Air Trans Services Group (NASDAQ:ATSG)

Removing ATSG from the GeoSpeicial List

• Added to the GeoSpecial list June 1, 2009 @ 1.90

Catalyst: Reduced debt by $113 million. Restrictions lifted, allowing company to pay dividends and buy back stock.
Current road block: EPS comparison for next several quarters do not meet our criteria. We plan to aggressively revist this story in the future.

Current Price: $4.65
Peak performance:  Reached a high of $8.65 on 2/14/2011

ATSG has been one of our longer tenured GeoSpecials. Our initial alert was issued on June 1, 2009 @ 1.90.

Air Trans Services Group (NASDAQ:ATSG) Reduces debt by $113 million. Restrictions lifted, allowing company to pay dividends and buy back stock. May present a trading opportunity.The GeoTeam has coded the stock as a special situation play- Corporate Restructuring

This morning we issued an alert that we might be coding the stock as a GeoBargain.  However, after digging into the filings, we have decided to keep the stock coded as a GeoSpecial, since the company's debt to equity is ratio is over one.  However, we did add to our position, as we believe the balance sheet will continue to improve in the future, leading to P/E multiple expansion.

Air Trans Services Strengthens Balance Sheet

ATSG CEO and President Joe Hete said, “The completion of this agreement with DHL formalizes the deleveraging process that we announced earlier this year, including the restructuring of our promissory note to DHL. The combined effect of the capital lease transaction and note restructuring, including our commitment to pay DHL $15 million to further reduce the principal balance of the note, would be to reduce our outstanding debt principal by approximately $113 million. The note restructuring also removes some of the limitations on our Board’s ability to consider dividend payments or buybacks for our shareholders. DHL has worked closely with us in finalizing these agreements, and we continue to jointly explore opportunities to provide DHL with additional 767-200SF aircraft on an ACMI or dry lease basis beyond 2010.”