6,112	(268)
Income Taxes			0	0
Net income (loss)			$ 6,112	$ (268)

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Net Earnings Per Share - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Net income (loss) from continuing operations	$ (2,122)	$ (779)	$ 1,868	$ 2,561
Net (income) loss from continuing operations attributable to non-controlling interests	(287)	106	(2,660)	(348)
Net income (loss) from continuing operations attributable to Air T, Inc. stockholders	$ (2,409)	$ (673)	$ (792)	$ 2,213
Income (loss) from continuing operations per share:
Basic (in dollars per share)	$ (0.80)	$ (0.22)	$ (0.30)	$ 0.72
Diluted (in dollars per share)	$ (0.80)	$ (0.22)	$ (0.30)	$ 0.72
Loss from discontinued operations, net of tax	$ (235)	$ (648)	$ (70)	$ (705)
Gain on sale of discontinued operations, net of tax	8,359	0	8,359	0
Gain (loss) from discontinued operations attributable to Air T, Inc. stockholders	$ 8,124	$ (648)	$ 8,289	$ (705)
Income (loss) from discontinued operations per share:
Basic (in dollars per share)	$ 2.69	$ (0.21)	$ 3.14	$ (0.23)
Diluted (in dollars per share)	$ 2.68	$ (0.21)	$ 3.13	$ (0.23)
Weighted Average Shares Outstanding:
Basic (in shares)	3,025,000	3,066,000	2,641,000	3,066,000
Diluted (in shares)	3,029,000	3,066,000	2,645,000	3,074,000

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Business Combinations (Details Textual) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	May 04, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Business Acquisition [Line Items]
Bargain purchase gain recognized		$ 14	$ 0	$ 49	$ 1,984
Worthington Aviation Parts, Inc
Business Acquisition [Line Items]
Payment for earnest money deposit	$ 50
Cash consideration	$ 3,300
Deferred income taxes				589
Bargain purchase gain recognized				1,983
Acquisition related costs				$ 83

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Discontinued Operations - Income Statement Summary of Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of tax	$ (235)	$ (648)	$ (70)	$ (705)
Discontinued Operations, Disposed of by Sale | Global Aviation Services, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net sales	8,120	8,474	16,637	17,522
Operating Expense	(9,015)	(9,215)	(17,319)	(18,350)
Loss from discontinued operations before income taxes	(895)	(741)	(682)	(828)
Income tax benefit	(660)	(93)	(612)	(123)
Loss from discontinued operations, net of tax	$ (235)	$ (648)	$ (70)	$ (705)

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Discontinued Operations (Tables)

6 Months Ended

Sep. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

Summary of Discontinued Operations

Summarized results of operations of GAS for the three and six months ended September 30, 2019 and 2018 through the date of disposition are as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Net sales	$	8,120	$	8,474	$	16,637	$	17,522
Operating Expense	(9,015)		(9,215)		(17,319)		(18,350)
Loss from discontinued operations before income taxes	(895)		(741)		(682)		(828)
Income tax benefit	(660)		(93)		(612)		(123)
Loss from discontinued operations, net of tax	$	(235)	$	(648)	$	(70)	$	(705)

The following table presents summary balance sheet information of GAS that is presented as discontinued operations as of March 31, 2019 (in thousands):

Assets:	March 31, 2019
Cash and cash equivalents	$	107
Accounts receivable, net	8,197
Income tax receivable	17
Inventories, net	2,512
Other current assets	769
Current assets of discontinued operations	11,601
Property and equipment, net	554
Intangible assets, net	228
Goodwill	190
Other non-current assets	292
Non-current assets of discontinued operations	1,264
Liabilities:
Accounts payable	1,144
Income tax payable	(226)
Accrued expenses	669
Current liabilities of discontinued operations	$	1,587

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Subsequent Events

6 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Management performs an evaluation of events that occur after the balance sheet date but before consolidated financial statements are issued for potential recognition or disclosure of such events in its consolidated financial statements.

On November 8, 2019, we extended the maturity date of the Air T Revolver to February 28, 2020. The borrowing capacity returned to $17 million from a temporary increase to $20 million on September 24, as mentioned in Footnote 12, Financing Arrangements. Concurrently, the Company also extended the maturity date of the AirCo Revolver to February 28, 2020. Principal amount remained at $10 million. All other terms for both agreements remained unchanged.

On November 8, 2019, the Company purchased a 19.90% interest in Cadillac Castings, Inc, a Michigan corporation (“Cadillac”). The purchase price for the interest acquired approximated $3,000,000. Cadillac is a full-service ductile iron foundry located in Cadillac, Michigan. Cadillac operates a 275,000 square-foot facility located on 43 acres and is a major supplier of engineered ductile iron, including high silicon molybdenum cast components.

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Share Repurchase	6 Months Ended
	Sep. 30, 2019
Equity [Abstract]
Share Repurchase	Share RepurchaseOn May 14, 2014, the Company announced that its Board of Directors had authorized a program to repurchase up to 750,000 shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions, in compliance with SEC Rule 10b-18, over an indefinite period. During the three months ended September 30, 2019, the Company repurchased 5,883 shares at an aggregate cost of $101,039. These shares are reflected as retired as of September 30, 2019 in accordance with the intent of the authorized share repurchase program. The Company has reduced common stock and retained earnings to reflect the retirement of those shares.

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Geographical Information - Revenue by Geographic Areas (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Revenue, Major Customer [Line Items]
Total	$ 97,881	$ 92,687
United States
Revenue, Major Customer [Line Items]
Total	75,891	79,267
Foreign
Revenue, Major Customer [Line Items]
Total	$ 21,990	$ 13,420

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Variable Interest Entities (Details Textual) - USD ($)	3 Months Ended			6 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Variable Interest Entity [Line Items]
Gain on settlement of bankruptcy	$ 18,000	$ 4,509,302	$ 0	$ 4,527,000	$ 0
Delphax
Variable Interest Entity [Line Items]
Percentage of consolidated subsidiaries dividends attributable to parent				67.00%
Percentage of consolidated subsidiaries dividends attributable to noncontrolling interests				33.00%
Net income (loss) attributable to noncontrolling interest, percentage				33.00%	33.00%
Delphax | Delphax Senior Credit Agreement
Variable Interest Entity [Line Items]
Short-term debt	$ 0			$ 0

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Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Operating Revenues:
Total	$ 50,693,000	$ 40,867,000	$ 97,881,000	$ 92,687,000
Operating Expenses:
Overnight air cargo	17,707,000	15,350,000	34,226,000	30,524,000
Ground equipment sales	10,358,000	10,980,000	20,089,000	15,917,000
Printing equipment and maintenance	121,000	49,000	160,000	194,000
Commercial jet engines and parts	11,050,000	5,663,000	19,336,000	25,784,000
General and administrative	9,288,000	7,997,000	18,960,000	15,378,000
Depreciation and amortization	1,695,000	1,697,000	3,635,000	3,057,000
Impairment	7,000	10,000	14,000	21,000
Loss on sale of property and equipment	1,000	0	(4,000)	0
Operating Expenses	50,227,000	41,746,000	96,416,000	90,875,000
Operating Income (Loss)	466,000	(879,000)	1,465,000	1,812,000
Non-operating Income (Expense):
Other-than-temporary impairment loss on investments	(395,000)	0	(1,210,000)	0
Interest expense	(2,047,000)	(714,000)	(3,071,000)	(1,421,000)
Gain on settlement of bankruptcy	18,000	0	4,527,000	0
Bargain purchase acquisition gain	14,000	0	49,000	1,984,000
Income (loss) from equity method investments	(34,000)	160,000	(355,000)	170,000
Other	(440,000)	354,000	(205,000)	133,000
Nonoperating Income (Expense)	(2,884,000)	(200,000)	(265,000)	866,000
Income (Loss) Before Income Taxes	(2,418,000)	(1,079,000)	1,200,000	2,678,000
Income Taxes (Benefit)	(296,000)	(300,000)	(668,000)	117,000
Net income (Loss) from continuing operations	(2,122,000)	(779,000)	1,868,000	2,561,000
Loss from discontinued operations, net of tax	(235,000)	(648,000)	(70,000)	(705,000)
Gain on sale of discontinued operations, net of tax	8,359,000	0	8,359,000	0
Net income (loss)	6,002,000	(1,427,000)	10,157,000	1,856,000
Net (income) loss from continuing operations attributable to non-controlling interests	(287,000)	106,000	(2,660,000)	(348,000)
Net Income (Loss) Attributable to Air T, Inc. Stockholders	$ 5,715,000	$ (1,321,000)	$ 7,497,000	$ 1,508,000
Income (Loss) from continuing operations per share (Note 6)
Basic (in dollars per share)	$ (0.80)	$ (0.22)	$ (0.30)	$ 0.72
Diluted (in dollars per share)	(0.80)	(0.22)	(0.30)	0.72
Income (Loss) from discontinued operations per share (Note 6)
Basic (in dollars per share)	2.69	(0.21)	3.14	(0.23)
Diluted (in dollars per share)	$ 2.68	$ (0.21)	$ 3.13	$ (0.23)
Weighted Average Shares Outstanding:
Basic (in shares)	3,025,000	3,066,000	2,641,000	3,066,000
Diluted (in shares)	3,029,000	3,066,000	2,645,000	3,074,000
Overnight air cargo
Operating Revenues:
Total	$ 19,745,000	$ 17,064,000	$ 38,064,000	$ 34,705,000
Ground equipment sales
Operating Revenues:
Total	12,741,000	12,838,000	24,991,000	19,224,000
Printing equipment and maintenance
Operating Revenues:
Total	249,000	139,000	313,000	439,000
Commercial jet engines and parts
Operating Revenues:
Total	17,801,000	10,643,000	34,128,000	37,963,000
Corporate and other
Operating Revenues:
Total	$ 157,000	$ 183,000	$ 385,000	$ 356,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 10,157,000	$ 1,856,000
Loss from discontinued operations, net of income tax	70,000	705,000
Gain on sale of discontinued operations, net of income tax	(8,359,000)	0
Net income (loss) from continuing operations	1,868,000	2,561,000
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and  amortization	3,648,000	3,077,000
Bargain purchase acquisition gain	(49,000)	(1,984,000)
Impairment of investment	1,210,000	0
Gain on settlement of bankruptcy	(4,527,000)	0
Other	(1,785,000)	(464,000)
Change in operating assets and liabilities:
Accounts receivable	(7,331,000)	(1,853,000)
Costs and estimated earnings in excess of billings and uncompleted projects	0	2,012,000
Notes receivable and other non-trade receivables	(2,984,000)	(3,126,000)
Inventories	5,891,000	10,123,000
Accounts payable	3,188,000	3,124,000
Accrued expenses	739,000	2,233,000
Other	(359,000)	(300,000)
Total adjustments	(856,000)	12,213,000
Net cash provided by (used in) operating activities - continuing operations	(491,000)	15,403,000
Net cash provided by (used in) operating activities - discontinued operations	1,094,000	(532,000)
Net cash provided by operating activities	603,000	14,871,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(187,000)	(2,014,000)
Acquisition of businesses, net of cash acquired	(500,000)	(3,376,000)
Investment in reinsurance entity	0	(2,000,000)
Capital expenditures related to property & equipment	(575,000)	(763,000)
Capital expenditures related to assets on lease	(17,614,000)	(19,149,000)
Other	346,000	(213,000)
Net cash used in investing activities - continuing operations	(18,530,000)	(27,515,000)
Net cash provided by (used in) investing activities - discontinued operations	20,463,000	(61,000)
Net cash provided by (used in) investing activities	1,933,000	(27,576,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from lines of credit	48,267,000	51,151,000
Payments on lines of credit	(35,324,000)	(58,355,000)
Proceeds from term loan	13,001,000	21,714,000
Payments on term loan	(17,900,000)	(3,190,000)
Proceeds received from exercise of warrants	5,407,000	0
Proceeds from life insurance policy loan	0	1,897,000
Other	(1,124,000)	41,000
Net cash provided by financing activities - continuing operations	12,327,000	13,258,000
Effect of foreign currency exchange rates on cash and cash equivalents	26,000	5,000
NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	14,889,000	558,000
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD	12,647,000	5,073,000
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	27,536,000	5,631,000
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Equipment leased to customers transferred to inventory	18,710,000	234,000
Issuance of Debt - Trust Preferred Securities	4,000,000	0
Issuance of warrant liability	$ 840,000	$ 0

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Business Combinations - Summary of Total Consideration (Details) $ in Thousands	May 04, 2018 USD ($)
Business Acquisition [Line Items]
Total consideration	$ 3,326
Worthington Aviation Parts, Inc
Business Acquisition [Line Items]
Earnest money	50
Cash consideration	3,300
Less: Cash acquired	$ (24)

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Discontinued Operations - Balance Sheet Summary of Discontinued Operations (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Mar. 31, 2019
Discontinued Operation, Current Assets
Income tax receivable		$ 17
Current assets of discontinued operations	$ 0	11,601
Non-current assets of discontinued operations	0	1,264
Liabilities:
Current liabilities of discontinued operations	$ 0	1,587
Discontinued Operations, Disposed of by Sale | Global Aviation Services, LLC
Discontinued Operation, Current Assets
Cash and cash equivalents		107
Accounts receivable, net		8,197
Inventories, net		2,512
Other current assets		769
Current assets of discontinued operations		11,601
Property and equipment, net		554
Intangible assets, net		228
Goodwill		190
Other non-current assets		292
Non-current assets of discontinued operations		1,264
Liabilities:
Accounts payable		1,144
Income tax payable		(226)
Accrued expenses		669
Current liabilities of discontinued operations		$ 1,587

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Investments in Securities (Details Textual)	Sep. 30, 2019 USD ($)
Investments, Debt and Equity Securities [Abstract]
Aggregate unrealized gain	$ 2,273
Aggregate unrealized loss	$ 420,208

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Financing Arrangements - Contractual Financing Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Mar. 31, 2019
Debt Disclosure [Abstract]
September 30, 2020	$ 29,836
September 30, 2021	17,535
September 30, 2022	4,172
September 30, 2023	4,271
September 30, 2024	4,138
Thereafter	15,745
Long-term debt, gross	75,697	$ 58,022
Less: Unamortized Debt Issuance Costs	(317)	(369)
Total Debt, net	$ 75,380	$ 57,653

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Leases - Component of Lease Cost and Consolidated Balance Sheet Amounts (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Mar. 31, 2019
Leases [Abstract]
Operating lease cost	$ 514	$ 920
Short-term lease cost	50	255
Variable lease cost	71	207
Sublease income	0	0
Total lease cost	635	1,382
Operating leases
Operating lease right-of-use assets	7,154	7,154	$ 0
Operating lease liabilities	$ 7,577	$ 7,577
Weighted-average remaining lease term
Operating leases	15 years 6 months	15 years 6 months
Weighted-average discount rate
Operating leases	4.51%	4.51%

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Equity Method Investments (Details Textual) - USD ($) shares in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Mar. 31, 2019
Income (loss) from equity method investments	$ 34,000	$ (160,000)	$ 355,000	$ (170,000)
Impairment charges			1,210,000	0
Equity method investments	$ 4,046,000		$ 4,046,000		$ 5,611,000
Insignia
Number of shares held (in shares)	3.5		3.5
Ownership percentage	29.00%		29.00%
Income (loss) from equity method investments	$ 142,196		$ 166,000	$ (31,000)
Difference between carrying amount and underlying equity	24,032		24,032
Equity method investments	3,439,547		$ 3,439,547
Fence Store LLC
Impairment charges	$ 395,031

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Inventories (Tables)

6 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

Inventories consisted of the following (in thousands):

	September 30, 2019		March 31, 2019
Ground equipment manufacturing:
Raw materials	$	4,191	$	2,498
Work in process	910		1,660
Finished goods	1,922		973
Printing equipment and maintenance
Raw materials	476		401
Finished goods	912		1,048
Commercial jet engines and parts	32,133		21,032
Total inventories	40,544		$	27,612
Reserves	(174)		(157)
Total inventories, net of reserves	$	40,370	$	27,455

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Geographical Information (Tables)

6 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Long-lived Assets by Geographic Areas

Total property and equipment, including assets on lease, net of accumulated depreciation, located in the United States, the Company's country of domicile, and held outside the United States are summarized in the following table as of September 30, 2019 and March 31, 2019, in thousands:

	September 30, 2019		March 31, 2019
United States	$	18,321	$	4,393
Foreign	7,008		25,035
Total property and equipment, net	$	25,329	$	29,428

The Company's tangible long-lived assets, net of accumulated depreciation, held outside of the United States represent engines and aircraft on lease at September 30, 2019. The net book value located within each individual country at September 30, 2019 and March 31, 2019 is listed below, in thousands:

	September 30, 2019		March 31, 2019
Australia	$	3	$	5
Mexico	1,845		2,681
Netherlands	5,160		5,541
China	—		16,808
Total property and equipment, net	$	7,008	$	25,035

Revenue from External Customers by Geographic Areas

Total revenue from continuing operations, in and outside the United States is summarized in the following table for the six months ended September 30, 2019 and September 30, 2018, in thousands:

	September 30, 2019		September 30, 2018
United States	$	75,891	$	79,267
Foreign	21,990		13,420
Total revenue from continuing operations	$	97,881	$	92,687

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- Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2019	Apr. 01, 2019
Revenue from Contract with Customer [Abstract]
Contract with customer, liabilities	$ 10,291	$ 1,867
Outstanding contract liabilities recognized as revenue	1,781
Contract with customer, assets	$ 5,174	$ 1,743

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Inventories

6 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following (in thousands):

	September 30, 2019		March 31, 2019
Ground equipment manufacturing:
Raw materials	$	4,191	$	2,498
Work in process	910		1,660
Finished goods	1,922		973
Printing equipment and maintenance
Raw materials	476		401
Finished goods	912		1,048
Commercial jet engines and parts	32,133		21,032
Total inventories	40,544		$	27,612
Reserves	(174)		(157)
Total inventories, net of reserves	$	40,370	$	27,455

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Income Taxes

6 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Tax

Income Taxes

During the three-month period ended September 30, 2019, the Company recorded $296,000 in income tax benefit from continuing operations at an effective rate ("ETR") of 12.2%. The Company records income taxes using a discrete, year-to-date tax expense calculation for interim reporting. The primary factors contributing to the difference between the federal statutory rate of 21.0% and the Company's effective tax rate for the three-month period ended September 30, 2019 were the change in valuation allowance related to Delphax, the estimated expense for the exclusion of loss for the Company's captive insurance company subsidiary under Section 831(b), the estimated deduction for Foreign-Derived Intangible Income, and the exclusion from the tax provision of the minority owned portion of the pretax income of Contrail Aviation Support, LLC. During the three month period ended September 30, 2018, the Company recorded $300,000 in income tax benefit from continuing operations at an ETR of 27.8%. The primary factors contributing to the difference between the federal statutory rate and the Company's effective tax rate for the three-month period ended September 30, 2018 were the estimated benefit for the exclusion of income for the Company's captive insurance company subsidiary under Section 831(b), the presentation of the tax impact of the bargain purchase gain and state income tax expense.

During the six-month period ended September 30, 2019, the Company recorded $668,000 in income tax benefit from continuing operations at an ETR of (55.6)%. The Company records income taxes using a discrete, year-to-date tax expense calculation for interim reporting. The primary factors contributing to the difference between the federal statutory rate of 21.0% and the Company's effective tax rate for the six-month period ended September 30, 2019 were the change in valuation allowance related to Delphax, the estimated expense for the exclusion of loss for the Company's captive insurance company subsidiary under Section 831(b), the estimated deduction for Foreign-Derived Intangible Income, and the exclusion from the tax provision of the minority owned portion of the pretax income of Contrail Aviation Support, LLC. During the six-month period ended September 30, 2018, the Company recorded $117,000 in income tax expense from continuing operations at an ETR of 4.4%. The primary factors contributing to the difference between the federal statutory rate and the Company's effective tax rate for the six-month period ended September 30, 2018 were related to the estimated benefit for the exclusion of income for the Company's captive insurance company subsidiary afforded under Section 831(b), the change in valuation allowance and the presentation of the tax impact of the bargain purchase gain.

For the three and six months ended September 30, 2019, the ETR in discontinued operations is 73.7% and 89.7%, respectively. The ETR is impacted by the effect of the release of the valuation allowance recorded in fiscal year 2019 against the $2 million impaired reinsurance contracts. For the three and six months ended September 30, 2018, the ETR in discontinued operations is 12.6% and 14.8%, respectively. The ETR is impacted by permanent, non-deductible items for tax.

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Revenue Recognition (Tables)

6 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table summarizes disaggregated revenues by type (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Product Sales
Air Cargo	$	6,680	$	5,003	$	12,094	$	10,523
Ground equipment sales	12,489		12,447		24,492		18,617
Commercial jet engines and parts	13,218		7,380		24,388		32,409
Printing equipment and maintenance	20		122		68		409
Corporate and other	—		—		—		—
Support Services
Air Cargo	13,033		11,985		25,927		24,082
Ground equipment sales	105		148		210		249
Commercial jet engines and parts	1,597		1,327		3,007		2,293
Printing equipment and maintenance	225		12		236		20
Corporate and other	(8)		16		33		16
Leasing Revenue
Air Cargo	—		—		—		—
Ground equipment sales	33		15		53		46
Commercial jet engines and parts	2,941		1,826		6,655		3,027
Printing equipment and maintenance	—		—		—		—
Corporate and other	36		32		81		72
Other
Air Cargo	32		76		43		100
Ground equipment sales	114		228		236		312
Commercial jet engines and parts	45		110		78		234
Printing equipment and maintenance	4		5		9		10
Corporate and other	129		135		271		268
Total	$	50,693	$	40,867	$	97,881	$	92,687

The following table summarizes total revenues by segment (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Air cargo	$	19,745	$	17,064	$	38,064	$	34,705
Ground equipment sales	12,741		12,838		24,991		19,224
Commercial jet engines and parts	17,801		10,643		34,128		37,963
Printing equipment and maintenance	249		139		313		439
Corporate and other	157		183		385		356
Total	$	50,693	$	40,867	$	97,881	$	92,687

Contract with Customer, Asset and Liability

The following table presents outstanding contract liabilities as of April 1, 2019 and September 30, 2019 and the amount of contract liabilities that were recognized as revenue during the six-month period ended September 30, 2019 (in thousands):

	Outstanding contract liabilities		Outstanding contract liabilities as of April 1, 2019 Recognized as Revenue
As of September 30, 2019	$	10,291
As of April 1, 2019	1,867
For the six months ended September 30, 2019			1,781

Contract assets primarily relate to deposits paid to vendors. The following table presents the amount of contract assets as of April 1, 2019 and September 30, 2019 (in thousands):

	Contract assets
As of September 30, 2019	$5,174
As of April 1, 2019	1,743

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Segment Information

6 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company has five business segments: overnight air cargo, ground equipment sales, commercial jet engine and parts segment, printing equipment and maintenance and corporate and other. Segment data is summarized as follows (in thousands):

(In Thousands)	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Operating Revenues by Segment:
Overnight Air Cargo	$	19,745	$	17,064	$	38,065	$	34,705
Ground Equipment Sales:
Domestic	12,102		11,070		22,960		16,362
International	639		1,776		2,030		2,871
Total Ground Equipment Sales	12,741		12,846		24,990		19,233
Printing Equipment and Maintenance:
Domestic	175		3		197		194
International	74		137		120		245
Total Printing Equipment and Maintenance	249		140		317		439
Commercial Jet Engines and Parts:
Domestic	6,203		5,341		14,631		27,659
International	11,699		5,302		19,840		10,304
Total Commercial Jet Engines and Parts	17,902		10,643		34,471		37,963
Corporate and other	542		189		1,141		365
Intercompany	(486)		(15)		(1,103)		(18)
Total	50,693		40,867		97,881		92,687
Operating Income (Loss):
Overnight Air Cargo	216		197		264		1,253
Ground Equipment Sales	1,221		697		2,568		1,091
Printing Equipment and Maintenance	(381)		(413)		(837)		(654)
Commercial Jet Engines and Parts	1,193		575		3,191		3,788
Corporate and other	(1,902)		(1,935)		(3,860)		(3,666)
Intercompany	119		—		139		—
Total	466		(879)		1,465		1,812
Capital Expenditures:
Overnight Air Cargo	26		29		56		34
Ground Equipment Sales	286		156		10		296
Printing Equipment and Maintenance	—		—		—		—
Commercial Jet Engines and Parts	16,005		19,287		17,656		19,471
Corporate and other	51		34		72		111
Total	16,368		19,506		17,794		19,912
Depreciation, Amortization and Impairment:
Overnight Air Cargo	19		21		37		44
Ground Equipment Sales	63		65		116		157
Printing Equipment and Maintenance	27		15		30		30
Commercial Jet Engines and Parts	1,456		1,456		3,192		2,554
Corporate and other	137		151		277		296
Intercompany	—		(1)		(3)		(3)
Total	$	1,702	$	1,707	$	3,649	$	3,078

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Discontinued Operations (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale of discontinued operations, net of tax	$ 8,359	$ 0	$ 8,359	$ 0
Discontinued Operations, Disposed of by Sale | Global Aviation Services, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership percentage	100.00%		100.00%
Purchase price consideration	$ 21,000		$ 21,000
Consideration earn-out provision	4,000		$ 4,000
Proceeds from divestiture of businesses	20,500
Recognition of pre-tax gain on sale of GAS	(10,800)
Tax expense on disposal	2,400
Gain on sale of discontinued operations, net of tax	$ 8,400

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Net Earnings Per Share (Details Textual)	Sep. 30, 2019 shares	Jun. 10, 2019	Jun. 04, 2019
Earnings Per Share [Abstract]
Number of anti-dilutive securities (in shares)	3,151
Stock split conversion ratio			1.5
Common stock dividend rate percentage		50.00%

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Share Repurchase (Details Textual) - USD ($)	3 Months Ended
	Sep. 30, 2019	May 14, 2014
Equity [Abstract]
Stock repurchase program, number of shares authorized to be repurchased (in shares)		750,000
Stock repurchased during period, shares (in shares)	5,883
Stock repurchased during period, value	$ 101,039

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Financing Arrangements - Schedule of Warrant Fair Value (Details)	Sep. 30, 2019 USD ($)
Debt Disclosure [Abstract]
Warrant liability (Level 2)	$ 614,720

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Financial Statement Presentation

6 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Financial Statement Presentation

Financial Statement Presentation

The condensed consolidated financial statements of Air T, Inc. (“Air T”, the “Company”, “we”, “us” or “our”) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the results for the periods presented have been made.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended March 31, 2019. The results of operations for the period ended September 30, 2019 are not necessarily indicative of the operating results for the full year.

Certain reclassifications have been made to the prior period amounts to conform to the current presentation.

Discontinued Operations

On September 30, 2019, the Company completed the sale of Global Aviation Services, LLC ("GAS"). The results of operations of GAS are reported as discontinued operations in the condensed consolidated statements of operations for the three and six months ended September 30, 2019 and 2018. Refer to Footnote 4 - "Discontinued Operations" for additional information. Unless otherwise indicated, the disclosures accompanying the condensed consolidated financial statements reflect the Company's continuing operations.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) as amended by multiple standards updates. The new standard provides that a lessee should recognize the assets and the liabilities that arise from leases, including operating leases. Under the new requirements, a lessee will recognize in the statement of financial position a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal year, with early adoption permitted. Topic 842 permits two transition methods: (1) a modified retrospective transition method requiring retrospective adjustment of each comparative presented with an adjusting entry at the beginning of the earliest comparative period presented and (2) a modified retrospective approach with no restatement of prior periods and an adjusting entry as of the effective date. Under both transition methods, entities may elect certain transition practical expedients that would be required to be applied to all leases.

The Company adopted the standard in the fiscal year beginning April 1, 2019 using the modified retrospective transition method that does not require retrospective adjustment of the comparative periods. The Company reviewed existing leases to determine the impact of the adoption of the standard on its consolidated financial statements. Implementation had an immaterial cumulative effect on retained earnings. Adoption resulted in the recognition of right-of-use assets of approximately $10.7 million, and lease liabilities of approximately $11.2 million.

Upon adoption, the Company elected practical expedients related to a) short term lease exemption b) not separate lease and non-lease components c) not reassess whether expired or existing contracts contain leases, d) not reassess lease classification for existing or expired leases and e) not consider whether previously capitalized initial direct costs would be appropriate under the new standard.

Recently Issued Accounting Pronouncements

In October 2018, the FASB updated the Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities of the Accounting Standards Codification. The amendments in this update affect reporting entities that are required to

determine whether they should consolidate a legal entity under the guidance within the Variable Interest Entities Subsections of Subtopic 810-10, Consolidation—Overall. Indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.

The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of this amendment on its consolidated financial statements and disclosures.

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Segment Information - Segment Data (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	$ 50,693	$ 40,867	$ 97,881	$ 92,687
Overnight Air Cargo	466	(879)	1,465	1,812
Ground Equipment Sales	16,368	19,506	17,794	19,912
Printing Equipment and Maintenance	1,702	1,707	3,649	3,078
Corporate and other
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	542	189	1,141	365
Overnight Air Cargo	(1,902)	(1,935)	(3,860)	(3,666)
Ground Equipment Sales	51	34	72	111
Printing Equipment and Maintenance	137	151	277	296
Intercompany
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	(486)	(15)	(1,103)	(18)
Overnight Air Cargo	119	0	139	0
Printing Equipment and Maintenance	0	(1)	(3)	(3)
Air Cargo
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	19,745	17,064	38,064	34,705
Air Cargo | Operating Segments
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	19,745	17,064	38,065	34,705
Overnight Air Cargo	216	197	264	1,253
Ground Equipment Sales	26	29	56	34
Printing Equipment and Maintenance	19	21	37	44
Ground equipment sales
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	12,741	12,838	24,991	19,224
Ground equipment sales | Operating Segments
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	12,741	12,846	24,990	19,233
Overnight Air Cargo	1,221	697	2,568	1,091
Ground Equipment Sales	286	156	10	296
Printing Equipment and Maintenance	63	65	116	157
Ground equipment sales | Operating Segments | Domestic
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	12,102	11,070	22,960	16,362
Ground equipment sales | Operating Segments | International
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	639	1,776	2,030	2,871
Printing equipment and maintenance
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	249	139	313	439
Printing equipment and maintenance | Operating Segments
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	249	140	317	439
Overnight Air Cargo	(381)	(413)	(837)	(654)
Ground Equipment Sales	0	0	0	0
Printing Equipment and Maintenance	27	15	30	30
Printing equipment and maintenance | Operating Segments | Domestic
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	175	3	197	194
Printing equipment and maintenance | Operating Segments | International
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	74	137	120	245
Commercial Jet Engines and Parts | Operating Segments
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	17,902	10,643	34,471	37,963
Overnight Air Cargo	1,193	575	3,191	3,788
Ground Equipment Sales	16,005	19,287	17,656	19,471
Printing Equipment and Maintenance	1,456	1,456	3,192	2,554
Commercial Jet Engines and Parts | Operating Segments | Domestic
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	6,203	5,341	14,631	27,659
Commercial Jet Engines and Parts | Operating Segments | International
Segment Reporting Information [Line Items]
Operating Revenues by Segment:	$ 11,699	$ 5,302	$ 19,840	$ 10,304

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Mar. 31, 2019
Current Assets:
Cash and cash equivalents	$ 27,434	$ 12,417
Marketable securities	1,423	1,760
Restricted cash	102	123
Restricted investments	1,018	831
Accounts receivable, net of allowance for doubtful accounts of $382 and $408	18,464	10,881
Income tax receivable	1,030	142
Inventories, net	40,370	27,455
Other current assets	9,232	6,138
Current assets of discontinued operations	0	11,601
Total current assets	99,073	71,348
Assets on lease, net of accumulated depreciation of $6,007 and $6,689	21,019	25,164
Property and equipment, net of accumulated depreciation of $3,935 and $3,470	4,310	4,264
Right-of-use assets	7,154	0
Cash surrender value of life insurance policies, net of policy loans	80	122
Other tax receivables-long-term	0	311
Deferred income taxes	781	548
Investments in securities	785	1,086
Equity method investments	4,046	5,611
Other assets	284	200
Intangible assets, net of accumulated amortization of $2,229 and $2,097	898	998
Goodwill	4,227	4,227
Non-current assets of discontinued operations	0	1,264
Total Assets	142,657	115,143
Current Liabilities:
Accounts payable	12,540	11,409
Income tax payable	940	888
Advanced customer deposits	9,996	1,520
Accrued expenses and other	1,380	12,314
Deferred income	295	341
Current portion of long-term debt	29,836	24,735
Short-term lease liability	1,131	0
Current liabilities of discontinued operations	0	1,587
Total current liabilities	56,118	52,794
Long-term debt	45,544	32,918
Long-term lease liability	6,446	0
Other non-current liabilities	1,202	597
Total Liabilities	109,310	86,309
Redeemable non-controlling interest	6,000	5,476
Commitments and contingencies (Note 16)
Equity:
Preferred stock, $1.00 par value, 50,000 shares authorized	0	0
Common stock, $.25 par value; 4,000,000 shares authorized, 3,022,745 and 2,022,637 shares issued and outstanding	756	506
Additional paid-in capital	2,410	2,866
Retained earnings	23,610	21,191
Accumulated other comprehensive loss	(461)	(205)
Total Air T, Inc. Stockholders' Equity	26,315	24,358
Non-controlling Interests	1,032	(1,000)
Total Equity	27,347	23,358
Total Liabilities and Equity	$ 142,657	$ 115,143

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Leases - Future Minimum Rental Payments (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Leases [Abstract]
2020	$ 3,133
2021	2,115
2022	1,625
2023	1,241
2024	692
Thereafter	6,267
Total minimum lease payments	$ 15,073

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Inventories - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Mar. 31, 2019
Printing equipment and maintenance
Commercial jet engines and parts	$ 32,133	$ 21,032
Total inventories	40,544	27,612
Reserves	(174)	(157)
Total inventories, net of reserves	40,370	27,455
Ground equipment manufacturing:
Ground equipment manufacturing
Raw materials	4,191	2,498
Work in process	910	1,660
Finished goods	1,922	973
Printing equipment and maintenance
Raw materials	4,191	2,498
Finished goods	1,922	973
Printing equipment and maintenance
Ground equipment manufacturing
Raw materials	476	401
Finished goods	912	1,048
Printing equipment and maintenance
Raw materials	476	401
Finished goods	$ 912	$ 1,048

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Investments in Securities

6 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investments in Securities

Investments in Securities

As of September 30, 2019, the Company had a gross unrealized gain aggregating to $2,273 and gross unrealized losses aggregating to $420,208, which are included in the Consolidated Statement of Income.

All investments in marketable securities are priced using publicly quoted market prices and are considered Level 1 fair value measurements.

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Business Combinations

6 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Business Combinations

Business Combinations

Acquisition of Worthington Aviation Parts, Inc.

On May 4, 2018, Air T, Inc. completed the acquisition (the “Transaction”) of substantially all of the assets and assumed certain liabilities of Worthington Aviation Parts, Inc. (“Worthington”), pursuant to the Asset Purchase Agreement (the “Purchase Agreement”), dated as of April 6, 2018, by and among the Company, Worthington, and Churchill Industries, Inc., as guarantor of Worthington’s obligations as disclosed in the Purchase Agreement.

Worthington is primarily engaged in the business of operating, distributing and selling airplane and aviation parts along with repair services. The Company agreed to acquire the assets and liabilities in exchange for payment to Worthington of $50,000 as earnest money upon execution of the Agreement and a cash payment of $3,300,000 upon closing. Total consideration is summarized in the table below (in thousands):

Earnest money	$	50
Cash consideration	3,300
Cash acquired	(24)
Total consideration	$	3,326

The Transaction was accounted for as a business combination in accordance with ASC Topic 805 "Business Combinations." Assets acquired and liabilities assumed were recorded in the accompanying consolidated balance sheet at their estimated fair values as of May 4, 2018, with the excess of fair value of net assets acquired recorded as a bargain purchase gain. The most significant asset acquired was Worthington’s inventory. The following table outlines the consideration transferred and purchase price allocation at the respective estimated fair values as of May 4, 2018 (in thousands):

	May 4, 2018
ASSETS
Accounts receivable	$	1,929
Inventories	4,564
Other current assets	150
Property and equipment	392
Other assets	189
Intangible assets - tradename	138
Total assets	7,362
LIABILITIES
Accounts payable	1,289
Accrued expenses	175
Deferred tax liability	589
Total liabilities	2,053
Net assets acquired	5,309
Consideration paid	3,350
Less: Cash acquired	(24)
Bargain purchase gain	$	1,983

The transaction resulted in a bargain purchase gain because Worthington was a non-marketed transaction and in financial distress at the time of the acquisition. The seller engaged in a formal bidding process and determined Air T was the best option for Worthington. The tax impact related to the bargain purchase gain was to record a deferred tax liability and record tax expense against the bargain purchase gain of approximately $589,000.  The resulting net bargain purchase gain after taxes was approximately $1,983,000. Total transaction costs incurred in connection with this acquisition were approximately $83,000.

Pro forma financial information is not presented as the results are not material to the Company’s consolidated financial statements.

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Financing Arrangements

6 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Financing Arrangements

Financing Arrangements

Borrowings of the Company and its subsidiaries are summarized below (in thousands) at September 30, 2019 and March 31, 2019, respectively. AirCo and Contrail Aviation (“Contrail”) are subsidiaries of the Company in the commercial jet engines and parts segment.

(In Thousands)	September 30, 2019		March 31, 2019		Maturity Date	Interest Rate	Unused commitments as of September 30, 2019
Revolver - MB&T	$	18,424	$	12,403	November 30, 2019	Prime - 1%	$	1,576
Term Note A - MB&T	8,250		8,750		January 1, 2028	1-month LIBOR + 2%
Term Note B - MB&T	4,125		4,375		January 1, 2028	4.5%
Term Note D - MB&T	1,574		1,607		January 1, 2028	1-month LIBOR + 2%
Debt - Trust Preferred Securities	9,632		—		June 7, 2049	8%
Air T Debt	42,005		27,135
Revolver - MB&T	—		3,820		May 21, 2019	7.5%
Revolver - MB&T	6,921		—		November 30, 2019	greater of 6.50% or Prime + 2%	3,078
Term Loan - MB&T	—		450		December 17, 2019	7.50%
Term Loan - MB&T	—		400		June 17, 2020	7.25%
Term Loan - Park State	—		2,100		June 17, 2020	8.50%
AirCo Debt	6,921		6,770
Revolver	—		—		September 5, 2021	1-month LIBOR + 3%	20,000
Term Loan A	7,466		8,617		January 26, 2021	1-month LIBOR + 3.75%
Term Loan B	6,500		15,500		September 14, 2021	1-month LIBOR + 3.75%
Term Loan C	12,805		—		August 1, 2024	1-month LIBOR + 3.75%
Contrail Debt - Old National	26,771		24,117
Total Debt	75,697		58,022
Less: Unamortized Debt Issuance Costs	(317)		(369)
Total Debt, net	$	75,380	$	57,653

At September 30, 2019, our contractual financing obligations, including payments due by period, are as follows (in thousands):

Due by	Amount
September 30, 2020	$	29,836
September 30, 2021	17,535
September 30, 2022	4,172
September 30, 2023	4,271
September 30, 2024	4,138
Thereafter	15,745
	75,697
Less: Unamortized Debt Issuance Costs	(317)
	$	75,380

On June 10, 2019, the Company completed a transaction with all holders of the Company’s Common Stock to receive a special, pro-rata distribution of three securities as enumerated below:

•A dividend of one additional share for every two shares already held (a 50% stock dividend, or the equivalent of a 3-for-2 stock split). See Footnote 6 for discussion.

•The Company issued and distributed to existing common shareholders an aggregate of 1.6 million trust preferred capital security ("TruPs") shares (aggregate $4.0 million stated value) and an aggregate of 8.4 million warrants ("Warrants") (representing warrants to purchase $21.0 million in stated value of TruPs). The Warrants are exercisable for one year from issuance.

The issuance of the TruPs and Warrants on June 10, 2019 is disclosed on our consolidated statements of equity as well as within the supplemental non-cash disclosure of the Company's consolidated statements of cash flows. As of September 30, 2019, 2,252,797 Warrants have been exercised. As a result, the amount outstanding on the Company's Debt - Trust Preferred Securities is $9,632,243 as of September 30, 2019.

At September 30, 2019, the Company had Warrants outstanding and exercisable to purchase 6,147,203 shares of its TruPs at an exercise price of $2.40 per share, which represents a discount to the $2.50 face value of each Trust Preferred Security. The Warrants will expire on June 7, 2020 or earlier upon redemption or liquidation.

	Fair Value Measurement as of September 30, 2019
Warrant liability (Level 2)	$	614,720

As of September 30, 2019, the Warrants are recorded within "Other non-current liabilities" on our consolidated balance sheets. Fair value measurement was based on market activity and trading volume as observed on the NASDAQ Global Market. The liability is classified as Level 2 in the hierarchy (Level 2 is defined as quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability).

On August 16, 2019, Contrail entered into a term loan agreement with to borrow $13 million at the interest rate of LIBOR plus 3.75% per annum. The maturity date of the term loan is August 1, 2024.

On September 24, 2019, Air T amended the MBT revolver ("Air T Revolver") to temporarily increase the borrowing commitment from $17 million to $20 million. All other terms of the credit agreement remain unchanged. As noted in Footnote 17 - Subsequent Events, on November 8, 2019, Air T extended the maturity date of the Air T Revolver to February 28, 2020. The principal amount reverted back to $17 million. Concurrently, the Company also extended the maturity date of the AirCo MBT revolver ("AirCo Revolver") to February 28, 2020. Principal amount and terms of the AirCo Revolver remained unchanged.

The Company assumes various financial obligations and commitments in the normal course of its operations and financing activities. Financial obligations are considered to represent known future cash payments that the Company is required to make under existing contractual arrangements such as debt and lease agreements.

As part of the Company’s interest rate risk management strategy, the Company, from time to time, uses derivative instruments to minimize significant unanticipated earnings fluctuations that may arise from rising variable interest rate costs associated with existing borrowings (Air T Term Note A and Term Note D). To meet these objectives, the Company entered into interest rate swaps with notional amounts consistent with the outstanding debt to provide a fixed rate of 4.56% and 5.09%, respectively, on Term Notes A and D. The swaps mature in January 2028.

As of August 1, 2018, these swap contracts were designated as cash flow hedging instruments and qualified as effective hedges in accordance with ASC 815-30. The effective portion of changes in the fair value on these instruments is recorded in other comprehensive income and is reclassified into the consolidated statement of income as interest expense in the same period in which the underlying hedge transaction affects earnings. As of September 30, 2019 and March 31, 2019, the fair value of the interest-rate swap contracts was a liability of $570,069 and $227,000, respectively, which is included within other non-current liabilities in the consolidated balance sheets. During the three months ended September 30, 2019, the Company recorded a loss of approximately $88,000, net of tax, in the consolidated statement of comprehensive income (loss) for changes in the fair value of the instruments.

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Financing Arrangements (Tables)

6 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of Debt

Borrowings of the Company and its subsidiaries are summarized below (in thousands) at September 30, 2019 and March 31, 2019, respectively. AirCo and Contrail Aviation (“Contrail”) are subsidiaries of the Company in the commercial jet engines and parts segment.

(In Thousands)	September 30, 2019		March 31, 2019		Maturity Date	Interest Rate	Unused commitments as of September 30, 2019
Revolver - MB&T	$	18,424	$	12,403	November 30, 2019	Prime - 1%	$	1,576
Term Note A - MB&T	8,250		8,750		January 1, 2028	1-month LIBOR + 2%
Term Note B - MB&T	4,125		4,375		January 1, 2028	4.5%
Term Note D - MB&T	1,574		1,607		January 1, 2028	1-month LIBOR + 2%
Debt - Trust Preferred Securities	9,632		—		June 7, 2049	8%
Air T Debt	42,005		27,135
Revolver - MB&T	—		3,820		May 21, 2019	7.5%
Revolver - MB&T	6,921		—		November 30, 2019	greater of 6.50% or Prime + 2%	3,078
Term Loan - MB&T	—		450		December 17, 2019	7.50%
Term Loan - MB&T	—		400		June 17, 2020	7.25%
Term Loan - Park State	—		2,100		June 17, 2020	8.50%
AirCo Debt	6,921		6,770
Revolver	—		—		September 5, 2021	1-month LIBOR + 3%	20,000
Term Loan A	7,466		8,617		January 26, 2021	1-month LIBOR + 3.75%
Term Loan B	6,500		15,500		September 14, 2021	1-month LIBOR + 3.75%
Term Loan C	12,805		—		August 1, 2024	1-month LIBOR + 3.75%
Contrail Debt - Old National	26,771		24,117
Total Debt	75,697		58,022
Less: Unamortized Debt Issuance Costs	(317)		(369)
Total Debt, net	$	75,380	$	57,653

Schedule of Maturities of Long-term Debt

At September 30, 2019, our contractual financing obligations, including payments due by period, are as follows (in thousands):

Due by	Amount
September 30, 2020	$	29,836
September 30, 2021	17,535
September 30, 2022	4,172
September 30, 2023	4,271
September 30, 2024	4,138
Thereafter	15,745
	75,697
Less: Unamortized Debt Issuance Costs	(317)
	$	75,380

Schedule of Warrant Fair Value

	Fair Value Measurement as of September 30, 2019
Warrant liability (Level 2)	$	614,720

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Financial Statement Presentation (Details Textual) - USD ($) $ in Thousands	Sep. 30, 2019	Apr. 01, 2019	Mar. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets	$ 7,154		$ 0
Total lease liabilities	$ 7,577
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets		$ 10,700
Total lease liabilities		$ 11,200

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Financing Arrangements - Long-term Debt (Details) - USD ($)	6 Months Ended
	Sep. 30, 2019	Mar. 31, 2019
Debt Instrument [Line Items]
Long-term debt, gross	$ 75,697,000	$ 58,022,000
Less: Unamortized Debt Issuance Costs	(317,000)	(369,000)
Total Debt, net	75,380,000	57,653,000
AirCo
Debt Instrument [Line Items]
Long-term debt, gross	6,921,000	6,770,000
AirCo | Revolving Loan
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	3,820,000
Interest rate stated percentage	7.50%
AirCo | Revolver - MB&T
Debt Instrument [Line Items]
Long-term debt, gross	$ 6,921,000	0
Interest rate stated percentage	6.50%
Unused commitments as of September 30, 2019	$ 3,078,000
AirCo | Term Loan - MB&T
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	450,000
Interest rate stated percentage	7.50%
AirCo | Term Loan - MB&T, Two
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	400,000
Interest rate stated percentage	7.25%
AirCo | Term Loan - Park State
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	2,100,000
Interest rate stated percentage	8.50%
Contrail Aviation Inc.
Debt Instrument [Line Items]
Long-term debt, gross	$ 26,771,000	24,117,000
Contrail Aviation Inc. | Revolving Loan
Debt Instrument [Line Items]
Long-term debt, gross	0	0
Unused commitments as of September 30, 2019	20,000,000
Contrail Aviation Inc. | Term Loan A
Debt Instrument [Line Items]
Long-term debt, gross	7,466,000	8,617,000
Contrail Aviation Inc. | Term Loan B
Debt Instrument [Line Items]
Long-term debt, gross	6,500,000	15,500,000
Contrail Aviation Inc. | Term Loan C
Debt Instrument [Line Items]
Long-term debt, gross	12,805,000	0
Parent Company
Debt Instrument [Line Items]
Long-term debt, gross	42,005,000	27,135,000
Parent Company | Revolving Loan
Debt Instrument [Line Items]
Long-term debt, gross	$ 18,424,000	12,403,000
Maturity Date	Nov. 30, 2019
Unused commitments as of September 30, 2019	$ 1,576,000
Parent Company | Term Note A - MB&T
Debt Instrument [Line Items]
Long-term debt, gross	$ 8,250,000	8,750,000
Maturity Date	Jan. 01, 2028
Parent Company | Term Note B - MB&T
Debt Instrument [Line Items]
Long-term debt, gross	$ 4,125,000	4,375,000
Maturity Date	Jan. 01, 2028
Interest rate stated percentage	4.50%
Parent Company | Term Note D - MB&T
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,574,000	1,607,000
Maturity Date	Jan. 01, 2028
Parent Company | Debt - Trust Preferred Securities
Debt Instrument [Line Items]
Long-term debt, gross	$ 9,632,243	$ 0
Interest rate stated percentage	8.00%
Prime Rate | AirCo | Revolver - MB&T
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
Prime Rate | Parent Company | Revolving Loan
Debt Instrument [Line Items]
Interest rate stated percentage	1.00%
London Interbank Offered Rate (LIBOR) | Contrail Aviation Inc. | Revolving Loan
Debt Instrument [Line Items]
Basis spread on variable rate	3.00%
London Interbank Offered Rate (LIBOR) | Contrail Aviation Inc. | Term Loan A
Debt Instrument [Line Items]
Basis spread on variable rate	3.75%
London Interbank Offered Rate (LIBOR) | Contrail Aviation Inc. | Term Loan B
Debt Instrument [Line Items]
Basis spread on variable rate	3.75%
London Interbank Offered Rate (LIBOR) | Contrail Aviation Inc. | Term Loan C
Debt Instrument [Line Items]
Basis spread on variable rate	3.75%
London Interbank Offered Rate (LIBOR) | Parent Company | Term Note A - MB&T
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
London Interbank Offered Rate (LIBOR) | Parent Company | Term Note D - MB&T
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%

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Leases (Details Textual)	Sep. 30, 2019
Minimum
Lessee, Lease, Description [Line Items]
Lease term	2 years
Maximum
Lessee, Lease, Description [Line Items]
Lease term	5 years
Real Estate
Lessee, Lease, Description [Line Items]
Lease term	30 years

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Subsequent Events (Details Textual)	Nov. 08, 2019 USD ($) a ft²	Sep. 24, 2019 USD ($)	Sep. 23, 2019 USD ($)
Subsequent Event | Cadillac Castings, Inc
Subsequent Event [Line Items]
Acquired ownership percentage of investment	19.90%
Purchase price for investment	$ 3,000,000
Area of real estate property | ft²	275,000
Subsequent Event | Cadillac Castings, Inc | Land and Building
Subsequent Event [Line Items]
Area of real estate property | a	43
Revolving Credit Facility | Line of Credit
Subsequent Event [Line Items]
Credit facility maximum borrowing capacity		$ 20,000,000	$ 17,000,000
Revolving Credit Facility | Line of Credit | Subsequent Event
Subsequent Event [Line Items]
Credit facility maximum borrowing capacity	$ 17,000,000
Amount of principal remaining	$ 10,000,000

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Variable Interest Entities

6 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

Variable Interest Entities

A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. Under ASC 810 - Consolidation, an entity that holds a variable interest in a VIE and meets certain requirements would be considered to be the primary beneficiary of the VIE and required to consolidate the VIE in its consolidated financial statements. In order to be considered the primary beneficiary of a VIE, an entity must hold a variable interest in the VIE and have both:

•the power to direct the activities that most significantly impact the economic performance of the VIE; and

•the right to receive benefits from, or the obligation to absorb losses of, the VIE that could be potentially significant to the VIE.

The Company concluded that its investments in Delphax’s equity and debt, and its investment in the Delphax warrant, each constituted a variable interest. In addition, the Company concluded that it became the primary beneficiary of Delphax on November 24, 2015. The Company consolidated Delphax in its consolidated financial statements beginning on that date.

The following table sets forth the carrying values of Delphax’s assets and liabilities as of September 30, 2019 and March 31, 2019 (in thousands):

	September 30, 2019		March 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	13	$	12
Accounts receivable, net	50		47
Other current assets	9		59
Total current assets	72		118
Other tax receivables-long-term	—		311
Total assets	72		429
LIABILITIES
Current liabilities:
Accounts payable	96		2,151
Accrued expenses	392		3,158
Short-term debt	—		1,750
Total current liabilities	488		7,059
Total liabilities	488		7,059
Net Liabilities	$	(416)	$	(6,630)

Upon petition by the Company, on August 8, 2017 the Ontario Superior Court of Justice in Bankruptcy and Insolvency adjudged Delphax Canada to be bankrupt. As a result, Delphax Canada ceased to have capacity to deal with its property, which then vested in the trustee in bankruptcy of Delphax Canada subject to the rights of secured creditors. As of June 30, 2019, the bankruptcy proceedings were finalized in accordance with Canadian law and, therefore, Delphax Canada was legally discharged of its liabilities. The conclusion of the bankruptcy proceedings also resulted in the dissolution of Delphax Canada. In addition, on June 11, 2019, the Company has also fully dissolved Delphax UK. As such, the only Delphax entity that remains in existence as of September 30, 2019 is Delphax France. The Company extinguished the assets and liabilities of Delphax Canada and Delphax UK during the quarter ended June 30, 2019 and recognized a gain on dissolution of entities of $4,509,302.

Delphax’s revenues and expenses are included in our consolidated financial statements beginning November 24, 2015 through September 30, 2019. Revenues and expenses prior to the date of initial consolidation were excluded. We have determined that the attribution of Delphax net income or loss should be based on consideration of all of Air T’s investments in Delphax and Delphax Canada. The Delphax warrant ("Delphax warrant") provides that in the event that dividends are paid on the common stock of Delphax, the holder of the Delphax warrant is entitled to participate in such dividends on a ratable basis as if the Delphax warrant had been fully exercised and the shares of Series B Preferred Stock acquired upon such exercise had been converted into shares of Delphax common

stock. This provision would have entitled Air T, Inc. to approximately 67% of any Delphax dividends paid, with the remaining 33% paid to the non-controlling interests. We concluded that this was a substantive distribution right which should be considered in the attribution of Delphax net income or loss to non-controlling interests. We furthermore concluded that our investment in the debt of Delphax should be considered in attribution. Specifically, Delphax’s net losses are attributed first to our Series B Preferred Stock and Delphax warrant investments and to the non-controlling interest (67%/33%) until such amounts are reduced to zero. Additional losses are then fully attributed to our debt investments until they too are reduced to zero. This sequencing reflects the relative priority of debt to equity. Any further losses are then attributed to Air T and the non-controlling interests based on the initial 67%/33% share. Delphax net income is attributed using a backwards-tracing approach with respect to previous losses.

As a result of the application of the above-described attribution methodology, for the quarters ended September 30, 2019 and September 30, 2018 the attribution of Delphax losses to non-controlling interests was 33% and 33%, respectively.

The following table sets forth the revenue and expenses of Delphax prior to intercompany eliminations that are included in the Company’s condensed consolidated statement of income for the three months ended September 30, 2019 and 2018 (in thousands):

	Six Months Ended September 30,
	2019		2018
Operating Revenues	$	—	$	—
Operating Expenses:
Cost of sales	—		—
General and administrative	125		222
	125		222
Operating Loss	(125)		(222)
Non-operating Income (Expenses), net	6,237		(46)
Income (Loss) Before Income Taxes	6,112		(268)
Income Taxes	—		—
Net Income (Loss)	$	6,112	$	(268)

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Equity Method Investments

6 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Equity Method Investments

The Company’s investment in Insignia Systems, Inc. (“Insignia”) is accounted for under the equity method of accounting. The Company has elected a three-month lag upon adoption of the equity method. At September 30, 2019, the Company held approximately 3.5 million shares of Insignia’s common stock representing approximately 29% of the outstanding shares. For the quarter ended September 30, 2019, the Company recorded approximately $142,196 as its share of Insignia’s net loss for the three months ended June 30, 2019 along with a basis difference adjustment of approximately $24,032. In addition, due to the adverse financial results as reported in Insignia's Form 10-Q for the quarter ended June 30, 2019 in addition to consideration of analyst reports and other qualitative factors, the Company determined that it has suffered from an other-than-temporary impairment in its investment in Insignia . As such, the Company recorded an impairment charge of $395,031 during the quarter ended September 30, 2019. After the impairment, the Company's net investment basis in Insignia is $3,439,547 as of September 30, 2019.

Summarized unaudited financial information for Insignia for the three months ended June 30, 2019 and 2018 is as follows (in thousands):

	Three Months Ended June 30, 2019		Three Months Ended June 30, 2018
Revenue	$	5,842	$	8,245
Gross Profit	1,465		3,005
Operating income (loss)	(683)		253
Net income (loss)	(488)		184
Net income attributable to Air T, Inc. stockholders	$	(166)	$	31

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Label	Element	Value
Accounting Standards Update 2016-02 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (41,000)
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (41,000)

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Discontinued Operations

6 Months Ended

Sep. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

On September 30, 2019, the Company completed the sale of 100% of the equity ownership in the Company’s wholly-owned subsidiary, Global Aviation Services, LLC ("GAS") to PrimeFlight Aviation Services, Inc., a Delaware corporation. The agreement includes a purchase price of $21 million as well as an earn-out provision of $4 million if certain performance metrics are achieved by March 31, 2020. The Company received approximately $20.5 million of total proceeds at closing after the initial net working capital adjustment. The Company recognized a pre-tax gain on the sale of GAS of approximately $10.8 million with tax impact of $2.4 million for a net of tax gain of $8.4 million in the second quarter of 2019. The gain is subject to change pending final settlement statement, final transaction costs and net working capital adjustments.

Summarized results of operations of GAS for the three and six months ended September 30, 2019 and 2018 through the date of disposition are as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Net sales	$	8,120	$	8,474	$	16,637	$	17,522
Operating Expense	(9,015)		(9,215)		(17,319)		(18,350)
Loss from discontinued operations before income taxes	(895)		(741)		(682)		(828)
Income tax benefit	(660)		(93)		(612)		(123)
Loss from discontinued operations, net of tax	$	(235)	$	(648)	$	(70)	$	(705)

The following table presents summary balance sheet information of GAS that is presented as discontinued operations as of March 31, 2019 (in thousands):

Assets:	March 31, 2019
Cash and cash equivalents	$	107
Accounts receivable, net	8,197
Income tax receivable	17
Inventories, net	2,512
Other current assets	769
Current assets of discontinued operations	11,601
Property and equipment, net	554
Intangible assets, net	228
Goodwill	190
Other non-current assets	292
Non-current assets of discontinued operations	1,264
Liabilities:
Accounts payable	1,144
Income tax payable	(226)
Accrued expenses	669
Current liabilities of discontinued operations	$	1,587

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Leases (Tables)

6 Months Ended

Sep. 30, 2019

Leases [Abstract]

Lease, Cost

The components of lease cost for the three and six months ended September 30, 2019 are as follows (in thousands):

	Three Months Ended September 30, 2019		Six Months Ended September 30, 2019
Operating lease cost	$	514	$	920
Short-term lease cost	50		255
Variable lease cost	71		207
Sublease income	—		—
Total lease cost	$	635	$	1,382

Amounts reported in the consolidated balance sheets for leases where we are the lessee as of the quarter ended September 30, 2019 were as follows (in thousands):

	September 30, 2019
Operating leases
Operating lease right-of-use assets	$	7,154
Operating lease liabilities	$	7,577
Weighted-average remaining lease term	15.50 years
Operating leases
Weighted-average discount rate	4.51		%
Operating leases

Lessee, Operating Lease, Liability, Maturity

Maturities of lease liabilities under non-cancellable leases where we are the lessee as of the quarter ended September 30, 2019 are as follows (in thousands):

	Operating Leases
2020 (excluding the six months ended September 30, 2019)	$	786
2021	1,311
2022	1,131
2023	938
2024	637
2025	402
Thereafter	5,757
Total undiscounted lease payments	$	10,962
Less: Interest	2,890
Less: Discount	495
Total lease liabilities	$	7,577

Schedule of Future Minimum Rental Payments for Operating Leases

At March 31, 2019, future minimum annual lease payments (foreign currency amounts translated using applicable March 31, 2019 exchange rates) are as follows (in thousands):

Year ended March 31,
2020	$	3,133
2021	2,115
2022	1,625
2023	1,241
2024	692
Thereafter	6,267
Total minimum lease payments	$	15,073

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Segment Information (Tables)

6 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Segment data is summarized as follows (in thousands):

(In Thousands)	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Operating Revenues by Segment:
Overnight Air Cargo	$	19,745	$	17,064	$	38,065	$	34,705
Ground Equipment Sales:
Domestic	12,102		11,070		22,960		16,362
International	639		1,776		2,030		2,871
Total Ground Equipment Sales	12,741		12,846		24,990		19,233
Printing Equipment and Maintenance:
Domestic	175		3		197		194
International	74		137		120		245
Total Printing Equipment and Maintenance	249		140		317		439
Commercial Jet Engines and Parts:
Domestic	6,203		5,341		14,631		27,659
International	11,699		5,302		19,840		10,304
Total Commercial Jet Engines and Parts	17,902		10,643		34,471		37,963
Corporate and other	542		189		1,141		365
Intercompany	(486)		(15)		(1,103)		(18)
Total	50,693		40,867		97,881		92,687
Operating Income (Loss):
Overnight Air Cargo	216		197		264		1,253
Ground Equipment Sales	1,221		697		2,568		1,091
Printing Equipment and Maintenance	(381)		(413)		(837)		(654)
Commercial Jet Engines and Parts	1,193		575		3,191		3,788
Corporate and other	(1,902)		(1,935)		(3,860)		(3,666)
Intercompany	119		—		139		—
Total	466		(879)		1,465		1,812
Capital Expenditures:
Overnight Air Cargo	26		29		56		34
Ground Equipment Sales	286		156		10		296
Printing Equipment and Maintenance	—		—		—		—
Commercial Jet Engines and Parts	16,005		19,287		17,656		19,471
Corporate and other	51		34		72		111
Total	16,368		19,506		17,794		19,912
Depreciation, Amortization and Impairment:
Overnight Air Cargo	19		21		37		44
Ground Equipment Sales	63		65		116		157
Printing Equipment and Maintenance	27		15		30		30
Commercial Jet Engines and Parts	1,456		1,456		3,192		2,554
Corporate and other	137		151		277		296
Intercompany	—		(1)		(3)		(3)
Total	$	1,702	$	1,707	$	3,649	$	3,078

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Business Combinations (Tables) - Worthington Aviation Parts, Inc

6 Months Ended

Sep. 30, 2019

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition

Total consideration is summarized in the table below (in thousands):

Earnest money	$	50
Cash consideration	3,300
Cash acquired	(24)
Total consideration	$	3,326

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table outlines the consideration transferred and purchase price allocation at the respective estimated fair values as of May 4, 2018 (in thousands):

	May 4, 2018
ASSETS
Accounts receivable	$	1,929
Inventories	4,564
Other current assets	150
Property and equipment	392
Other assets	189
Intangible assets - tradename	138
Total assets	7,362
LIABILITIES
Accounts payable	1,289
Accrued expenses	175
Deferred tax liability	589
Total liabilities	2,053
Net assets acquired	5,309
Consideration paid	3,350
Less: Cash acquired	(24)
Bargain purchase gain	$	1,983

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Commitments and Contingencies

6 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and ContingenciesContrail Aviation Support, LLC (“Contrail Aviation”), a subsidiary of the Company, completed the purchase of all of the assets owned by Contrail Aviation Support, Inc. (the “Seller”) in July 2016. As part of this purchase, Contrail Aviation agreed to pay contingent additional deferred consideration of up to a maximum of $1,500,000 per year and $3,000,000 in the aggregate. The Company has paid

in full the contingent consideration as of September 30, 2019 and there is no remaining liability as of September 30, 2019.

Contrail Aviation entered into an Operating Agreement (the “Operating Agreement”) with the Seller providing for the governance of and the terms of membership interests in Contrail Aviation and including put and call options (“Put/Call Option”). The Put/Call Option permits the Seller to require Contrail Aviation to purchase all of the Seller’s equity membership interests in Contrail Aviation commencing on the fifth anniversary of the acquisition, which is on July 18, 2021. The Company has presented this redeemable non-controlling interest in Contrail Aviation between the liabilities and equity sections of the accompanying consolidated balance sheets. In addition, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The fair value of the redeemable non-controlling interest is $6,000,000. The net change in the redemption value compared to March 31, 2019 is an increase of $524,000, of which $203,858 was related to the net change in fair value during the six months ended September 30, 2019, which is reflected on our consolidated statements of equity.

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Business Combinations - Assets Acquired and Liabilities Assumed by Worthington (Details) - USD ($) $ in Thousands		6 Months Ended
	May 04, 2018	Sep. 30, 2019	Sep. 30, 2018
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired		$ 500	$ 3,376
Worthington Aviation Parts, Inc
Business Acquisition [Line Items]
Accounts receivable	$ 1,929
Inventories	4,564
Other current assets	150
Property and equipment	392
Other assets	189
Total assets	7,362
Accounts payable	1,289
Accrued expenses	175
Deferred tax liability	589
Total liabilities	2,053
Net assets acquired	5,309
Payments to Acquire Businesses, Net of Cash Acquired	3,350
Less: Cash acquired	(24)
Bargain purchase gain	1,983
Worthington Aviation Parts, Inc | Trade Names
Business Acquisition [Line Items]
Intangible assets - tradename	$ 138

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Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (296)	$ (300)	$ (668)	$ 117
Effective income tax rate, percent	12.20%	27.80%	(55.60%)	4.40%
Effective tax rate for discontinued operations, percent	73.70%	12.60%	89.70%	14.80%
Impaired reinsurance contracts			$ 2,000

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Document And Entity Information - shares	6 Months Ended
	Sep. 30, 2019	Nov. 06, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Entity Registrant Name	Air T, Inc.
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding (in shares)		3,023,805
Entity Central Index Key	0000353184
Current Fiscal Year End Date	--03-31
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Small Business	true
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

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Commitments and Contingencies (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2019	Jul. 18, 2016
Business Acquisition, Contingent Consideration [Line Items]
Fair value of redeemable non-controlling interest	$ 6,000,000		$ 6,000,000
Change in redemption value			524,000
Adjustment to fair value of redeemable non-controlling interest	781,000	$ (985,000)	203,858
Contrail Aviation Support LLC. | Contrail Aviation Inc.
Business Acquisition, Contingent Consideration [Line Items]
Contingent consideration maximum per year				$ 1,500,000
Contingent consideration aggregate				$ 3,000,000
Current remaining liability	$ 0		$ 0

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2019	Mar. 31, 2019
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 382	$ 408
Assets on lease, accumulated depreciation	6,007	6,689
Property and equipment, accumulated depreciation	3,935	3,470
Intangible assets, accumulated amortization	$ 2,229	$ 2,097
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	50,000	50,000
Common stock, par value (in dollars per share)	$ 0.25	$ 0.25
Common stock, shares authorized (in shares)	4,000,000	4,000,000
Common stock, shares issued (in shares)	3,022,745	2,022,637
Common stock, shares outstanding (in shares)	3,022,745	2,022,637

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Geographical Information - Long-lived Assets By Geographic Region (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Mar. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current Assets	$ 25,329	$ 29,428
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current Assets	18,321	4,393
Foreign
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current Assets	7,008	25,035
Australia
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current Assets	3	5
Mexico
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current Assets	1,845	2,681
Netherlands
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current Assets	5,160	5,541
China
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current Assets	$ 0	$ 16,808

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Variable Interest Entities - Carrying Values of Assets and Liabilities of Delphax Included on the Company's Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Mar. 31, 2019
Variable Interest Entity [Line Items]
Cash and cash equivalents	$ 27,434	$ 12,417
Accounts receivable, net	18,464	10,881
Total current assets	99,073	71,348
Total Assets	142,657	115,143
Accounts payable	12,540	11,409
Total current liabilities	56,118	52,794
Total Liabilities	109,310	86,309
Delphax | Reportable Legal Entities
Variable Interest Entity [Line Items]
Cash and cash equivalents	13	12
Accounts receivable, net	50	47
Other current assets	9	59
Total current assets	72	118
Other tax receivables-long-term	0	311
Total Assets	72	429
Accounts payable	96	2,151
Accrued expenses	392	3,158
Short-term debt	0	1,750
Total current liabilities	488	7,059
Total Liabilities	488	7,059
Net Liabilities	$ (416)	$ (6,630)

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Revenue Recognition

6 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Substantially all of the Company’s revenue is derived from contracts with an initial expected duration of one year or less, as a result, the Company has applied the practical expedient to exclude consideration of significant financing components from the determination of transaction price, to expense costs incurred to obtain a contract, and to not disclose the value of unsatisfied performance obligations.

The following is a description of the Company’s performance obligations:

Type of Revenue	Nature, Timing of Satisfaction of Performance Obligations, and Significant Payment Terms
Product Sales	The Company generates revenue from sales of various distinct products such as parts, aircraft equipment, printing equipment, jet engines, airframes, and scrap metal to its customers. A performance obligation is created when the Company accepts an order from a customer to provide a specified product. Each product ordered by a customer represents a performance obligation. The Company recognizes revenue when obligations under the terms of the contract are satisfied; generally, this occurs at a point-in-time upon shipment or when control is transferred to the customer. Transaction prices are based on contracted terms, which are at fixed amounts based on standalone selling prices. While the majority of the Company's contracts do not have variable consideration, for the limited number of contracts that do, the Company records revenue based on the standalone selling price less an estimate of variable consideration (such as rebates, discounts or prompt payment discounts). The Company estimates these amounts based on the expected incentive amount to be provided to customers and reduces revenue accordingly. Performance obligations are short-term in nature and customers are typically billed upon transfer of control. The Company records all shipping and handling fees billed to customers as revenue. The terms and conditions of the customer purchase orders or contracts are dictated by either the Company’s standard terms and conditions or by a master service agreement or by the contract.
Support Services	The Company provides a variety of support services such as aircraft maintenance, printer maintenance, and short-term repair services to its customers. Additionally, the Company operates certain aircraft routes on behalf of FedEx. A performance obligation is created when the Company agrees to provide a particular service to a customer. For each service, the Company recognizes revenues over time as the customer simultaneously receives the benefits provided by the Company's performance. This revenue recognition can vary from when the Company has a right to invoice to the output or input method depending on the structure of the contract and management’s analysis. For repair-type services, the Company records revenue over-time based on an input method of costs incurred to total estimated costs. The Company believes this is appropriate as the Company is enhancing an asset that the customer controls as repair work, such as labor hours are incurred, and parts installed, is being performed. The vast majority of repair-services are short term in nature and are typically billed upon completion of the service. Some of the Company’s contracts contain a promise to stand ready as the Company is obligated to perform certain maintenance or administrative services. For most of these contracts, the Company applies the 'as invoiced' practical expedient as the Company has a right to consideration from the customer in an amount that corresponds directly with the value of the entity's performance completed to date. A small number of contracts are accounted for as a series and recognized equal to the amount of consideration the Company is entitled to less an estimate of variable consideration (typically rebates). These services are typically ongoing and are generally billed on a monthly basis.

In addition to the above type of revenues, the Company also has Leasing Revenue, which is in scope under Topic 842 (Leases) and out of scope under Topic 606 and Other Revenues (Freight, Management Fees, etc.) which are immaterial for disclosure under Topic 606.

The following table summarizes disaggregated revenues by type (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Product Sales
Air Cargo	$	6,680	$	5,003	$	12,094	$	10,523
Ground equipment sales	12,489		12,447		24,492		18,617
Commercial jet engines and parts	13,218		7,380		24,388		32,409
Printing equipment and maintenance	20		122		68		409
Corporate and other	—		—		—		—
Support Services
Air Cargo	13,033		11,985		25,927		24,082
Ground equipment sales	105		148		210		249
Commercial jet engines and parts	1,597		1,327		3,007		2,293
Printing equipment and maintenance	225		12		236		20
Corporate and other	(8)		16		33		16
Leasing Revenue
Air Cargo	—		—		—		—
Ground equipment sales	33		15		53		46
Commercial jet engines and parts	2,941		1,826		6,655		3,027
Printing equipment and maintenance	—		—		—		—
Corporate and other	36		32		81		72
Other
Air Cargo	32		76		43		100
Ground equipment sales	114		228		236		312
Commercial jet engines and parts	45		110		78		234
Printing equipment and maintenance	4		5		9		10
Corporate and other	129		135		271		268
Total	$	50,693	$	40,867	$	97,881	$	92,687

The following table summarizes total revenues by segment (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Air cargo	$	19,745	$	17,064	$	38,064	$	34,705
Ground equipment sales	12,741		12,838		24,991		19,224
Commercial jet engines and parts	17,801		10,643		34,128		37,963
Printing equipment and maintenance	249		139		313		439
Corporate and other	157		183		385		356
Total	$	50,693	$	40,867	$	97,881	$	92,687

See Note 14 for the Company's disaggregated revenues by geographic region and Note 15 for the Company’s disaggregated revenues by segment. These notes disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Contract Balances and Costs

Contract liabilities relate to deferred income and advanced customer deposits with respect to product sales. The following table presents outstanding contract liabilities as of April 1, 2019 and September 30, 2019 and the amount of contract liabilities that were recognized as revenue during the six-month period ended September 30, 2019 (in thousands):

	Outstanding contract liabilities		Outstanding contract liabilities as of April 1, 2019 Recognized as Revenue
As of September 30, 2019	$	10,291
As of April 1, 2019	1,867
For the six months ended September 30, 2019			1,781

Contract assets primarily relate to deposits paid to vendors. The following table presents the amount of contract assets as of April 1, 2019 and September 30, 2019 (in thousands):

	Contract assets
As of September 30, 2019	$5,174
As of April 1, 2019	1,743