Dahlman Rose Comments On Air Transport Services New Credit Facility, Earnings Estimates

The higher than expected maintenance cost and lower ACMI revenue negatively affected earnings by $0.03/per share. Air Transport Services Group ATSG just signed a new credit facility for $325 million, but will take a $6.8 million non-cash loss due to the early termination of the old credit facility. Dalhman Rose is lowering its 1Q11 EPS estimate to $0.03, from a prior estimate of $0.16. Dahlman is leaving its 2012 EPS estimate of $0.92 unchanged as these are one time, non-recurring issues are unlikely to impact 2012. Air Transport Services Group signed a new credit facility that includes a term loan of $150 million and a $175 million revolver with an accordion for up to an additional $50 million. The new facility will be priced at the 90-day LIBOR rate plus two percentage points, 25 basis points lower than the current agreement. Dahlman Rose has a $12 PT and Buy rating on ATSG ATSG closed Monday at $8.10