AerSale(ASLE) - 2024 Q3 - Quarterly Report

Revenue Performance - Total revenue for the three months ended September 30, 2024 decreased by $9.8 million or 10.6$14.6 million or 22.5% in Asset Management Solutions revenues, offset by an increase of $4.8 million or 17.6$50.4 million for the three months ended September 30, 2024, due to a $11.9 million or 57.2$2.7 million or 6.1% decrease in Engine revenue [99]. - TechOps revenue increased by $4.8 million or 17.6$32.3 million for the three months ended September 30, 2024, driven by higher contributions from component and landing gear repair activities [102]. - For the nine months ended September 30, 2024, total revenue increased by 4.3% to $250.3 million compared to$240.1 million in the same period in 2023 [108]. - Total revenue for the nine months ended September 30, 2024, increased by $10.2 million or 4.3$0.9 million increase in Asset Management Solutions and a $9.3 million increase in TechOps [109]. - Asset Management Solutions segment sales increased by$0.9 million or 0.6% to $151.5 million, with a$24.4 million increase in Engine revenue offset by a $23.4 million decrease in Aircraft revenue [110]. - TechOps revenue increased by$9.3 million or 10.4% to $98.9 million, primarily driven by higher MRO product sales [114]. Profitability - Gross profit for the Asset Management Solutions segment increased by$0.8 million or 4.1% to $19.3 million for the three months ended September 30, 2024, primarily due to higher margins on Flight Equipment sales [100]. - The gross profit margin for Engines improved to 39.3$9.3 million or 19.5% to $57.3 million for the nine months ended September 30, 2024 [112]. Expenses - Selling, general and administrative expenses decreased by$3.7 million or 14.7% to $21.7 million for the three months ended September 30, 2024, mainly due to lower repair and maintenance and payroll-related costs [104]. - Selling, general and administrative expenses decreased by$8.3 million or 10.7% to $69.4 million for the nine months ended September 30, 2024 [116]. Interest and Tax - Interest expense, net increased to$1.8 million for the three months ended September 30, 2024, compared to $0.3 million in the prior year, primarily due to higher borrowings to support feedstock acquisitions [106]. - The effective tax rate for the three months ended September 30, 2024, was 13.0$26.4 million for the nine months ended September 30, 2024, a decrease of $141.7 million compared to the same period in 2023 [125]. - Net cash used in investing activities was$11.5 million for the nine months ended September 30, 2024, compared to cash provided of $6.7 million in the same period for 2023 [126]. - Net cash provided by financing activities was$41.7 million for the nine months ended September 30, 2024, compared to $17.3 million in the same period for 2023 [127]. Financial Position - As of September 30, 2024, the company had$9.8 million in cash and cash equivalents and $78.5 million outstanding under the Revolving Credit Agreement [121]. - As of September 30, 2024, the Company had$78.5 million in outstanding variable rate borrowings under the Revolving Credit Agreement [142]. - A 10% increase in the average interest rate affecting the variable rate debt would raise the annual interest expense by $0.6 million [142]. - The Company primarily uses the U.S. dollar as its functional currency to mitigate foreign currency market risk [143]. - A hypothetical 10% devaluation of the U.S. dollar against foreign currencies would not have materially impacted the Company's financial position as of September 30, 2024 [143]. Valuation Estimates - The fair value determination of the Company's reporting units and goodwill relies on estimates such as revenue growth rates, profit margins, and discount rates, which are subject to change [140].