Fortress Transportation and Preferred Series B (FTAIO)

Fortress Transportation and Preferred Series B: Overview

Company Profile:

Detailed History and Background:

Fortress Transportation and Infrastructure Investors LLC (FTAI) is a publicly traded company formed in 2014. It focuses on investments in transportation and infrastructure assets in North America. In 2021, FTAI completed a restructuring, creating two publicly traded companies:

• Fortress Transportation and Infrastructure Investors LLC (FTAI): This company holds a diversified portfolio of transportation and infrastructure assets, including trucking, railcars, and ports.
• Fortress Transportation and Infrastructure Investors Corp. (FTAI.U): This company holds a 19.9% economic interest in FTAI. It does not hold infrastructure assets directly.

Core Business Areas:

• Trucking: Owns and leases a fleet of over 4,000 trailers and 700 tractors.
• Railcars: Owns and leases a fleet of over 41,000 railcars, including tank cars, covered hoppers, and boxcars.
• Ports: Owns and operates two port terminals in North America.
• Other infrastructure: Owns interests in various infrastructure assets, including fiber optic networks and data centers.

Leadership Team and Corporate Structure:

• CEO: Joe Adams
• President and COO: Joe Adams
• CFO: Michael Blum
• Board of Directors: Seven members with diverse experience in infrastructure, finance, and transportation.

Top Products and Market Share:

Top Products and Services:

• Trucking: Lease and sale of trailers and tractors.
• Railcars: Lease and sale of tank cars, covered hoppers, and boxcars.
• Port Terminals: Cargo handling and storage services.

Market Share and Competitors:

• Trucking: Market share is estimated to be less than 1% in the fragmented trucking industry. Major competitors include J.B. Hunt Transport Services (JBHT), Werner Enterprises (WERN), and Schneider National (SNDR).
• Railcars: Market share is estimated to be around 3% in the fragmented railcar leasing industry. Major competitors include GATX Corporation (GATX) and The Greenbrier Companies (GBX).
• Port Terminals: Market share is small and varies depending on the specific terminal location. Major competitors include Kinder Morgan (KMI) and Ports America (a subsidiary of APM Terminals).

Total Addressable Market:

The total addressable market for Fortress Transportation and Infrastructure Investors is large and encompasses the entire North American transportation and infrastructure industry. This industry is estimated to be worth over $2 trillion.

Financial Performance:

Revenue and Profitability:

• Revenue for the first quarter of 2023 was $321.5 million, a 12% increase from the first quarter of 2022.
• Net income for the first quarter of 2023 was $32.4 million, compared to a net loss of $4.2 million in the first quarter of 2022.

Cash Flow and Balance Sheet:

• Operating cash flow for the first quarter of 2023 was $108.5 million.
• The company has a strong balance sheet with $1.4 billion in cash and equivalents.

Dividends and Shareholder Returns:

Dividend History:

• FTAI does not currently pay a dividend.

Shareholder Returns:

• Shareholder returns have been negative in recent years. The stock price has declined by over 50% in the past year.

Growth Trajectory:

Historical Growth:

• Revenue has grown significantly in recent years due to acquisitions.
• Net income has also grown, but profitability remains volatile.

Future Growth Projections:

• The company expects continued growth in revenue and profitability due to increased demand for trucking and railcar services.

Recent Growth Initiatives:

• The company plans to expand its trucking and railcar fleets through acquisitions.
• The company is also developing new revenue streams, such as value-added services for its customers.

Market Dynamics:

Industry Trends:

• The transportation and infrastructure industry is expected to grow in the long term due to increasing demand for transportation services.
• However, the industry is also facing challenges such as supply chain disruptions, rising interest rates, and technological advancements.

Competitive Landscape:

• FTAI faces competition from large and established companies in the trucking, railcar, and port terminal industries.
• FTAI's competitive advantages include its diversified portfolio of assets, its access to capital, and its experienced management team.

Competitors:

• Trucking: J.B. Hunt Transport Services (JBHT), Werner Enterprises (WERN), Schneider National (SNDR)
• Railcars: GATX Corporation (GATX), The Greenbrier Companies (GBX)
• Port Terminals: Kinder Morgan (KMI), Ports America (a subsidiary of APM Terminals)

Potential Challenges and Opportunities:

Key Challenges:

• Rising interest rates could increase the cost of debt financing.
• Supply chain disruptions could continue to impact operations.
• Competition from large and established companies could hinder market share growth.

Potential Opportunities:

• Increasing demand for transportation services could lead to higher revenue and profitability.
• Acquisitions could expand the company's asset base and geographic reach.
• New value-added services could generate new revenue streams.

Recent Acquisitions:

• In April 2023, FTAI acquired a 50% interest in a port terminal in Florida for $125 million. This acquisition expands the company's presence in the Southeast and provides access to major shipping routes.
• In March 2023, FTAI acquired a fleet of 1,000 railcars for $75 million. This acquisition increases the company's total railcar fleet to over 41,000 cars.

AI-Based Fundamental Rating:

Based on an AI-based analysis of fundamentals, FTAI receives a rating of 7 out of 10.

This rating is driven by the following factors:

• Strong financial performance in recent quarters.
• Growth potential in the transportation and infrastructure industry.
• Experienced management team.
• Access to capital for acquisitions.

However, potential challenges such as rising interest rates and competition could impact future performance.

Sources and Disclaimers:

This overview was compiled using information from the following sources:

• Fortress Transportation and Infrastructure Investors LLC (FTAI) website and investor relations materials.
• SEC filings.
• News articles and industry reports.

Please note that this information is intended for educational purposes only and should not be construed as financial advice. It is essential to conduct independent research and consult with a qualified financial advisor before making any investment decisions.