AerSale(US:ASLE)2025-11-07 21:10Revenue Performance - Total revenue for the three months ended September 30, 2025, decreased by $11.5 million, or 13.9%, compared to the same period in 2024, driven by a 22.2% decrease in Asset Management Solutions revenue[110] - Revenue in the Asset Management Solutions segment decreased by $11.2 million, or 22.2%, to $39.2 million, primarily due to a $10.5 million, or 25.4%, decrease in Engine revenue[111] - Total revenue for the nine months ended September 30, 2025 decreased by $6.0 million, or 2.4%, compared to the same period in 2024, driven by a decrease in TechOps revenue[124] - Revenue in the Asset Management Solutions segment increased by $3.2 million, or 2.1%, to $154.7 million, primarily due to a $11.6 million, or 9.9%, increase in Engine revenue[125] - TechOps revenue decreased by $9.2 million, or 9.3%, to $89.7 million, primarily due to lower MRO services[129] Profitability - Gross profit for the Asset Management Solutions segment decreased by $5.9 million, or 30.6%, to $13.4 million for the three months ended September 30, 2025[112] - Gross profit in the Asset Management Solutions segment decreased by $4.9 million, or 8.6%, to $52.4 million, attributed to changes in the revenue mix[126] - Gross profit margin for TechOps increased to 25.3% for the three months ended September 30, 2025, compared to 13.6% for the prior year period, driven by higher margin opportunities[117] - Gross profit margin for TechOps increased to 25.0% for the nine months ended September 30, 2025, compared to 17.1% for the same period in 2024[130] Expenses - Selling, general and administrative expenses decreased by $3.1 million, or 14.1%, to $18.6 million for the three months ended September 30, 2025, due to lower payroll costs[118] - Selling, general and administrative expenses decreased by $3.3 million, or 4.8%, to $66.0 million, due to lower payroll costs[131] Interest and Tax - Interest expense, net increased to $2.4 million for the three months ended September 30, 2025, compared to $1.8 million in the prior year, primarily due to higher borrowings[120] - Interest expense, net increased to $6.0 million for the nine months ended September 30, 2025, compared to $4.2 million in the prior year[133] - The effective tax rate for the three months ending September 30, 2025, was 119.6%, significantly higher than the 13.3% for the same period in 2024, mainly due to state income taxes and stock-based compensation[121] Cash Flow and Commitments - Cash used in operating activities was $34.3 million for the nine months ended September 30, 2025, an increase of $8.0 million from the prior year[141] - As of September 30, 2025, the company had $123.8 million outstanding under the Revolving Credit Agreement and $53.6 million of availability[148] - The company has a purchase commitment of $6.8 million for technical equipment related to the AerAware product, expected to be satisfied in 2025[152] Debt and Currency Risk - As of September 30, 2025, the company had $123.8 million in outstanding variable rate borrowings under the Revolving Credit Agreement[155] - The company also had $2.5 million in outstanding variable rate borrowings under the CIBC Equipment Loan as of September 30, 2025[155] - A hypothetical 10% increase in the average interest rate affecting the company's variable rate debt would increase annual interest expense by $0.6 million[155] - The company primarily uses the U.S. dollar as its functional currency to mitigate foreign currency market risk[156] - Only general office expenses and payroll transactions for international locations are denominated in local currency[156] - A hypothetical 10% devaluation of the U.S. dollar against foreign currencies would not have a material impact on the company's financial position as of September 30, 2025[156]