AerSale(ASLE) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements The company's unaudited financials show increased assets, a return to profitability in Q2 2025, and a significant share repurchase Condensed Consolidated Balance Sheets Total assets grew to $646.7 million, funded by increased debt, while stockholders' equity declined due to a share repurchase Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $5,747 | $4,698 | | Total Inventory (Current & Non-current) | $388,303 | $355,790 | | Total assets | $646,671 | $604,723 | | Liabilities & Equity | | | | Revolving credit facility | $114,509 | $39,235 | | Total liabilities | $230,759 | $149,103 | | Total stockholders' equity | $415,912 | $455,620 | Condensed Consolidated Statements of Operations Q2 2025 revenue grew 39.3% year-over-year to $107.4 million, driving a net income of $8.6 million Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $107,382 | $77,101 | $173,158 | $167,641 | | Gross profit | $35,337 | $21,720 | $53,302 | $50,516 | | Income (loss) from operations | $12,514 | $(1,852) | $5,867 | $2,811 | | Net income (loss) | $8,575 | $(3,637) | $3,298 | $2,640 | | Diluted EPS | $0.18 | $(0.07) | $0.07 | $0.05 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased to $415.9 million primarily due to a $45.0 million treasury stock retirement - The company purchased and retired 6,428,571 shares of treasury stock for $45.0 million during the first quarter of 2025[20] - Total stockholders' equity decreased by $39.7 million in the first six months of 2025, from $455.6 million to $415.9 million[20] Condensed Consolidated Statements of Cash Flows Net cash used in operations was $25.4 million, while financing activities provided $30.2 million from borrowings Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(25,436) | $(36,800) | | Net cash used in investing activities | $(3,759) | $(9,000) | | Net cash provided by financing activities | $30,244 | $44,212 | | Increase (decrease) in cash | $1,049 | $(1,588) | Notes to the Condensed Consolidated Financial Statements Notes detail strong Asset Management segment growth, a $67.6 million insurance claim, and a $45.0 million share repurchase Disaggregated Revenue by Segment (YTD, in thousands) | Segment / Type | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Asset Management Solutions | $115,478 | $101,061 | | - USM | $64,609 | $37,132 | | - Whole asset sales | $35,137 | $56,561 | | - Leasing | $15,732 | $7,368 | | TechOps | $57,680 | $66,580 | | - Services (MRO) | $45,715 | $55,365 | | - Engineered solutions/Products | $11,965 | $11,215 | | Total Revenue | $173,158 | $167,641 | - A fire destroyed a warehouse in April 2024, leading to a $67.6 million insurance claim and a $28.6 million deferred gain as of June 30, 2025[51][52] - On March 18, 2025, the company repurchased and retired 6,428,571 shares of its common stock for $45.0 million[87] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Q2 2025 revenue growth was driven by the Asset Management segment, offsetting a decline in TechOps Q2 2025 vs Q2 2024 Revenue Performance (in thousands) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Asset Management Solutions | $76,265 | $41,799 | 82.5% | | TechOps | $31,117 | $35,302 | (11.9)% | | Total | $107,382 | $77,101 | 39.3% | Q2 2025 vs Q2 2024 Gross Profit Performance (in thousands) | Segment | Q2 2025 Gross Profit | Q2 2024 Gross Profit | % Change | | :--- | :--- | :--- | :--- | | Asset Management Solutions | $26,957 | $15,361 | 75.5% | | TechOps | $8,380 | $6,359 | 31.8% | | Total | $35,337 | $21,720 | 62.7% | - As of June 30, 2025, the company had $5.7 million in cash, $114.5 million outstanding under its revolving credit facility, and $63.1 million of availability[133][134] - Net cash used in operating activities for the first six months of 2025 was $25.4 million, while net cash from financing was $30.2 million[134][138][140] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks are interest rate fluctuations on its variable-rate debt and minimal foreign currency exposure - The company is exposed to interest rate risk on its $116.2 million in variable-rate debt as of June 30, 2025[152] - A 10% increase in the average interest rate would increase annual interest expense by $0.5 million[152] - Foreign currency exchange risk is not considered material as the company primarily transacts in U.S. dollars[153] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[156] - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[157] PART II – OTHER INFORMATION Item 1. Legal Proceedings Current litigation is not expected to materially affect the company's financial condition or results of operations - The company does not expect current legal proceedings to have a material impact on its financial condition or operations[159] Item 1A. Risk Factors No material changes to risk factors have been reported since the 2024 Annual Report on Form 10-K - No material changes to risk factors were reported since the 2024 Form 10-K[160] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the reporting period - None[161] Item 3. Defaults Upon Senior Securities The company reported no defaults upon its senior securities - None[162] Item 4. Mine Safety Disclosures This section is not applicable to the company's operations - Not applicable[163] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the quarter[164] Item 6. Exhibits This section lists all exhibits filed with the report, including required officer certifications - The report includes certifications from the Chief Executive Officer and Chief Financial Officer as required by Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350[167]