AerSale(US:ASLE)2024-11-08 12:50Revenue Performance - Total revenue for the three months ended September 30, 2024 decreased by $9.8 million or 10.6% compared to the same period in 2023, driven by a decrease of $14.6 million or 22.5% in Asset Management Solutions revenues, offset by an increase of $4.8 million or 17.6% in TechOps revenues [97]. - Revenue from the Asset Management Solutions segment decreased to $50.4 million for the three months ended September 30, 2024, due to a $11.9 million or 57.2% decrease in Aircraft revenue and a $2.7 million or 6.1% decrease in Engine revenue [99]. - TechOps revenue increased by $4.8 million or 17.6% to $32.3 million for the three months ended September 30, 2024, driven by higher contributions from component and landing gear repair activities [102]. - For the nine months ended September 30, 2024, total revenue increased by 4.3% to $250.3 million compared to $240.1 million in the same period in 2023 [108]. - Total revenue for the nine months ended September 30, 2024, increased by $10.2 million or 4.3% compared to the same period in 2023, driven by a $0.9 million increase in Asset Management Solutions and a $9.3 million increase in TechOps [109]. - Asset Management Solutions segment sales increased by $0.9 million or 0.6% to $151.5 million, with a $24.4 million increase in Engine revenue offset by a $23.4 million decrease in Aircraft revenue [110]. - TechOps revenue increased by $9.3 million or 10.4% to $98.9 million, primarily driven by higher MRO product sales [114]. Profitability - Gross profit for the Asset Management Solutions segment increased by $0.8 million or 4.1% to $19.3 million for the three months ended September 30, 2024, primarily due to higher margins on Flight Equipment sales [100]. - The gross profit margin for Engines improved to 39.3% for the three months ended September 30, 2024, up from 26.9% in the prior year, attributed to higher margins on Flight Equipment sales and leasing revenues [101]. - Gross profit in the Asset Management Solutions segment increased by $9.3 million or 19.5% to $57.3 million for the nine months ended September 30, 2024 [112]. Expenses - Selling, general and administrative expenses decreased by $3.7 million or 14.7% to $21.7 million for the three months ended September 30, 2024, mainly due to lower repair and maintenance and payroll-related costs [104]. - Selling, general and administrative expenses decreased by $8.3 million or 10.7% to $69.4 million for the nine months ended September 30, 2024 [116]. Interest and Tax - Interest expense, net increased to $1.8 million for the three months ended September 30, 2024, compared to $0.3 million in the prior year, primarily due to higher borrowings to support feedstock acquisitions [106]. - The effective tax rate for the three months ended September 30, 2024, was 13.0%, a significant decrease from 93.0% in the same period in 2023, primarily due to state income taxes and stock-based compensation impacts [107]. - The effective tax rate for the nine months ended September 30, 2024, was 5.2%, a significant decrease from 59.8% for the same period in 2023 [119]. Cash Flow - Net cash used in operating activities was $26.4 million for the nine months ended September 30, 2024, a decrease of $141.7 million compared to the same period in 2023 [125]. - Net cash used in investing activities was $11.5 million for the nine months ended September 30, 2024, compared to cash provided of $6.7 million in the same period for 2023 [126]. - Net cash provided by financing activities was $41.7 million for the nine months ended September 30, 2024, compared to $17.3 million in the same period for 2023 [127]. Financial Position - As of September 30, 2024, the company had $9.8 million in cash and cash equivalents and $78.5 million outstanding under the Revolving Credit Agreement [121]. - As of September 30, 2024, the Company had $78.5 million in outstanding variable rate borrowings under the Revolving Credit Agreement [142]. - A 10% increase in the average interest rate affecting the variable rate debt would raise the annual interest expense by $0.6 million [142]. - The Company primarily uses the U.S. dollar as its functional currency to mitigate foreign currency market risk [143]. - A hypothetical 10% devaluation of the U.S. dollar against foreign currencies would not have materially impacted the Company's financial position as of September 30, 2024 [143]. Valuation Estimates - The fair value determination of the Company's reporting units and goodwill relies on estimates such as revenue growth rates, profit margins, and discount rates, which are subject to change [140].