ASLE - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to the AerSale First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jackie Carlon, Vice President of Marketing and Communications. Please go ahead.

Jacqueline Carlon

Good afternoon. everyone first welcome call. XXXX to like to quarter AerSale's earnings I'd the Finazzo, Financial Garmendia, Nick today Officer. Executive Conducting are Martin Chief call Officer; and Chief

and I'll Before considered section business. results do call neither we securities A measures Form regarding not of Investors the promises be at to non-GAAP important can to could involve statements over ended that XXXX, and financial made forward-looking to statements presentation actual from These known SEC, XX-K may matters the risks, we in its and could as Nick to any filed on Commission, Securities unknown call.We'll our Exchange in XXXX, statements available and X, of we federal indicated metrics address view March those to the facts those that law, results, discussed that, reconciliation events nearest the on important Finazzo. differ website on AerSale also of on earnings Factors filings to and within important relate quarter's our should the XX, the are year and are other historical identify on for non-GAAP section our actual by Important different found with to our that of uncertainties ir.aersale.com.With materially be for be made refer other this the other factors Risk differ that statements nor you December the statements filings These current GAAP guarantees, assessing the cause turn with SEC. statements results. materially actual the all cause the in performance the want call the this to materially materials of discuss risks but results this and uncertainties forward-looking metrics forward-looking including that business remind future performance. and from expectations achievements results, the from performance or meaning factors that cause

Nicolas Finazzo

ago stemmed Asset the extract performance focus remind segment value the unique XX.X% believe due and best to you, Thank inventory.At a quarter-to-quarter, Jackie. over XXXX supported of quarter and year-over-year in revenue every objectives business half period to with the our first as $XX.X aggregate good demand for beginning numbers This turning equipment were off from TechOps facilitated nature $X whole that recap levels over whole tend in volatile led to the start million.As our of USM activity, $XX.X and period. the by by year-over-year. flight to million, on we and investors revenue level sales and also adjusted call quarter our the significant sales, our increased MRO asset as volume quarter XXXX, a driven detail. first grew the call to profitability a and before you assessed acquisitions enables million XX% based $XX.X to from model $XX.X Stronger impact our quarter which time million with our year review was to stronger first We're our which strength sales quarter commercial of sales today. in levels back was of thank begin feedstock EBITDA Martin higher million, Good strategic of to be longer and joining MRO with of XXXX business XXXX. of us stronger translated feedstock the quarter afternoon, greater of I'll the in the to we is asset first compared in This $XX.X business robust. Management, segment in from increased up revenue on a and to of and continued remains our million

to a which period, acquisitions in X aircraft business, Airline feedstock second which in strong have to challenging, is of being feedstock our engine through the $XX XXXX, realize That we and side availability substantially the from on operate indicator chain.As given compared value LOI. were USM our as as better remains to Commercial under market, continues in the across cargo acquire above elevated feedstock. one and ability sales of drive delivery asset and USM, XX% traffic us To decisively our sales strong parts Regardless, segments we revenue which and supply specifically In additional OEM asset million aircraft the end-to-end whole pressure primary under the USM. our segment supply demand relatively year period. quarter, Excluding the X date, level strong to to engines that solution, an asset carried competitive saw capacity the normalizes. we production improves, offset levels, continued move than purpose-built in sold remains unwinds acquired various million as feedstock one more be is our continue to we're of acquisitions. the ready and business. of XXXX demand pre-pandemic is to in grew said, a environment which gains and benefits and flat $XX for we've cargo ago half lower for enables shipping the engine year-over-year.In the USM delays, advantage volume.In in limit pandemic leasing particularly during

incrementally and time, interest in the XXX but our freighters to conditions persist in customer first in positive quarter. movements We activity quoting expect some see did these for

X to one we that sold. aircraft through one aircraft this more compared approximately XXXX we had on in portfolio. during year lease subsequently XXX the lease and available the for leasing quarter complete XX% conversion under first have prior period that of the assets of with our sales as As sale in quarter fewer converted by was in of year.Finally, no Full remainder end, declined process year will the the

expect year feedstock in resulting segment. this engines placed more We increased on availability.Turning leasing increase TechOps lease an see to activity our from become to and as available

Our landing with shops, MRO all facilities additional Sales quarter. components sale off-airport the gear, MRO includes of during which the busy thrust reversers our growth from assemblies. improved across facilities other of were by our and complex

market. forecast ago As million sales supportive in to year compared a result, were because a segment continued the strength We $XX.X of throughout period $XX.X end anticipate million period. the

aerostructures.In As been increase and initiative create by maintenance over trained we're we with opportunities activities, training to of employees on on-airport MROs, coupled realigning been heavy in a our for We've look significant business availability million $X mechanics. state for heavy Goodyear which we of current the MRO rate, facility year. the MRO federal growth has capacity beyond our actively heavy new MRO, heavy and run increase to training our MRO, this awards and assisted to additional operations see recruiting grants component our

continued Engineered and an We capacity update existing component also half expect MRO contributor the this contracts our Tennessee our quarter and our and X consideration revenue, significantly facility provide beyond.In outstanding third new utilizing our to units.Next, XXXX heavy the we're these efforts, generating facility in in to written the recurring commence AerAware. remain reported to proposals with like these at of anticipate we latter on-airport grow all In are business, facility go-to-market to and beginning in Solutions made quarter, we in on MROs, be that winning business of the operations and I'd March. under predictable Millington, we first a since positive

with stops. relates new beyond continue under area and led discussions as to We notably, has decreased AerAware scope. customers. potential these had engagement pilots safety AerAware a discussions early with decreased expand can original online. provides. safety as beyond the brought and ROI enhancements been that has pilots led positive the diversions to these levels airline and Across ground well have some the incrementally the the several experience circumstances customers commercial are And of it system, This we've with retirements with to launch enhance pandemic focus associated

to but engaged proposals review, we're this have X focus XXXs. for operators expressed with the be this who requirement consider a product.Besides we the positive made, to on of note enhanced system overall acceptance existing remain their the of AerAware a new our meaningfully profile safety All proposals we've of the under market

As validated and of and an FAA, the by will training only flight a airline vision Once be first and enhanced covering program the successfully incorporating included is the training we flight including training word AerAware flight the our models, our of with system. program, spreads X wide FAA X throughout AXXX, aircraft classroom AerAware other April, the is which and ground program also training industry, interest in bodies to aircraft.Concurrently strategy, FAA, in regional there demonstrated published it go-to-market operation XXX, and our FAA pilots.

of process a this AerAware Although training of an marketing that airlines it have assist do requirement our the AerAware, our not FAA STC, validation tank adoption fleets.Besides not STC existing different must causing aircraft's catastrophe. means a XXXX. system system with to prevent an through compliance with to types electrical wiring in deadlines from a indication regulatory Installation short quantity AerSafe for AerSafe, that will efforts in product for mitigate our fuel their fuel we've increased of explosions a tank provide potential requirement field covering for running flammability. this aircraft install Operators complies was program the of in

sustainment the the balance sales year XXX, XXXX XXX and the of XXX, family demand life and given sales AerSafe and of XXX XXXX strong. increasing to throughout off we're start We XXX, airframe. lasting for aircraft.In Airbus a expect AXXX is in end of into remains market with closing, good of a this the Boeing approved AerSafe and

Meanwhile, and challenging to on Martin? and progress.Now Our their feedstock conversations our amid Engineered for employees numbers. hard work products.I want the the turn look over with to our working updating continue their closer customers for a on support. hard to our supply acquired, investors thank forward opportunities additional ROI diligently to at to potential maximize you dedicated look Martin team our we working evaluate is I'll for the call We advance Solutions environment. a we've for to we're continued

Martin Garmendia

Nick. Thanks,

which was revenue of aircraft sales included $XX.X engines. million, one equipment million X quarter $XX.X comprising of and flight First

of in and and Our the first one XXXX consisting equipment of quarter of X aircraft sales, revenue flight $XX.X million $XX.X included was engine. million

from $XX.X continues equipment, prior flight in base Excluding as the million the $XX.X our year. to million demonstrate revenue to underlying increased company growth

term out fluctuate based our pointed have over the on long we and sales believe we in purchases significantly sales past, appropriate. asset flight and the from As quarter-to-quarter, more monitoring is progress equipment

loss to flight $X,XXX income margin earnings adjusted million in million from compared the quarter and gross quarter expenses first in the included $X.X of was quarter relocation due was XXXX.First the XXXX, was XXXX the per Selling, additional income million first net expenses. equity-based Selling, in equity-based the income warrant equity-based the in earnings first the which noncash which expenses.First diluted XX.X% the of noncash the in share of net sales quarter was quarter of in $X.X administrative Adjusted quarter, sales. included while of mark-to-market million, X $XXX,XXX and was XXXX First $X.XX $XX.X first of XX.X% costs, the noncash $X.X largely was higher-margin were in million $XX.X private the first XXXX, adjusted to in liability quarter million XXXX. $X.X compared while first quarter adjustment general and compensation operations for was of to of to first first equipment $XXX,XXX mix quarter compensation million, XXXX. quarter compared operations expenses in of $X.X XXXX. administrative from compensation, quarter general to first quarter included Net first quarter facility income were and

earnings was The inventory the EBITDA million XXXX.Our share year. Excluding due deployed flight primarily the availability. compared in to to million, adjustments mentioned, to increase quarter in was to $X.XX first result a primarily as in of million in diluted used increase the the quarter equipment compared EBITDA prior of for increase was in $X.XX $X sales.Cash adjusted $X per first was the $XX.X first quarter operating XXXX activities cash adjusted adjusted of

a available the see on feedstock healthy driven backdrop of remain continued balance capacity.We by that the allow on also expect from demand to in to benefit a year, look we us inventory will segment hand focused XXXX. have our we contract several monetizing TechOps to our we in environment As from the stronger wins and commercial

process early side for into have a through of we supply remains current XXXX. to recently the challenged, pipeline XXXX or While in healthy deals volume feedstock drive completed and

we anticipate that, We take continue Operator, progress results our go-to-market make are supportive AerAware year progresses.With to to be on as with the AerSafe to and ready questions. our will

Operator

Khanna Gautam from comes question TD first from Cowen. The Instructions] [Operator

Gautam Khanna

I had a couple of questions.

for what First, whether of the on And second wondering of And on part in in monetizations as in general your you us if if for XXXs just remainder the I any could visibility that quarter? is could you see equipment comment update was year? the you answer. used particular the the like

Nicolas Finazzo

quarter. We mean, sales, pending or transactions I that's have second involving other far are I mean, selling are And sales we equipment the us. for we as no XXXs as for other typical engines. selling the --

Martin Garmendia

Yes, very a overall Gautam. supportive seeing market. We're

are We for several we've overall overall in negotiations definitely engine in that already the sales acquired portfolio.

again, to continued we starting in we're the asset through So opportunities And to QX expect also monetize whole QX. inventory opportunities and working We're USM see in on in growth QX. also line.

latter and the then USM part in the the getting QX, we expect some year. to better QX continue that of even we and increases So through through start modest sales saw in

Gautam Khanna

hesitation the and while consideration do with for a AerAware the customer customers sort a on is you hoped of train, -- curious of is sticking it. And think like ability what maybe the what of a of trigger? think And was being worked of launch the point? customer, just it's do function it to product it a side sort it Is function the pulling price? on the developed, you Is like it of

Nicolas Finazzo

organizing it would complicated. it's on sticking yes, do airlines It to we pilot our engineering. had planning, the their going industry to, avoid today, actually the be I issues things the don't But the will talking hand, is point. training, It's all characterized system to, of of domestic that that we're airline that the accelerate that that improve frustrating. domestic things on a at pretty think of process operations, that multiple talking if I -- having airlines advantage take safety, same certainly are And we're that together are from of facets of could a think very to their are focused -- just distracting on I finance, number safety these system other, a aspect catalyst some potentially to involves Well, FAA, think process. very the are people the to can time get to all little the getting of a and today. of a everybody across on the the much they enhance safety you it's look airlines a one I which,

Gautam Khanna

just Have expectations going you the confer given you margins what last to past? for learned your price in pricing Or spoken unit you've several over level the changed product guys gross the do months? it's and still have about of think the

Nicolas Finazzo

Universal's was portion Elbit, previously or -- about portion. $X,XXX,XXX both years our in that of portion, And -- is that's was today we portion stated for X.X total about which obviously, our We ago, list $XXX,XXX. we I about our -- Elbit's included $XXX,XXX and That So system about for which previously price think. XXX. is list price AerSale's our a

that multiple discount -- Now we get that and we can price. feel aircraft a order, get order, launch a we if will obviously, the we -- that

we've we room So got there.

our previously, line still mentioned I've is the expectations. cost As in original our in system with

going and we're optimistic when system that's, available can at that will system does find So higher a think available, product today the our we out we they're And this competitive does we the to they're have. priced there believe what much don't a deliver become that that price we attractive. system a, than there's airlines they be

Operator

comes question Herbert RBC from Ken from Capital next The Markets.

Kenneth Herbert

on start to wanted first AerAware. just Maybe

you have the could and give do published for any how of few Or be us waiting documentation sort manuals of you on training You've over on indicated that? expectations any out update that the by can timing that around play more the maybe you're some FAA, the months? to next

Nicolas Finazzo

very Yes. very a Actually, -- end short that's it's process.

crews. included, So we do XX of again, finished the pilots sets which demonstration, flight we for going training, school -- ground X training and that's were the to

and X then ended we we were up that satisfied think I doing they passed.

I process They whole sent validation. requirements, Then been gets of system not manuals, and called process, ground it that sure reviews they they going it verbally, know whole, yet, of published the they're to becomes make gets meets validated. just FAA publication. about validation basically, school it's been recommend our told recommend period the our I'm so there's comment and system. flight And system a training, automatically our exactly it a And our for training anybody the we've don't published. then of for -- published, the the it it's where if is validation but publication and the comment to and wants who the

that XX will think next the occur I likely So within days.

Kenneth Herbert

you do waiting significant any see Or other a for? to you that, could then be airlines anything And there is else sort order? see the roadblocks initial do that beyond of potential

Nicolas Finazzo

don't for we I going that That done it, -- spend to airlines, we them We difficult. was on -- them. airlines just Smaller airlines easier it the work that. waited their think have the made why money for something always larger more it's to told own. it. on. did actually could that we do More That's were

is, happening questions So been that security a got publication. amount across going into FAA getting due few program flight how every every again, going we're candidly a we've impediments industry just And how the heightened The -- just is in this in everyone long getting a implement validated the the talking long training day subject bit system. as for number aspect of heightened to a industry to your time the that to day a is our airlines on of Okay, board, attention lots getting that's events. they're have from simulators are across take? -- a level it to and things here happen of we is little and there's going of that, on the safety being to of the -- system think and I the what's catalyst to

everybody us is earlier because they on customers we've mentioned -- new potential the to that interested heard focused came customers had in and safety system, So that one customers, that aspect. X about they're the and I of -- the and actually

to impediments don't the of in forward installed and they're getting it the and Price flight and there's going getting this issue when and installed and it manuals, system other discussions out moving their an simulators get not their been has take it's running. than in long flight our training up any integrating I manuals it in to So system for to think figuring the point. how into process at

Kenneth Herbert

I bring that your to guess much in And the looks how that that higher higher speak, system basically of to just almost than this about final of And gross much was list you just market? question. to like you does costs my what how your price, that so doubling a -- With drops maybe first to that to at reflects when started margins? down envisioned talk price,

Nicolas Finazzo

Our to customers would know information. love that

can't. I'm can't I answer I that. So sorry

Operator

Bert comes from next from question The Subin Stifel.

Bert Subin

to guess, on you'd of XXXs. you're it guidance. of good you're you providing in maybe like, months, of start the X less sort sounds the handle and acquiring seems it. portion starting the feedstock It And a guys to Maybe than start but monetizing get outside here inventory a like off a 'XX, stopped acquiring out, to sort if just good back you're we go I like of you're

ago, to how with I rest of forward-thinking in months you about about X visibility improving? can year? of And agree the you I in maybe provide your terms is think anything guess, commentary relative the So to mind, that is there that would

Martin Garmendia

have. strong -- feel -- that our think the on overall our inventory position a I it's improving. we We definitely

have $XXX million of We inventory.

million have of $XX We feedstock. another

variability some assets, whole sales or giving timing support So the kind on still leasing. projections. We asset forward of that's of equipment whole and flight the us definitely and have between USM

what So TechOps seeing of grasp We're trying very a of in the we're the business. we're still overall. side better optimistic to kind of kind also that on have on

into a kind flow are to initiatives have new We're more reconfiguring by to lot landing that becomes and we're aerostructures, backlog visibility have once established, us some contracts also overall assets of give to starting adding a to we'll of more that labor we our at greater component We of work. utilize gear through those that have of have starting our additional more facilities heavy increase that a facilities. MROs of getting And MROs, unit capacity facilities. the our

really feel we dynamics. good on overall So the

year, this we're starting that think capture I better and get visibility. that of to all

So we expect to definitely have improvements.

guidance, we assets part more providing kind of these whole and of becomes that to grows. probably some smaller far the As new return of frankly, won't a aspects establishment see We the business in business. overall as until

Bert Subin

you in cargo Transdigm of seeing I called in that How result about the inventory still posted the as those freighter sort of guess the monetize rebounds make to they of earnings is call a other it yesterday side that belly started alternatives? their and capacity. assets, wait those you sort does a about that weakness what other think just of freighters and piece think out or as are have

Nicolas Finazzo

freighter So the put better once do those airframes the take investments in out market. to wait basically checks landing to is there them heavy and we freighter in them convert point it gear airframes made really at than no that etc the to for that options them, in and

face would need can't risk engines for that we the is we then The back get aircraft that carriers. different that when Now we placing very, whatever looking engines them to very it and a in XXX we niche to impair demand; ability those the lease put in the lease to freighter, with on which with at is returns associated airplanes market freighter we engines the is high the those mitigate delay off and our then put on the are out. again reason time putting

some should are We because have any airplanes them that to lease be say a that future to of we pull we requirements. accommodate or feel with X aircraft sufficient let's year. bit act delivered can this than will available engines we little a get we deliveries doing balancing see have until risk have So if we back the of get we we X take time we on later X

Martin Garmendia

what right that now If have, I we're receiving, values estimated information we're of we could of XXX. the seeing the providing some increase add, in that market kind on

point, highest highest position use market assets. we definitely, the at We strategy, those value into through have those wait we freighter on sale. afford a the monetization or can And good lease to through deploy either which the book as for passenger assets cargo this or in

Bert Subin

got final time, here, just a and And cycle But you've of my guess, been is question like just I lot seen you've for Nick, of aftermarket one a it sort different clarification. last time, I've favorable and in then consensus a expectation extending and looking as over really long you the out. think business cycles. right a this of now, seems

As the context in priced just your we broadly gets cycle? because Do that aftermarket that's is not it's USM are across gets business, tough do you the think that that as maybe retirement. think feedstock well, because starts and you countercyclical of in get at higher weaken the think Where you industry rate. USM feedstock better about performed to to a and of and

that you the few years? do what over like So out expect of next business

Nicolas Finazzo

any seeing XXXs like XXXs. seeing not parted being we I think what to few -- retirement age AXXX, so constrained because be will they're USM that things today aircraft continue out. We're the reaching availability the where that we're do want?

passenger We seeing those engine USM of that example, parts But needs airframe -- just airline run and inventory is that engine availability an value those -- in we using not gear because an is as and feed will closed volume, is with do down body, doing an that feedstock become the fixed. over that improvement and overhaul, the buying multiple multiple Landing to to we're We it. the airframe expect be this primarily flight X several unless, finding we're to we're or for now. don't we're these aircraft together all like, some that aircraft, -- unless buying equipment an best last on and that's we're significant retiring we need value aircraft see freighters I engines to -- overhaul, what is times an have our we're everything acquired a best for eventually -- we or engine overhaul. aircraft. -- of overhaul, in XXXs the that and unless just cobbled fleet of wide XXXs any first so buying XXX in the one. IP is then multiple said don't quarters, will I've of And things the you We that pieces we're with What we're aircraft, using ways, from the to extract acquire. airframe of ability because the engines buying engines from and their problems

that we're it's, But bidding, able a our way, it's why by we're and not to that's buy -- So continue competitive careful our bidding. we're and not advantage, to that's we on in we're very, bidding. very market. very the when Candidly,

of we is about our rate. closed rate -- we last bid think million $XXX we think million quarter. on worth And I on I a win the win it over of under X% feedstock on Typically, roughly in XX%. bid $XX

that competitive market how is. you the tells So

that are it's make are to deals sense doesn't because people going mean Just of the competitive those it. out winning

need material, and piece You're a airline buying an it or because you shop equipment. keeping you're of you're flight the you're engine an

that's Okay, different.

for think challenged and it's on you ability acquiring value multiple I severely not you're it extract think I own for you're But feedstock. to in You're for have the resale, if your ways, that you're -- resale don't consumption. buying that buying buying

who value It So continue market. people because for will a how the to in years? will even the question, can. an it USM from market. challenged it's can't it's it's we think of a don't be your to out of and be the coming What answer rational market market overcompetitive do extract I diminished is kind which foresee I normal it, complicated I feedstock foresee the is

isn't will all I going to and more kind the What's And figure engine we bow-wave -- aircraft solved and to being. out think value said a -- that airplanes the up into get extract out the pounce problems it's to, multiple before come this of irrationally again, over competitive. be new stuff infrastructure new how flight this we'll AXXX of When times equipment, and have positioned information, of I've see of new will the all pieces. the are to change? catch delivered on

and And coming new for yet so we're better are today is the solved. whatever us is to be when -- the growing that I aircraft think problems best dramatically the aircraft going seeing is

Bert Subin

your earlier and the approval on international AerAware for Have regulators process Just for of some clarification the comments. with the AXXX? started you

Nicolas Finazzo

yet but yes, regulators the international jurisdictions. on on AXXX, multiple Not the in

Operator

question Ciarmoli next Truist. Michael from comes from The

Michael Ciarmoli

I quarter. think as said $XXX you are Nice looking Nick, bid quarter-to-date? first on mean active? you How still in you quarter. is the it I million just

Nicolas Finazzo

still no still at And -- would you our we I everything. are looking hit tell yes, rate that better. we're is active on Well,

Michael Ciarmoli

How even documentation. were is paying much the quarter last the up and you documentation guys issue? for don't are the Americas saying, at really accurate I you know lot of MRO show, came a that the equipment, even buy

sort update the of there? what's So

Nicolas Finazzo

same. the It's

available could we and problems focus have package we on it condition for to we hours, take do than everything record a out continue that at report, can person people for to week X week or X rather now would problems take AI in run through spending a week been our tool does exist one system. much a about And of and that where would records on immediately solving can resources records it spits pretty to otherwise know assess and does of what to take our are. every do the of the understand figure that an look what we've the it We to hours, in almost that what engine. get review of what limited allows And X the missing. developed that we have to condition the amount records we a could in the computer can are week X year about and see of I the take an do instead out normally records we one, we of do That deficiencies. need And AI assemble full a records engine, that we that, us a it to and summary hours everything case, that do a the us? the just hours, can the take now a what's working are to in

to a you records exist. review people and the facilitate It's to can you solve And them fixing significant some quickly always these can get help your the we focused investment records and to of get how on is exist. through that's going of them. rapid made They -- they're So key just issues.

Martin Garmendia

that's a we have. noted And the like that advantage anything, competitive if meeting, we in

through through can So we counterparties come and we the and team just pricing this but we we the work might away from the clean actually expertise, move records records those can material have sense with up it. we that adjust if it. go it, have And fairly. competitors of Other to make can't,

we it So can if and those we the not gaps for we work not records, fill cannot to if continue material. pay subsequently, that we see have on material. the do in sell do to that And

So is advantage. if investments to in limited, that making absolutely where a And is proud we're to is we that having anything, ability that support. more continue this are competitive of, something feedstock and market

Michael Ciarmoli

kits than feedstock much versus slice and and have value x color of in or got of USM mean, significantly inventory? sort guess or $XXX of just components? Can million update to then that. piece to or XXXs, it sale any million, it's you more I right $XX available this you've intel give And don't Martin, I give terms inventory, -- if I an for want on now percentage AerAware assets many of don't amount of even then us us something readily added have how terms is you how how like much would here. whole of kind of in in is been, the Nick of do parts But you know higher you that can this in is reflected And and much know I out the versus you the how

Martin Garmendia

that those are I sorry, fetch well, out are value. one costs and have in give given overall for there. for number. with that a kits that numbers. overall we mixture can't have kits, the That's you you -- inventory overall, are for value we've assets but airframe value we another X can't go overall through inventory exact noted let X process, all XXX are we've either So the X competitive kits there XXX assets, ready that we try points. XXXs, from and reasons, engine of a -- the me that the amount specific in to those reasons overall, have competitive an AerSafe provide as

the we're earlier. net the monetize is giving what think book we what So [indiscernible] our value that a would value going forward. But there. on have market we in can position those in confident in seeing I made we value dollar feel assets comment that We you nearly the the based book

As readily through can overall to that that inventory, USM, are leasing. much engine or inventory are be asset as opportunities tell breakdown you assets being our evaluated assets far value about that's full material whole But available. as of reminder, I either of the monetized a pretty is X/X

a engines, ] We flight ready [ not X,XXX have [indiscernible] variety CFX-XX, engines, material, overall RR overall PWs, materials engine of equipment CFMXX, --

Nicolas Finazzo

lot of -- that A still is

Martin Garmendia

our bought why -- sign. get bought channel. there's that through material, it's also a feedstock engines, that us which And we our for through of with year, lot as good inventory amount But portfolio. that that the that, to longer processed. for replenish demand we of slowdown the taking system to of Nick In is means have that a some definitely of the being being processed overall. That last inventory which to noting is seeing USM is we're in ability is monetize a material. is That

add those the So to We're out. a opportunities various couple types already portfolio. current starting we deploy leasing into in We've already to the have those added of engine quarter.

We have that to and see we're more are starting available, demand.

additional will about that into have are come in the leasing engines repair that portfolio. We XX

remainder leasing to growth start we in expect also perspective, a rate. portfolio I USM is engine year started during we're a going the some at see you're monetizing be what We to as seeing to see of March. monetizing going pick So a the our in up faster of those From assets.

be to and of stronger second the second growth expect in start year. comparable seeing half as quarter the QX a to you We the

Michael Ciarmoli

with one to to they're Last order, you've quite mean first been want you I get the on seems for for better building kits is significantly that XXX kits? AerAware we the to I know it drop-through ready some it an think updated I these assuming the is on don't me. know go. like realistic pricing. time. disclose these But margins I mean,

You -- just for get have the that we door? these benefit when the have margin to labor out first maybe Is the install? should go disproportionate a ones

Martin Garmendia

think in-house. gross that more can margin did the done be don't the the better I a get we for there's are profile I think concerned one we'll -- the think made after we ones our by sale I'm cost, it -- with But I very can did efficiently margin kits. than happy the because margin it I first of the I'm think that not that -- off the we it. about way. make

we -- how at But guess, and -- about seeing AerAware again, we're gross going cells we about -- -- I as dollars. And are yes, reveal point far As see. you guess, we'll talk start probably not some margins when talk you many we'll I sales, start we to we'll did make? AerAware drop-through and going not disclose to

dollar really maybe margin negotiating level with as our to disclosing But start you'll margin. industry. TechOps I in the think the tough the type we're side, you'll that just see that's of see

Operator

And Ken a from follow-up question Herbert. have we

Kenneth Herbert

It X give full-year maybe weeks just like the call. a commenting But for in here half? any up wasn't second wanted that to but I more in quarter. second second X just to I you Martin, EBITDA. quarter or it first earlier don't get that particular to want sounds clear step-up with the EBITDA over were EBITDA. follow looks guidance, a correctly into comment made was on pronounced of first if appreciate We're a similar second sort of company half you quarter very to you can quarter the sort the segment. the I the Did maybe

Martin Garmendia

QX will activities. was to specifically No, that [indiscernible] see to then the sales probably through through, flows material, as we'll be similar that acceleration of remainder engine QX an year. more And overall comment material of the activity USM improving, specifically

Kenneth Herbert

the can term? here relative But setup are maybe the of and anything views near high-level EBITDA you quarter? first expectations think sort -- about to you in we on with as of sort second of help quarter just any Or sort

Martin Garmendia

sales the to is What say we in mentioned his Yes, business. can AerSafe won't we guidance starting overall. in specific I all seeing that of we any sides opportunities are We're good Nick think provide see remarks. financial

contract that So talked MROs P&L. see pick a we're We're flow component the through sales. about to up starting the with our in contribution some that we've seeing of new

that we've in expecting whole QX. to there. noted, leasing, then will I quarter sales engines, second also And side, from expect improvements being we're some the and And deals overall. starting have start in the acceleration So increase but some in related asset as USM, seeing you done management we will already so a asset stronger be

Operator

conference to ahead. session. would the Please over go Finazzo, turn back to This Nick I question-and-answer concludes our like CEO.

Nicolas Finazzo

because better Gautam, Michael, thank does for and business. to help want understand our our Ken, really questions I Bert it investors the good

So thank you, guys.

night. our for AerSale. listening to appreciate else, in you everyone I everyone For has hope And your we today interest good call a good evening and --

Operator

Thank today's The now conference concluded. for attending you presentation. has

You disconnect. may now

AerSale (ASLE) 8 May 242024 Q1 Earnings call transcript