Company: AIRTP
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0000353184-25-000126
Chunk: 5

Company: AIR T INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 2
Chunk 5
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27%) compared to the first quarter of the prior fiscal year. The increase was primarily driven by acquisition-related costs incurred during the current year, as well as higher payroll and employee-related expenses.

Non-Operating Income (Expense)

Following is a table detailing non-operating income (expense) during the three months ended September 30, 2025 compared to the same quarter in the prior fiscal year (in thousands):

Three Months EndedSeptember 30,Change20252024Interest expense$(2,252)$(2,162)$(90)Income from equity method investments4,179 2,346 1,833 Other(201)(505)304 $1,726 $(321)$2,047 

The Company had net non-operating income of $1.7 million during the quarter ended September 30, 2025, compared to net non-operating loss of $0.3 million in the prior year quarter. The non-operating income was driven by a  $1.8 million increase in net income allocated to the Company from equity method investments, as detailed in Note 9 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Report on Form 10-Q.

Provision for Income Taxes

During the three-month period ended September 30, 2025, the Company recorded $2.2 million in income tax expense at an effective tax rate (“ETR”) of 30.4%. The Company has computed the provision for income taxes based on the estimated annual effective tax rate and the application of discrete items, if any, 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, 2025 were the valuation allowance related to the Company’s U.S. consolidated group, DTI and DSI, the foreign rate differentials for Air T’s operations located in the Netherlands and Puerto Rico, non-deductible acquisition-related costs, and the benefit from the Foreign-Derived Intangible Income (“FDII”) deduction.

During the three-month period ended September 30, 2024, the Company recorded $0.3 million in income tax expense at an ETR of 10.2%. The Company has computed the provision for income taxes based on the estimated annual effective tax rate excluding loss jurisdictions with no tax benefit and the application of discrete items, if any, for interim reporting. The primary factors contributing to