EX-99.1 2 a17-19122_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

NEWS RELEASE

 

CONTACT:

 

Scott B. Flaherty

 

 

Chief Financial Officer

 

 

(415) 408-4700

 

Willis Lease Finance Reports Second Quarter Pretax Profit Grew 76% to $10.2 Million

 

NOVATO, CA —August 8, 2017 — Willis Lease Finance Corporation (NASDAQ: WLFC) today reported that pretax income grew 76% to $10.2 million in the second quarter of 2017, compared to $5.8 million in the second quarter of 2016, on revenues of $67.8 million. The Company’s second quarter 2017 results were bolstered by continued strength in its core leasing business with 90% utilization at quarter end and $19.4 million of spare parts and equipment sales revenue, of which $12.9 million was generated by the sale of equipment. Net income attributable to common shareholders for the second quarter increased 68% to $5.7 million, or $0.92 per diluted share, from $3.4 million, or $0.49 per diluted share, in the second quarter 2016.  Earnings in the second quarter included a $2.3 million non-cash write down of equipment and parts.

 

“We continue to drive strong pre-tax financial growth in 2017, and build the business for the future,” said Charles F. Willis, Chairman and CEO.  “Our leasing business is delivering support and value for our customers at a time when engine shop visit activity is extremely high.”

 

“We believe we have a unique service offering and our customers are just beginning to see the value of our total platform,” said Brian R. Hole, President. “While leasing remains strong with utilization of 90% at quarter end and our trading business continues to become more efficient, we will focus on growth and delivering additional value worldwide through our subsidiaries, Willis Aeronautical Services and Willis Asset Management.”

 

Second Quarter 2017 Highlights:

 

·                  Total revenue grew 36.7% to $67.8 million in the second quarter of 2017, from $49.6 million in the year ago period.

·                  Average utilization in the second quarter of 2017 was 88% as compared to 89% in the preceding quarter. Utilization was 90% at the end of Q2 2017.

·                  Second quarter lease rent revenue was $31.3 million, up 7.4% year-over-year.

·                  Maintenance reserve revenue for the six months ended June 30, 2017 increased 40% to $43.8 million compared to $31.3 million in the year ago period.

·                  The Company purchased $81.5 million and sold $21.2 million of assets in the second quarter of 2017.

·                  The equipment portfolio grew 2.1% to $1.161 billion, from $1.137 billion at year end 2016, net of asset sales and depreciation expense.

·                  Tangible book value per share increased 7% to $32.52 at June 30, 2017, as compared to $30.66 per share at December 31, 2016.

·                  Under the Company’s five-year repurchase plan, the Company purchased a total of 114,833 shares of common stock in the quarter for $2.7 million.

·                  The Company maintained $250 million of undrawn revolver capacity at June 30, 2017.

 


 

Balance Sheet

 

As of June 30, 2017, Willis Lease had 217 commercial aircraft engines, 13 aircraft and 5 aircraft parts packages and other engine-related equipment in its lease portfolio, with a net book value of $1.161 billion, compared to 201 commercial aircraft engines, 10 aircraft, 5 aircraft parts packages, and other engine-related equipment in its lease portfolio, with a net book value of $1.081 billion a year ago.  The Company’s funded debt-to-equity ratio was 4.40 to 1 at quarter end compared to 4.59 to 1 at December 31, 2016, and 4.47 to 1 a year ago.

 

Willis Lease Finance

 

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, as well as various end-of-life solutions for aircraft, 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, 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 the 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.

 


 

Consolidated Statements of Income

(In thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

 

 

June 30,

 

%

 

June 30,

 

%

 

 

 

2017

 

2016

 

Change

 

2017

 

2016

 

Change

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease rent revenue

 

$

31,337

 

$

29,181

 

7.4

%

$

61,572

 

$

57,457

 

7.2

%

Maintenance reserve revenue

 

11,881

 

15,514

 

(23.4

)%

43,843

 

31,333

 

39.9

%

Spare parts and equipment sales

 

19,383

 

3,673

 

427.7

%

31,979

 

6,305

 

407.2

%

Gain on sale of leased equipment

 

3,527

 

258

 

1267.1

%

4,509

 

3,250

 

38.7

%

Other revenue

 

1,716

 

992

 

73.0

%

3,888

 

1,992

 

95.2

%

Total revenue

 

67,844

 

49,618

 

36.7

%

145,791

 

100,337

 

45.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

16,015

 

16,188

 

(1.1

)%

32,644

 

32,607

 

0.1

%

Cost of spare parts and equipment sales

 

13,730

 

2,787

 

392.6

%

23,130

 

4,719

 

390.1

%

Write-down of equipment

 

2,277

 

1,893

 

20.3

%

15,285

 

3,929

 

289.0

%

General and administrative

 

13,065

 

10,685

 

22.3

%

26,265

 

22,437

 

17.1

%

Technical expense

 

2,448

 

1,803

 

35.8

%

4,740

 

3,499

 

35.5

%

Net finance costs

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

11,312

 

10,397

 

8.8

%

22,178

 

20,405

 

8.7

%

Loss on extinguishment of debt

 

—

 

137

 

(100.0

)%

—

 

137

 

(100.0

)%

Total net finance costs

 

11,312

 

10,534

 

7.4

%

22,178

 

20,542

 

8.0

%

Total expenses

 

58,847

 

43,890

 

34.1

%

124,242

 

87,733

 

41.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from operations

 

8,997

 

5,728

 

57.1

%

21,549

 

12,604

 

71.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from joint ventures

 

1,161

 

56

 

n/a

 

3,015

 

243

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

10,158

 

5,784

 

75.6

%

24,564

 

12,847

 

91.2

%

Income tax expense

 

4,168

 

2,418

 

72.4

%

10,406

 

5,470

 

90.2

%

Net income

 

$

5,990

 

$

3,366

 

78.0

%

$

14,158

 

$

7,377

 

91.9

%

Preferred stock dividends

 

324

 

—

 

100.0

%

646

 

—

 

(100.0

)%

Accretion of preferred stock issuance costs

 

9

 

—

 

100.0

%

17

 

—

 

100.0

%

Net income attributable to common shareholders

 

$

5,657

 

$

3,366

 

68.1

%

$

13,495

 

$

7,377

 

82.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.94

 

$

0.50

 

 

 

$

2.22

 

$

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

 

$

0.92

 

$

0.49

 

 

 

$

2.18

 

$

1.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding

 

6,036

 

6,685

 

 

 

6,075

 

6,917

 

 

 

Diluted average common shares outstanding

 

6,142

 

6,819

 

 

 

6,201

 

7,047

 

 

 

 


 

Consolidated Balance Sheets

(In thousands, except share data, unaudited)

 

 

 

June 30, 2017

 

December 31, 2016

 

ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

11,256

 

$

10,076

 

Restricted cash

 

43,244

 

22,298

 

Equipment held for operating lease, less accumulated depreciation

 

1,160,545

 

1,136,603

 

Maintenance rights

 

17,159

 

17,670

 

Equipment held for sale

 

27,826

 

30,710

 

Operating lease related receivable, net of allowances

 

12,867

 

16,484

 

Spare parts inventory

 

22,955

 

25,443

 

Investments

 

45,928

 

45,406

 

Property, equipment & furnishings, less accumulated depreciation

 

16,400

 

16,802

 

Intangibles assets, net

 

1,980

 

2,182

 

Other assets

 

26,194

 

14,213

 

Total assets

 

$

1,386,354

 

$

1,337,887

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

$

24,452

 

$

17,792

 

Deferred income taxes

 

114,127

 

104,978

 

Notes payable

 

921,782

 

900,255

 

Maintenance reserves

 

68,512

 

71,602

 

Security deposits

 

23,074

 

21,417

 

Unearned lease revenue

 

5,195

 

5,823

 

Total liabilities

 

1,157,142

 

1,121,867

 

 

 

 

 

 

 

Redeemable preferred stock ($0.01 par value)

 

$

19,777

 

$

19,760

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock ($0.01 par value)

 

64

 

64

 

Paid-in capital in excess of par

 

708

 

2,512

 

Retained earnings

 

209,497

 

194,729

 

Accumulated other comprehensive loss, net of tax

 

(834

)

(1,045

)

Total shareholders’ equity

 

209,435

 

196,260

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,386,354

 

$

1,337,887

 

 

Note:  Transmitted on GlobeNewsWire on August 8, 2017, at 5:00 am PT