Willis Lease Finance Corporation Reports Third Quarter Pre-tax Profit of $13.3 Million
Willis Lease Finance Corporation (NASDAQ: WLFC) today reported a pre-tax profit of $13.3 million in the third quarter of 2018, including record quarterly lease rent revenue of $47.0 million. Leasing results were driven by continued high utilization and 18.5% growth of our portfolio to $1.590 billion at quarter-end compared to $1.343 billion at December 31, 2017. Aggregate lease rent and maintenance reserve revenues were $66.4 million for the third quarter 2018, up 23.2% from the comparable period in 2017.
“We continue to deliver positive profits and cash flow during a significant period of expansion for the Company,” said Charles F. Willis, Chairman and CEO. “We are very excited about our growth and capabilities in our asset management business, which we believe will be what helps us re-shape the industry and especially the way airlines utilize and manage engines.”
“Demand for engines, parts and technical services grew in the third quarter and our financial results reflect that our Platform is uniquely situated to deliver value for our customers across the spectrum,” said Brian R. Hole, President. “While our priority is to deliver for customers today, we are always looking for ways to grow the Platform with new and innovative products and programs for tomorrow.”
Third Quarter 2018 Highlights (at or for the periods ended September 30, 2018, as compared to September 30, 2017, and December 31, 2017):
Total revenue grew by 18.4% to $78.0 million in the third quarter of 2018, compared to $65.9 million in the comparable prior year period.
Lease rent revenue achieved a record quarterly high of $47.0 million in the third quarter of 2018; 40.4% growth from $33.5 million in the comparable quarter of 2017.
Earnings before tax was $13.3 million in the third quarter of 2018, up 60.7% when compared to the comparable quarter of 2017.
We closed our $373.4 million WEST IV ABS transaction during the third quarter of 2018, which helps us lock in attractive long-term fixed rate debt and de-lever our revolving credit facility.
General and administrative expenses increased, primarily due to one-time costs associated with facility relocations and employee transitions, increased headcount to support our broadening Platform and increased compensation accruals due to operating performance.
Utilization at the end of the third quarter of 2018 was 92% compared to 89% at 2017 year-end.
Our equipment lease portfolio grew 18.5% to $1.590 billion, from $1.343 billion at December 31, 2017, net of asset sales and depreciation expense. The book value of lease assets we own directly or through our joint ventures was $1.9 billion at September 30, 2018. As of September 30, 2018, the Company managed 423 engines, aircraft and related equipment on behalf of third parties.
The Company maintained $424 million of undrawn revolver capacity at September 30, 2018.
Diluted weighted average earnings per common share grew 84% to $1.47 per share from the comparable period in 2017.
Book value per diluted weighted average common share outstanding increased to $44.50 at September 30, 2018, compared to $41.63 at December 31, 2017.
As of September 30, 2018, the Company had a total lease portfolio consisting of 250 engines, 14 aircraft and 10 other leased parts and equipment with a net book value of $1.590 billion. As of December 31, 2017, the Company had a total lease portfolio consisting of 225 engines, 16 aircraft and 7 other leased parts and equipment, with a net book value of $1.343 billion.