Willis Lease Finance Corporation ( WLFC), the independent jet engine lessor in the commercial finance sector, has reported first quarter 2014 net income was $4.3 million, or $0.53 per diluted share, compared to $1.6 million, or $0.19 per diluted share, in the first quarter of 2013, and $6.6 million, or $0.81 per diluted share, in the fourth quarter of 2013.
“Our year is off to a good start, with first quarter profits more than double the earnings we generated in the first quarter a year ago,” said Charles F. Willis, Chairman and CEO. “All of our revenue categories exhibited sizable increases in the quarter except for gain on sale. We reported an impressive increase in our first quarter lease rent revenue, which is up nearly 10% year over year. Together with growth in the lease portfolio, improved utilization was a significant contributor to this healthy increase, reaching a three year high of 89% in January 2014. Since the middle of last year we were able to generate consecutive increases in utilization in six out of eight months.”
“While the first quarter results are very encouraging, we continue to be faced with the usual challenges including, among other things, dealing with heavy competition from existing and new participants in the engine leasing space, maintaining utilization at acceptable levels and deciding the best way to invest our available capital,” said Willis.
“With more than 240 engines in our portfolio or under our management, there is constant movement of assets transitioning on and off lease at any given time,” said Donald Nunemaker, President. “We had an unusually high number of leases terminate in March, which brought our quarter-end utilization down to 84% from a three year high of 89% reached in January 2014. The increase in March lease terminations can be attributed to multiple causes including seasonality, natural expiration of certain long-term leases, as well as an unusually high number of short-term lease expirations. Our marketing and technical teams are working hard to place engines with our customers, and while we see solid demand across most engines types in the global markets today, it will likely take some time to move utilization back to the level reached in January of this year.”
At March 31, 2014, Willis Lease had 200 commercial aircraft engines, 5 aircraft parts packages and 4 aircraft and other engine-related equipment in its lease portfolio, with a net book value of $1.02 billion, compared to 193 commercial aircraft engines, 3 aircraft parts packages and 7 aircraft and other engine-related equipment in its lease portfolio, with a net book value of 1.02 billion, a year ago. The Company’s funded debt-to-equity is 3.53 to 1 at quarter end, compared to 3.70 to 1 at December 31, 2013 and 3.75 to 1 a year ago.