Willis Lease Finance reported pretax income grew 27% to $8.3 million in Q3/17 compared to $6.5 million in Q3/16 on revenues of $65.9 million, up 28% from $51.5 million a year earlier.

The company’s third quarter 2017 results were bolstered by continued strength in its core leasing business with $33.5 million of lease rent revenue driven by 91% utilization at quarter end. Net income attributable to common shareholders for Q3/17 increased 24% to $4.9 million from $4.0 million in Q3/16. Earnings in the third quarter include a $7.0 million non-cash write down of equipment and parts.

“In the third quarter, we completed two major financings: the closing of our WEST III ABS offering and a preferred stock offering. The WEST III aligns our long-lived assets with long-term, fixed rate capital and our preferred stock offering equitizes our balance sheet for continued growth,” said Charles F. Willis, chairman and CEO.

“In addition to closing two milestone financings, we were very active trading equipment in the third quarter as we continue to execute our strategy to grow and improve the efficiency of our leasing portfolio,” said Brian R. Hole, president. “Willis Aeronautical also continues to demonstrate its value to our total platform, not only in support of our effort to monetize residual values but also in support of our effort to deliver value-added programs for our customers.”

Q3/17 highlights:

• Total revenue grew 28.0% to $65.9 million in Q3/17 from $51.5 million in the year ago period.
• Average utilization in Q3/17 remained constant at 91% from the year ago period. Utilization was 91% at the end of Q3/17.
• Third quarter lease rent revenue was $33.5 million, up 7.0% year over year.
• Maintenance reserve revenue for the nine months ended September 30, 2017 increased 40.9% to $64.2 million compared to $45.6 million in the year ago period.
• The equipment portfolio grew 5.6% to $1.200 billion, from $1.137 billion in the year ago period, net of asset sales and depreciation expense.
• Tangible book value per share increased 9.3% to $33.51 as of September 30, 2017, compared to $30.66 per share as of December 31, 2016.
• The company maintained $561 million of undrawn revolver capacity as of September 30, 2017.
• The book value of owned and managed engines and aircraft, exclusive of assets managed by its WAML subsidiary, was approximately $1.6 billion at the end of the third quarter.
• During the quarter, the company purchased five aircraft and two engines for a total purchase price of $58.2 million.
• The company closed a $336 million asset-backed securitization, Willis Engine Structured Trust III (WEST III) on August 4, 2017. The notes were secured by a portfolio of 56 engines from the revolving credit facility.
• The funds, net of transaction expenses, were used to pay off part of a revolving credit facility.