Financial Data and Key Metrics Changes - The company reported second quarter revenue of $107.4 million, up from $77.1 million in the prior year, reflecting a significant increase in sales growth and profitability [4][16] - Adjusted EBITDA improved to $18.3 million compared to $3.2 million in the previous year, indicating stronger execution and operational efficiency [4][18] - Gross margin increased to 32.9% from 28.2% year over year, driven by improved performance across the business [16][17] Business Line Data and Key Metrics Changes - Asset management segment sales rose to $76.3 million from $41.8 million, attributed to higher flight equipment sales and increased USM part sales [5][16] - Tech ops segment revenue decreased by 11.9% year over year from $35.3 million to $31.1 million, primarily due to reduced activity at heavy MRO facilities [8][18] - The company aggressively pursued feedstock acquisitions, acquiring assets totaling $27.1 million in the quarter, bringing the year-to-date total to $70.5 million [6] Market Data and Key Metrics Changes - The narrow body engine market remains highly competitive, with valuations consistently falling below internal rate of return benchmarks, while the wide body engine market shows more favorable conditions [7][28] - USM sales nearly doubled year over year, supported by improved feedstock and a strong inventory position [21] Company Strategy and Development Direction - The company is focused on expanding its lease pool and MRO operations, with expectations for incremental revenue growth from new capabilities [14][46] - The strategic emphasis is on enhancing operational efficiency and leveraging feedstock acquisitions to support long-term growth objectives [6][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in building on the momentum from the second quarter, expecting continued financial improvement in the second half of the year [13][14] - The company anticipates full-year sales growth with EBITDA growth outpacing revenue due to expanding margins and increased operating leverage [13][14] Other Important Information - The company ended the quarter with $68.8 million in liquidity, consisting of $5.7 million in cash and $63.1 million available on its revolving credit facility [19] - The AirSafe backlog stood at $12.9 million, with expectations for increased orders as the company approaches a 2026 compliance deadline [10][14] Q&A Session Summary Question: Can you provide more detail on the types of assets being acquired and the pace of activity? - Management noted a focus on airframes and wide body engines, indicating a strong market niche in these areas, while the narrow body market remains challenging due to competition and maintenance issues [26][28][30] Question: What is the visibility for flight equipment sales in the second half of the year? - Management indicated that while there is a good inventory level, the decision to sell or lease equipment will be evaluated on a case-by-case basis, making it difficult to predict exact sales figures [34][39] Question: Are there any areas of risk regarding the carrying value of assets on the balance sheet? - Management stated that there are currently no anticipated impairments in inventory or overall assets, citing strong opportunities in both passenger and cargo demand [40][42] Question: How is the restructuring of the MRO business progressing? - Management expressed optimism about the completion of MRO facilities and the expected increase in business as they transition to new capabilities, with significant expansion anticipated in the coming months [43][46]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $65.8 million, down from $90.5 million in the prior year period, reflecting a decline in whole asset sales [6][17] - Adjusted EBITDA for Q1 2025 was $3.2 million compared to $9 million in the prior year, primarily due to lower whole asset transactions [7][20] - First quarter gross margin decreased to 27.3% from 31.8% in Q1 2024, attributed to lower whole asset sales which typically carry higher margins [18] Business Line Data and Key Metrics Changes - Asset management segment sales declined by 33.8%, entirely due to lower whole asset sales; however, excluding whole assets, segment revenue increased by 81.7% to $37.5 million, driven by stronger USM sales and a larger active lease pool [7][22] - Tech Ops segment revenue decreased by 15.1% to $26.6 million, anticipated due to the conclusion of a maintenance check line with a large customer [10][22] - The engineered solutions unit saw an increase in AirSafe deliveries, with a backlog totaling $11 million at quarter end [11] Market Data and Key Metrics Changes - The availability of favorably priced feedstock improved significantly in Q1, allowing the company to acquire $43.4 million of feedstock, leading to a 10.4% win rate [8] - The company noted a strong demand for engines, with every engine type in high demand, despite a lack of supply [31] Company Strategy and Development Direction - The company is balancing lease pool expansion against quicker turn whole asset transactions to generate cash and EBITDA [9] - Strategic decisions are being made to pursue longer-term, more predictable contracts in MRO services to better match staffing levels with volume [10] - The company expects to generate new incremental revenue from component MRO facility expansion projects within the next 30 to 60 days [11][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying fundamentals of the business, despite lower whole asset sales, and expects EBITDA growth to outpace revenue growth for the year [15][21] - The company anticipates a strong recovery in the second half of the year, driven by a robust air safe backlog and efficiency measures implemented [15][22] Other Important Information - The company ended the quarter with $48.9 million in liquidity, consisting of $4.7 million in cash and $44.2 million available on its revolving credit facility [20] - Management emphasized the importance of monitoring progress based on asset purchases and sales over the long term rather than quarterly fluctuations [17] Q&A Session Summary Question: Whole asset sales outlook for 2025 - Management indicated it is difficult to predict whole asset sales but noted they have 21 engines available for trading or leasing, with expectations for a higher amount in the second half of the year [25][27] Question: Demand shifts from airline customers - Management reported that there is currently high demand for engines, with a lack of supply affecting the ability to meet that demand [30][31]

Financial Data and Key Metrics Changes - Consolidated revenue for the first quarter was $65.8 million compared to $90.5 million in the prior year period, reflecting a decline due to fewer whole asset sales [5][15] - Adjusted EBITDA was $3.2 million in the first quarter, down from $9 million in the prior year, primarily due to lower whole asset transactions [6][18] - First quarter gross margin was 27.3%, down from 31.8% in the first quarter of the previous year, attributed to lower whole asset sales [16] Business Line Data and Key Metrics Changes - Asset management segment sales declined 33.8%, entirely related to lower whole asset sales, but excluding whole assets, segment revenue increased 81.7% to $37.5 million driven by stronger USM sales [6][19] - Tech Ops segment revenue declined 15.1% to $26.6 million, anticipated due to the conclusion of a maintenance check line with a large customer [9] - Component MRO facility expansion projects are expected to generate new incremental revenue within the next 30 to 60 days [10] Market Data and Key Metrics Changes - The availability of favorably priced feedstock improved considerably, allowing the company to acquire $43.4 million of feedstock during the quarter [7] - The company achieved a 10.4% win rate in feedstock acquisitions, indicating a favorable market position [7] Company Strategy and Development Direction - The company is balancing lease pool expansion against quicker turn whole asset transactions to generate cash and EBITDA [8] - There is a focus on pursuing longer-term, more predictable contracts in MRO services to better match staffing levels with volume [9] - The company anticipates building a robust AirSafe backlog as it approaches the 2026 compliance deadline [12] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand for engines, with a lack of supply affecting the market, and emphasized the importance of managing cash flow expectations [28][29] - The company expects significantly improved results incrementally each quarter, with full-year growth in sales and EBITDA growth expected to exceed revenue growth [11][13] Other Important Information - The company ended the quarter with $48.9 million of liquidity, consisting of $4.7 million in cash and $44.2 million available on its revolving credit facility [18] - The company has made efficiency measures to enhance profitability, which are expected to yield results in the second half of the year [20] Q&A Session Summary Question: Can whole asset sales be at 2024 levels this year? - Management indicated it is difficult to predict exact whole asset sales but noted they have enough whole assets on hand and expect a higher amount of engines to become available in the second half of the year [23][25] Question: Have there been any shifts in demand from airline customers? - Management stated that there is high demand for nearly every engine type owned, but a lack of supply is creating challenges [28]