Willis Lease Finance Corporation (NASDAQ:WLFC) today reported a pre-tax profit of $9.6 million in the first quarter of 2018. The Company achieved record quarterly lease rent revenue of $39.6 million in the period driven by 86% average utilization of a portfolio that grew 9.2% to $1.466 billion at quarter-end compared to $1.343 billion at December 31, 2017. Aggregate lease rent and maintenance reserve revenues were $55.1 million for the first quarter 2018. Diluted weighted average earnings per common share was $1.00 for the three months ended March 31, 2018.
“We have continued to maintain strong lease engine utilization while growing the portfolio with the purchase of modern new engines,” said Charles F. Willis, Chairman and CEO. “We plan to maintain strong utilization while growing not only the lease engine portfolio but also our surplus material, asset management and consultancy businesses.”
“The first quarter of 2018 was marked by a tremendous amount of activity across the Platform, including in leasing, acquisitions, spare parts sales and our asset management and services businesses and our people have done a tremendous job managing all of this activity,” said Brian R. Hole, President. “We, and our customers, are very fortunate to have such a dedicated and talented group of professionals leading this Company forward.”
First Quarter 2018 Highlights (at or for the periods ended March 31, 2018, as compared to March 31, 2017, and December 31, 2017):
Lease rent revenue achieved a record quarterly high of $39.6 million in the first quarter of 2018; 31.1% growth from $30.2 million in the same quarter of 2017.
Quarterly Maintenance reserve revenue decreased by $16.5 million due to fewer long-term leases expiring as compared to the prior year period.
Spare parts and equipment sales decreased as there were no equipment sales in the current period, compared to $6.4 million in the first quarter of 2017.
General and administrative expenses increased, primarily due to costs associated with transitioning employees to our new Coconut Creek facility.
Average utilization in the quarter was approximately 86%, compared to 89% during the first quarter of 2017. Utilization was influenced by the Company’s acquisition of new equipment.
Our equipment lease portfolio grew 9.2% to $1.466 billion, from $1.343 billion at December 31, 2017, net of asset sales and depreciation expense. The book value of lease assets we own directly or through our joint ventures was $1.7 billion at March 31, 2018.
The Company purchased $154.9 million of equipment in the first quarter of 2018, compared to $40.3 million in the first quarter of 2017.
The Company maintained $286 million of undrawn revolver capacity at March 31, 2018.
Tangible book value per diluted weighted average common share outstanding increased 0.8% to $41.96 at March 31, 2018, compared to $41.63 at December 31, 2017.
A total of 297,367 shares of common stock were repurchased in the first three months of 2018 for $10.2 million.
During the first quarter of 2018, the Company entered into agreements to purchase $217.1 million of engines and related equipment for our lease portfolio.
As of March 31, 2018, the Company had a total lease portfolio consisting of 243 engines and related equipment, 15 aircraft and 9 other leased parts and equipment with a net book value of $1.466 billion. As of December 31, 2017, the Company had a total lease portfolio consisting of 225 engines and related equipment, 16 aircraft and 7 other leased parts and equipment, with a net book value of $1.343 billion.