Equity Method Investments

9 Months Ended

Dec. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

The Company’s investment in Insignia Systems, Inc. (“Insignia”) is accounted for under the equity method of accounting. The Company has elected a three-month lag upon adoption of the equity method. On December 31, 2020, Insignia effected a seven-for-one reverse stock split of its outstanding common stock. As such, as of December 31, 2020, the number of Insignia's shares owned by the Company was adjusted to 0.5 million, representing approximately 28% of the outstanding shares. The Company recorded approximately $0.2 million and $1.0 million as its share of Insignia’s net loss for the three and nine months ended September 30, 2020 along with a basis difference adjustment of approximately $24.0 thousand and $72.0 thousand, respectively. The Company's net investment basis in Insignia is $0.2 million as of December 31, 2020.

On November 8, 2019, the Company made an investment of $2.8 million to purchase a 19.90% ownership stake in Cadillac Casting, Inc. ("CCI"), subsequently reduced to a 18.98% ownership stake as of September 30, 2020. The Company accounts for this investment under the equity method of accounting. Due to the differing fiscal year-ends, the Company has elected a three-month lag to record the CCI investment at cost, with a basis difference of $0.3 million. The Company recorded a gain of $0.6 million and $0.3 million as its share of CCI's net income for the three and nine months ended September 30, 2020, along with a basis difference adjustment of $12.0 thousand and $37.0 thousand, respectively. The Company's net investment basis in CCI is $3.5 million as of December 31, 2020.

Summarized unaudited financial information for the Company's equity method investees for the three and nine months ended September 30, 2020 and 2019 is as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Revenue	$	27,327	$	25,325	$	61,402	$	85,546
Gross Profit	3,231		1,071		5,196		4,688
Operating income (loss)	891		(2,374)		(3,496)		(5,746)
Net income (loss)	2,242		(2,556)		(2,075)		(6,528)
Net income (loss) attributable to Air T, Inc. stockholders	$	355	$	(285)	$	(705)	$	(749)