Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 06, 2024 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38801 | |
Entity Registrant Name | AerSale Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-3976002 | |
Entity Address, Address Line One | 255 Alhambra Circle, Suite 435 | |
Entity Address, City or Town | Coral Gables | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33134 | |
City Area Code | 305 | |
Local Phone Number | 764-3200 | |
Title of 12(b) Security | Common stock, $0.0001 par value per share | |
Trading Symbol | ASLE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 53,009,026 | |
Entity Central Index Key | 0001754170 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 2,637 | $ 5,873 |
Accounts receivable, net of allowance for credit losses of $978 as of March 31, 2024 and December 31, 2023 | 30,057 | 31,239 |
Income tax receivable | 1,628 | 1,628 |
Inventory: | ||
Aircraft, airframes, engines, and parts, net | 203,652 | 177,770 |
Advance vendor payments | 37,560 | 35,757 |
Deposits, prepaid expenses, and other current assets | 12,840 | 12,507 |
Total current assets | 288,374 | 264,774 |
Fixed assets: | ||
Aircraft and engines held for lease, net | 23,262 | 26,475 |
Property and equipment, net | 30,387 | 27,692 |
Inventory: | ||
Aircraft, airframes, engines, and parts, net | 147,193 | 151,398 |
Operating lease right-of-use assets | 26,307 | 27,519 |
Deferred income taxes | 12,906 | 12,203 |
Deferred financing costs, net | 1,424 | 1,506 |
Deferred customer incentives and other assets, net | 525 | 525 |
Goodwill | 19,860 | 19,860 |
Other intangible assets, net | 21,456 | 21,986 |
Total assets | 571,694 | 553,938 |
Current liabilities: | ||
Accounts payable | 26,278 | 29,899 |
Accrued expenses | 5,720 | 5,478 |
Lessee and customer purchase deposits | 805 | 1,467 |
Current operating lease liabilities | 4,401 | 4,593 |
Current portion of long-term debt | 1,033 | 1,278 |
Deferred revenue | 2,009 | 2,998 |
Total current liabilities | 40,246 | 45,713 |
Revolving credit facility | 51,969 | 29,000 |
Long-term debt | 3,527 | 7,281 |
Long-term lease deposits | 102 | 102 |
Long-term operating lease liabilities | 23,398 | 24,377 |
Maintenance deposit payments and other liabilities | 62 | 64 |
Warrant liability | 407 | 2,386 |
Total liabilities | 119,711 | 108,923 |
Stockholders' equity: | ||
Common stock, $0.0001 par value. Authorized 200,000,000 shares; issued and outstanding 53,009,026 and 52,954,430 shares as of March 31, 2024 and December 31, 2023 | 5 | 5 |
Additional paid-in capital | 312,430 | 311,739 |
Retained earnings | 139,548 | 133,271 |
Total stockholders' equity | 451,983 | 445,015 |
Total liabilities and stockholders' equity | $ 571,694 | $ 553,938 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Allowance for credit losses | $ 978 | $ 978 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 53,009,026 | 52,954,430 |
Common Stock, Shares, Outstanding | 53,009,026 | 52,954,430 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue: | ||
Total revenue | $ 90,540 | $ 78,271 |
Cost of sales and operating expenses: | ||
Total cost of sales | 61,744 | 53,880 |
Gross profit | 28,796 | 24,391 |
Selling, general, and administrative expenses | 24,133 | 25,224 |
Income (loss) from operations | 4,663 | (833) |
Other income (expenses): | ||
Interest (expense) income, net | (935) | 1,047 |
Other income, net | 169 | 233 |
Change in fair value of warrant liability | 1,979 | (334) |
Total other income | 1,213 | 946 |
Income before income tax provision | 5,876 | 113 |
Income tax benefit (expense) | 401 | (108) |
Net income | $ 6,277 | $ 5 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.12 | |
Diluted (in dollars per share) | $ 0.12 | |
Weighted average shares outstanding: | ||
Basic (in shares) | 52,991,506 | 51,206,226 |
Diluted (in shares) | 53,247,979 | 52,958,555 |
Product sales | ||
Revenue: | ||
Total revenue | $ 61,610 | $ 45,495 |
Cost of sales and operating expenses: | ||
Total cost of sales | 39,619 | 31,548 |
Leasing | ||
Revenue: | ||
Total revenue | 3,082 | 5,622 |
Cost of sales and operating expenses: | ||
Total cost of sales | 1,193 | 1,123 |
Services | ||
Revenue: | ||
Total revenue | 25,848 | 27,154 |
Cost of sales and operating expenses: | ||
Total cost of sales | $ 20,932 | $ 21,209 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common stock | Additional paid-in capital | Retained earnings | Total |
Balance at beginning at Dec. 31, 2022 | $ 5 | $ 306,141 | $ 138,834 | $ 444,980 |
Balance at beginning (in shares) at Dec. 31, 2022 | 51,189,461 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | 2,731 | 2,731 | ||
Shares issued under the 2020 Equity Incentive Plan (in shares) | 31,925 | |||
Shares surrendered for tax withholdings on equity awards | (70) | (70) | ||
Net income | 5 | 5 | ||
Balance at ending at Mar. 31, 2023 | $ 5 | 308,802 | 138,839 | 447,646 |
Balance at ending (in shares) at Mar. 31, 2023 | 51,221,386 | |||
Balance at beginning at Dec. 31, 2023 | $ 5 | 311,739 | 133,271 | 445,015 |
Balance at beginning (in shares) at Dec. 31, 2023 | 52,954,430 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | 799 | 799 | ||
Shares issued under the 2020 Equity Incentive Plan (in shares) | 54,596 | |||
Shares surrendered for tax withholdings on equity awards | (108) | (108) | ||
Net income | 6,277 | 6,277 | ||
Balance at ending at Mar. 31, 2024 | $ 5 | $ 312,430 | $ 139,548 | $ 451,983 |
Balance at ending (in shares) at Mar. 31, 2024 | 53,009,026 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities: | |||
Net income | $ 6,277 | $ 5 | |
Adjustments to reconcile net income to net cash (used in) operating activities: | |||
Depreciation and amortization | 2,779 | 2,469 | |
Amortization of debt issuance costs | 82 | 39 | $ 100 |
Amortization of operating lease assets | 40 | 101 | |
Inventory reserve | 504 | 773 | |
Deferred income taxes | (703) | 72 | |
Change in fair value of warrant liability | (1,979) | 334 | |
Share-based compensation | 799 | 2,731 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,182 | (7,996) | |
Inventory | (23,961) | (48,983) | |
Deposits, prepaid expenses, and other current assets | (332) | (2,966) | |
Deferred customer incentives and other assets | 68 | ||
Advance vendor payments | (1,803) | (12,476) | |
Accounts payable | (3,619) | 14,018 | |
Accrued expenses | 914 | (3,396) | |
Deferred revenue | (989) | 1,343 | |
Lessee and customer purchase deposits | (662) | (7,985) | |
Other liabilities | (2) | (593) | |
Net cash (used in) operating activities | (21,473) | (62,442) | |
Cash flows from investing activities: | |||
Proceeds from sale of assets | 3,800 | 4,500 | |
Purchase of property and equipment | (3,574) | (1,481) | |
Net cash (used in) provided by investing activities | 226 | 3,019 | |
Cash flows from financing activities: | |||
Repayments of long-term debt | (4,000) | ||
Proceeds from revolving credit facility | 61,600 | ||
Repayments of revolving credit facility | (39,481) | ||
Taxes paid related to net share settlement of equity awards | (108) | (70) | |
Net cash provided by (used in) financing activities | 18,011 | (70) | |
(Decrease) in cash and cash equivalents | (3,236) | (59,493) | |
Cash and cash equivalents, beginning of period | 5,873 | 147,188 | 147,188 |
Cash and cash equivalents, end of period | 2,637 | 87,695 | $ 5,873 |
Supplemental disclosure of cash activities | |||
Income tax payments, net | 3 | (100) | |
Interest paid | 925 | 141 | |
Supplemental disclosure of noncash investing activities | |||
Reclassification of aircraft and aircraft engines inventory to (from) aircraft and engine held for lease, net | $ (2,020) | $ 3,573 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 3 Months Ended |
Mar. 31, 2024 | |
DESCRIPTION OF THE BUSINESS | |
DESCRIPTION OF THE BUSINESS | NOTE A — DESCRIPTION OF THE BUSINESS Organization Monocle Acquisition Corporation (“Monocle”) was initially formed on August 20, 2018 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses. On December 22, 2020, Monocle consummated the previously announced business combination pursuant to that certain Amended and Restated Agreement and Plan of Merger, dated September 8, 2020 (the “Merger Agreement”) by and among Monocle, AerSale Corporation (f/k/a Monocle Holdings Inc.), a Delaware corporation (the “Company”), AerSale Aviation, Inc. (f/k/a AerSale Corp.), a Delaware corporation (“AerSale Aviation”), Monocle Merger Sub 1 Inc., a Delaware corporation (“Merger Sub 1”), Monocle Merger Sub 2 LLC, a Delaware limited liability company (“Merger Sub 2”), and Leonard Green & Partners, L.P., a Delaware limited partnership, solely in its capacity as the initial Holder Representative (as defined in the Merger Agreement). The transactions contemplated by the Merger Agreement are referred to herein as the “Merger” or the “Business Combination” and in connection therewith, Monocle merged with and into us, whereby we survived the merger and became the successor issuer to Monocle by operation of Rule 12g-3 under the Securities Exchange Act, as amended. Upon the consummation of the Merger: (a) Merger Sub 1 was merged with and into Monocle, with Monocle surviving the merger as a wholly-owned direct subsidiary of the Company (the “First Merger”), and (b) Merger Sub 2 was merged with and into AerSale Aviation, with AerSale Aviation surviving the merger as a wholly-owned indirect subsidiary of the Company (the “Second Merger”). In connection with the closing of the Business Combination (the “Closing”), AerSale Aviation changed its name from “AerSale Corp.” to “AerSale Aviation, Inc.” and the Company changed its name from “Monocle Holdings Inc.” to “AerSale Corporation.” Immediately following the Merger, the Company contributed all of its ownership in Monocle to AerSale Aviation which continued as a wholly owned subsidiary of the Company. The Company’s corporate headquarters are based in Miami, Florida, with additional offices, hangars, and warehouses located globally. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) for interim financial information and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (“SEC”), which permits reduced disclosures for interim periods. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes all adjustments, consisting only of normal recurring adjustments, and disclosures necessary for a fair presentation of the accompanying condensed consolidated balance sheets, statements of operations, stockholders’ equity, and cash flows have been made. Unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. Unaudited interim condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), wherein a more complete discussion of significant accounting policies and certain other information can be found. Revenue Recognition Products Revenue — Used Serviceable Material (“USM”) Sales Revenues from sales of USM are measured based on consideration specified in a contract with a customer, and excludes any sales commissions and taxes collected and remitted to government agencies. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The parts are sold at a fixed price with no right of return. In determining the performance obligation, management has identified the promise in the contract to be the shipment of the spare parts to the customer. Title passes to the buyer when the goods are shipped, and the buyer is responsible for any loss in transit, and the Company has a legal right to payment for the spare parts once shipped. We generally sell our USM products under standard 30-day payment terms, subject to certain exceptions. Customers neither have the right to return products nor do they have the right to extended financing. The Company has determined that physical acceptance of the spare parts to be a formality in accordance with Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers (“ASC 606”). Spare parts revenue is based on a set price for a set number of parts as defined in the purchase order. The performance obligation is completed once the parts have shipped and as a result, all of the transaction price is allocated to that performance obligation. The Company has determined that it is appropriate to recognize spare parts sales at a point in time (i.e., the date the parts are shipped) in accordance with ASC 606. Products Revenue — Whole Asset Sales Revenues from whole asset sales are measured based on consideration specified in the contract with the customer. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, condition of the whole asset, bill of sale and the assignment of rights and warranties from the Company to the customer. The Company has identified the transfer of the whole asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of whole assets) and is explicitly stated in each contract. Whole asset sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer is the date the customer obtains control over the asset and would cause the revenue recognition. Payment is required in full upon customers’ acceptance of the whole asset on the date of the transfer, unless the Company extends credit terms to customers it deems creditworthy. Leasing Revenue The Company leases aircraft and engines (“Flight Equipment”) under operating leases that contain monthly base rent and reports rental income straight line over the life of the lease as it is earned. Additionally, the Company’s leases provide for supplemental rent, which is calculated based on actual hours or cycles of utilization and, for certain components, based on the amount of time until maintenance of that component is required. In certain leases, the Company records supplemental rent paid by the lessees as maintenance deposit payments and other liabilities in recognition of the Company’s contractual commitment to reimburse qualifying maintenance. Reimbursements to the lessees upon receipt of evidence of qualifying maintenance work are charged against the existing maintenance deposit payment liabilities. In leases where the Company is responsible for performing certain repairs or replacement of aircraft components or engines, supplemental rent is recorded as revenue in the period earned. In the event of premature lease termination or lessee default on the lease terms, revenue recognition will be discontinued when outstanding balances are beyond the customers’ deposits held. Flight Equipment leases are billed in accordance with the lease agreement and invoices are due upon receipt. Service Revenue Service revenues are recognized as performance obligations are fulfilled and the benefits are transferred to the customer. At contract inception, we evaluate if the contract should be accounted for as a single performance obligation or if the contract contains multiple performance obligations. In some cases, our service contract with the customer is considered one performance obligation as it includes factors such as the good or service being provided is significantly integrated with other promises in the contract, the service provided significantly modifies or customizes the other good or service or the goods or services are highly interdependent or interrelated with each other. If the contract has more than one performance obligation, the Company determines the standalone price of each distinct good or service underlying each performance obligation and allocates the transaction price based on their relative standalone selling prices. The transaction price of a contract, which can include both fixed and variable amounts, is allocated to each performance obligation identified. Some contracts contain variable consideration, which could include incremental fees or penalty provisions related to performance. Variable consideration that can be reasonably estimated based on current assumptions and historical information is included in the transaction price at the inception of the contract but limited to the amount that is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. For most service contracts, our performance obligations are satisfied over time as work progresses or at a point in time based on transfer of control of products and services to our customers. We receive payments from our customers based on billing schedules or other terms as written in our contracts. For our performance obligations that are satisfied over time, we measure progress in a manner that depicts the performance of transferring control to the customer. As such, we utilize the input method of cost-to-cost to recognize revenue over time as this depicts when control of the promised goods or services are transferred to the customer. Revenue is recognized based on the relationship of actual costs incurred to date to the estimated total cost at completion of the performance obligation. We are required to make certain judgments and estimates, including estimated revenue and costs, as well as inflation and the overall profitability of the arrangement. Key assumptions involved include future labor costs and efficiencies, overhead costs and ultimate timing of product delivery. Differences may occur between the judgments and estimates made by management and actual program results. Under most of our maintenance, repair and overhaul (“MRO”) contracts, if the contract is terminated for convenience, we are entitled to payment for items delivered, fair compensation for work performed, the costs of settling and paying other claims, and a reasonable profit on the costs incurred or committed. Changes in estimates and assumptions related to our arrangements accounted for using the input method based on labor hours are recorded using the cumulative catchup method of accounting. These changes are primarily adjustments to the estimated profitability for our long-term programs where we provide MRO services. We have elected to use certain practical expedients permitted under ASC 606. Shipping and handling fees and costs incurred associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales in our condensed consolidated statements of operations and are not considered a performance obligation to our customers. Our reported revenue on our condensed consolidated statements of operations is net of any sales or related non-income taxes. Revision of Prior Period Financial Statements Certain balances in the condensed consolidated financial statements as of December 31, 2023, and for the three months ended March 31, 2023, have been reclassified to conform to the presentation in the condensed consolidated financial statements for the three months ended March 31, 2024, primarily the reclassification of amounts related to deposits for Flight Equipment purchases from the deposits, prepaid expenses, and other current assets to advance vendor payments. Such reclassification did not impact net income, stockholder’s equity or total operating cash, and did not have a material impact on the consolidated financial statements. New Accounting Pronouncements Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (“Topic 740”): Improvements to Income Tax Disclosures, which would require additional transparency for income tax disclosures, including the income tax rate reconciliation table and cash taxes paid both in the United States and foreign jurisdictions. This standard is effective for annual periods beginning after December 15, 2024. We are currently assessing the impact this standard will have on our disclosures. There have been no other accounting pronouncements issued but not yet adopted by us which are expected to have a material impact on our consolidated financial statements. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2024 | |
REVENUE | |
REVENUE | NOTE C — REVENUE The timing of revenue recognition, customer billings, and cash collections results in a contract asset or contract liability at the end of each reporting period. Contract assets consist of unbilled receivables or costs incurred where revenue recognized over time exceeds the amounts billed to customers. We record a receivable when revenue is recognized prior to invoicing and we have an unconditional right to consideration (only the passage of time is required before payment of that consideration is due) and a contract asset when the right to payment is conditional upon our future performance. Contract liabilities include advance payments and billings in excess of revenue recognized. Certain customers make advance payments prior to our satisfaction of our performance obligations on the contract. These amounts are recorded as contract liabilities until such performance obligations are satisfied. Contract assets and contract liabilities are determined on a contract by contract basis. Contract assets are as follows (in thousands): March 31, 2024 December 31, 2023 Change Contract assets $ 6,134 $ 6,474 $ (340) Contract assets are reported within deposits, prepaid expenses, and other current assets on our condensed consolidated balance sheets. Changes in contract assets primarily results from the timing difference between the performance of services. Contract liabilities are reported as deferred revenue on our condensed consolidated balance sheets and amounted to $3.0 million as of December 31, 2023, of which $2.7 million was related to contract liabilities for services to be performed. For the three months ended March 31, 2024, the Company recognized as revenue $2.3 million of contract liabilities included in the beginning balance for services performed as the timing between customer payments and our performance of the services is generally no longer than six months. Disaggregation of Revenue The Company reports revenue by segment. The following tables present revenue by segment, as well as a reconciliation to total revenue for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 Asset Management Solutions TechOps Total Revenues USM $ 17,532 $ 5,375 $ 22,907 Whole asset sales 38,648 - 38,648 Engineered solutions - 55 55 Total products 56,180 5,430 61,610 Leasing 3,082 - 3,082 Services - 25,848 25,848 Total revenues $ 59,262 $ 31,278 $ 90,540 Three Months Ended March 31, 2023 Asset Management Solutions TechOps Total Revenues USM $ 15,152 $ 2,416 $ 17,568 Whole asset sales 27,656 - 27,656 Engineered solutions - 271 271 Total products 42,808 2,687 45,495 Leasing 5,622 - 5,622 Services - 27,154 27,154 Total revenues $ 48,430 $ 29,841 $ 78,271 |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2024 | |
INVENTORY | |
INVENTORY | NOTE D — INVENTORY Following are the major classes of inventory as of the below dates (in thousands): March 31, 2024 December 31, 2023 USM $ 112,116 $ 120,053 Work-in-process 28,974 22,270 Whole assets 209,755 186,845 $ 350,845 329,168 Less short term (203,652) (177,770) Long term $ 147,193 $ 151,398 The Company recorded inventory scrap loss reserves of $0.5 million for the three months ended March 31, 2024 and 2023. Additions to inventory reserves are included in cost of products in the accompanying condensed consolidated statements of operations. Our allocation of inventory between short term and long term reflects the inventory’s operating cycle, which is longer than one year due to teardown and repair lead times. Inventory expected to be monetized within 18 months as well as work-in-process are reported under current assets. In April 2024, there was a fire which damaged one of the USM long-term storage warehouses in our Roswell facility. We are still assessing the impact to our condensed consolidated financial statements; however, the loss associated with our inventory and property and equipment is not expected be material and is covered by our insurance policy. Furthermore, we do not expect a significant disruption to our revenue generating operations as a result of this event. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE E — INTANGIBLE ASSETS In accordance with ASC 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill and other intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. The Company reviews and evaluates our goodwill and indefinite life intangible assets for potential impairment at a minimum annually or more frequently if circumstances indicate that impairment is possible. The Company determined the fair value of assets acquired and liabilities assumed using a variety of methods. An income approach based on discounted cash flows was used to determine the values of our trademarks, certifications, customer relationships and Federal Aviation Administration (“FAA”) certificates. The assumptions the Company used to estimate the fair value of our reporting units are based on historical performance, as well as forecasts used in our current business plan and require considerable management judgment. The Company’s goodwill and intangible assets as defined by ASC 350 is related to our subsidiaries, AerSale Component Solutions (d/b/a AerSale Landing Gear Solutions) (“ALGS”), Avborne Component Solutions (d/b/a AerSale Component Solutions) (“ACS”), and Aircraft Composite Technologies (“ACT”), which are included in the TechOps segment, as well as Qwest Air Parts (“Qwest”), which is included under the Asset Management Solutions segment. Goodwill and other intangibles as of the below dates are (in thousands): March 31, 2024 December 31, 2023 Qwest: FAA Certifications $ 724 $ 724 Goodwill 13,416 13,416 ALGS: FAA Certifications 710 710 Goodwill 379 379 ACS: Trademarks 600 600 FAA Certifications 7,300 7,300 Goodwill 63 63 ACT: Trademarks 200 200 FAA Certificates 796 796 Goodwill 6,002 6,002 Total intangible assets with indefinite lives $ 30,190 $ 30,190 Intangible assets with definite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets with definite lives as of the below dates are as follows (in thousands): Useful Life In Years March 31, 2024 December 31, 2023 Qwest: Customer relationships 10 $ 4,920 $ 5,163 ALGS: Customer relationships 10 25 30 ACS: Customer relationships 10 980 1,033 ACT: Customer relationships 10 5,201 5,430 Total intangible assets with definite lives $ 11,126 $ 11,656 Total amortization expense amounted to $0.5 million for the three months ended March 31, 2024 and 2023. Accumulated amortization amounted to $9.9 million and $9.3 million as of March 31, 2024 and December 31, 2023, respectively. In the first quarter of 2024, the Company identified a triggering event indicating the fair value of one or more of the Company’s reporting units more likely than not did not exceed their carrying values. The triggering event was due to the significant decline in the market price of the Company’s common stock during the quarter. As a result, the Company performed an interim quantitative goodwill impairment test for the Asset Management and ACT reporting units as of March 31, 2024, and determined that the fair values exceeded the carrying values for each reporting unit. As such, the interim quantitative test did not result in a goodwill impairment for the Company’s reporting units. In addition, the Company performed a qualitative assessment of long-lived assets and concluded it is not more likely than not that long-lived assets are impaired. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2024 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | NOTE F — PROPERTY AND EQUIPMENT, NET Property and equipment, net, as of the below dates consisted of the following (in thousands): Useful Life In Years March 31, 2024 December 31, 2023 Tooling and equipment 7 - 15 $ 16,221 $ 16,024 Furniture and other equipment 5 11,942 12,076 Computer software 5 2,538 2,374 Leasehold improvements 3 - 10 18,819 16,269 Equipment under capital lease 5 192 192 Flight equipment held for R&D 2 7,994 7,784 57,706 54,719 Less accumulated depreciation (27,319) (27,027) $ 30,387 $ 27,692 Depreciation expense, which includes amortization of equipment under capital lease, amounted to $1.1 million and $0.9 million for the three months ended March 31, 2024 and 2023, respectively. |
LEASE RENTAL REVENUES AND AIRCR
LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE | 3 Months Ended |
Mar. 31, 2024 | |
LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE | |
LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE | NOTE G — LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE Aircraft and engines held for operating leases, net, as of the below dates consisted of the following (in thousands): March 31, 2024 December 31, 2023 Aircraft and engines held for lease $ 52,055 $ 58,136 Less accumulated depreciation (28,793) (31,661) $ 23,262 $ 26,475 Total depreciation expense amounted to $1.2 million and $1.1 million for the three months ended March 31, 2024 and 2023, respectively, and is included in cost of leasing in the condensed consolidated statements of operations. Supplemental rents recognized as revenue totaled $1.5 million and $3.1 million for the three months ended March 31, 2024 and 2023, respectively. The Company’s current operating lease agreements for leased Flight Equipment expire over the next three years. The amounts in the following table are based upon the assumption that Flight Equipment under operating leases will remain leased for the length of time specified by the respective lease agreements. Minimum future annual lease rentals contracted to be received under existing operating leases of Flight Equipment were as follows (in thousands): Year ending December 31: Remaining nine months of 2024 $ 5,363 2025 903 2026 599 2027 549 Total minimum lease payments $ 7,414 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2024 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE H — ACCRUED EXPENSES The following is a summary of the components of accrued expenses as of the below dates (in thousands): March 31, 2024 December 31, 2023 Accrued compensation and related benefits $ 2,469 $ 2,241 Accrued legal fees 553 854 Commission fee accrual 696 260 Accrued federal, state and local taxes and fees 152 105 Other 1,850 2,018 $ 5,720 $ 5,478 |
WARRANT LIABILITY
WARRANT LIABILITY | 3 Months Ended |
Mar. 31, 2024 | |
WARRANT LIABILITY | |
WARRANT LIABILITY | NOTE I – WARRANT LIABILITY Warrants to purchase a total of 623,834 shares of the Company’s common stock were outstanding as of March 31, 2024 and December 31, 2023. 750,000 warrants were issued to founders in a private placement (the “Private Warrants”). Each of the Private Warrants entitles the registered holder to purchase one share of the Company’s common stock at a price of $11.50 per share, subject to adjustment. The outstanding Private Warrants will expire at 5:00 p.m., New York City time, on December 22, 2025, or earlier upon redemption or liquidation. The Private Warrants include provisions that affect the settlement amount. Such variables are outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the Private Warrants do not meet the criteria for equity treatment under guidance contained in ASC Topic 815, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in a Company’s Own Stock.” The Company classifies the Private Warrants as a liability at their fair value subject to re-measurement at each balance sheet date and adjusted at each reporting period until exercised or expired, and any change in fair value is recognized in the Company's condensed consolidated statements of operations. The fair value of the Private Warrants is determined using the Black-Scholes option pricing model. The following table represents the assumptions used in determining the fair value of the Private Warrants as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Risk-free interest rate 4.21% 3.84% Expected volatility of common stock 41.98% 41.66% Expected option term in years 1.7 2.0 The significant assumptions utilized in the Black-Scholes calculation consist of interest rate for U.S. Treasury Bonds, as published by the U.S. Federal Reserve, and expected volatility estimated using historical daily volatility of guideline public companies. The warrant liability adjustment recognized in the Company's condensed consolidated statements of operations related to the change in fair value of warrant liability was $2.0 million income and $0.3 million expense during the three months ended March 31, 2024 and 2023, respectively. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2024 | |
FINANCING ARRANGEMENTS | |
FINANCING ARRANGEMENTS | NOTE J – FINANCING ARRANGEMENTS March 31, December 31, 2024 2023 $180.0 million Wells Fargo Senior Secured Revolving Credit Agreement $ 51,969 $ 29,000 $10.0 million Synovus Property and Equipment Revolving Term Loan 4,560 8,559 Total 56,529 37,559 Less current portion (1,033) (1,278) Total long-term portion $ 55,496 $ 36,281 At March 31, 2024 and December 31, 2023, total deferred financing costs were $1.4 and $1.5 million, respectively. Amortized debt issuance costs are recorded in interest expense through maturity of the related debt using the straight-line method, which approximates the effective interest method. Amortization expense amounted to $0.1 million for the three months ended March 31, 2024 and 2023, respectively. $180.0 million Wells Fargo Senior Secured Revolving Credit Agreement On July 20, 2018, the Company and other subsidiary borrowers’ signatory thereto entered into a secured amended and restated revolving credit agreement (as amended, the “Revolving Credit Agreement”), which provides for a $150.0 million aggregate amount of revolver commitments subject to borrowing base limitations. Effective July 25, 2023, the Company amended the Revolving Credit Agreement to increase the maximum commitments thereunder to $180.0 million aggregate amount, expandable to $200.0 million, subject to borrowing base limitations, and to extend the maturity date to July 24, 2028. The interest rate applicable to loans outstanding on the Revolving Credit Agreement is a floating rate of interest per annum of Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.75%. The interest rate as of March 31, 2024 was 8.67%. Interest expense on the Revolving Credit Agreement was $0.6 million for the three months ended March 31, 2024. The Company’s ability to borrow on the Revolving Credit Agreement is subject to ongoing compliance by the Company and the borrowers with various customary affirmative and negative covenants. The Revolving Credit Agreement requires the Company and borrowers to meet certain financial and nonfinancial covenants. The Company was in compliance with these covenants as of March 31, 2024 and December 31, 2023. $10.0 million Synovus Property and Equipment Revolving Term Loan On June 30, 2023, the Company entered into a Property and Equipment Revolving Term Loan (the “Equipment Loan”) with a total advance commitment of $10.0 million for the purpose of financing capital expenditures on property and equipment. Once the total advance commitment is reached or commencing on June 30, 2024, whichever comes first, this facility will become a term loan with a maturity date of June 30, 2027. This loan is collateralized by the property and equipment it finances and requires interest only payment until converted to a term loan, at which point, principal and interest payments will be required. The Equipment Loan bears interest at a rate per annum equal to one-month SOFR plus 3.50%, which will be adjusted monthly. The effective rate on this facility as of March 31, 2024 was 8.83%. Interest expense on the Equipment Loan was $0.1 million for the three months ended March 31, 2024. The schedule of payments on the Equipment Loan as of March 31, 2024 is as follows (in thousands): Year ending December 31: 2024 $ 681 2025 1,453 2026 1,582 2027 844 Total payments $ 4,560 Subsequent to March 31, 2024, the outstanding balance on the Equipment Loan was paid off. The Equipment Loan is subject to ongoing compliance by the Company in the form of various customary affirmative and negative covenants, as well as certain financial covenants. The Company was in compliance with these covenants as of March 31, 2024. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE K — EARNINGS PER SHARE The computation of basic and diluted earnings per share (“EPS”) is based on the weighted average number of common shares outstanding during each period. The following table provides a reconciliation of the computation for basic and diluted earnings per share for the three months ended March 31, 2024 and 2023, respectively (in thousands, except share and per share data): Three Months Ended March 31, 2024 2023 Net income $ 6,277 $ 5 Weighted-average number of shares outstanding - basic 52,991,506 51,206,226 Additional shares from assumed stock-settled restricted stock units 247,438 1,745,293 Additional shares issued under the employee stock purchase plan 9,035 7,036 Weighted-average number of shares outstanding - diluted 53,247,979 52,958,555 Earnings per share – basic: $ 0.12 $ - Earnings per share – diluted: $ 0.12 $ - Anti-dilutive shares/units excluded from earnings per share - diluted: Additional shares from assumed exercise of private warrants - 220,428 |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Mar. 31, 2024 | |
BUSINESS SEGMENTS | |
BUSINESS SEGMENTS | NOTE L — BUSINESS SEGMENTS Consistent with how our chief operating decision maker (Chairman and Chief Executive Officer) evaluates performance and utilizes gross profit as a profitability measure, the Company reports its activities in two business segments: ● Asset Management Solutions — comprised of activities to extract value from strategic asset acquisitions through leasing, trading, or disassembling for product sales. ● TechOps — comprised of MRO activities and product sales of internally developed engineered solutions and other serviceable products. The Asset Management Solutions segment activities include monetization of assets through the lease or sale of whole assets, or through disassembly activities in support of our USM-related activities. Our monetizing services have been developed to maximize returns on mid-life Flight Equipment throughout their operating life, in conjunction with realizing the highest residual value of Flight Equipment at its retirement. The TechOps segment consists of aftermarket support and services businesses that provide maintenance support for aircraft and aircraft components, and sale of engineered solutions. Our MRO business also engages in longer term projects such as aircraft modifications, cargo conversions of wide-body aircraft, and aircraft storage. The segment also includes MRO of landing gear, thrust reversers, and other components. Cost of sales consists principally of the cost of product, direct labor, and overhead. Our engineered solutions revenue consists of sales of products internally developed as permitted by Supplemental Type Certificates issued by the FAA. These products are proprietary in nature and function as non-original equipment manufacturer solutions to airworthiness directives and other technical challenges for operators. In order to develop these products, the Company engages in research and development activities, which are expensed as incurred. The TechOps segment also engages in the repair and sale of USM inventory for which it has the overhaul capabilities and relationships to sell. Gross profit is calculated by subtracting cost of sales from revenue. The assets and certain expenses related to corporate activities are not allocated to the segments. Our reportable segments are aligned principally around the differences in products and services. The segment reporting excludes the allocation of selling, general and administrative expenses, interest income (expense) and income tax expense. Selected financial information for each segment is as follows (in thousands): Three Months Ended March 31, 2024 2023 Revenue Asset Management Solutions Aircraft $ 16,338 $ 24,895 Engine 42,924 23,535 59,262 48,430 TechOps MRO services 25,848 27,154 Product sales 5,430 2,687 31,278 29,841 Total $ 90,540 $ 78,271 Three Months Ended March 31, 2024 2023 Gross profit Asset Management Solutions Aircraft $ 4,837 $ 8,455 Engine 17,815 9,604 22,652 18,059 TechOps MRO services 4,916 5,945 Product sales 1,228 387 6,144 6,332 Total $ 28,796 $ 24,391 March 31, 2024 December 31, 2023 Total assets Asset Management Solutions $ 388,041 $ 372,326 Tech Ops 170,369 163,883 Corporate 13,284 17,729 $ 571,694 $ 553,938 The following table reconciles segment gross profit to income before income tax provision for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 2023 Segment gross profit $ 28,796 $ 24,391 Selling, general and administrative expenses (24,133) (25,224) (Expense) interest income, net (935) 1,047 Other income, net 169 233 Change in fair value of warrant liability 1,979 (334) Income before income tax provision $ 5,876 $ 113 Intersegment sales include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed or products sold and agreed-upon pricing which is intended to be reflective of the arm’s length value of the contribution made by the supplying business segment. All intersegment transactions have been eliminated upon consolidation. Intersegment revenue for the three months ended March 31, 2024 and 2023, is as follows (in thousands): Three Months Ended March 31, 2024 2023 Asset Management Solutions $ 437 $ 1,821 TechOps 5,578 3,758 Total intersegment revenues $ 6,015 $ 5,579 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE M — STOCKHOLDERS’ EQUITY Common Stock The Company’s common stock, $0.0001 par value, consists of 200,000,000 authorized shares, of which 53,009,026 and 52,954,430 shares were issued outstanding 2020 Equity Incentive Plan The Company maintains a 2020 Equity Incentive Plan (the “2020 Plan”) and has registered 6,200,000 shares of common stock issuable under the Plan. The 2020 Plan authorizes discretionary grants of incentive stock options to employees of the Company and its qualifying subsidiaries. The 2020 Plan also authorizes discretionary grants of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents or other equity or cash-based awards to employees and consultants of the Company and its subsidiaries and to members of the Board of Directors (the “Board”) of the Company. To the extent that an award under the 2020 Plan expires, is cancelled, forfeited, terminated, settled in cash or is otherwise settled without issuance of the full number of shares to which it relates, those shares will become or again be available for awards under the 2020 Plan. The 2020 Plan is administered by the Board’s Compensation Committee. The Compensation Committee has complete, full and final authority to: designate participants; determine the types of awards to be granted; determine the terms of awards; interpret and administer the 2020 Plan and any agreements and awards thereunder. Restricted stock unit activity under the 2020 Plan for the three months ended March 31, 2024 and 2023 was as follows: Weighted Average Weighted Average Remaining Contractual Amount Grant Date Fair Value Life (Years) Outstanding at December 31, 2023 532,399 $ 14.82 1.84 Granted 4,394 11.87 Forfeited (26,821) 14.58 Vested (65,442) 15.50 Outstanding March 31, 2024 444,530 $ 14.71 1.67 Weighted Average Weighted Average Remaining Contractual Amount Grant Date Fair Value Life (Years) Outstanding at December 31, 2022 1,374,383 $ 10.72 2.88 Granted 22,410 16.06 Vested (31,925) 15.11 Outstanding March 31, 2023 1,364,868 $ 10.71 2.92 As of March 31, 2023, the Company’s restricted stock units included 1,073,736 performance-based awards that had vesting provisions subject to both time vesting and the achievement of certain performance milestones at 100% and 200% vesting targets. Effective March 31, 2022, the performance-based awards granted in 2021 (the “2021 PSUs”) met the performance metric at the maximum level of 200%, of which one two For the restricted stock unit awards granted under the 2020 Plan containing both service and performance conditions, the Company recognizes compensation expense when the awards are considered probable of vesting. Restricted stock units are considered granted, and the service inception date begins, when a mutual understanding of the key terms and conditions between the Company and the employee have been established. The fair value of these awards is determined based on the closing price of the shares on the grant date. The probability of restricted share awards granted with future performance conditions is evaluated at each reporting period and compensation expense is adjusted based on the probability assessment. 2020 Employee Stock Purchase Plan The Company also maintains the AerSale Corporation 2020 Employee Stock Purchase Plan (the “ESPP”) and has registered 500,000 shares of common stock issuable under the ESPP. No shares were issued during the three months ended March 31, 2024 and 2023. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) for interim financial information and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (“SEC”), which permits reduced disclosures for interim periods. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes all adjustments, consisting only of normal recurring adjustments, and disclosures necessary for a fair presentation of the accompanying condensed consolidated balance sheets, statements of operations, stockholders’ equity, and cash flows have been made. Unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. Unaudited interim condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), wherein a more complete discussion of significant accounting policies and certain other information can be found. |
Revenue Recognition | Revenue Recognition Products Revenue — Used Serviceable Material (“USM”) Sales Revenues from sales of USM are measured based on consideration specified in a contract with a customer, and excludes any sales commissions and taxes collected and remitted to government agencies. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The parts are sold at a fixed price with no right of return. In determining the performance obligation, management has identified the promise in the contract to be the shipment of the spare parts to the customer. Title passes to the buyer when the goods are shipped, and the buyer is responsible for any loss in transit, and the Company has a legal right to payment for the spare parts once shipped. We generally sell our USM products under standard 30-day payment terms, subject to certain exceptions. Customers neither have the right to return products nor do they have the right to extended financing. The Company has determined that physical acceptance of the spare parts to be a formality in accordance with Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers (“ASC 606”). Spare parts revenue is based on a set price for a set number of parts as defined in the purchase order. The performance obligation is completed once the parts have shipped and as a result, all of the transaction price is allocated to that performance obligation. The Company has determined that it is appropriate to recognize spare parts sales at a point in time (i.e., the date the parts are shipped) in accordance with ASC 606. Products Revenue — Whole Asset Sales Revenues from whole asset sales are measured based on consideration specified in the contract with the customer. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, condition of the whole asset, bill of sale and the assignment of rights and warranties from the Company to the customer. The Company has identified the transfer of the whole asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of whole assets) and is explicitly stated in each contract. Whole asset sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer is the date the customer obtains control over the asset and would cause the revenue recognition. Payment is required in full upon customers’ acceptance of the whole asset on the date of the transfer, unless the Company extends credit terms to customers it deems creditworthy. Leasing Revenue The Company leases aircraft and engines (“Flight Equipment”) under operating leases that contain monthly base rent and reports rental income straight line over the life of the lease as it is earned. Additionally, the Company’s leases provide for supplemental rent, which is calculated based on actual hours or cycles of utilization and, for certain components, based on the amount of time until maintenance of that component is required. In certain leases, the Company records supplemental rent paid by the lessees as maintenance deposit payments and other liabilities in recognition of the Company’s contractual commitment to reimburse qualifying maintenance. Reimbursements to the lessees upon receipt of evidence of qualifying maintenance work are charged against the existing maintenance deposit payment liabilities. In leases where the Company is responsible for performing certain repairs or replacement of aircraft components or engines, supplemental rent is recorded as revenue in the period earned. In the event of premature lease termination or lessee default on the lease terms, revenue recognition will be discontinued when outstanding balances are beyond the customers’ deposits held. Flight Equipment leases are billed in accordance with the lease agreement and invoices are due upon receipt. Service Revenue Service revenues are recognized as performance obligations are fulfilled and the benefits are transferred to the customer. At contract inception, we evaluate if the contract should be accounted for as a single performance obligation or if the contract contains multiple performance obligations. In some cases, our service contract with the customer is considered one performance obligation as it includes factors such as the good or service being provided is significantly integrated with other promises in the contract, the service provided significantly modifies or customizes the other good or service or the goods or services are highly interdependent or interrelated with each other. If the contract has more than one performance obligation, the Company determines the standalone price of each distinct good or service underlying each performance obligation and allocates the transaction price based on their relative standalone selling prices. The transaction price of a contract, which can include both fixed and variable amounts, is allocated to each performance obligation identified. Some contracts contain variable consideration, which could include incremental fees or penalty provisions related to performance. Variable consideration that can be reasonably estimated based on current assumptions and historical information is included in the transaction price at the inception of the contract but limited to the amount that is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. For most service contracts, our performance obligations are satisfied over time as work progresses or at a point in time based on transfer of control of products and services to our customers. We receive payments from our customers based on billing schedules or other terms as written in our contracts. For our performance obligations that are satisfied over time, we measure progress in a manner that depicts the performance of transferring control to the customer. As such, we utilize the input method of cost-to-cost to recognize revenue over time as this depicts when control of the promised goods or services are transferred to the customer. Revenue is recognized based on the relationship of actual costs incurred to date to the estimated total cost at completion of the performance obligation. We are required to make certain judgments and estimates, including estimated revenue and costs, as well as inflation and the overall profitability of the arrangement. Key assumptions involved include future labor costs and efficiencies, overhead costs and ultimate timing of product delivery. Differences may occur between the judgments and estimates made by management and actual program results. Under most of our maintenance, repair and overhaul (“MRO”) contracts, if the contract is terminated for convenience, we are entitled to payment for items delivered, fair compensation for work performed, the costs of settling and paying other claims, and a reasonable profit on the costs incurred or committed. Changes in estimates and assumptions related to our arrangements accounted for using the input method based on labor hours are recorded using the cumulative catchup method of accounting. These changes are primarily adjustments to the estimated profitability for our long-term programs where we provide MRO services. We have elected to use certain practical expedients permitted under ASC 606. Shipping and handling fees and costs incurred associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales in our condensed consolidated statements of operations and are not considered a performance obligation to our customers. Our reported revenue on our condensed consolidated statements of operations is net of any sales or related non-income taxes. |
Revision of Prior Period Financial Statements | Revision of Prior Period Financial Statements Certain balances in the condensed consolidated financial statements as of December 31, 2023, and for the three months ended March 31, 2023, have been reclassified to conform to the presentation in the condensed consolidated financial statements for the three months ended March 31, 2024, primarily the reclassification of amounts related to deposits for Flight Equipment purchases from the deposits, prepaid expenses, and other current assets to advance vendor payments. Such reclassification did not impact net income, stockholder’s equity or total operating cash, and did not have a material impact on the consolidated financial statements. |
New Accounting Pronouncements Adopted | New Accounting Pronouncements Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (“Topic 740”): Improvements to Income Tax Disclosures, which would require additional transparency for income tax disclosures, including the income tax rate reconciliation table and cash taxes paid both in the United States and foreign jurisdictions. This standard is effective for annual periods beginning after December 15, 2024. We are currently assessing the impact this standard will have on our disclosures. There have been no other accounting pronouncements issued but not yet adopted by us which are expected to have a material impact on our consolidated financial statements. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
REVENUE | |
Schedule of contract assets | Contract assets are as follows (in thousands): March 31, 2024 December 31, 2023 Change Contract assets $ 6,134 $ 6,474 $ (340) |
Schedule of revenue by segment, as well as total revenue | The Company reports revenue by segment. The following tables present revenue by segment, as well as a reconciliation to total revenue for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 Asset Management Solutions TechOps Total Revenues USM $ 17,532 $ 5,375 $ 22,907 Whole asset sales 38,648 - 38,648 Engineered solutions - 55 55 Total products 56,180 5,430 61,610 Leasing 3,082 - 3,082 Services - 25,848 25,848 Total revenues $ 59,262 $ 31,278 $ 90,540 Three Months Ended March 31, 2023 Asset Management Solutions TechOps Total Revenues USM $ 15,152 $ 2,416 $ 17,568 Whole asset sales 27,656 - 27,656 Engineered solutions - 271 271 Total products 42,808 2,687 45,495 Leasing 5,622 - 5,622 Services - 27,154 27,154 Total revenues $ 48,430 $ 29,841 $ 78,271 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INVENTORY | |
Schedule of inventory | Following are the major classes of inventory as of the below dates (in thousands): March 31, 2024 December 31, 2023 USM $ 112,116 $ 120,053 Work-in-process 28,974 22,270 Whole assets 209,755 186,845 $ 350,845 329,168 Less short term (203,652) (177,770) Long term $ 147,193 $ 151,398 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets with indefinite lives | Goodwill and other intangibles as of the below dates are (in thousands): March 31, 2024 December 31, 2023 Qwest: FAA Certifications $ 724 $ 724 Goodwill 13,416 13,416 ALGS: FAA Certifications 710 710 Goodwill 379 379 ACS: Trademarks 600 600 FAA Certifications 7,300 7,300 Goodwill 63 63 ACT: Trademarks 200 200 FAA Certificates 796 796 Goodwill 6,002 6,002 Total intangible assets with indefinite lives $ 30,190 $ 30,190 |
Schedule of intangible assets with definite lives | Intangible assets with definite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets with definite lives as of the below dates are as follows (in thousands): Useful Life In Years March 31, 2024 December 31, 2023 Qwest: Customer relationships 10 $ 4,920 $ 5,163 ALGS: Customer relationships 10 25 30 ACS: Customer relationships 10 980 1,033 ACT: Customer relationships 10 5,201 5,430 Total intangible assets with definite lives $ 11,126 $ 11,656 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of Property and equipment, net | Property and equipment, net, as of the below dates consisted of the following (in thousands): Useful Life In Years March 31, 2024 December 31, 2023 Tooling and equipment 7 - 15 $ 16,221 $ 16,024 Furniture and other equipment 5 11,942 12,076 Computer software 5 2,538 2,374 Leasehold improvements 3 - 10 18,819 16,269 Equipment under capital lease 5 192 192 Flight equipment held for R&D 2 7,994 7,784 57,706 54,719 Less accumulated depreciation (27,319) (27,027) $ 30,387 $ 27,692 |
LEASE RENTAL REVENUES AND AIR_2
LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE | |
Summary of aircraft and engines held for operating leases, net | Aircraft and engines held for operating leases, net, as of the below dates consisted of the following (in thousands): March 31, 2024 December 31, 2023 Aircraft and engines held for lease $ 52,055 $ 58,136 Less accumulated depreciation (28,793) (31,661) $ 23,262 $ 26,475 |
Summary of minimum future annual lease rentals contracted to be received under existing operating leases of flight equipment | Minimum future annual lease rentals contracted to be received under existing operating leases of Flight Equipment were as follows (in thousands): Year ending December 31: Remaining nine months of 2024 $ 5,363 2025 903 2026 599 2027 549 Total minimum lease payments $ 7,414 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
ACCRUED EXPENSES | |
Schedule of components of accrued expenses | The following is a summary of the components of accrued expenses as of the below dates (in thousands): March 31, 2024 December 31, 2023 Accrued compensation and related benefits $ 2,469 $ 2,241 Accrued legal fees 553 854 Commission fee accrual 696 260 Accrued federal, state and local taxes and fees 152 105 Other 1,850 2,018 $ 5,720 $ 5,478 |
WARRANT LIABILITY (Tables)
WARRANT LIABILITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
WARRANT LIABILITY | |
Schedule of assumptions of Black-Scholes option pricing model used in determining fair value of private warrants | March 31, 2024 December 31, 2023 Risk-free interest rate 4.21% 3.84% Expected volatility of common stock 41.98% 41.66% Expected option term in years 1.7 2.0 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
FINANCING ARRANGEMENTS | |
Schedule of outstanding debt obligations | March 31, December 31, 2024 2023 $180.0 million Wells Fargo Senior Secured Revolving Credit Agreement $ 51,969 $ 29,000 $10.0 million Synovus Property and Equipment Revolving Term Loan 4,560 8,559 Total 56,529 37,559 Less current portion (1,033) (1,278) Total long-term portion $ 55,496 $ 36,281 |
Schedule of payments on the equipment loan | The schedule of payments on the Equipment Loan as of March 31, 2024 is as follows (in thousands): Year ending December 31: 2024 $ 681 2025 1,453 2026 1,582 2027 844 Total payments $ 4,560 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
Summary of reconciliation of the computation for basic and diluted earnings per share | The following table provides a reconciliation of the computation for basic and diluted earnings per share for the three months ended March 31, 2024 and 2023, respectively (in thousands, except share and per share data): Three Months Ended March 31, 2024 2023 Net income $ 6,277 $ 5 Weighted-average number of shares outstanding - basic 52,991,506 51,206,226 Additional shares from assumed stock-settled restricted stock units 247,438 1,745,293 Additional shares issued under the employee stock purchase plan 9,035 7,036 Weighted-average number of shares outstanding - diluted 53,247,979 52,958,555 Earnings per share – basic: $ 0.12 $ - Earnings per share – diluted: $ 0.12 $ - Anti-dilutive shares/units excluded from earnings per share - diluted: Additional shares from assumed exercise of private warrants - 220,428 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
BUSINESS SEGMENTS | |
Summary of selected financial information for each segment | Selected financial information for each segment is as follows (in thousands): Three Months Ended March 31, 2024 2023 Revenue Asset Management Solutions Aircraft $ 16,338 $ 24,895 Engine 42,924 23,535 59,262 48,430 TechOps MRO services 25,848 27,154 Product sales 5,430 2,687 31,278 29,841 Total $ 90,540 $ 78,271 Three Months Ended March 31, 2024 2023 Gross profit Asset Management Solutions Aircraft $ 4,837 $ 8,455 Engine 17,815 9,604 22,652 18,059 TechOps MRO services 4,916 5,945 Product sales 1,228 387 6,144 6,332 Total $ 28,796 $ 24,391 March 31, 2024 December 31, 2023 Total assets Asset Management Solutions $ 388,041 $ 372,326 Tech Ops 170,369 163,883 Corporate 13,284 17,729 $ 571,694 $ 553,938 |
Summary of reconciliation segment gross profit to income before income tax provision | The following table reconciles segment gross profit to income before income tax provision for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, 2024 2023 Segment gross profit $ 28,796 $ 24,391 Selling, general and administrative expenses (24,133) (25,224) (Expense) interest income, net (935) 1,047 Other income, net 169 233 Change in fair value of warrant liability 1,979 (334) Income before income tax provision $ 5,876 $ 113 |
Summary of intersegment revenues | Intersegment revenue for the three months ended March 31, 2024 and 2023, is as follows (in thousands): Three Months Ended March 31, 2024 2023 Asset Management Solutions $ 437 $ 1,821 TechOps 5,578 3,758 Total intersegment revenues $ 6,015 $ 5,579 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS' EQUITY | |
Schedule of Restricted Stock Unit activity | Weighted Average Weighted Average Remaining Contractual Amount Grant Date Fair Value Life (Years) Outstanding at December 31, 2023 532,399 $ 14.82 1.84 Granted 4,394 11.87 Forfeited (26,821) 14.58 Vested (65,442) 15.50 Outstanding March 31, 2024 444,530 $ 14.71 1.67 Weighted Average Weighted Average Remaining Contractual Amount Grant Date Fair Value Life (Years) Outstanding at December 31, 2022 1,374,383 $ 10.72 2.88 Granted 22,410 16.06 Vested (31,925) 15.11 Outstanding March 31, 2023 1,364,868 $ 10.71 2.92 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
ASC impact, balance sheet | ||
Contract assets | $ 6,134 | $ 6,474 |
Change in contract assets | (340) | |
Deferred revenue | 2,009 | 2,998 |
Contract liabilities for services to be performed | $ 2,700 | |
Contract liabilities, revenue recognized | $ 2,300 | |
Maximum customer payment period (in months) | 6 months |
REVENUE - Disaggregation (Detai
REVENUE - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue disaggregation | ||
Total revenue | $ 90,540 | $ 78,271 |
Total products | ||
Revenue disaggregation | ||
Total revenue | 61,610 | 45,495 |
Leasing | ||
Revenue disaggregation | ||
Total revenue | 3,082 | 5,622 |
Services | ||
Revenue disaggregation | ||
Total revenue | 25,848 | 27,154 |
Operating segments | ||
Revenue disaggregation | ||
Total revenue | 90,540 | 78,271 |
Operating segments | Total products | ||
Revenue disaggregation | ||
Total revenue | 61,610 | 45,495 |
Operating segments | USM | ||
Revenue disaggregation | ||
Total revenue | 22,907 | 17,568 |
Operating segments | Whole asset sales | ||
Revenue disaggregation | ||
Total revenue | 38,648 | 27,656 |
Operating segments | Engineered solutions | ||
Revenue disaggregation | ||
Total revenue | 55 | 271 |
Operating segments | Leasing | ||
Revenue disaggregation | ||
Total revenue | 3,082 | 5,622 |
Operating segments | Services | ||
Revenue disaggregation | ||
Total revenue | 25,848 | 27,154 |
Asset Management Solutions | Operating segments | ||
Revenue disaggregation | ||
Total revenue | 59,262 | 48,430 |
Asset Management Solutions | Operating segments | Total products | ||
Revenue disaggregation | ||
Total revenue | 56,180 | 42,808 |
Asset Management Solutions | Operating segments | USM | ||
Revenue disaggregation | ||
Total revenue | 17,532 | 15,152 |
Asset Management Solutions | Operating segments | Whole asset sales | ||
Revenue disaggregation | ||
Total revenue | 38,648 | 27,656 |
Asset Management Solutions | Operating segments | Leasing | ||
Revenue disaggregation | ||
Total revenue | 3,082 | 5,622 |
TechOps | Operating segments | ||
Revenue disaggregation | ||
Total revenue | 31,278 | 29,841 |
TechOps | Operating segments | Total products | ||
Revenue disaggregation | ||
Total revenue | 5,430 | 2,687 |
TechOps | Operating segments | USM | ||
Revenue disaggregation | ||
Total revenue | 5,375 | 2,416 |
TechOps | Operating segments | Engineered solutions | ||
Revenue disaggregation | ||
Total revenue | 55 | 271 |
TechOps | Operating segments | Services | ||
Revenue disaggregation | ||
Total revenue | $ 25,848 | $ 27,154 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
INVENTORY | |||
USM | $ 112,116 | $ 120,053 | |
Work-in-process | 28,974 | 22,270 | |
Whole assets | 209,755 | 186,845 | |
Inventory, Net, Total | 350,845 | 329,168 | |
Less short term | (203,652) | (177,770) | |
Long term | 147,193 | $ 151,398 | |
Inventory scrap loss reserves | $ 500 | $ 500 |
INTANGIBLE ASSETS - Assets with
INTANGIBLE ASSETS - Assets with indefinite lives (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Intangible assets | ||
Goodwill | $ 19,860 | $ 19,860 |
Total intangible assets with indefinite lives | 30,190 | 30,190 |
Asset Management Solutions | Qwest | ||
Intangible assets | ||
Goodwill | 13,416 | 13,416 |
Asset Management Solutions | Qwest | FAA Certificates | ||
Intangible assets | ||
Intangible assets with indefinite lives excluding goodwill | 724 | 724 |
TechOps | ALGS | ||
Intangible assets | ||
Goodwill | 379 | 379 |
TechOps | ALGS | FAA Certificates | ||
Intangible assets | ||
Intangible assets with indefinite lives excluding goodwill | 710 | 710 |
TechOps | ACS | ||
Intangible assets | ||
Goodwill | 63 | 63 |
TechOps | ACS | Trademarks | ||
Intangible assets | ||
Intangible assets with indefinite lives excluding goodwill | 600 | 600 |
TechOps | ACS | FAA Certificates | ||
Intangible assets | ||
Intangible assets with indefinite lives excluding goodwill | 7,300 | 7,300 |
TechOps | ACT | ||
Intangible assets | ||
Goodwill | 6,002 | 6,002 |
TechOps | ACT | Trademarks | ||
Intangible assets | ||
Intangible assets with indefinite lives excluding goodwill | 200 | 200 |
TechOps | ACT | FAA Certificates | ||
Intangible assets | ||
Intangible assets with indefinite lives excluding goodwill | $ 796 | $ 796 |
INTANGIBLE ASSETS - Assets wi_2
INTANGIBLE ASSETS - Assets with definite lives (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Intangible assets | ||
Total intangible assets with definite lives | $ 11,126 | $ 11,656 |
Asset Management Solutions | Qwest | Customer relationships | ||
Intangible assets | ||
Useful life (in years) | 10 years | |
Total intangible assets with definite lives | $ 4,920 | 5,163 |
TechOps | ALGS | Customer relationships | ||
Intangible assets | ||
Useful life (in years) | 10 years | |
Total intangible assets with definite lives | $ 25 | 30 |
TechOps | ACS | Customer relationships | ||
Intangible assets | ||
Useful life (in years) | 10 years | |
Total intangible assets with definite lives | $ 980 | 1,033 |
TechOps | ACT | Customer relationships | ||
Intangible assets | ||
Useful life (in years) | 10 years | |
Total intangible assets with definite lives | $ 5,201 | $ 5,430 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
INTANGIBLE ASSETS | |||
Amortization expense | $ 0.5 | $ 0.5 | |
Accumulated amortization | $ 9.9 | $ 9.3 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment | ||
Property and equipment, gross | $ 57,706 | $ 54,719 |
Less accumulated depreciation | (27,319) | (27,027) |
Property and equipment, net | 30,387 | 27,692 |
Tooling and equipment | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 16,221 | 16,024 |
Furniture and other equipment | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 11,942 | 12,076 |
Useful life (in years) | 5 years | |
Computer software | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 2,538 | 2,374 |
Useful life (in years) | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 18,819 | 16,269 |
Equipment under capital lease | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 192 | 192 |
Useful life (in years) | 5 years | |
Flight equipment held for R&D | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 7,994 | $ 7,784 |
Useful life (in years) | 2 years | |
Minimum | Tooling and equipment | ||
Property, Plant and Equipment | ||
Useful life (in years) | 7 years | |
Minimum | Leasehold improvements | ||
Property, Plant and Equipment | ||
Useful life (in years) | 3 years | |
Maximum | Tooling and equipment | ||
Property, Plant and Equipment | ||
Useful life (in years) | 15 years | |
Maximum | Leasehold improvements | ||
Property, Plant and Equipment | ||
Useful life (in years) | 10 years |
PROPERTY AND EQUIPMENT, NET - D
PROPERTY AND EQUIPMENT, NET - Depreciation expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET | ||
Depreciation expense | $ 1.1 | $ 0.9 |
LEASE RENTAL REVENUES AND AIR_3
LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE - Components (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE | |||
Depreciation expense | $ 1,200 | $ 1,100 | |
Supplemental rents recognized as revenue | $ 1,500 | $ 3,100 | |
Lease term (in years) | 3 years | ||
Aircraft and Engines | |||
Aircraft and engines held for lease | $ 52,055 | $ 58,136 | |
Less accumulated depreciation | (28,793) | (31,661) | |
Property held for operating leases, net | $ 23,262 | $ 26,475 |
LEASE RENTAL REVENUES AND AIR_4
LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE - Future payments received (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Minimum future annual lease rentals contracted to be received | |
Remaining nine months of 2024 | $ 5,363 |
2025 | 903 |
2026 | 599 |
2027 | 549 |
Total minimum lease payments | $ 7,414 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
ACCRUED EXPENSES | ||
Accrued compensation and related benefits | $ 2,469 | $ 2,241 |
Accrued legal fees | 553 | 854 |
Commission fee accrual | 696 | 260 |
Accrued federal, state and local taxes and fees | 152 | 105 |
Other | 1,850 | 2,018 |
Total accrued expenses | $ 5,720 | $ 5,478 |
WARRANT LIABILITY - Narratives
WARRANT LIABILITY - Narratives (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding (in shares) | 623,834 | 623,834 | |
Change in fair value of warrant liability | $ (1,979) | $ 334 | |
Private Placement | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding (in shares) | 750,000 | ||
Number of shares of common stock called by each warrant (in shares) | 1 | ||
Exercise price of warrants (in $ per share) | $ 11.50 |
WARRANT LIABILITY - Black-Schol
WARRANT LIABILITY - Black-Scholes option pricing model (Details) | Mar. 31, 2024 Y | Dec. 31, 2023 Y |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.0421 | 0.0384 |
Expected volatility of common stock | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.4198 | 0.4166 |
Expected option term in years | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 1.7 | 2 |
FINANCING ARRANGEMENTS - Outsta
FINANCING ARRANGEMENTS - Outstanding debt obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Jul. 25, 2023 |
Debt Instrument [Line Items] | |||
Total | $ 56,529 | $ 37,559 | |
Less current portion | (1,033) | (1,278) | |
Total long-term portion | 55,496 | 36,281 | |
Wells Fargo | Revolving Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total | 51,969 | 29,000 | |
Debt instrument, face amount | 180,000 | 180,000 | $ 180,000 |
Synovus | Equipment Loan | |||
Debt Instrument [Line Items] | |||
Total | 4,560 | 8,559 | |
Debt instrument, face amount | $ 10,000 | $ 10,000 |
FINANCING ARRANGEMENTS - Narrat
FINANCING ARRANGEMENTS - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Jul. 25, 2023 | |
Financing arrangements | ||||
Deferred financing costs, net | $ 1,424 | $ 1,506 | ||
Amortization expense | $ 82 | $ 39 | $ 100 | |
Revolving Credit Agreement | Wells Fargo | ||||
Financing arrangements | ||||
Maximum borrowing capacity, expandable amount | $ 200,000 |
FINANCING ARRANGEMENTS - Revolv
FINANCING ARRANGEMENTS - Revolving credit facility (Details) - Revolving Credit Agreement - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2024 | Dec. 31, 2023 | Jul. 25, 2023 | Jul. 20, 2018 | |
Financing arrangements | ||||
Line of Credit Facility, Current Borrowing Capacity | $ 150 | |||
Wells Fargo | ||||
Financing arrangements | ||||
Debt instrument, face amount | $ 180 | $ 180 | $ 180 | |
Maximum borrowing capacity, expandable amount | $ 200 | |||
Effective Interest Rate (in %) | 8.67% | |||
Interest expense | $ 0.6 | |||
SOFR | Wells Fargo | ||||
Financing arrangements | ||||
Spread on variable rate (in %) | 2.75% |
FINANCING ARRANGEMENTS - Equipm
FINANCING ARRANGEMENTS - Equipment Loan (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | |
Maturities of equipment loan | |||
Total payments | $ 3,527 | $ 7,281 | |
Equipment Loan | Synovus | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 10,000 | $ 10,000 | |
Effective Interest Rate (in %) | 8.83% | ||
Interest expense | $ 100 | ||
Maturities of equipment loan | |||
2024 | 681 | ||
2025 | 1,453 | ||
2026 | 1,582 | ||
2027 | 844 | ||
Total payments | $ 4,560 | ||
Maximum borrowing capacity | $ 10,000 | ||
Equipment Loan | Synovus | SOFR | |||
Debt Instrument [Line Items] | |||
Spread on variable rate (in %) | 3.50% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net income | $ 6,277 | $ 5 |
Weighted-average number of shares outstanding - basic | 52,991,506 | 51,206,226 |
Additional shares from assumed stock-settled restricted stock units | 247,438 | 1,745,293 |
Additional shares issued under the employee stock purchase plan | 9,035 | 7,036 |
Weighted-average number of shares outstanding - diluted | 53,247,979 | 52,958,555 |
Earnings per share-basic | ||
Earnings per share - basic: | $ 0.12 | |
Earnings per share-diluted | ||
Earnings per share - diluted: | $ 0.12 | |
Private warrants | ||
Anti-dilutive shares/units excluded from earnings per share - diluted: | ||
Additional shares from assumed exercise of private warrants | 220,428 |
BUSINESS SEGMENTS - Narratives
BUSINESS SEGMENTS - Narratives (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
BUSINESS SEGMENTS | |
Number of business segments | 2 |
BUSINESS SEGMENTS - Selected fi
BUSINESS SEGMENTS - Selected financial information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
BUSINESS SEGMENTS | |||
Revenue | $ 90,540 | $ 78,271 | |
Gross profit | 28,796 | 24,391 | |
Total assets | 571,694 | 553,938 | $ 553,938 |
Asset Management Solutions | |||
BUSINESS SEGMENTS | |||
Revenue | 59,262 | 48,430 | |
Gross profit | 22,652 | 18,059 | |
Total assets | 388,041 | 372,326 | |
Asset Management Solutions | Aircraft | |||
BUSINESS SEGMENTS | |||
Revenue | 16,338 | 24,895 | |
Gross profit | 4,837 | 8,455 | |
Asset Management Solutions | Engine | |||
BUSINESS SEGMENTS | |||
Revenue | 42,924 | 23,535 | |
Gross profit | 17,815 | 9,604 | |
TechOps | |||
BUSINESS SEGMENTS | |||
Revenue | 31,278 | 29,841 | |
Gross profit | 6,144 | 6,332 | |
Total assets | 170,369 | 163,883 | |
TechOps | Product sales | |||
BUSINESS SEGMENTS | |||
Revenue | 5,430 | 2,687 | |
Gross profit | 1,228 | 387 | |
TechOps | MRO services | |||
BUSINESS SEGMENTS | |||
Revenue | 25,848 | 27,154 | |
Gross profit | 4,916 | 5,945 | |
Corporate | |||
BUSINESS SEGMENTS | |||
Total assets | $ 13,284 | $ 17,729 |
BUSINESS SEGMENTS - Gross profi
BUSINESS SEGMENTS - Gross profit to income before income tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
BUSINESS SEGMENTS | ||
Segment gross profit | $ 28,796 | $ 24,391 |
Selling, general, and administrative expenses | (24,133) | (25,224) |
(Expense) interest income, net | (935) | 1,047 |
Other income, net | 169 | 233 |
Change in fair value of warrant liability | 1,979 | (334) |
Income before income tax provision | $ 5,876 | $ 113 |
BUSINESS SEGMENTS - Intersegmen
BUSINESS SEGMENTS - Intersegment revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | $ 90,540 | $ 78,271 |
Intersegment | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | 6,015 | 5,579 |
Asset Management Solutions | Intersegment | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | 437 | 1,821 |
TechOps | Intersegment | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | $ 5,578 | $ 3,758 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock (Details) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
STOCKHOLDERS' EQUITY | ||
Par value per share | $ 0.0001 | $ 0.0001 |
Shares authorized | 200,000,000 | 200,000,000 |
Shares issued | 53,009,026 | 52,954,430 |
Shares outstanding | 53,009,026 | 52,954,430 |
STOCKHOLDERS' EQUITY - 2020 Pla
STOCKHOLDERS' EQUITY - 2020 Plan and ESPP (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Dec. 22, 2023 | Dec. 22, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2022 | |
2021 PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting in the period (in shares) | 1,073,736 | ||||
Share-based compensation expense | $ 0 | $ 2 | |||
2021 PSUs | Maximum level of 200% Vesting on December 22, 2022 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage (in %) | 0.3333% | ||||
2021 PSUs | Maximum level of 200% Vesting on December 22, 2023 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage (in %) | 0.6666% | ||||
2021 PSUs | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage (in %) | 100% | ||||
2021 PSUs | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage (in %) | 200% | 200% | |||
2020 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock issuable (in shares) | 6,200,000 | ||||
Vesting in the period (in shares) | 65,442 | 31,925 | |||
2020 Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock issuable (in shares) | 500,000 | ||||
Shares issued (in shares) | 0 | 0 |
STOCKHOLDERS' EQUITY - Restrict
STOCKHOLDERS' EQUITY - Restricted Stock Unit Activity (Details) - 2020 Plan - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Amount (in Shares) | ||||
Beginning balance | 532,399 | 1,374,383 | 1,374,383 | |
Granted | 4,394 | 22,410 | ||
Forfeited | (26,821) | |||
Vested | (65,442) | (31,925) | ||
Ending balance | 444,530 | 1,364,868 | 532,399 | 1,374,383 |
Weighted Average Grant Date Fair Value | ||||
Beginning Balance | $ 14.82 | $ 10.72 | $ 10.72 | |
Granted | 11.87 | 16.06 | ||
Forfeited | 14.58 | |||
Vested | 15.50 | 15.11 | ||
Ending Balance | $ 14.71 | $ 10.71 | $ 14.82 | $ 10.72 |
Weighted Average Contractual Life (Years) | ||||
Outstanding | 1 year 8 months 1 day | 2 years 11 months 1 day | 1 year 10 months 2 days | 2 years 10 months 17 days |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 6,277 | $ 5 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |