Willis Lease Finance Earns $4.3 Million or $0.53 Per Share in 1Q14

NOVATO, Calif., May 5, 2014 (GLOBE NEWSWIRE) — Willis Lease Finance Corporation (WLFC), the premier independent jet engine lessor in the commercial finance sector, today reported first quarter 2014 net income was $4.3 million, or $0.53 per diluted share, compared to $1.6 million, or $0.19 per diluted share, in the first quarter of 2013, and $6.6 million, or $0.81 per diluted share, in the fourth quarter of 2013.

“Our year is off to a good start, with first quarter profits more than double the earnings we generated in the first quarter a year ago,” said Charles F. Willis, Chairman and CEO. “All of our revenue categories exhibited sizable increases in the quarter except for gain on sale. We reported an impressive increase in our first quarter lease rent revenue, which is up nearly 10% year over year. Together with growth in the lease portfolio, improved utilization was a significant contributor to this healthy increase, reaching a three year high of 89% in January 2014. Since the middle of last year we were able to generate consecutive increases in utilization in six out of eight months.”

“While the first quarter results are very encouraging, we continue to be faced with the usual challenges including, among other things, dealing with heavy competition from existing and new participants in the engine leasing space, maintaining utilization at acceptable levels and deciding the best way to invest our available capital,” said Willis.

First Quarter 2014 Highlights (at or for the three-month periods ended March 31, 2014, compared to March 31, 2013, and December 31, 2013):

Tangible book value per share increased 10.9% to $25.75 at March 31, 2014 compared to $23.21 a year ago.
Lease rent revenues increased 9.9% year-over-year, reflecting higher average portfolio utilization and an increase in the average size of the lease portfolio.
Total revenues increased 21.8% to $43.0 million in 1Q14 from $35.3 million in 1Q13 with increases recorded in all revenue line items except Gain on Sale.
Average utilization in the current quarter was 87% compared to 84% in the first quarter of 2013.
Utilization was 84% at quarter end, compared to 86% at the end of 2013 and 82% a year ago.
Liquidity under the revolving credit facility was $101 million at quarter end, up from $83 million a year ago.
“With more than 240 engines in our portfolio or under our management, there is constant movement of assets transitioning on and off lease at any given time,” said Donald Nunemaker, President. “We had an unusually high number of leases terminate in March, which brought our quarter-end utilization down to 84% from a three year high of 89% reached in January 2014. The increase in March lease terminations can be attributed to multiple causes including seasonality, natural expiration of certain long-term leases, as well as an unusually high number of short-term lease expirations. Our marketing and technical teams are working hard to place engines with our customers, and while we see solid demand across most engines types in the global markets today, it will likely take some time to move utilization back to the level reached in January of this year.”

Balance Sheet

At March 31, 2014, Willis Lease had 200 commercial aircraft engines, 5 aircraft parts packages and 4 aircraft and other engine-related equipment in its lease portfolio, with a net book value of $1.02 billion, compared to 193 commercial aircraft engines, 3 aircraft parts packages and 7 aircraft and other engine-related equipment in its lease portfolio, with a net book value of 1.02 billion, a year ago. The Company’s funded debt-to-equity is 3.53 to 1 at quarter end, compared to 3.70 to 1 at December 31, 2013 and 3.75 to 1 a year ago.