FTAI Aviation Ltd. Reports Second Quarter 2024 Results, Declares Dividend of $0.30 per Ordinary Share

Rhea-AI Summary

FTAI Aviation (NASDAQ: FTAI) reported its Q2 2024 financial results, revealing a net loss of $228.2 million and basic/diluted earnings per share of -$2.26. Despite the loss, the company's Adjusted EBITDA reached $213.9 million. The Board declared a cash dividend of $0.30 per ordinary share for Q2, payable on August 20, 2024. Additionally, dividends were declared for preferred shares series A, B, C, and D.

Business highlights include Aerospace Products achieving a record Adjusted EBITDA of $91.2 million in Q2. FTAI has inducted 20 V2500 engines year-to-date and plans to induct 30 more by year-end. The company's Module Factory™ now boasts over 50 active customers worldwide.

Positive

• Adjusted EBITDA reached $213.9 million for Q2 2024
• Aerospace Products segment achieved record Adjusted EBITDA of $91.2 million
• FTAI inducted 20 V2500 engines year-to-date with plans for 30 more by year-end
• Module Factory™ now has over 50 active customers worldwide
• Declared cash dividend of $0.30 per ordinary share for Q2 2024

Negative

• Reported net loss of $228.2 million for Q2 2024
• Basic and diluted earnings per share were negative at -$2.26

Insights

Financial Analyst

Financial Overview: The financial results for Q2 2024 highlight some significant issues. The company reported a net loss of $228,205,000, which translates to a loss of $2.26 per basic and diluted share. While the adjusted EBITDA of $213,904,000 suggests that the underlying operational performance might be healthier, the substantial net loss is concerning and indicates potential inefficiencies or extraordinary expenses.

Dividend Declaration: Declaring a dividend of $0.30 per ordinary share is a positive sign, suggesting that the company is confident in its cash flow and liquidity, despite the net loss. Dividends on preferred shares also indicate a commitment to return value to shareholders.

Investors should be cautious; while the high EBITDA shows operational strength, the substantial net loss requires a closer look at operating expenses and debt levels. The dividend might provide short-term confidence but understanding the causes of the net loss is critical for long-term investment decisions.

Market Research Analyst

Aerospace Products Performance: The business highlight mentioning the Aerospace Products segment reaching a new Adjusted EBITDA high of $91.2 million is noteworthy. This indicates a strong performance in a critical segment, which could be a sign of competitive strength and effective market positioning.

With 20 V2500 engines inducted to date and expectations to induct 30 more by year-end, FTAI shows robust activity in its operational capabilities. Additionally, having over 50 active customers for the Module Factory™ suggests strong demand and customer trust. These operational metrics can be seen as positive indicators for future revenue growth and market share stability.

Investors should monitor the sustainability of these numbers, as consistency in such performance could offset some concerns over the net loss.

Tech Expert

Technological Advancements: The induction of V2500 engines and the expansion of the Module Factory™ to over 50 active customers demonstrate significant technological capabilities. It shows that FTAI is not only active in maintaining but also expanding its technological assets, which could provide a competitive edge.

The ability to induct 50 engines within a year reflects operational efficiency and high demand for FTAI’s technological solutions. Innovations in engine maintenance and repair could potentially lead to higher margins and customer retention.

For investors, these technological advancements may suggest a long-term growth trajectory, making the company's stock potentially more appealing despite short-term financial setbacks.

NEW YORK, July 23, 2024 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today reported financial results for the second quarter 2024. The Company’s consolidated comparative financial statements and key performance measures are attached as an exhibit to this press release.

Financial Overview

(in thousands, except per share data)
Selected Financial Results		Q2’24
Net Loss Attributable to Shareholders		$	(228,205	)
Basic Earnings per Ordinary Share		$	(2.26	)
Diluted Earnings per Ordinary Share		$	(2.26	)
Adjusted EBITDA(1)		$	213,904
_______________________________ (1) For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.

Second Quarter 2024 Dividends

On July 23, 2024, the Company’s Board of Directors (the “Board”) declared a cash dividend on our ordinary shares of $0.30 per share for the quarter ended June 30, 2024, payable on August 20, 2024 to the holders of record on August 12, 2024.

Additionally, on July 23, 2024, the Board declared cash dividends on its Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A Preferred Shares”), Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”), Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (“Series C Preferred Shares”) and Fixed-Rate Reset Series D Cumulative Perpetual Redeemable Preferred Shares (“Series D Preferred Shares”) of $0.51563, $0.50000, $0.51563 and $0.59375 per share, respectively, for the quarter ended June 30, 2024, payable on September 16, 2024 to the holders of record on September 6, 2024.

Business Highlights

• Aerospace Products reaches new Adjusted EBITDA high of $91.2mm for Q2. ⁽¹⁾
• FTAI has inducted 20 V2500 engines year to date and expects to induct an additional 30 by year end.
• FTAI’s Module Factory™ now has over 50 active customers worldwide.

_{(1) For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.}

Additional Information

For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Center section of the Company’s website, https://www.ftaiaviation.com, and the Company’s Quarterly Report on Form 10-Q, when available on the Company’s website. Nothing on the Company’s website is included or incorporated by reference herein.

Conference Call

In addition, management will host a conference call on Wednesday, July 24, 2024, at 8:00 A.M. Eastern Time. The conference call may be accessed by registering via the following link https://register.vevent.com/register/BIdca77333acf741569740cfda9a5d8b1a/. Once registered, participants will receive a dial-in and unique pin to access the call.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at https://www.ftaiaviation.com/. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.

A replay of the conference call will be available after 11:30 A.M. on Wednesday, July 24, 2024 through 11:30 A.M. on Wednesday, July 31, 2024 on https://ir.ftaiaviation.com/news-events/presentations/.

The information contained on, or accessible through, any websites included in this press release is not incorporated by reference into, and should not be considered a part of, this press release.

About FTAI Aviation Ltd.

FTAI owns and maintains commercial jet engines with a focus on CFM56 and V2500 engines. FTAI’s propriety portfolio of products, including the Module Factory and a joint venture to manufacture engine PMA, enables it to provide cost savings and flexibility to our airline, lessor, and maintenance, repair, and operations customer base. Additionally, FTAI owns and leases jet aircraft which often facilitates the acquisition of engines at attractive prices. FTAI invests in aviation assets and aerospace products that generate strong and stable cash flows with the potential for earnings growth and asset appreciation.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, expectations for inducting an additional 30 V2500 engines by year end. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond the Company’s control. The Company can give no assurance that its expectations will be attained and such differences may be material. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.ftaiaviation.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based. This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

For further information, please contact:

Alan Andreini
Investor Relations
FTAI Aviation Ltd.
(646) 734-9414
aandreini@fortress.com

Exhibit – Financial Statements

FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
		Three Months Ended June 30,								Six Months Ended June 30,
			2024				2023				2024				2023
Revenues
Lease income		$	70,754			$	59,541			$	123,915			$	115,519
Maintenance revenue			51,187				42,065				96,977				77,206
Asset sales revenue			72,433				76,836				111,040				185,527
Aerospace products revenue			245,200				92,725				434,257				177,838
Other revenue			4,020				3,178				4,099				10,973
Total revenues			443,594				274,345				770,288				567,063
Expenses
Cost of sales			205,857				104,532				348,661				250,202
Operating expenses			29,099				24,797				54,416				47,331
General and administrative			2,969				3,188				6,652				7,255
Acquisition and transaction expenses			8,019				2,672				14,198				5,934
Management fees and incentive allocation to affiliate			3,554				5,563				8,449				8,560
Internalization fee to affiliate			300,000				—				300,000				—
Depreciation and amortization			56,691				38,514				106,611				79,440
Asset impairment			—				—				962				1,220
Interest expense			55,196				38,499				102,903				77,791
Total expenses			661,385				217,765				942,852				477,733
Other (expense) income
Equity in losses of unconsolidated entities			(694	)			(380	)			(1,361	)			(1,715	)
Loss on extinguishment of debt			(13,920	)			—				(13,920	)			—
Other (expense) income			(498	)			408				136				416
Total other (expense) income			(15,112	)			28				(15,145	)			(1,299	)
(Loss) income before income taxes			(232,903	)			56,608				(187,709	)			88,031
(Benefit from) provision for income taxes			(13,033	)			1,855				(7,461	)			3,881
Net (loss) income			(219,870	)			54,753				(180,248	)			84,150
Less: Dividends on preferred shares			8,335				8,335				16,670				15,126
Net (loss) income attributable to shareholders		$	(228,205	)		$	46,418			$	(196,918	)		$	69,024
(Loss) Earnings per share:
Basic		$	(2.26	)		$	0.47			$	(1.96	)		$	0.69
Diluted		$	(2.26	)		$	0.46			$	(1.96	)		$	0.69
Weighted average shares outstanding:
Basic			100,958,524				99,732,179				100,602,214				99,730,223
Diluted			100,958,524				100,462,277				100,602,214				100,314,508

FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share and per share data)
		(Unaudited)
		June 30, 2024				December 31, 2023
Assets
Cash and cash equivalents		$	169,485			$	90,756
Restricted cash			150				150
Accounts receivable, net			154,051				115,156
Leasing equipment, net			2,202,866				2,032,413
Property, plant, and equipment, net			33,078				45,175
Investments			19,886				22,722
Intangible assets, net			42,138				50,590
Goodwill			4,630				4,630
Inventory, net			373,282				316,637
Other assets			449,686				286,456
Total assets		$	3,449,252			$	2,964,685
Liabilities
Accounts payable and accrued liabilities		$	128,708			$	112,907
Debt, net			3,077,596				2,517,343
Maintenance deposits			75,939				65,387
Security deposits			41,536				41,065
Other liabilities			55,906				52,100
Total liabilities		$	3,379,685			$	2,788,802
Commitments and contingencies
Equity
Ordinary shares ($0.01 par value per share; 2,000,000,000 shares authorized; 102,211,402 and 100,245,905 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)		$	1,022			$	1,002
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 15,920,000 and 15,920,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)			159				159
Additional paid in capital			330,419				255,973
Accumulated deficit			(262,033	)			(81,785	)
Shareholders' equity			69,567				175,349
Non-controlling interest in equity of consolidated subsidiaries			—				534
Total equity			69,567				175,883
Total liabilities and equity		$	3,449,252			$	2,964,685

Key Performance Measures

The Chief Operating Decision Maker (“CODM”) utilizes Adjusted EBITDA as our key performance measure.

Adjusted EBITDA provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions. Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares, and interest expense, internalization fee to affiliate, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

The following table sets forth a reconciliation of net (loss) income attributable to shareholders to Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023:

		Three Months Ended June 30,								Change				Six Months Ended June 30,								Change
(in thousands)			2024				2023								2024				2023
Net (loss) income attributable to shareholders		$	(228,205	)		$	46,418			$	(274,623	)		$	(196,918	)		$	69,024			$	(265,942	)
Add: (Benefit from) provision for income taxes			(13,033	)			1,855				(14,888	)			(7,461	)			3,881				(11,342	)
Add: Equity-based compensation expense			638				510				128				1,148				618				530
Add: Acquisition and transaction expenses			8,019				2,672				5,347				14,198				5,934				8,264
Add: Losses on the modification or extinguishment of debt and capital lease obligations			13,920				—				13,920				13,920				—				13,920
Add: Changes in fair value of non-hedge derivative instruments			—				—				—				—				—				—
Add: Asset impairment charges			—				—				—				962				1,220				(258	)
Add: Incentive allocations			3,148				5,324				(2,176	)			7,456				8,266				(810	)
Add: Depreciation and amortization expense (1)			65,809				48,934				16,875				124,931				97,704				27,227
Add: Interest expense and dividends on preferred shares			63,531				46,834				16,697				119,573				92,917				26,656
Add: Internalization fee to affiliate			300,000				—				300,000				300,000				—				300,000
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)			(617	)			150				(767	)			(1,165	)			(546	)			(619	)
Less: Equity in losses of unconsolidated entities			694				380				314				1,361				1,715				(354	)
Less: Non-controlling share of Adjusted EBITDA			—				—				—				—				—				—
Adjusted EBITDA (non-GAAP)		$	213,904			$	153,077			$	60,827			$	378,005			$	280,733			$	97,272
_______________________________ (1) Includes the following items for the three months ended June 30, 2024 and 2023: (i) depreciation and amortization expense of $56,691 and $38,514, (ii) lease intangible amortization of $3,786 and $3,616 and (iii) amortization for lease incentives of $5,332 and $6,804, respectively. Includes the following items for the six months ended June 30, 2024 and 2023: (i) depreciation and amortization expense of $106,611 and $79,440, (ii) lease intangible amortization of $7,762 and $7,762 and (iii) amortization for lease incentives of $10,558 and $10,665, respectively. (2) Includes the following items for the three months ended June 30, 2024 and 2023: (i) net loss of $694 and $380, (ii) depreciation and amortization expense of $77 and $435, and (iii) acquisition and transaction expenses of $0 and $95, respectively. Includes the following items for the six months ended June 30, 2024 and 2023: (i) net loss of $1,361 and $1,715, (ii) depreciation and amortization expense of $196 and $835, and (iii) acquisition and transaction expenses of $0 and $334, respectively.

FAQ

What was FTAI's net loss for Q2 2024?

FTAI reported a net loss of $228.2 million for the second quarter of 2024.

What dividend did FTAI declare for Q2 2024?

FTAI declared a cash dividend of $0.30 per ordinary share for the quarter ended June 30, 2024, payable on August 20, 2024.

How many V2500 engines has FTAI inducted in 2024 so far?

FTAI has inducted 20 V2500 engines year-to-date in 2024 and plans to induct an additional 30 by year-end.

What was FTAI's Adjusted EBITDA for Q2 2024?

FTAI reported an Adjusted EBITDA of $213.9 million for the second quarter of 2024.

How many active customers does FTAI's Module Factory™ have?

FTAI's Module Factory™ now has over 50 active customers worldwide.