AerSale Reports First Quarter 2024 Results
AerSale (Nasdaq: ASLE) reported first-quarter 2024 revenue of $90.5 million, up from $78.3 million in the prior year. GAAP net income was $6.3 million compared to $5 thousand before. Adjusted Net Income1 rose to $5.5 million from $3.3 million, with Adjusted EBITDA1 reaching $9.0 million, up from $5.0 million. Flight equipment sales saw a boost, with inventory reaching $350.1 million. Asset Management Solutions revenue grew to $59.3 million, and TechOps revenue increased to $31.3 million. Gross margin improved to 31.8%, and SG&A expenses decreased to $24.1 million. Non-GAAP Financial Measures were positive, with adjusted EBITDA, adjusted Net Income, and adjusted diluted EPS seeing increases. The Company ended the quarter with $128.9 million in liquidity. The Engineered Solutions segment continues to progress, with the Enhanced Flight Vision System gaining traction. The Company will host a conference call to discuss these results.
Revenue increased to $90.5 million from $78.3 million in the prior year.
GAAP net income rose to $6.3 million from $5 thousand in the prior year.
Adjusted Net Income1 increased to $5.5 million from $3.3 million.
Adjusted EBITDA1 reached $9.0 million, up from $5.0 million.
Flight equipment sales showed growth, with inventory at $350.1 million.
Asset Management Solutions revenue grew to $59.3 million.
TechOps revenue increased to $31.3 million.
Gross margin improved to 31.8%.
SG&A expenses decreased to $24.1 million.
Non-GAAP Financial Measures like adjusted EBITDA, adjusted Net Income, and adjusted diluted EPS saw positive changes.
The Company ended the quarter with $128.9 million in liquidity.
The Engineered Solutions segment continues to progress, with the Enhanced Flight Vision System showing promise.
Fluctuation in revenues due to flight equipment sales could impact progress.
Feedstock availability remains pressured due to OEM delivery issues.
Operating activities saw a cash use of $21.5 million due to continued investment in inventory.
Repayments of long-term debt had an impact on financing activities.
Insights
The reported increase in revenue to
The reduction in SG&A (Selling, General and Administrative expenses) by
The liquidity position of
The increase in Asset Management Solutions revenue to
The TechOps sector's revenue growth underscores the ongoing demand for specialized MRO services, indicative of an industry trend where airlines are investing in maintenance and upgrades to enhance fleet efficiency and longevity. This can be attributed to the surge in travel post-pandemic measures and the subsequent need for airlines to maintain operational integrity.
Of particular interest to investors might be the company's ability to navigate OEM (Original Equipment Manufacturer) delivery issues, signifying a resilient supply chain — a critical component in sustaining growth momentum in the dynamically evolving aviation aftermarket.
AerSale's EFVS (Enhanced Flight Vision System) development for the Boeing B737NG and the FAA's recent STC (Supplemental Type Certificate) approval, position the company at the forefront of aviation innovation. This technological advancement is not only a testament to the company's R&D capabilities but could also be a harbinger of new revenue streams as airlines look to retrofit fleets with advanced safety features. The potential for this system to become a differentiator in the market is high, particularly considering the 50% visual advantage over unaided vision it offers, which could lead to enhanced safety and operational efficiencies for airline customers.
Investors should note the impact of such technological milestones on long-term valuation, as they can lead to sustained competitive advantages and possibly, premium pricing power in niche markets. Yet, the real-world adoption rate and the integration into existing fleets are important factors that would affect the financial impact of the EFVS product line.
First Quarter 2024 Highlights
-
Revenue of
$90.5 million $78.3 million -
GAAP net income of
$6.3 million $5 thousand -
Adjusted Net Income1 of
$5.5 million $3.3 million -
Adjusted EBITDA1 of
$9.0 million $5.0 million - Flight equipment sales consisted of one aircraft and four engines in the first quarter of 2024, compared to two aircraft and one engine in the prior year period.
-
Feedstock acquisitions of
$28.2 million $51.7 million -
Flight Equipment inventory of
$350.1 million
Nicolas Finazzo, AerSale’s Chief Executive Officer, commented, “We are off to a good start in the first quarter of 2024, underscored by higher feedstock purchases in 2023 that drove a greater level of sales. Our MRO facilities are benefitting from robust demand as airlines are operating at elevated capacity levels.”
Finazzo added, “As we look to the balance of 2024, we expect commercial demand to remain strong resulting from a favorable operating backdrop. We have acquired
Asset Management Solutions (“Asset Management") revenue increased to
TechOps revenue increased
Gross margin was
Selling, general and administrative expenses decreased
Income from operations was
Income tax benefit was
GAAP net income was
Diluted earnings per share was
Adjusted EBITDA in the first quarter of 2024 was
AerSale ended the quarter with
Update on Engineered Solutions
The Company is continuing its go-to-market strategy for its Enhanced Flight Vision System (“EFVS”), AerAware™, and remains in open dialogue with multiple aircraft operators to secure a first order while continuing to educate potential customers on the benefits of having the AerAware™ system in their fleets.
In December 2023, the Federal Aviation Administration (“FAA”) issued AerSale a Supplemental Type Certificate (“STC”) for “AerAware™”, the Company’s revolutionary Enhanced Flight Vision System (“EFVS”) for the Boeing B737NG product line. This achievement marked the world's first commercial EFVS system to achieve a
Conference Call Information
The Company will host a conference call today, May 8, 2024, at 4:30 pm Eastern Time to discuss these results. A live webcast will also be available at https://ir.aersale.com/news-events/events. Participants may access the call at 1-877-300-8521, international callers may use 1-412-317-6026, and request to join the AerSale Corporation earnings call.
A telephonic replay will be available shortly after the conclusion of the call and until July 8, 2024. Participants may access the replay at 1-844-512-2921, international callers may use 1-412-317-6671, and enter access code 10188062. An archived replay of the call will also be available on the Investors portion of the AerSale website at https://ir.aersale.com/.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures, including adjusted EBITDA, adjusted Net Income, and adjusted diluted Earnings per Share. AerSale defines adjusted EBITDA as net income (loss) after giving effect to interest expense, depreciation and amortization, income tax expense (benefit), and other non-recurring or unusual items. Adjusted Net Income is defined as net income (loss) after giving effect to mark-to-market adjustments relating to our Private Warrants, stock-based compensation expense and other non-recurring or unusual items. Adjusted diluted earnings per share also exclude these material non-recurring or unusual items.
AerSale believes these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to AerSale’s financial condition and results of operations. AerSale’s management uses certain of these non-GAAP measures to compare AerSale’s performance to that of prior periods for trend analyses and for budgeting and planning purposes. These non- GAAP measures should not be construed as an alternative to net income or net income margin as an indicator of operating performance or as an alternative to cash flow from operating activities as a measure of liquidity (each as determined in accordance with GAAP).
You should review AerSale’s financial statements, and not rely on any single financial measure to evaluate AerSale’s business. Other companies may calculate adjusted EBITDA, Adjusted Net Income, or Adjusted diluted earnings per share differently, and therefore AerSale’s adjusted EBITDA, adjusted Net Income, or adjusted diluted earnings per share measures may not be directly comparable to similarly titled measures of other companies.
Reconciliations of Net Income, the Company’s closest GAAP measure, to adjusted EBITDA, Adjusted Net Income, and adjusted diluted earnings per share, are outlined in the tables below following the Company’s condensed consolidated financial statements.
First Quarter 2024 Financial Results
AERSALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) |
|||||||
|
|||||||
|
Three Months Ended March 31, |
||||||
|
2024 |
|
2023 |
||||
Revenue: |
|
|
|
|
|
||
Products |
$ |
61,610 |
|
|
$ |
45,495 |
|
Leasing |
|
3,082 |
|
|
|
5,622 |
|
Services |
|
25,848 |
|
|
|
27,154 |
|
Total revenue |
|
90,540 |
|
|
|
78,271 |
|
Cost of sales and operating expenses: |
|
|
|
|
|
||
Cost of products |
|
39,619 |
|
|
|
31,548 |
|
Cost of leasing |
|
1,193 |
|
|
|
1,123 |
|
Cost of services |
|
20,932 |
|
|
|
21,209 |
|
Total cost of sales |
|
61,744 |
|
|
|
53,880 |
|
Gross profit |
|
28,796 |
|
|
|
24,391 |
|
Selling, general, and administrative expenses |
|
24,133 |
|
|
|
25,224 |
|
Income (loss) from operations |
|
4,663 |
|
|
|
(833 |
) |
Other income (expenses): |
|
|
|
|
|
||
Interest (expense) income, net |
|
(935 |
) |
|
|
1,047 |
|
Other income, net |
|
169 |
|
|
|
233 |
|
Change in fair value of warrant liability |
|
1,979 |
|
|
|
(334 |
) |
Total other income |
|
1,213 |
|
|
|
946 |
|
Income before income tax provision |
|
5,876 |
|
|
|
113 |
|
Income tax benefit (expense) |
|
401 |
|
|
|
(108 |
) |
Net income |
$ |
6,277 |
|
|
$ |
5 |
|
|
|
|
|
|
|
||
Earnings per share: |
|
|
|
|
|
||
Basic |
$ |
0.12 |
|
|
$ |
- |
|
Diluted |
$ |
0.12 |
|
|
$ |
- |
|
Weighted average shares outstanding: |
|
|
|
|
|
||
Basic |
|
52,991,506 |
|
|
|
51,206,226 |
|
Diluted |
|
53,247,979 |
|
|
|
52,958,555 |
|
AERSALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data and par value) |
||||||
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
||
|
|
2024 |
|
2023 |
||
|
|
(Unaudited) |
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,637 |
|
$ |
5,873 |
Accounts receivable, net of allowance for credit losses of |
|
|
30,057 |
|
|
31,239 |
Income tax receivable |
|
|
1,628 |
|
|
1,628 |
Inventory: |
|
|
|
|
|
|
Aircraft, airframes, engines, and parts, net |
|
|
203,652 |
|
|
177,770 |
Advance vendor payments |
|
|
37,560 |
|
|
35,757 |
Deposits, prepaid expenses, and other current assets |
|
|
12,840 |
|
|
12,507 |
Total current assets |
|
|
288,374 |
|
|
264,774 |
Fixed assets: |
|
|
|
|
|
|
Aircraft and engines held for lease, net |
|
|
23,262 |
|
|
26,475 |
Property and equipment, net |
|
|
30,387 |
|
|
27,692 |
Inventory: |
|
|
|
|
|
|
Aircraft, airframes, engines, and parts, net |
|
|
147,193 |
|
|
151,398 |
Operating lease right-of-use assets |
|
|
26,307 |
|
|
27,519 |
Deferred income taxes |
|
|
12,906 |
|
|
12,203 |
Deferred financing costs, net |
|
|
1,424 |
|
|
1,506 |
Deferred customer incentives and other assets, net |
|
|
525 |
|
|
525 |
Goodwill |
|
|
19,860 |
|
|
19,860 |
Other intangible assets, net |
|
|
21,456 |
|
|
21,986 |
Total assets |
|
$ |
571,694 |
|
$ |
553,938 |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
26,278 |
|
$ |
29,899 |
Accrued expenses |
|
|
5,720 |
|
|
5,478 |
Lessee and customer purchase deposits |
|
|
805 |
|
|
1,467 |
Current operating lease liabilities |
|
|
4,401 |
|
|
4,593 |
Current portion of long-term debt |
|
|
1,033 |
|
|
1,278 |
Deferred revenue |
|
|
2,009 |
|
|
2,998 |
Total current liabilities |
|
|
40,246 |
|
|
45,713 |
Revolving credit facility |
|
|
51,969 |
|
|
29,000 |
Long-term debt |
|
|
3,527 |
|
|
7,281 |
Long-term lease deposits |
|
|
102 |
|
|
102 |
Long-term operating lease liabilities |
|
|
23,398 |
|
|
24,377 |
Maintenance deposit payments and other liabilities |
|
|
62 |
|
|
64 |
Warrant liability |
|
|
407 |
|
|
2,386 |
Total liabilities |
|
|
119,711 |
|
|
108,923 |
Stockholders’ equity: |
|
|
|
|
|
|
Common stock, |
|
|
5 |
|
|
5 |
Additional paid-in capital |
|
|
312,430 |
|
|
311,739 |
Retained earnings |
|
|
139,548 |
|
|
133,271 |
Total stockholders' equity |
|
|
451,983 |
|
|
445,015 |
Total liabilities and stockholders’ equity |
|
$ |
571,694 |
|
$ |
553,938 |
AERSALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) |
||||||||
|
|
Three Months Ended March 31, |
||||||
|
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
6,277 |
|
|
$ |
5 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
2,779 |
|
|
|
2,469 |
|
Amortization of debt issuance costs |
|
|
82 |
|
|
|
39 |
|
Amortization of operating lease assets |
|
|
40 |
|
|
|
101 |
|
Inventory reserve |
|
|
504 |
|
|
|
773 |
|
Deferred income taxes |
|
|
(703 |
) |
|
|
72 |
|
Change in fair value of warrant liability |
|
|
(1,979 |
) |
|
|
334 |
|
Share-based compensation |
|
|
799 |
|
|
|
2,731 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
1,182 |
|
|
|
(7,996 |
) |
Inventory |
|
|
(23,961 |
) |
|
|
(48,983 |
) |
Deposits, prepaid expenses, and other current assets |
|
|
(332 |
) |
|
|
(2,966 |
) |
Deferred customer incentives and other assets |
|
|
- |
|
|
|
68 |
|
Advance vendor payments |
|
|
(1,803 |
) |
|
|
(12,476 |
) |
Accounts payable |
|
|
(3,619 |
) |
|
|
14,018 |
|
Accrued expenses |
|
|
914 |
|
|
|
(3,396 |
) |
Deferred revenue |
|
|
(989 |
) |
|
|
1,343 |
|
Lessee and customer purchase deposits |
|
|
(662 |
) |
|
|
(7,985 |
) |
Other liabilities |
|
|
(2 |
) |
|
|
(593 |
) |
Net cash used in operating activities |
|
|
(21,473 |
) |
|
|
(62,442 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Proceeds from sale of assets |
|
|
3,800 |
|
|
|
4,500 |
|
Purchase of property and equipment |
|
|
(3,574 |
) |
|
|
(1,481 |
) |
Net cash provided by investing activities |
|
|
226 |
|
|
|
3,019 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
Repayments of long-term debt |
|
|
(4,000 |
) |
|
|
- |
|
Proceeds from revolving credit facility |
|
|
61,600 |
|
|
|
- |
|
Repayments of revolving credit facility |
|
|
(39,481 |
) |
|
|
- |
|
Taxes paid related to net share settlement of equity awards |
|
|
(108 |
) |
|
|
(70 |
) |
Net cash provided by (used in) financing activities |
|
|
18,011 |
|
|
|
(70 |
) |
|
|
|
|
|
|
|
||
Decrease in cash and cash equivalents |
|
|
(3,236 |
) |
|
|
(59,493 |
) |
Cash and cash equivalents, beginning of period |
|
|
5,873 |
|
|
|
147,188 |
|
Cash and cash equivalents, end of period |
|
$ |
2,637 |
|
|
$ |
87,695 |
|
|
|
|
|
|
|
|
||
Supplemental disclosure of cash activities |
|
|
|
|
|
|
||
Income tax payments, net |
|
|
3 |
|
|
|
(100 |
) |
Interest paid |
|
|
822 |
|
|
|
141 |
|
Supplemental disclosure of noncash investing activities |
|
|
|
|
|
|
||
Reclassification of aircraft and aircraft engines inventory to (from) aircraft and engine held for lease, net |
|
|
(2,020 |
) |
|
|
3,573 |
|
AERSALE CORPORATION
Adjusted EBITDA, Net Income and Diluted EPS Reconciliation Table (In ‘000s, except per share data) (Unaudited) |
||||||||||||
Three months ended March 31, |
||||||||||||
2024 |
|
% of Total Revenue |
2023 |
|
% of Total Revenue |
|||||||
Reported Net Income |
6,277 |
|
6.9 |
% |
5 |
|
0.0 |
% |
||||
Addbacks: |
||||||||||||
Change in FV of Warrant Liability |
(1,979 |
) |
(2.2 |
%) |
334 |
|
0.4 |
% |
||||
Stock Compensation |
799 |
|
0.9 |
% |
2,731 |
|
3.5 |
% |
||||
Payroll taxes related to stock-based compensation |
36 |
|
0.0 |
% |
- |
|
0.0 |
% |
||||
Secondary Offering Costs |
55 |
|
0.1 |
% |
- |
|
0.0 |
% |
||||
Facility Relocation Costs |
460 |
|
0.5 |
% |
380 |
|
0.5 |
% |
||||
Income Tax Effect of Adjusting Items (1) |
(124 |
) |
(0.1 |
%) |
(109 |
) |
(0.1 |
%) |
||||
Adjusted Net Income |
5,524 |
|
6.1 |
% |
3,341 |
|
4.2 |
% |
||||
Interest Expense (Income) |
935 |
|
1.0 |
% |
(1,047 |
) |
(1.3 |
%) |
||||
Income Tax Expense (Benefit) |
(401 |
) |
(0.4 |
%) |
108 |
|
0.1 |
% |
||||
Depreciation and Amortization |
2,779 |
|
3.1 |
% |
2,469 |
|
3.2 |
% |
||||
Reversal of Income Tax Effect of Adjusting Items (1) |
124 |
|
0.1 |
% |
109 |
|
0.1 |
% |
||||
Adjusted EBITDA |
8,961 |
|
9.9 |
% |
4,980 |
|
6.4 |
% |
||||
Reported Basic earnings per share |
0.12 |
|
0.00 |
|
||||||||
Addbacks: |
||||||||||||
Change in FV of Warrant Liability |
(0.04 |
) |
0.01 |
|
||||||||
Stock Compensation |
0.02 |
|
0.05 |
|
||||||||
Payroll taxes related to stock-based compensation |
0.00 |
|
- |
|
||||||||
Secondary Offering Costs |
0.00 |
|
- |
|
||||||||
Facility Relocation Costs |
0.01 |
|
0.01 |
|
||||||||
Income Tax Effect of Adjusting Items (1) |
(0.00 |
) |
(0.00 |
) |
||||||||
Adjusted Basic earnings per share |
0.11 |
|
0.07 |
|
||||||||
Reported Diluted earnings per share |
0.12 |
|
0.00 |
|
||||||||
Addbacks: |
||||||||||||
Change in FV of Warrant Liability |
(0.04 |
) |
0.01 |
|
||||||||
Stock Compensation |
0.02 |
|
0.05 |
|
||||||||
Payroll taxes related to stock-based compensation |
0.00 |
|
- |
|
||||||||
Secondary Offering Costs |
0.00 |
|
- |
|
||||||||
Facility Relocation Costs |
0.01 |
|
0.01 |
|
||||||||
Income Tax Effect of Adjusting Items (1) |
(0.00 |
) |
(0.00 |
) |
||||||||
Adjusted Diluted earnings per share |
0.11 |
|
0.07 |
|
||||||||
Forward Looking Statements
This press release includes “forward-looking statements”. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this press release may constitute forward-looking statements, and include, but are not limited to, statements regarding our anticipated financial performance, including anticipations regarding greater demand for AerSale’s USM business; expectations regarding feedstock and commercial demand; expectations from letters of intent on an additional
Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements and we qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
About AerSale
AerSale serves airlines operating large jets manufactured by Boeing, Airbus and McDonnell Douglas and is dedicated to providing integrated aftermarket services and products designed to help aircraft owners and operators to realize significant savings in the operation, maintenance and monetization of their aircraft, engines, and components. AerSale’s offerings include: Aircraft & Component MRO, Aircraft and Engine Sales and Leasing, Used Serviceable Material sales, and internally developed ‘Engineered Solutions’ to enhance aircraft performance and operating economics (e.g. AerSafe™, AerTrak™, and now AerAware™).
____________________________
1 Adjusted net income, adjusted EBITDA and adjusted diluted earnings per share are non-GAAP measures. See “Non-GAAP Financial Measures” and “Adjusted EBITDA, Net Income and Diluted EPS Reconciliation Table” at the end of this press release for a discussion of why we believe these non-GAAP measures are useful and a detailed reconciliation of these measures to the most directly comparable GAAP (Generally Accepted Accounting Principles) measure, respectively.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508903741/en/
Media Contacts:
For more information about AerSale, please visit our website: www.AerSale.com.
Follow us on: LinkedIn | Twitter | Facebook | Instagram
AerSale: Jackie Carlon
Telephone: (305) 764-3200
Email: media.relations@aersale.com
Investor Contact:
AerSale: AersaleIR@icrinc.com
Source: AerSale Corporation
FAQ
<p>What was AerSale's revenue in the first quarter of 2024?</p>
AerSale reported revenue of $90.5 million in the first quarter of 2024, up from $78.3 million in the prior year.
<p>How did AerSale's GAAP net income compare between the first quarters of 2024 and 2023?</p>
AerSale's GAAP net income increased to $6.3 million in the first quarter of 2024 from $5 thousand in the first quarter of 2023.
<p>What were AerSale's adjusted EBITDA figures for the first quarters of 2024 and 2023?</p>
AerSale's adjusted EBITDA reached $9.0 million in the first quarter of 2024, up from $5.0 million in the first quarter of 2023.
<p>What was AerSale's gross margin in the first quarter of 2024?</p>
AerSale's gross margin improved to 31.8% in the first quarter of 2024 from 31.2% in the same period last year.
<p>How did AerSale's liquidity position change in the first quarter of 2024?</p>
AerSale ended the first quarter of 2024 with $128.9 million in liquidity, consisting of $2.6 million in cash and available capacity of $126.3 million on their revolving credit facility.
