Air Transport Services Group, Inc

Thank you for standing by, and welcome to the Air Transport Services Group First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr. Joe Payne, Chief Legal Officer. Please go ahead.

Good morning, and welcome to our first quarter 2023 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 and underlying assumptions, factors, new information, or other changes. These factors include, but are not limited to, unplanned changes in the market demand for our assets and services, our operating airline's ability to maintain on-time service and control costs, the cost and timing with respect to which we are able to purchase and modify aircraft to a cargo configuration, fluctuations in ATSG's traded share price and in interest rates, which may result in mark-to-market charges on certain financial instruments. The number, timing, and scheduled routes of our aircraft deployments to customers. Our ability to remain in compliance with key agreements with customers, lenders, and government agencies. The impact of current supply chain constraints, both within and outside the U.S., which may be more severe or persist longer than we currently expect. the impact of the current competitive labor market, changes in general economic and or industry-specific conditions, including inflation, the impact of geographical events or health epidemics, such as the COVID-19 pandemic, 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 remarks.

Thanks, Joe, and good morning, everyone. On our last call, we talked about the headwinds facing us in 2023 in our operating businesses, but mostly at our airlines. Unfortunately, The results we issued yesterday and our guidance change for the year as a whole show that reduced revenues at our passenger airline Omni and inflation-driven costs at all of our airlines are having a bigger effect than we expected. We are not alone in this regard. Inflation and a softening macroeconomy are squeezing profitability in many sectors, and especially in transport. We have limited exposure to fuel costs, but our personnel costs are rising. including for line maintenance workers and travel for flight crews shuttling between assignments. That said, we're fortunate that demand for our leased cargo aircraft remains strong. Our guidance changes were not related to CAM, which deployed two of the record 20 freighters we released this year at rates that meet our return requirements. I'll be back to share more of that perspective after Quint reviews our financial results for the first quarter. Quint?