19.	QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (in thousands, except per share data)

	First			Second		Third		Fourth
	Quarter			Quarter		Quarter		Quarter

2017
Operating Revenues	$	30,493		$	38,523	$	35,769	$	43,687
Operating Income (Loss)		(7,073	)		1,022	$	1,639		1,311
Net Income (Loss) Attributable to Air T, Inc Stockholders		(5,751	)		1,084		1,220		233
Basic Earnings (Loss) per share		(2.42	)		0.53		0.60		0.11
Diluted Earnings (Loss) per share		(2.42	)		0.53		0.60		0.11

2016
Operating Revenues	$	22,359		$	44,654	$	46,619	$	34,581
Operating Income (Loss)		(1,049	)		5,505		3,890		(2,314	)
Net Income (Loss) Attributable to Air T, Inc Stockholders		(736	)		3,794		2,726		(1,370	)
Basic Earnings (Loss) per share		(0.31	)		1.60		1.15		(0.57	)
Diluted Earnings (Loss) per share		(0.31	)		1.58		1.14		(0.57	)

During the quarter ended

June 30, 2016,

Delphax was informed by its largest customer that the customer had decided to accelerate its plans for removing Delphax legacy printing systems from production and that Delphax should, as a consequence, expect the future volume of legacy product orders from the customer to decline markedly from prior forecasts. Furthermore, the future timeframe over which orders could be expected from this customer was being sharply curtailed. In addition to this specific customer communication, Delphax also experienced a broad-based decline in legacy product customer demand during the quarter. Sales of Delphax

’s new élan printer system also did

not

materialize to expectations in the quarter.

The adverse business developments during the quarter ended

June 30, 2016

and the significantly deteriorated outlook for future orders of legacy and élan product caused the Company to reevaluate the recoverability of Delphax

’s assets, both tangible and intangible. Based on this reevaluation, which involved material estimation and subjectivity (including with respect to the recovery on assets in an operating liquidation), the Company concluded that a significant increase to inventory reserves was necessary. In addition, the Company concluded that Delphax related intangible assets, both amortizable assets and goodwill, should be fully impaired. This impairment totaled approximately

$1,385,000

during the quarter ended

June 30, 2016.

The Company also recorded a partial impairment of Delphax related long-lived tangible assets, totaling approximately

$249,000

during the quarter ended

June 30, 2016.

These impairment losses are reflected on the consolidated statements of income (loss) within the “depreciation, amortization and impairment” line item. Furthermore, there was an assessment regarding whether, at

June 30, 2016,

future severance actions under existing Delphax employee benefit plans were both probable and estimable. This assessment led to the Company establishing an estimated accrual for future severance actions. The effects of these various adjustments discussed above, which aggregated to approximately

$5,610,000,

are reflected in the operating results of Delphax for the quarter ended

June 30, 2016.

In addition, results for the quarter ended

June 30, 2016

included a non-operating charge of approximately

$1,502,000

related to the Company

’s investment in marketable securities of Insignia Systems, Inc. (“Insignia”). While the Company does

not

intend to liquidate its securities holdings in Insignia within

twelve

months, the Company recognized an impairment loss on the investment during the quarter ended

June 30, 2016

due in part to the magnitude of the loss position in the investment, which increased sharply during the quarter, and the fact that the investment had been in a continuous loss position for well over

one

year.