Air Transport Services Group, Inc

Good day and thank you for standing by. Welcome to the second quarter 2022 Air Transport Services Group conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Joe Payne, Chief Legal Officer. Please go ahead.

Good morning, and welcome to our second quarter 2022 earnings conference call. We issued our earnings release yesterday after the market closed. It's on our website, ATSGINC.com. Let me begin by advising you that during the course of this call, we will make projections and other forward-looking statements that involve risks and uncertainties. Our actual results and other future events may differ materially from those we describe here. These forward-looking statements are based on information, plans, and estimates as of the date of this call. Air Transport Services Group undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions, factors, new information, or other changes. These factors include but are not limited to the extent to which changes in market conditions impact the number, timing, and scheduled routes of aircraft deployments to new and existing customers. The cost and timing with respect to which we were able to purchase and modify aircraft to a cargo configuration, which may be impacted by global supply chain disruptions. Our operating airline's ability to maintain on-time service and control costs. Our ability to remain in compliance with key agreements with customers, lenders, and government agencies. Persistent elevated rates of inflation and changes in general economic and or industry-specific conditions, such as higher labor costs, increases in interest rates, an economic recession, and downturns in customer business cycles. The impact arising from COVID-19 outbreaks, including the emergence of COVID-19 variants. Mark-to-market changes on certain financial instruments, and other factors as contained from time to time in our filings with the SEC, including the Form 10-Q we will file next week. We will also refer to non-GAAP financial measures from continuing operations, including adjusted earnings, adjusted earnings per share, adjusted pre-tax earnings, adjusted EBITDA, and adjusted free cash flow. Management believes these metrics are useful to investors in assessing ATSG's financial position and results. These non-GAAP measures are not meant to be a substitute for our GAAP financials. We advise you to refer to the Reconciliations to GAAP measures, which are included in our earnings release and on our website. And now I'll turn the call over to Rich Corrado, our President and CEO, for his opening comments.

Thanks, Joe, and good morning, everyone. I'm pleased to tell you that ATSG remains solidly in growth mode. The second quarter was our fourth in a row of double-digit quarterly increases in revenue and adjusted EBITDA over the prior year. Our growth directly reflects that of the principal markets we serve, dedicated midsize freighter aircraft that we lease and fly for major transport integrators and e-commerce merchandisers. Our customers are eager to lease all of the cargo aircraft we can deliver. And the fleets of our cargo airlines are growing even faster than our lease portfolio, as our two principal air cargo customers prefer that our airlines fly their own freighters and dedicated networks. Others are coming to us for the first time, seeking both wide and narrow-body freighters for expanding express networks throughout the world. E-commerce remains the principal driver of our growth. Consumers still prefer buying online and not just for convenience. They are also looking for the lower prices they often find online to stretch their own budgets to cover inflation. We remain direct beneficiaries of the rapid delivery that online shopping requires, and we'll keep reinvesting the majority of our strong cash flow to meet this demand. At the same time, we benefited from increased passenger flying. We fully expect to meet our $640 million adjusted EBITDA target for 2022. We'll deploy 10 lease freighters in 2022, including four 767s and two Airbus A321s in the second half. That's one Boeing 767 fewer than our prior target, primarily due to the delays that our conversion vendor related to parts and supply chain challenges. Quint is ready to review the details of our second quarter results, I'll be back to share more about our very bright long outlook after that.