Sky Harbour Group (SKYH) Sidoti September Small-Cap Virtual Conference summary

Business model and market opportunity

• Operates as a real estate platform developing private hangar campuses at key U.S. airports, targeting long-term leases with high-credit tenants.

• Focuses on airports with significant supply-demand mismatches for large aircraft hangars, driven by fleet growth and outdated infrastructure.

• Proprietary site acquisition skills enable securing ground leases at high-demand airports, often requiring changes to airport master plans.

• Targets mid-teens unlevered yield on cost and over 30% return on equity with leverage, leveraging unique bond financing available to airport operators.

• Plans to scale to over 50 airports, with current operations at four campuses and 10 more in development.

Financial strategy and capital formation

• Each campus averages 200,000 sq ft of rentable space, developed in two phases, with project costs of $280–$300 per sq ft.

• Growth funded through a mix of equity and tax-exempt private activity bonds, with a $150 million debt facility in process and $62 million equity to be raised in two tranches.

• Aims for investment-grade ratings by next summer as the debt program matures.

• Liquidity stands at $150 million, mostly allocated to ongoing construction, with new capital to fund additional campus phases.

• Capital deployment is expected to be highly accretive, targeting NOI yields of 13–15% and ROEs above 30%.

Growth outlook and operational milestones

• Expects to achieve consolidated cash flow positivity on an adjusted EBITDA basis by next year, driven by new campus openings in Denver, Phoenix, and Dallas.

• Operating leverage anticipated as SG&A is kept tight and more campuses come online.

• Revenue capture from current and announced campuses estimated at $130 million, with actual rents exceeding conservative underwriting metrics.

• Additional services, such as fuel sales and in-hangar security, are being layered onto the real estate platform through partnerships.

• Focus remains on greenfield development rather than acquisitions, due to high asset multiples in the market.