Willis Lease Finance Corporation Reports Annual Pre-tax Profit of $88.9 million

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Willis Lease Finance Corporation (NASDAQ: WLFC) today reported annual total revenues of $409.2 million and pre-tax profit of $88.9 million for the year ended December 31, 2019. The Company’s 2019 pre-tax results were driven by continued leasing revenue growth as well as gains associated with the active management of its portfolio. Aggregate lease rent and maintenance reserve revenues were $299.7 million for 2019. The Company's results also include $18.2 million of non-cash write downs.

“2019 was a great year for our business as evidenced by our exceeding $400 million of revenue and $88.9 million of earnings before tax,” said Charles F. Willis, Chairman and CEO. “There is obvious volatility in the global markets, generally, but we believe the Company is well positioned to continue to build market share and grow customer relationships by leveraging our in-demand portfolio of lease assets and continuing to focus on delivering unique customer solutions.”

“We are very proud of what our teams accomplished in 2019, but given the macro issues facing our industry, obviously now is no time to rest on last year’s performance,” said Brian R. Hole, President. “We believe the Willis Platform™ can deliver the most value in a stressed environment when our customers are raising or conserving cash and looking for ways to reduce engine expense, or avoid it altogether, by leveraging our balance sheet, existing engine portfolio, surplus material and overall power plant management capabilities.”

2019 Highlights (at or for the year ended December 31, 2019, as compared to December 31, 2018):

  • Total revenue increased by 17.5% to $409.2 million in 2019 compared to $348.3 million in 2018.
  • Lease rent revenue was $190.7 million in 2019; 8.6% growth from $175.6 million in 2018.
  • Maintenance reserve revenue was $109.0 million in 2019, an increase of 25.3% compared to $87.0 million in 2018. Long term maintenance reserve revenue increased to $37.6 million in 2019, compared to $23.3 million in the prior year.
  • Spare parts and equipment sales were $74.7 million in 2019, compared to $71.1 million in 2018.
  • Gain on sale of leased equipment was $20.0 million in 2019, reflecting the sale of 16 engines, seven aircraft, four airframes and other related equipment from the lease portfolio, compared to $6.9 million in 2018, reflecting the sale of 14 engines, six aircraft, one airframe and other related equipment from the lease portfolio.
  • Other revenue increased by $7.1 million to $14.8 million in 2019, compared to $7.6 million in 2018, primarily reflecting interest revenue from our notes receivable and an increase in fees earned related to engines managed on behalf of third parties.
  • Income before income taxes was $88.9 million in 2019, compared to $56.3 million in 2018.
  • The book value of lease assets we own directly or through our joint ventures was $2.0 billion at December 31, 2019. As of December 31, 2019, the Company also managed 450 engines, aircraft and related equipment on behalf of third parties.
  • The Company maintained $603 million of undrawn revolver capacity at December 31, 2019.
  • Diluted weighted average earnings per common share was $10.50 for 2019, compared to $6.60 in 2018.
  • Book value per diluted weighted average common share outstanding increased to $57.83 at December 31, 2019, compared to $47.43 at December 31, 2018.

Balance Sheet

As of December 31, 2019, the Company had a total lease portfolio consisting of 263 engines, 12 aircraft, 10 other leased parts and equipment and one marine vessel with a net book value of $1.651 billion. As of December 31, 2018, the Company had a total lease portfolio consisting of 244 engines, 17 aircraft and 10 other leased parts and equipment, with a net book value of $1.673 billion.