Willis Lease and GEM to build engine test facility in Florida

COCONUT CREEK, Fla. - Willis Lease Finance Corporation (NASDAQ:WLFC), a prominent aircraft engine leasing company with a market capitalization of $1.2 billion and impressive revenue growth of 36% over the last twelve months, has announced a joint venture with Global Engine Maintenance (GEM) to establish an engine test cell facility in West Palm Beach, Florida. Named Willis Global Engine Testing (WGET), the initiative aims to address the current shortage of engine testing facilities in North America, which has been a bottleneck for lessors and operators in returning engines to service promptly.

The partnership leverages WLFC’s extensive industry experience and GEM’s expertise in CFM56 engine overhauls. "Through this investment in our services business, we expect to improve turnaround times of customer shop visits for WLFC, GEM, and third-party customers," stated Austin C. Willis, CEO of WLFC. The collaboration is designed to pool resources, share expertise, and mitigate risks while expediting market entry. According to InvestingPro data, WLFC maintains impressive gross profit margins of 91.5% and has delivered a remarkable 270% return over the past year, suggesting strong operational efficiency.

Dominic Raja, Vice Chairman and President of GEM, expressed that the joint venture marks a significant expansion of GEM’s capabilities and presence in the global engine MRO market. "By partnering with WLFC, we are combining our deep expertise in CFM56 MRO with their extensive leasing and asset management solutions to deliver a streamlined, high-quality engine testing experience," Raja said.

The facility is set to initially service CFM56-5B and CFM56-7B engines, with plans to accommodate newer generation engine types in the future. Construction on the site is planned to commence in late 2025.

Willis Lease Finance Corporation specializes in leasing spare commercial aircraft engines and auxiliary power units, offering a range of services including engine and aircraft trading, lease pools, asset management, and end-of-life solutions for aviation materials. Its subsidiary, Willis Engine Repair Center, provides engine maintenance and other aviation services. Trading at a P/E ratio of 11.3x with strong liquidity metrics, WLFC shows solid financial health despite operating with significant debt. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks.

Global Engine Maintenance is recognized for its CFM56 MRO services, offering customized engine solutions with a focus on flexibility, rapid turnaround, and customer-centric maintenance programs.

This news is based on a press release statement and should not be relied upon as a guarantee for future performance. Forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially.

In other recent news, Willis Lease Finance Corporation reported a strong financial performance for the full year 2024, achieving record revenues of $569.2 million and a significant 127% increase in earnings before tax. The company’s net income rose by 159%, highlighting successful strategic initiatives. Additionally, Willis Lease expanded its credit facility to $1 billion, enhancing its financial flexibility. Despite these achievements, the company’s stock experienced a decline in pre-market trading, reflecting potential investor concerns about future earnings.

In another development, Willis Lease Finance renewed the employment agreement with Charles F. Willis IV, who will continue as the Executive Chairman of the Board. The agreement includes an annual base salary of $1,269,000 and a significant restricted stock award valued at $8,000,000, set to be fully vested upon grant. Furthermore, the company granted a non-qualified stock option for Mr. Willis to purchase up to 231,000 shares of common stock. These compensatory arrangements are part of the company’s strategy to secure leadership continuity.

These recent developments reflect Willis Lease Finance’s robust financial health and strategic planning.

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