Willis Lease Finance Corporation Reports Third Quarter Pre-tax Profit of $6.0 million
Willis Lease Finance Corporation (NASDAQ: WLFC) reported Q3 2020 revenues of $70.6 million, reflecting a 41.3% decline from Q3 2019's $120.4 million, largely due to COVID-19's impact on the aviation industry. Pre-tax profit stood at $6.0 million, down from $31.1 million a year earlier. Lease and maintenance reserve revenues totaled $62.3 million, while spare parts sales dropped to $2.9 million from $24.4 million. Despite challenges, the company's liquidity and innovative solutions position it to navigate the evolving market.
- Pre-tax profit of $6.0 million despite a challenging environment.
- Year-over-year increase in aggregate lease assets to $1.776 billion, up 6.6%.
- Book value per share increased to $59.74 as of September 30, 2020.
- Total revenues decreased by 41.3% compared to Q3 2019.
- Maintenance reserve revenue declined by $6.9 million, or 17.5%, from Q3 2019.
- Spare parts sales plummeted from $24.4 million in Q3 2019 to $2.9 million.
COCONUT CREEK, Fla., Nov. 02, 2020 (GLOBE NEWSWIRE) -- Willis Lease Finance Corporation (NASDAQ: WLFC) today reported third quarter total revenues of
“We are pleased to have produced
“The fear of COVID-19 and related government travel restrictions continue to deprive airlines of a flying public,” said Brian R. Hole, President. “But as our customers begin to settle into the pandemic-affected landscape, we believe our multi-faceted role in providing liquidity options for airlines, helping them reduce costs by avoiding maintenance spend and also assisting their efforts to plan for the future will become even more important.”
Third Quarter 2020 Highlights (at or for the periods ended September 30, 2020, as compared to September 30, 2019, and December 31, 2019):
- Total revenue was
$70.6 million in the third quarter of 2020, a41.3% decrease when compared to$120.4 million in the same quarter of 2019. - Lease rent revenue was
$30.0 million in the third quarter of 2020. - Maintenance reserve revenue was
$32.3 million in the third quarter of 2020, a decrease of$6.9 million , or17.5% , compared to$39.2 million in the same quarter of 2019. Long term maintenance reserve revenue, which is influenced by end of lease compensation, increased to$30.6 million for the third quarter of 2020, compared to$19.9 million in the comparable prior period. Short term maintenance reserve revenue, which is influenced by our customers' usage of assets we lease to them, was$1.7 million for the third quarter of 2020 compared to$19.2 million in the comparable prior period. - Spare parts and equipment sales were
$2.9 million in the third quarter of 2020, compared to$24.4 million during the same quarter of 2019. The 2019 quarter included equipment sales of$9.4 million , primarily reflecting the sale of two engines. - Income before income taxes was
$6.0 million in the third quarter of 2020, compared to$31.1 million in the same quarter of 2019 and was$24.3 million year-to-date 2020, compared to$80.7 million year-to-date 2019. - Our aggregate lease assets, inclusive of our equipment held for operating lease and notes receivable, at September 30, 2020 and 2019 was
$1.77 6 billion and$1.66 6 billion, respectively, which is a6.6% year-over-year increase and also includes a transition to next generation technology. - The book value of lease assets we own directly or through our joint ventures, including our notes receivable, was
$2.1 billion at September 30, 2020. As of September 30, 2020, the Company also managed 408 engines, aircraft and related equipment on behalf of third parties. - The Company maintained
$482 million of undrawn revolver capacity at September 30, 2020. - Under the Company's repurchase plan, the Company repurchased a total of 800 shares of common stock in the third quarter of 2020 for
$19,500. - Diluted weighted average earnings per common share was
$0.35 for the third quarter of 2020, compared to$3.81 in the similar period in 2019. - Book value per diluted weighted average common share outstanding increased to
$59.74 at September 30, 2020, compared to$57.83 at December 31, 2019.
Balance Sheet
As of September 30, 2020, the Company's
Willis Lease Finance Corporation
Willis Lease Finance Corporation leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair and overhaul providers in 120 countries. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services supported by cutting edge technology through its subsidiary, Willis Asset Management Limited, as well as various end-of-life solutions for engines and aviation materials provided through its subsidiary, Willis Aeronautical Services, Inc.
Except for historical information, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties. Do not unduly rely on forward-looking statements, which give only expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to: the effects on the airline industry and the global economy of events such as terrorist activity and the COVID-19 pandemic; changes in oil prices and other disruptions to the world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in the Company’s Annual Report on Form 10-K and other continuing reports filed with the Securities and Exchange Commission.
Unaudited Consolidated Statements of Income
(In thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||
| REVENUE | |||||||||||||||||||||||
| Lease rent revenue | $ | 30,025 | $ | 49,090 | (38.8 | ) | % | $ | 114,874 | $ | 142,484 | (19.4 | ) | % | |||||||||
| Maintenance reserve revenue | 32,302 | 39,173 | (17.5 | ) | % | 82,816 | 90,998 | (9.0 | ) | % | |||||||||||||
| Spare parts and equipment sales | 2,888 | 24,409 | (88.2 | ) | % | 14,848 | 56,497 | (73.7 | ) | % | |||||||||||||
| Gain on sale of leased equipment | — | 4,589 | (100.0 | ) | % | 1,367 | 19,279 | (92.9 | ) | % | |||||||||||||
| Other revenue | 5,398 | 3,105 | 73.8 | % | 13,300 | 10,674 | 24.6 | % | |||||||||||||||
| Total revenue | 70,613 | 120,366 | (41.3 | ) | % | 227,205 | 319,932 | (29.0 | ) | % | |||||||||||||
| EXPENSES | |||||||||||||||||||||||
| Depreciation and amortization expense | 24,022 | 22,736 | 5.7 | % | 71,176 | 63,037 | 12.9 | % | |||||||||||||||
| Cost of spare parts and equipment sales | 4,125 | 20,195 | (79.6 | ) | % | 13,461 | 47,192 | (71.5 | ) | % | |||||||||||||
| Write-down of equipment | 5,245 | 6,954 | (24.6 | ) | % | 14,371 | 11,321 | 26.9 | % | ||||||||||||||
| General and administrative | 16,461 | 23,257 | (29.2 | ) | % | 51,256 | 66,086 | (22.4 | ) | % | |||||||||||||
| Technical expense | 827 | 1,739 | (52.4 | ) | % | 3,422 | 4,934 | (30.6 | ) | % | |||||||||||||
| Net finance costs: | |||||||||||||||||||||||
| Interest expense | 15,351 | 16,572 | (7.4 | ) | % | 47,136 | 51,232 | (8.0 | ) | % | |||||||||||||
| Loss on debt extinguishment | — | — | — | % | 4,688 | 220 | 2,030.9 | % | |||||||||||||||
| Total net finance costs | 15,351 | 16,572 | (7.4 | ) | % | 51,824 | 51,452 | 0.7 | % | ||||||||||||||
| Total expenses | 66,031 |
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FAQ
What were the total revenues for WLFC in Q3 2020?
Willis Lease Finance Corporation reported total revenues of $70.6 million in Q3 2020.
How much did WLFC's pre-tax profit decline in Q3 2020?
The pre-tax profit for WLFC in Q3 2020 was $6.0 million, down from $31.1 million in the same quarter of 2019.
What is the impact of COVID-19 on WLFC's revenues?
COVID-19 led to a 41.3% decrease in WLFC's revenues compared to Q3 2019 due to reduced aircraft utilization and demand.
What is the book value per share for WLFC as of September 30, 2020?
The book value per diluted weighted average common share for WLFC was $59.74 as of September 30, 2020.
How did WLFC's spare parts sales change in Q3 2020?
Spare parts sales for WLFC fell to $2.9 million in Q3 2020 from $24.4 million in Q3 2019.
Willis Lease Finance Corp
NASDAQ:WLFCWLFC RankingsWLFC Latest NewsWLFC Stock Data
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Rental & Leasing Services
Wholesale-machinery, Equipment & Supplies
United States of America
COCONUT CREEK
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