2016 Highlights (at or for the periods ended December 31, 2016 as compared to December 31, 2015):
- Pre-tax earnings increased 87.4% to $23.9 million in 2016 from $12.8 million in 2015.
- Average utilization in the fourth quarter was sustained at 92% up from 91% reported for the year ago period.
- Total revenues grew 4.7% to $207.3 million in 2016, fueled primarily by a growing lease portfolio, higher portfolio utilization and rising lease rates.
- Lease rent revenues grew 11.0% to $119.9 million and 8.0% to $31.2 million for the full year and fourth quarter of 2016, respectively.
- The equipment portfolio grew 2.5% in 2016 to $1.137 billion from $1.109 billion a year ago.
- The Company purchased $149 million of equipment in 2016 as compared to $171 million in 2015. In the fourth quarter of 2016, the Company purchased two aircraft and fourteen engines for $64 million.
- Tangible book value per share increased 10.6% to $30.66 at December 31, 2016, compared to $27.72 a year ago.
- We repurchased a total of 1.2 million shares in 2016 at a weighted average price of $23.71 per share. The Company repurchased 153,925 shares in the fourth quarter.
- On October 14, 2016, the Company issued $20.0 million of 6.5% Series A Preferred Stock.
- On October 26, 2016, through its wholly owned subsidiary Willis Asset Management Limited, the Company purchased the consultancy business of Total Engine Support Limited, significantly improving the Company's asset management service offering and growing the Company's owned and managed portfolio of engines, aircraft and equipment by over 500 assets.
Balance SheetAs of December 31, 2016, Willis Lease had 208 commercial aircraft engines, 11 aircraft and 5 aircraft parts packages and other engine-related equipment in its lease portfolio, with a net book value of $1.137 billion, compared to 201 commercial aircraft engines, 10 aircraft and 5 aircraft parts packages and other engine-related equipment in its lease portfolio, with a net book value of $1.109 billion, a year ago. The Company's funded debt-to-equity ratio was 4.17 to 1 at year end, compared to 4.14 to 1 a year ago. Willis Lease Finance Willis Lease Finance Corporation leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair and overhaul providers in 120 countries. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services supported by cutting edge technology through its subsidiary Willis Asset Management, as well as various end-of-life solutions for aircraft, engines and aviation materials provided through its subsidiary, Willis Aeronautical Services, Inc. Except for historical information, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties. Do not unduly rely on forward-looking statements, which give only expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to: the effects on the airline industry and the global economy of events such as terrorist activity, changes in oil prices and other disruptions to the world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet the changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in the Company's Annual Report on Form 10-K and other continuing reports filed with the Securities and Exchange Commission.
|Consolidated Statements of Income|
|(In thousands, except per share data, unaudited)|
|Three Months Ended||Years Ended|
|December 31,||%||December 31,||%|
|Lease rent revenue||$||31,168||$||28,849||8.0||%||$||119,895||$||108,046||11.0||%|
|Maintenance reserve revenue||11,529||14,361||(19.7||)%||57,091||53,396||6.9||%|
|Spare parts and equipment sales||7,318||10,582||(30.8||)%||17,783||25,582||(30.5||)%|
|Gain on sale of leased equipment||52||654||(92.0||)%||3,482||8,320||(58.1||)%|
|Depreciation and amortization expense||17,045||17,034||0.1||%||66,280||69,424||(4.5||)%|
|Cost of spare parts and equipment sales||5,508||7,630||(27.8||)%||13,293||17,849||(25.5||)%|
|Write-down of equipment||3,590||601||497.3||%||9,514||9,181||3.6||%|
|General and administrative||13,086||11,918||9.8||%||47,780||42,744||11.8||%|
|Net finance costs|
|Loss (gain) on extinguishment of debt||-||-||0.0||%||137||(1,151||)||(111.9||)%|
|Total net finance costs||10,509||9,780||7.5||%||41,281||37,861||9.0||%|
|Earnings from operations||3,658||6,655||(45.0||)%||22,133||11,600||90.8||%|
|Earnings from joint ventures||939||48||n/a||1,813||1,175||54.3||%|
|Income before income taxes||4,597||6,703||(31.4||)%||23,946||12,775||87.4||%|
|Income tax expense||1,890||3,659||(48.3||)%||9,877||6,315||56.4||%|
|Accretion of preferred stock issuance costs||8||-||100.0||%||8||-||100.0||%|
|Preferred stock dividends||281||-||100.0||%||281||-||100.0||%|
|Net income attributable to common shareholders||$||2,418||$||3,044||(20.6||)%||$||13,780||$||6,460||113.3||%|
|Basic earnings per common share||$||0.39||$||0.39||$||2.10||$||0.83|
|Diluted earnings per common share||$||0.39||$||0.39||$||2.05||$||0.81|
|Average common shares outstanding||6,149||7,739||6,570||7,817|
|Diluted average common shares outstanding||6,275||7,872||6,714||7,987|
|Consolidated Balance Sheets|
|(In thousands, except share data, unaudited)|
|December 31, 2016||December 31, 2015|
|Cash and cash equivalents||$||10,076||9,732|
|Equipment held for operating lease, less accumulated depreciation||1,136,603||1,109,168|
|Equipment held for sale||30,710||23,454|
|Operating lease related receivable, net of allowances||16,484||13,626|
|Spare parts inventory||25,443||20,826|
|Property, equipment & furnishings, less accumulated depreciation||16,802||20,247|
|Intangibles assets, net||2,182||932|
|LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY|
|Accounts payable and accrued expenses||$||17,792||21,665|
|Deferred income taxes||104,978||96,154|
|Unearned lease revenue||5,823||5,090|
|Redeemable preferred stock ($0.01 par value)||19,760||-|
|Common stock ($0.01 par value)||64||75|
|Paid-in capital in excess of par||2,512||28,720|
|Accumulated other comprehensive loss, net of tax||(1,045||)||(521||)|
|Total shareholders' equity||196,260||209,223|
|Total liabilities, redeemable preferred stock and shareholders' equity||$||1,337,887||1,294,285|
|Consolidated Statements of Income (Loss)|
|(In thousands, except per share data, unaudited)|
|Lease rent revenue||$||119,895||$||108,046||$||101,431||$||101,737||$||108,046|
|Maintenance reserve revenue||57,091||53,396||53,322||46,694||53,396|
|Spare parts and equipment sales||17,783||25,582||8,917||-||25,582|
|Gain on sale of leased equipment||3,482||8,320||5,882||5,675||8,320|
|Depreciation and amortization expense||66,280||69,424||65,314||58,727||69,424|
|Cost of spare parts and equipment sales||13,293||17,849||7,474||-||17,849|
|Write-down of equipment||9,514||9,181||5,602||6,461||9,181|
|General and administrative||47,780||42,744||35,859||33,868||42,744|
|Net finance costs|
|Loss (gain) on extinguishment of debt||137||(1,151||)||-||-||15,462|
|Total net finance costs||41,281||37,861||37,062||38,719||47,131|
|Earnings from operations||22,133||11,600||10,411||7,774||937|
|Earnings from joint ventures||1,813||1,175||1,329||3,526||1,759|
|Income before income taxes||23,946||12,775||11,740||11,300||2,696|
|Income tax expense||9,877||6,315||4,560||(4,326||)||1,161|
|Accretion of preferred stock issuance costs||8||-||-||-||-|
|Preferred stock dividends||281||-||-||-||2,493|
|Preferred stock redemption costs||-||-||-||-||2,835|
|Net income (loss) attributable to common shareholders||$||13,780||$||6,460||$||7,180||$||15,626||$||(3,793||)|
|Basic earnings (loss) per common share||$||2.10||$||0.83||$||0.91||$||1.95||$||(0.45||)|
|Diluted earnings (loss) per common share||$||2.05||$||0.81||$||0.88||$||1.89||$||(0.43||)|
|Average common shares outstanding||6,570||7,817||7,917||8,029||8,490|
|Diluted average common shares outstanding||6,714||7,987||8,141||8,289||8,791|
Contact: Scott B. FlahertyChief Financial Officer