8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 _____________________

Form 8-K

 _____________________

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 29, 2020

   _____________________

Air Transport Services Group, Inc.

(Exact name of registrant as specified in its charter)

  _____________________

DE	000-50368	26-1631624
(State or other jurisdiction of incorporation)	Commission File Number:	(IRS Employer Identification No.)

145 Hunter Drive, Wilmington, OH 45177

(Address of principal executive offices, including zip code)

(937) 382-5591

(Registrant's telephone number, including area code)

 _____________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ATSG	NASDAQ Stock Market LLC

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. ☐

Item 1.01 Entry into a Material Definitive Agreement

See disclosures under Item 3.02 of this Form 8-K with respect to the issuance by Air Transport Services Group, Inc. ("ATSG") to Amazon.com, Inc. on May 29, 2020, of the warrant to purchase 7,014,804 shares of the common stock of ATSG.

Item 3.02 Unregistered Sales of Equity Securities

On May 29, 2020, Air Transport Services Group, Inc. (“ATSG”), through its subsidiary, Airborne Global Solutions, Inc., entered into a Second Amended and Restated Air Transportation Services Agreement (the “ATSA”) with Amazon.com Services, LLC (“ASL”), a subsidiary of Amazon.com, Inc. (“Amazon”), effective on May 29, 2020, pursuant to which ATSG, through its subsidiary, Cargo Aircraft Management, Inc. (“CAM”), will lease 12 additional Boeing 767-300 series converted freighter aircraft to ASL, the first of which was delivered on May 29, 2020 and the remaining 11 of which will be delivered in 2021. CAM currently leases 27 Boeing 767 converted freighter aircraft to ASL, including six leased during 2019. In December 2018, Amazon committed to lease those six plus an additional four Boeing 767 converted freighter aircraft from CAM by the end of 2020. The ATSA increases the projected number of Boeing 767 converted freighter aircraft CAM will have leased to ASL to 31 by the end of 2020 and to 42 by the end of 2021.

On May 29, 2020, in conjunction with ASL entering into a binding commitment to lease 12 additional Boeing 767-300 converted freighter aircraft from CAM pursuant to the ATSA, ATSG issued to Amazon a warrant to purchase 7,014,804 shares of the common stock of ATSG. The grant was made pursuant to that certain Investment Agreement, dated December 20, 2018, between ATSG and Amazon (the “Investment Agreement”). The exercise price of the warrants is $20.40 per share, which represents the volume-weighted average price of ATSG’s common stock over the 30 trading days immediately preceding May 29, 2020. The warrants will vest in increments of 584,567 common shares each time that CAM and ASL enter into a definitive lease agreement for an aircraft. The warrants will be exercisable in accordance with their terms through December 20, 2025. The Investment Agreement has been filed by ATSG with the SEC as Exhibit 10.30 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

The issuance of the warrants and of common stock issuable upon the exercise of the warrants, which are subject to the terms and conditions set forth in the Investment Agreement, have not been registered under the Securities Act of 1933, as amended, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) promulgated thereunder.

Item 7.01 Regulation FD Disclosure.

On June 4, 2020, Air Transport Services Group, Inc. ("ATSG") announced that it had entered into a Second Amended and Restated Air Transportation Services Agreement with Amazon.com Services, LLC (“ASL”), a subsidiary of Amazon.com, Inc., effective on May 29, 2020, pursuant to which ATSG, through its subsidiary, Cargo Aircraft Management, Inc., will lease 12 additional Boeing 767-300 series freighter aircraft to ASL, the first of which was delivered on May 29, 2020 and the remaining eleven of which will be delivered in 2021. A copy of the release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.    Description

99.1        Press release issued by Air Transport Services Group, Inc. on June 4, 2020.

SIGNATURES

Pursuant to the requirements 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 TRANSPORT SERVICES GROUP, INC.
By:	/S/  W. JOSEPH PAYNE
	W. Joseph Payne
	Chief Legal Officer & Secretary
Date:	June 4, 2020

EX-99.1

ATSG to Lease Twelve Additional 767 Freighters to Amazon

Latest leasing commitments would bring the number of Boeing 767 aircraft that ATSG leases to Amazon to 31 by the end of 2020, and 42 aircraft by the end of 2021

WILMINGTON, OH, June 4, 2020 - Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading provider of medium wide-body aircraft leasing, air transportation and related services, today announced an agreement to lease twelve additional Boeing 767-300 converted freighter aircraft to Amazon.com Services LLC. One of the twelve aircraft was delivered on May 29, 2020 and the remaining eleven will be delivered in 2021. All twelve will be leased to Amazon for ten years, with options for Amazon to extend the leases for three additional years.

Cargo Aircraft Management (CAM), ATSG’s aircraft leasing subsidiary, currently leases twenty-seven 767 aircraft to Amazon, including six leased during 2019. In December 2018, Amazon committed to lease those six plus an additional four 767s from CAM by the end of 2020. The agreement announced today increases the projected number of 767s CAM will have leased to Amazon to 31 by the end of 2020 and to 42 by the end of 2021.

Rich Corrado, President and CEO of ATSG said, “This new commitment is further evidence of Amazon’s confidence in our ability to support its expanding U.S. air network. We look forward to supporting Amazon with additional aircraft capacity and to generating additional revenues and cash flows for our shareholders from our unique asset and service offerings, for many years to come.”

Widebody Boeing 767 freighters have become the preeminent midsize component of regional air-cargo networks over the last ten years, and ATSG is the world’s largest lessor of that aircraft type. ATSG expects to end 2020 with seventy-eight owned 767 freighter aircraft in operation, seventy-one of which will be leased to eleven external customers.

Pursuant to the terms of the parties’ December 2018 deal, Amazon will be granted approximately seven million warrants to purchase ATSG common shares in exchange for its commitment to these twelve additional leases. The cash exercise price for these warrants will be $20.40 per share, based upon the volume-weighted average price of ATSG’s stock for the 30 trading days concluded prior to the contractual commitment for the leases.

About Air Transport Services Group, Inc. (ATSG)

ATSG is a leading provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. ATSG, through its leasing and airline subsidiaries, is the world's largest owner and operator of converted Boeing 767 freighter aircraft. Through its principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier certificates, ATSG provides aircraft leasing, air cargo lift, passenger ACMI and charter services, aircraft maintenance services and airport ground services. ATSG's subsidiaries include ABX Air, Inc.; Airborne Global Solutions, Inc.; Airborne Maintenance and Engineering Services, Inc., including its subsidiary, Pemco World Air Services, Inc.; Air Transport International, Inc.; Cargo Aircraft Management, Inc.; and Omni Air International, LLC. For more information, please see www.atsginc.com.

Except for historical information contained herein, the matters discussed in this release contain forward-looking statements that involve risks and uncertainties. There are several important factors that could cause Air Transport

Services Group's (“ATSG's”) actual results to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, potential disruptions to our workforce and staffing capability, and the ability of our vendors and third party service providers to maintain customary service levels, arising from the current COVID-19 pandemic and related economic downturn; the cost and timing with respect to which we are able to purchase and modify aircraft to a cargo configuration; our ability to remain in compliance with our commercial arrangements with Amazon and our lenders; and other factors that are contained from time to time in ATSG's filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should carefully review this release and should not place undue reliance on ATSG's forward-looking statements. These forward-looking statements were based on information, plans, and estimates as of the date of this release. ATSG undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events, or other changes.

Contact:

Quint O. Turner, ATSG Inc. Chief Financial Officer

937-366-2303

XML

Cover Cover	May 29, 2020
Cover [Abstract]
Amendment Flag	false
Document Type	8-K
Document Period End Date	May 29, 2020
Entity Registrant Name	Air Transport Services Group, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	000-50368
Entity Tax Identification Number	26-1631624
Entity Address, Address Line One	145 Hunter Drive
Entity Address, City or Town	Wilmington
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45177
City Area Code	937
Local Phone Number	382-5591
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ATSG
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000894081