COCONUT CREEK, FL — May 5, 2020 — Willis Lease Finance Corporation (NASDAQ: WLFC) today reported first quarter pre-tax profit and total revenues of $8.5 million and $81.6 million, respectively. The Company’s first quarter 2020 pre-tax results were impacted by both lower revenue in the core leasing business, which was influenced by a reduction in reported asset usage and reduced spare parts sales, and the one-time expense associated with our Willis Engine Structured Trust II re-financing. Aggregate lease rent and maintenance reserve revenues were $66.9 million for the first quarter of 2020.
“The Company experienced another quarter of profitability but on lighter revenues primarily driven by the decline in global flight traffic, which led to lower maintenance revenues and spare parts sales,” said Charles F. Willis, Chairman and CEO. “We recognize that the COVID pandemic is putting a lot of strain on our lessee customer base and we do not see that correcting quickly. We therefore remain highly focused on protecting our business while continuing to deliver for our customers."
“Like the rest of the world, our business, our people and our customers have been negatively affected by this incredible pandemic,” said Brian R. Hole, President. “But we are working harder than ever to deliver all that our Platform has to offer in support of our customers, providing liquidity through asset financings, asset management and technical services for repositioning assets, surplus material to lower maintenance costs and even opening a new aircraft storage and disassembly facility in the United Kingdom.”
First Quarter 2020 Highlights (at or for the periods ended March 31, 2020, as compared to March 31, 2019, and December 31, 2019):
- Total revenue was $81.6 million in the first quarter of 2020, a 21.4% decrease when compared to $103.8 million in the same quarter of 2019.
- Lease rent revenue was $46.4 million in the first quarter of 2020.
- Maintenance reserve revenue was $20.5 million in the first quarter of 2020, a decrease of $4.8 million, or 19.0%, compared to $25.4 million in the same quarter of 2019. Long term maintenance reserve revenue increased to $8.6 million for the first quarter of 2020, compared to $7.8 million in the comparable prior period. Short term maintenance reserve revenue, which is influenced by lease asset usage, decreased to $11.9 million for the first quarter of 2020 compared to $17.6 million in the comparable prior period.
- Spare parts and equipment sales were $9.1 million in the first quarter of 2020, compared to $17.5 million during the same quarter of 2019.
- Gain on sale was $2.1 million in the first quarter of 2020, reflecting the sale of seven engines compared to $9.6 million in the same quarter of 2019, reflecting the sale of six engines, six aircraft, and two airframes.
- Other revenue increased to $3.5 million in the first quarter of 2020, compared to $3.0 million in the same quarter of 2019, primarily reflecting interest revenue from our Notes receivable.
- Income before income taxes was $8.5 million in the first quarter of 2020, compared to $27.8 million in the same quarter of 2019.
- Our equipment held for operating lease portfolio was $1.698 billion at March 31, 2020, compared to $1.651 billion at December 31, 2019.
- The book value of lease assets we own directly or through our joint ventures was $2.0 billion at March 31, 2020. As of March 31, 2020, the Company also managed 451 engines, aircraft and related equipment on behalf of third parties.
- The Company completed a $366.2 million re-financing of Willis Engine Structured Trust V (formerly known as Willis Engine Securitization Trust II).
- The Company maintained $362 million of undrawn revolver capacity at March 31, 2020.
- Diluted weighted average earnings per common share was $0.56 for the first quarter of 2020, compared to $3.35 in the similar period in 2019.
- Book value per diluted weighted average common share outstanding decreased to $57.64 at March 31, 2020, compared to $57.83 at December 31, 2019.
Balance Sheet
As of March 31, 2020, the Company's $1.698 billion equipment held for operating lease portfolio consisted of 260 engines, 10 aircraft and 11 other leased assets. As of December 31, 2019, the Company's $1.651 billion equipment held for operating lease portfolio consisted of 263 engines, 10 aircraft and 11 other leased assets.