Record Revenue Surge and …
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Total Revenue: $157.7 million, up 33% from Q1 2024.
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Pre-Tax Income (EBT): $25.3 million.
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Core Lease Rent Revenue: $67.7 million.
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Interest Revenue: $3.9 million.
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Maintenance Reserve Revenues: $54.9 million, up 25% from Q1 2024.
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Parts and Equipment Sales: $18.2 million, up 455% from Q1 2024.
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Gain on Sale of Leased Equipment: $4.8 million.
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Maintenance Service Revenue: $5.6 million.
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Depreciation Expense: $25 million, up 11.3%.
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G&A Expenses: $47.7 million, up from $29.6 million in Q1 2024.
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Net Finance Costs: $32.1 million, up from $23.0 million in Q1 2024.
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Net Income Attributable to Common Shareholders: $15.5 million.
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Diluted EPS: $2.21.
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Net Cash Provided by Operating Activities: $41.0 million.
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Total Debt Obligations: Increased to $2.2 billion from $1.7 billion in March 2024.
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Leverage Ratio: 3.31 times, down from 3.48 times at year-end 2024.
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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WLFC reported record quarterly revenues of $157.7 million, a 33% increase from the same quarter in 2024.
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The company achieved a significant increase in portfolio utilization, rising from 76.7% at the end of 2024 to 86.4% by the end of Q1 2025.
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WLFC paid its fourth consecutive quarterly dividend of $0.25 per share, reflecting strong financial health and shareholder returns.
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The company announced strategic transactions, including the purchase of 30 additional leap engines and a new constant thrust deal with Air India Express.
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WLFC is expanding its capabilities with a joint venture to build an engine test facility in Florida, addressing industry testing capacity shortages.
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Net finance costs increased to $32.1 million in Q1 2025, up from $23.0 million in the same period in 2024, due to higher indebtedness and interest rates.
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The gain on sale of leased equipment was lower than previous quarters, at $4.8 million compared to $9.2 million in the prior period.
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General and administrative expenses rose significantly to $47.7 million, driven by consultant-related fees and share-based compensation.
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The company’s maintenance reserve liability increased, indicating deferred revenue that has not yet been recognized.
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There is ongoing macroeconomic uncertainty, including potential impacts from tariffs, which could affect future business operations and asset values.
Q: Are you directly impacted by tariffs, particularly in terms of importing parts or materials for maintenance services? A: Brian Hole, President: So far, the impact has been minimal both on the import side of parts and on the leasing side. Most parts come from our own capabilities, and there hasn’t been much impact on leasing. Initial concerns regarding China have largely dissipated, so it’s business as usual.
Story Continues
Q: How might tariffs with Europe affect the market values and lease rates of your existing portfolio? A: Brian Hole, President: It’s speculative, but there could be asset inflation in our existing portfolio. New engines from OEMs may become more expensive due to tariffs, potentially increasing values elsewhere. Incumbent assets in certain jurisdictions might appreciate as they won’t be subject to cross-border tariffs.
Q: What are you seeing in the USM market, and how do you decide between repairing or tearing down an engine? A: Brian Hole, President: We’ve seen a significant step up in parts sales, indicating strong demand for used serviceable material. We evaluate engines on a case-by-case basis, considering net revenue from parting out, present value from repairs, and market bids. Often, we can procure engines at better value than overhauling them.
Q: Can you clarify the differentiation between spare parts and equipment sales versus leased engine portfolio sales? A: Scott Flaherty, CFO: Equipment sales are trading activities, not related to lease assets. They involve buying and selling engines or equipment without leasing them. The quarter saw a $2 million increase in this line item.
Q: How did the utilization rate change, and what influenced it? A: Scott Flaherty, CFO: Utilization increased from 76.7% at the end of 2024 to 86.4% by the end of Q1 2025, largely due to deploying GTF engines acquired late in 2024. These engines were leased out progressively, with some going on lease late into March.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
