Willis Lease Finance Q3 Earnings Soar Y/Y on Leasing Growth

Core Insights - Willis Lease Finance Corporation reported third-quarter earnings of $3.37 per share, a significant increase from $2.13 per share in the same quarter of 2023, with total revenues reaching $146.2 million, a 38.3% year-over-year increase from $105.7 million [1][2] Revenue Breakdown - Lease rent revenues amounted to $64.9 million, up 21.2% from $53.6 million in the same period last year, driven by increased asset deployment and new lease agreements [3] - Maintenance reserve revenues rose 32% year-over-year to $49.8 million, compared to $37.7 million in the third quarter of 2023, supported by high utilization rates of leased engines [4] - Revenues from spare parts and equipment sales increased significantly to $10.9 million from $3.4 million in the year-ago quarter, with an additional $1 million from equipment sales for one engine [5] - Gains from the sale of leased equipment totaled $9.5 million from the sale of 13 engines and other assets, a substantial increase from $0.8 million in the third quarter of 2023 [6] Expense Overview - Total expenses rose to $112.5 million, a 31.2% increase year-over-year, with general and administrative expenses increasing by 50.8% to $40 million [7] - Net finance costs increased by 46% to $27.8 million, primarily due to higher interest expenses associated with increased borrowing for equipment purchases [7] Profitability Metrics - Quarterly pre-tax income was $34.5 million, up 69.4% from $20.3 million in the prior-year period, reflecting strong demand in the aviation leasing market [9] - Net income attributable to common shareholders surged to $23.1 million, a 67.9% improvement from the third quarter of 2023, indicating robust operational efficiencies [10] Balance Sheet Highlights - As of September 30, 2024, cash and cash equivalents totaled $5.8 million, down from $7.1 million at the end of 2023, while total assets grew to $3 billion from $2.7 billion [11] - Debt obligations increased to $2 billion from $1.8 billion at year-end 2023, and shareholders' equity strengthened to $517.8 million, up from $439 million [11] Strategic Developments - The company refinanced its Series A preferred stock, consolidating it into a $65 million Series A series with an 8.35% dividend rate, enhancing its capital structure [12] - A new $1 billion, five-year revolving credit facility was established, replacing an existing $500 million facility, providing capital flexibility for future demand [13] - The company declared a quarterly dividend of 25 cents per share, to be paid on November 21, 2024, demonstrating its commitment to returning value to shareholders [13]