Summary and Analysis of Key Points

The Company

• AerSale operates as a platform for serving the commercial aviation aftermarket sector, with a focus on providing products and services that maximize the value of aircraft and engines (“Flight Equipment”) in the middle to end of their operating life cycle.
• The company has two business segments: Asset Management Solutions and TechOps.
• Asset Management Solutions focuses on monetizing mid-life Flight Equipment through leasing, sales, and disassembly for used serviceable material (USM).
• TechOps provides maintenance, repair, and overhaul (MRO) services, as well as internally developed Engineered Solutions such as Supplemental Type Certificates (STCs) and other products.
• The company faces uncertainty due to disruptions in the global economy, geopolitical instability, and potential changes in trade policies and tariffs.

Recent Financial Performance

• Total revenue for Q1 2025 decreased 27.4% compared to Q1 2024, driven by declines in both the Asset Management Solutions and TechOps segments.
• Asset Management Solutions revenue decreased 33.8%, due to lower sales of engines and aircraft.
• TechOps revenue decreased 15.1%, primarily due to lower sales volume at the Goodyear, Arizona facility.
• Gross profit decreased 37.6%, with declines in both segments.
• Selling, general, and administrative expenses increased 2.0%, mostly due to higher share-based compensation.
• The company recorded a $0.1 million change in fair value of warrant liability expense, compared to $2.0 million income in the prior year.
• Interest expense increased to $1.2 million from $0.9 million, due to higher outstanding borrowings.
• The effective tax rate was 12.0%, compared to (6.8%) in the prior year.

Financial Position, Liquidity, and Capital Resources

• As of March 31, 2025, the company had $4.7 million in cash and $133.1 million outstanding under its Revolving Credit Agreement, with $44.2 million of availability.
• The company used $45.2 million in cash from operations and $3.5 million in investing activities during Q1 2025.
• The company believes its equity, internally generated funds, and existing debt facilities are sufficient to maintain operations for the next 12 months, but future growth may be limited if external funding becomes constrained.
• The company repurchased 6,428,571 shares of common stock for $45.0 million in Q1 2025.
• The company has a $19.8 million purchase commitment with Universal Avionics for technical equipment to manufacture its AerAware product, expected to be satisfied in 2026.

Outlook and Risks

• The company faces ongoing uncertainty due to global economic and geopolitical conditions, as well as potential changes in trade policies and tariffs, which could impact its supply chain and customer demand.
• The company’s ability to continue growing its asset base and fund future operations may be limited if external funding becomes constrained.
• The company’s financial performance and liquidity position will be critical in determining its ability to execute its strategy and meet its obligations in the coming years.