Willis Lease Finance reported a net loss of $2.2 million in Q3/13 compared to a net loss of $8.0 million in the same 2012 quarter. For the first nine months, net income was $9.1 million, compared to a net loss of $3.0 million a year earlier.

The company said a significant improvement in portfolio utilization in the current quarter was overshadowed by asset write-downs and engine repair expenses. A year ago, the same quarter’s results were impacted by a $15.4 million charge for extinguishment of debt and derivatives termination related to the successful closing of the WEST II ABS financing.

“We achieved substantial improvement in our portfolio utilization this quarter,” said Charles F. Willis, chairman and CEO. “During September our portfolio utilization reached 88%, which represents a major improvement over the preceding quarter end level of 83%, and is the highest utilization percentage recorded for any month since February 2011. Furthermore, we believe the recent increase in our stock price since June, reflects the market’s recognition of our long-range strategic plan and our growing book value per share.”

“Leasing activity in September was robust, with a significant number of new leases signed, lifting our utilization to 88%, a level we haven’t seen for nearly three years,” said Donald A. Nunemaker, president. “One of the factors contributing to the improvement in utilization is that the market for V2500-A5 engines, which powers the A320 aircraft type, appears to be coming back to normal in terms of supply and demand. We had eight of these engines off-lease in early 2012 and have only two of these engines available for lease today.”

“The $2.2 million loss in the current quarter was mainly due to the write-down of certain assets and the expensing of engine repairs,” continued Willis. “The non-cash write-downs totaled $4.3 million, representing 0.4% of our total asset base, consisting of a $2.6 million write-down of parts inventories related to engines we consigned to third parties in the past, and a $1.7 million write-down of two engines we decided to part out. We also expensed $2.2 million in the period for engine repairs completed on two engines in our lease portfolio. We feel the above actions are appropriate to maintain a vibrant and suitably valued portfolio. The foregoing expenses overshadowed an otherwise profitable quarter – excluding these charges, third quarter pre-tax income was $2.9 million.”

To read the Willis Lease Finance news release click here.