Willis Lease Finance Corporation
WLFC Industrials Q4 2024
Document 991
Exhibit 99.1
CONTACT: | Scott B. Flaherty | |||||||
| NEWS RELEASE | Chief Financial Officer | |||||||
| 561.413.0112 | ||||||||
Record Results for Willis Lease Finance Corporation in 2024
COCONUT CREEK, FL — March 10, 2025 — Willis Lease Finance Corporation (NASDAQ: WLFC) (“WLFC”) today reported record annual total revenues of $569.2 million and pre-tax income of $152.6 million. For the year ended December 31, 2024, aggregate, core lease rent and maintenance reserve revenues were at an all-time record high of $452.1 million, up 30.4% as compared to $346.8 million in 2023. The growth was predominantly driven by core, recurring lease and maintenance revenues associated with a strong aviation marketplace.
“In 2024 we leveraged our strong earnings to reinvest in the most in demand engines and aircraft,” said Austin C. Willis, Chief Executive Officer of WLFC. “Our ability to profitably deploy nearly $1 billion is a direct reflection on how our platform maximizes the value of assets.”
2024 Highlights
•The Company generated a record $152.6 million of pre-tax income in 2024, up 127.4% compared to $67.1 million in 2023.
•Lease rent revenue increased by $25.1 million, or 11.8%, to a record $238.2 million in 2024, compared to $213.1 million in 2023.
•Maintenance reserve revenue was $213.9 million, another record high in 2024, an increase of 60.0%, compared to $133.7 million in 2023, reflecting the increased size of the lease portfolio and specifically those leases on short-term lease conditions. Engines out on lease with “non-reimbursable” usage fees generated $174.5 million of short-term maintenance revenues in 2024, compared to $118.3 million in the prior year. There was $39.4 million of long-term maintenance revenue recognized in 2024, compared to $15.4 million in the prior year. Long-term maintenance revenue is recognized at the end of a lease period as the related maintenance reserve liability is released from the balance sheet.
•Spare parts and equipment sales increased to $27.1 million in 2024, compared to $20.4 million in 2023. The increase in spare parts sales reflects the demand for surplus material that we are seeing as operators extend the lives of their current generation engine portfolios. Equipment sales were $1.0 million for the sale of one engine in 2024, as compared to no equipment sales in 2023.
•Gain on sale of leased equipment was $45.1 million in 2024, reflecting the sale of 35 engines, eight airframes, and other parts and equipment from the lease portfolio. Gain on sale of leased equipment was $10.6 million in 2023, reflecting the sale of 28 engines, one airframe, and other parts and equipment from the lease portfolio.
•The book value of lease assets including equipment held for operating lease, maintenance rights, notes receivable, and investments in sales-type leases, increased to $2,872.3 million as of December 31, 2024, as compared to $2,223.4 million as of December 31, 2023. Inclusive of lease assets in our joint ventures, the book value of lease assets increased to $3,238.4 million as of December 31, 2024, as compared to $2,495.4 million as of December 31, 2023.
•Diluted weighted average income per common share was $15.34 for 2024, compared to $6.23 in 2023.
•Book value per diluted weighted average common share outstanding increased to $80.74 at December 31, 2024, compared to $67.73 at December 31, 2023.
•The Company paid its second consecutive, recurring quarterly dividend on its common stock of $0.25 per share in November of 2024, and subsequent to year end 2024, declared and paid its third consecutive, recurring dividend on its common stock of $0.25 per share in February of this year.
•In October of 2024, the Company refinanced and expanded its $500 million credit facility, entering into a new five-year, $1.0 billion credit facility, providing incremental liquidity to support our continued growth.
Balance Sheet
As of December 31, 2024, the Company’s lease portfolio was $2,872.3 million, consisting of $2,635.9 million of equipment held in our operating lease portfolio, $183.6 million of notes receivable, $31.1 million of maintenance rights, and $21.6 million of investments in sales-type leases, which represented 354 engines, 16 aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2023, the Company’s lease portfolio was $2,223.4 million, consisting of $2,112.8 million of equipment held in our operating lease portfolio, $92.6 million of notes receivable, $9.2 million of maintenance rights, and $8.8 million of investments in sales-type leases, which represented 337 engines, 12 aircraft, one marine vessel and other leased parts and equipment.
Conference Call
WLFC will hold a conference call on Monday, March 10, 2025 at 10:00 a.m. Eastern Time to discuss its fourth quarter and full year 2024 results. Individuals wishing to participate in the conference call should dial: US and Canada (877) 612-6725, International +1 (646) 828-8082, wait for the conference operator and provide the operator with the Conference ID 808553. A digital replay will be available two hours after the completion of the conference call. To access the replay, please visit our website at www.wlfc.global under the Investor Relations section for details.
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 worldwide. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services through Willis Asset Management Limited, as well as various end-of-life solutions for engines and aviation materials provided through Willis Aeronautical Services, Inc. Additionally, through Willis Engine Repair Center®, Jet Centre by Willis, and Willis Aviation Services Limited, the Company’s service offerings include Part 145 engine maintenance, aircraft line and base maintenance, aircraft disassembly, parking and storage, airport FBO and ground and cargo handling services.
Unaudited Consolidated Statements of Income
(In thousands, except per share data)
| Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||
| 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||||||||||||||||
| REVENUE | |||||||||||||||||||||||||||||||||||
| Lease rent revenue | $ | 64,584 | $ | 51,929 | 24.4 | % | $ | 238,236 | $ | 213,138 | 11.8 | % | |||||||||||||||||||||||
| Maintenance reserve revenue | 57,381 | 37,059 | 54.8 | % | 213,908 | 133,668 | 60.0 | % | |||||||||||||||||||||||||||
| Spare parts and equipment sales | 6,762 | 7,398 | (8.6) | % | 27,099 | 20,359 | 33.1 | % | |||||||||||||||||||||||||||
| Interest revenue | 3,718 | 2,311 | 60.9 | % | 11,683 | 8,721 | 34.0 | % | |||||||||||||||||||||||||||
| Gain on sale of leased equipment | 11,915 | 5,480 | 117.4 | % | 45,063 | 10,581 | 325.9 | % | |||||||||||||||||||||||||||
| Maintenance services revenue | 6,202 | 7,461 | (16.9) | % | 24,158 | 24,168 | — | % | |||||||||||||||||||||||||||
| Other revenue | 2,235 | 2,641 | (15.4) | % | 9,076 | 7,920 | 14.6 | % | |||||||||||||||||||||||||||
| Total revenue | 152,797 | 114,279 | 33.7 | % | 569,223 | 418,555 | 36.0 | % | |||||||||||||||||||||||||||
| EXPENSES | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization expense | 24,157 | 22,794 | 6.0 | % | 92,460 | 90,925 | 1.7 | % | |||||||||||||||||||||||||||
| Cost of spare parts and equipment sales | 5,849 | 5,626 | 4.0 | % | 22,852 | 15,207 | 50.3 | % | |||||||||||||||||||||||||||
| Cost of maintenance services | 6,823 | 6,808 | 0.2 | % | 24,470 | 21,159 | 15.6 | % | |||||||||||||||||||||||||||
| Write-down of equipment | 10,362 | 2,008 | 416.0 | % | 11,228 | 4,398 | 155.3 | % | |||||||||||||||||||||||||||
| General and administrative | 42,452 | 29,637 | 43.2 | % | 146,757 | 115,740 | 26.8 | % | |||||||||||||||||||||||||||
| Technical expense | 4,370 | 8,353 | (47.7) | % | 22,294 | 28,109 | (20.7) | % | |||||||||||||||||||||||||||
| Net finance costs: | |||||||||||||||||||||||||||||||||||
| Interest expense | 29,386 | 22,269 | 32.0 | % | 104,764 | 78,795 | 33.0 | % | |||||||||||||||||||||||||||
| Total net finance costs | 29,386 | 22,269 | 32.0 | % | 104,764 | 78,795 | 33.0 | % | |||||||||||||||||||||||||||
| Total expenses | 123,399 | 97,495 | 26.6 | % | 424,825 | 354,333 | 19.9 | % | |||||||||||||||||||||||||||
| Income from operations | 29,398 | 16,784 | 75.2 | % | 144,398 | 64,222 | 124.8 | % | |||||||||||||||||||||||||||
| Income from joint ventures | 992 | 4,197 | (76.4) | % | 8,247 | 2,908 | 183.6 | % | |||||||||||||||||||||||||||
| Income before income taxes | 30,390 | 20,981 | 44.8 | % | 152,645 | 67,130 | 127.4 | % | |||||||||||||||||||||||||||
| Income tax expense | 9,329 | 10,028 | (7.0) | % | 44,033 | 23,349 | 88.6 | % | |||||||||||||||||||||||||||
| Net income | 21,061 | 10,953 | 92.3 | % | 108,612 | 43,781 | 148.1 | % | |||||||||||||||||||||||||||
| Preferred stock dividends | 1,368 | 903 | 51.5 | % | 4,126 | 3,334 | 23.8 | % | |||||||||||||||||||||||||||
| Accretion of preferred stock issuance costs | 69 | 12 | 475.0 | % | 108 | 75 | 44.0 | % | |||||||||||||||||||||||||||
| Net income attributable to common shareholders | $ | 19,624 | $ | 10,038 | 95.5 | % | $ | 104,378 | $ | 40,372 | 158.5 | % | |||||||||||||||||||||||
| Basic weighted average income per common share | $ | 2.97 | $ | 1.57 | $ | 15.97 | $ | 6.40 | |||||||||||||||||||||||||||
| Diluted weighted average income per common share | $ | 2.81 | $ | 1.53 | $ | 15.34 | $ | 6.23 | |||||||||||||||||||||||||||
| Basic weighted average common shares outstanding | 6,603 | 6,375 | 6,536 | 6,305 | |||||||||||||||||||||||||||||||
| Diluted weighted average common shares outstanding | 6,983 | 6,559 | 6,804 | 6,481 | |||||||||||||||||||||||||||||||
Unaudited Consolidated Balance Sheets
(In thousands, except per share data)
| December 31, 2024 | December 31, 2023 | |||||||||||||
| ASSETS | ||||||||||||||
| Cash and cash equivalents | $ | 9,110 | $ | 7,071 | ||||||||||
| Restricted cash | 123,392 | 160,958 | ||||||||||||
| Equipment held for operating lease, less accumulated depreciation | 2,635,910 | 2,112,837 | ||||||||||||
| Maintenance rights | 31,134 | 9,180 | ||||||||||||
| Equipment held for sale | 12,269 | 805 | ||||||||||||
| Receivables, net | 38,291 | 58,485 | ||||||||||||
| Spare parts inventory | 72,150 | 40,954 | ||||||||||||
| Investments | 62,670 | 58,044 | ||||||||||||
| Property, equipment & furnishings, less accumulated depreciation | 48,061 | 37,160 | ||||||||||||
| Intangible assets, net | 2,929 | 1,040 | ||||||||||||
| Notes receivable, net | 183,629 | 92,621 | ||||||||||||
| Investments in sales-type leases, net | 21,606 | 8,759 | ||||||||||||
| Other assets | 56,045 | 64,430 | ||||||||||||
| Total assets | $ | 3,297,196 | $ | 2,652,344 | ||||||||||
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY | ||||||||||||||
| Liabilities: | ||||||||||||||
| Accounts payable and accrued expenses | $ | 75,983 | $ | 52,937 | ||||||||||
| Deferred income taxes | 185,049 | 147,779 | ||||||||||||
| Debt obligations | 2,264,552 | 1,802,881 | ||||||||||||
| Maintenance reserves | 97,817 | 92,497 | ||||||||||||
| Security deposits | 23,424 | 23,790 | ||||||||||||
| Unearned revenue | 37,911 | 43,533 | ||||||||||||
| Total liabilities | 2,684,736 | 2,163,417 | ||||||||||||
| Redeemable preferred stock ($0.01 par value) | 63,122 | 49,964 | ||||||||||||
| Shareholders’ equity: | ||||||||||||||
| Common stock ($0.01 par value) | 72 | 68 | ||||||||||||
| Paid-in capital in excess of par | 50,928 | 29,667 | ||||||||||||
| Retained earnings | 491,439 | 397,781 | ||||||||||||
| Accumulated other comprehensive income, net of tax | 6,899 | 11,447 | ||||||||||||
| Total shareholders’ equity | 549,338 | 438,963 | ||||||||||||
| Total liabilities, redeemable preferred stock and shareholders’ equity | $ | 3,297,196 | $ | 2,652,344 | ||||||||||