Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $268.6 million in Q1 2025, up 7% from $252 million in Q4 2024 and up 64% from $164.1 million in Q1 2024 [9][10] - Adjusted free cash flow is expected to be in the range of $300 million to $350 million for the first half of the year, aligning with the target of $650 million for all of 2025 [6][9] Business Line Data and Key Metrics Changes - The Leasing segment generated approximately $162 million of EBITDA, with the pure leasing component at $152 million, up from $128 million in Q4 2024 [10] - Aerospace Products segment achieved $130.9 million of EBITDA with a margin of 36%, up 12% from $117.3 million in Q4 2024 and up 86% from $70.3 million in Q1 2024 [11] Market Data and Key Metrics Changes - The company anticipates a significant ramp in production in Q2, particularly in Montreal, to meet growing demand for aerospace products and services [5][8] - The company aims to increase its market share of restorations from the current 5% to 25% [5][21] Company Strategy and Development Direction - The company is focused on expanding production capabilities and enhancing operational efficiency through partnerships, including a joint venture with IAG Engine Center Europe [8] - The Strategic Capital Initiative (SCI) is expected to deploy over $4 billion in capital by the end of the year, with a focus on engine exchanges to improve asset ownership and operational efficiency [6][7] Management's Comments on Operating Environment and Future Outlook - Management does not foresee any material negative effects from tariffs, citing the nature of their business and the ability to pass on price increases to customers [31] - The company remains confident in achieving its EBITDA goal of $1.1 billion to $1.15 billion for 2025, with expectations to rise to approximately $1.4 billion in 2026 [8] Other Important Information - The company announced a dividend of $0.30 per share, marking its 40th dividend as a public company [4] - The company has recovered $30 million in insurance claims in Q1 and expects to recover an additional $24 million in Q2, with remaining claims of approximately $100 million still to be settled [78] Q&A Session Summary Question: Insights on Aerospace Product Segment Revenue Related to SCI Program - Management confirmed that approximately 30% of Q1 activity was related to the SCI program, with expectations that this will represent about 20% of total activity for 2025 [20][21] Question: Impact of Tariffs on Aerospace Products Margins - Management stated that they do not see any material negative effects from tariffs due to the nature of their business and their ability to pass on price increases [29][31] Question: Growth CapEx and Inventory Investment - The company plans to invest about $200 million in parts inventory in the first half of the year to avoid missing sales opportunities, while still expecting to generate $350 million in free cash flow [32][35] Question: Adoption of PMA Parts by Airlines - Management noted that airlines are increasingly focused on cost-saving techniques, leading to greater adoption of PMA parts, which is expected to enhance margins [49][56] Question: Update on SCI Aircraft Ownership and Target Customers - The majority of the aircraft owned or under MOUs are powered by CFM engines, with sourcing primarily from lessors and airlines looking to offload older equipment [98][100]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $268.6 million in Q1 2025, up 7% from $252 million in Q4 2024 and up 64% from $164.1 million in Q1 2024 [9][10] - The adjusted free cash flow is expected to be in the range of $300 million to $350 million for the first half of the year, aligning with the target of $650 million for the entire year [7][9] - The company announced a dividend of $0.30 per share, marking the 40th dividend as a public company [5] Business Line Data and Key Metrics Changes - The Leasing segment generated approximately $162 million of EBITDA, with the pure leasing component at $152 million, up from $128 million in Q4 2024 [10] - Aerospace Products segment achieved $130.9 million of EBITDA with a margin of 36%, up 12% from $117.3 million in Q4 2024 and up 86% from $70.3 million in Q1 2024 [11] - The company aims to grow its market share of restorations from 5% to 25% [6] Market Data and Key Metrics Changes - The company expects to generate $600 million to $650 million in EBITDA from Aerospace Products in 2025, up from $381 million in 2024 [11] - The company is experiencing strong demand for rebuilt engines across the industry, with production constrained by current capacity [16][20] Company Strategy and Development Direction - The company is focused on increasing production capacity and operational efficiency, particularly in Montreal and Miami, with plans to ramp up production significantly in Q2 [6][8] - The Strategic Capital Initiative (SCI) is expected to deploy over $4 billion in capital by the end of the year, with a focus on engine exchanges to enhance operational efficiency [7][20] - The company is committed to maintaining a strong balance sheet, targeting a debt-to-EBITDA ratio of around three times by the end of the year [60][64] Management's Comments on Operating Environment and Future Outlook - Management does not foresee any material negative effects from tariffs, citing the nature of their business and geographic diversification as mitigating factors [31] - The company remains optimistic about the growth in demand for aerospace products and services, reiterating guidance for both 2025 and 2026 [8][31] Other Important Information - The company has been actively working on operational plans with IAG Engine Center Europe to ramp up production following an acquisition [8] - The company has recovered $30 million in insurance claims this quarter, with additional recoveries expected [82] Q&A Session Summary Question: Insights on Aerospace product segment revenue related to SCI program - Management confirmed that approximately 30% of Q1 activity was related to SCI, with significant demand for rebuilt engines across the industry [20][16] Question: Impact of tariffs on Aerospace products margins - Management stated that tariffs are not expected to have a material negative effect due to the nature of their business and ability to pass on price increases [31][30] Question: Growth CapEx and inventory management - The company plans to invest about $200 million in parts inventory in the first half of the year to avoid missing sales opportunities [34][36] Question: Adoption of PMA parts by airlines - Management noted increasing focus on cost-saving techniques among airlines, leading to greater adoption of PMA parts [50][51] Question: Update on SCI ownership assets and customer base - The majority of assets in the SCI partnership are powered by CFM engines, with significant activity expected from both lessors and airlines [104][105] Question: Future capital deployment strategy - The company prioritizes growth CapEx, debt repayment, and shareholder returns, with plans to focus on shareholder returns towards the end of the year [60][61]